Unite binding business to fiber network

August, 06 2007

Fiber’s not just for breakfast anymore, as any business with high-bandwidth communication needs can tell you.
Engineering technician Joe Melvin of Unite works at locating an underground fiber optics cable near the intersection of 56th and Pine Lake Road Thursday afternoon. (Michael Paulsen)
Fiber-optic communication cable, which is made from glass and can carry more data more reliably than old-style copper cable, is the new communications standard for business and government.
And as far as they’re concerned, the only thing better than fiber is more fiber.
Unite Private Networks of Kearney, Mo., is pitching itself as a new “more fiber” option for the business community in Lincoln.
Unite entered the market with an extensive and recently completed project for Lincoln Public Schools, linking about 60 schools and other buildings.
The company overbuilt its network, which it said allows it to offer access and redundancy to business clients.
For businesses, redundancy means a Lincoln home office could stay in touch with other locations, even if, for example, a backhoe should cut one cable leading to a head end (an access point connecting a user’s computer to the Internet).
Unite counts TAG, Ameritas, Pfizer and Advanced Medical Imaging among its new and local private sector clients, said sales director Stuart Howerter.
The Lincoln model is similar to the way Unite entered other communities – get a school district contract, and build beyond what the district needs, to provide service to other parties.
That formula has worked in Colorado, Kansas, Missouri and Illinois, vice president and general manager Ron Reckrodt said.
While the company is currently bidding on projects for school districts in California and Texas, said Reckrodt, “we like the Midwest flavor.”
Unite is now pursuing a contract with Lexington Public Schools, Reckrodt said.
School districts make good initial customers, Howerter said, because schools typically are spread throughout a community, which allows convenient links to businesses in all parts of town.
Unite says it has 5,000 fiber miles in Lincoln. Alltel, the dominant phone company in Lincoln, says it has 12,000 miles. A fiber mile is one strand of fiber one mile long (or one-tenth of a mile with 10 strands).
Unite is a former unit of UtiliCorp, now Aquila, that was purchased by four former managers.
It can provide its service at a low price because of its young age, Reckrodt said; the company started in 1996, and has no infrastructure older than a few years.
“One obstacle we have to overcome is folks who don’t believe our prices,” Reckrodt said.
Incredulous or not, the school district’s director of technology, Kirk Langer, sees a system upgraded to a state that would not have been possible before.
Langer recalled that the district informally sought information on what a massive technology upgrade would cost. Initially, he said, LPS wanted to find Lincoln-area companies that could meet those needs.
Discussions with Alltel and Lincoln Electric System did not bear fruit, he said.
LPS approached Time Warner with a deal similar to the one it has with Unite, a 10-year lease with a guaranteed total cost of $2.875 million, said Langer.
“They virtually laughed us out of the room,” he said.
Unite’s 2001 bid to LPS beat out proposals from Alltel ($26.7 million), Quantum Electric’s ($18.8 million) and Dark Fiber Solutions ($41 million), said Dwayne Odvody, Lincoln Public Schools purchasing director.
Alltel spokesman Chris Hunt called the Unite bid “aggressive.” “It’s not uncommon for a company without customers to bid very aggressively to land that first customer,” Hunt said.
Unite, said Odvody, agreed to build the network and charge LPS to use it, expecting private sector clients would come along later and make the deal worthwhile. The other bids included the cost of building the network, he said.
Odvody said the guaranteed price means that LPS will not pay more, unless it asks for additional services. Despite the disparity among the bids, Unite vice president Rob Oyler said the company arrangement is still profitable for Unite. He said Unite doesn’t have debt or other commitments that would require it to charge a higher price. “We have no complaints,” he said.
Lincoln Electric System, the local public utility, did not receive – and is still without – regulatory permission to make its extensive fiber optics available to interested businesses. “LES has long had a goal of helping Lincoln businesses achieve redundancy and additional options for data communications services,” said administrator and CEO Terry Bundy. “Our efforts to provide services through our fiber have been vigorously opposed by telephone companies and the subject of debate in the legislature.” LES has agreed to a moratorium on providing any fiber-based services until the end of 2007, said Bundy.
Odvody said the guaranteed price in the Unite contract means that LPS will not pay more, unless it asks for additional services. The structure of the deal, he said, means LPS can be reimbursed up to 54 percent of the cost, or more than $1.55 million over the life of the contract, by the federal government. The presence of Unite and other fiber options means more choice for customers, and competitive pricing, said Eric Erlandson, vice president at Internet Nebraska.
Erlandson said Internet Nebraska is not a Unite customer, and is not in negotiations or about to sign a contract with Unite, but said that he sees Unite as a legitimate provider. “We’d be happy to do business with them, if made sense at some point in the future,” he said.
According to Langer, partnering with Unite certainly makes sense for the school district. Among new capabilities the fiber gives the district are Internet- protocol telephony and the use of video-on-demand for instructional TV. The district is also saving money on servers and bandwidth, 44 megabits of access for the cost the district previously paid for nine megabits, Langer said, and has more opportunities to use Internet 2, the high-speed educational network. So, said Langer, the district is paying about the same for its new network that it would be paying for its old infrastructure.
Advanced Medical Imaging hired Unite to upgrade its telemedicine capability from a T1 line to fiber optics, said operations director Georgia Blobaum. The physician-owned radiology center uses the network to receive radiology images from rural community hospitals, she said. “We could do it with T1, but the fiber is much quicker,” she said. Unite, Blobaum said, was responsive to Advanced Medical Imaging’s needs and crushed deadline expectations. “They said it would take 90 days, to install,” she recalled. “I think they did it in 45 to 50 days.”
Alltel spokesman Chris Hunt said Unite’s fiber doesn’t make it a large player in the business sector. In addition to Alltel, he said, companies including Qwest and Level 3 Communications Inc. have laid down communication fiber locally. “There has been redundancy for years,” Hunt said. But the Unite tale is about more than just dazzling new technology, said Langer. It’s also about customer service. Langer says Unite reacts quickly to outages caused by backhoes and acts of God, and is willing to schedule splicing and other tasks overnight so there’s no interruption to the business day. “We’ve banked our enterprise on that fiber being up and running,” said Langer. “And to their credit … it has been just that solid.”
Reach Rodd Cayton at 473-7107 or rcayton@journalstar.com. Journal Star archives contributed to this report.

Leave a Reply

Your email address will not be published. Required fields are marked *