In the Spring of 2022 issue of The Southern Utah Business Magazine, I wrote an article entitled “Have You Had Your Fiber Today?” In short, the article highlighted what is known in the technology industry as “Digital Transformation”. The Regional Bell Operating Companies (RBOCS) are retiring the legacy copper networks and transforming them into fiber optic networks. So why is this noteworthy news? What is the effect on your business?
Over a period of 35+ years, I have acquired greater than 95% of my customers by good old fashion cold calling. Feet on the street, face-to-face eye contact, and a good firm handshake. This front-line approach has given me a good view of the large gap between the technology industry and the consumer’s knowledge of technology trends. Unless the business is a fortune 1,000 level or greater and has a dedicated IT team, I have seen businesses react to technology changes vs. taking a more pro-informed and proactive posture. The greater number of business owners would hate to see the big fat red line on the accounting journal for all the lost revenue and time due to uninformed or ill informed business communications technology decisions.
I recently discovered one such potential technology disaster here in Southern Utah. Due to the favorable climate for 80% of the year, Southern Utah has attracted many real estate investors for both residential and commercial developments. One of these rather large commercial developments (with an estimated 100 new buildings) is severely lacking in any technology infrastructure. Businesses that have purchased the land and built brick-and-mortar locations (OK, metal warehouses with an office) must currently rely on a broadband point-to-point wireless or satellite for voice and data communications. Let that sink in for a moment or two. We may begin to reason that some type of copper DSL, T1, PRI, or POTS line would be available as a low-cost fallback, but those days are gone.
The carriers have not brought fiber optic to many parts of this business park or multiple other newly developed business parks across the country. The FCC or the US government no longer requires carriers to provide communications services to an address within their designated region. This particular business park will rely on point-to-point wireless and satellite internet for the foreseeable future. Many times, these technologies will provide a temporary solution but since this is based on an undetermined over-subscription of the service, as more customers are added to the provider, the quality of the service will diminish. Many times, businesses choose a residential-grade product based on cost. These services run in the range of$ 120.00 to$ 150.00 monthly. The residential products do not provide the option of a static IP address and are considered low priority. Should the business owner wish to switch to a commercial-grade service, the prices jump to an estimated$ 500.00 monthly and provide minimal additional service options.
Acquiring voice and data communications to a business address is now accomplished by an open bid process. The business owner will need to research which carriers might be in the area and able to provide service. Only after a carrier receives a signed order, will they perform a site survey to determine their cost to provide service to your new address. Once the carrier receives an estimate of their build cost, they will amortize that cost over a 36 – 60-month period, add their network access charges and provide you a final minimum agreement. The carrier may also choose to provide a CAPX upfront build cost to the business owner as an option for monthly payments. If the amount exceeds your original cost, the business could cancel the agreement without obligation or penalty.
One additional caveat to the carrier’s amortized pricing model is the first customer gets to carry the lion’s share of the build cost. Once the first customer pays the initial build cost to extend the fiber from the current distance into a multi-tenant building, the build cost for the second, third, and fourth customers is much less.
Oh, did I mention, we are trying to build and run a business here? If the business owner just happens to have an extra $30,000.00 laying around for a fiber build and decides to sign the agreement, the build could take anywhere from 90 days to 18 +months. The carrier will need to acquire construction permits from the city, possibly from the county or other municipalities. The carrier’s engineer needs to determine what network equipment is required for the circuit, and where they will splice into their fiber optic network. Also, the business owner needs to provide access to the carrier from the street into their IT room. If you wait until you are scheduled to move into your new location to build your IT network, you may have several weeks or months of little to no business productivity.
This is just one example of the potential effect for a new business. I called the developer of the business park I was mentioning above. I asked if the developer would be interested in assisting the carriers to bring fiber into the business park for the benefit of the new businesses in his park. I stated that he had a lot of money tied up in this real estate and that it would help in the overall value of the park. The response I received put a large knot in my stomach. “We have already sold 90
% of the lots”. “It is not our problem; we really don’t care.”
As a Technology Architect, I automatically think about the process of assisting these new businesses design, implement, and manage their voice, data, video, and visual media. So many business applications are being pushed onto a single IP data network. All this starts at the network gateway. If you don’t have quality network access (i.e.: internet) you won’t have a reliable, secure network. (Look for an upcoming post on “Business applications being pushed onto the corporate IP network”)
Takeaway
If you are looking for a new business location, check the address to verify the following before you sign a lease or purchase agreement.
- What carriers are available at your proposed new business address?
- What technology products are available from each carrier?
- Copper
- Fiber Optic
- Wireless
- Satellite
- Can you get pricing from a carrier for the internet speed your business will require?
It does not matter if your business will be in a new development or downtown in a metropolitan area. The copper networks that serviced many metropolitan areas are being retired and/or sold off to investment management groups or overseas companies. The result of these sales could be poor to no customer service, poor and unreliable voice quality, frequent network outages, and more.
CT Solutions works with over 600 regional, national, and international carriers. We can assist you and your business qualify your address to determine if the area is able to support your technology requirements. Please subscribe to this blog to view future additional posts on Technology Architecture and Digital Transformation. Please feel free to e-mail me if you have any questions or would like to discuss a technology design for your business.
Daniel P. Rhodes Managing Partner CT Solutions