Tag Archives: make ready

Replacing Poles

When folks ask me for an estimate of the cost of building aerial fiber, I always say that the cost is dependent upon the amount of required make-ready needed. Make-ready is well-named – it’s any work that must be done on poles to be ready to string the new fiber.

One of the most expensive aspects of make-ready comes from having to replace existing poles. Poles need to be replaced before adding a new fiber line for several reasons:

  • The original pole is too short, and there is not space to add another wire without upgrading to a taller pole. National electric standards require specific distances between different wires for technician safety when working on a pole.
  • It’s possible that the new wire will add enough expected wind resistance during storms that the existing pole is not strong enough to take on an additional wire.
  • One of the most common reasons for replacing poles is that the poles are worn out and won’t last much longer. That’s what the rest of the blog discusses.

Poles don’t last forever. The average wooden utility pole has an expected life of 45 to 50 years. This can differ by the locality, with poles lasting longer in the desert where there are no storms and having a shorter life in more challenging environments. It’s easy to think of poles as being strong and hard to damage, but the forces of nature can create a lot of stress on a pole. The biggest stress on most poles comes from the cumulative effect of heavy winds or ice pulling on the wires and attachments.

There are a lot of reasons why poles fails:

  • Although most poles are usually made of rot-resistant wood, the protection eventually wears off, and poles can decay. This can be made worse if vegetation has been allowed to grow onto a pole.
  • Using a pole differently than the way it was designed is common. A pole might have been rated to carry utility wires but over time got loaded with extra attachments like electric transformers, streetlights, or cellular electronics.
  • The soil around the base of a pole can change over the decades. The area may now be subject to flooding and erosion that wasn’t anticipated when the pole was built.
  • Somebody might have removed a guide wire that was supporting the pole and not replaced it.
  • A pole may have been hit by a car, but not badly enough to be replaced.

ISPs complain when saddled with the full cost of pole replacement. Many of the issues described above should more rightfully be borne by the pole owner. But the federal and most state make-ready rules put the entire cost burden of a pole replacement on the new attacher. It is clearly not fair to make a new attacher pay the full cost to replace a pole that was already in less than ideal condition.

It may seem to the general public that poles are just stuck into the ground. But if you’ve ever watched a new pole being placed, you’ll know that the process can be complex. The design of any new pole must account for all of the anticipated stresses the pole will have to endure. This includes the weight of the wires in a windstorm, ice accumulation, soil composition, the quality of neighboring poles, the spacing between poles (the greater the spacing, the more weight and wind resistance), and if the pole is standalone or to be guyed (anchored to the ground with several strong supporting cables).

Most engineers estimate that a generic aerial construction project will require replacing around 10% of the poles. It’s a pleasant surprise when the percentage is smaller but it can be a real sticker shock if a lot of poles must be replaced. I’ve seen projects where an electric company has neglected maintenance and most of the poles were inadequate.

The right question to ask is not how much it costs to build a mile of fiber. The better question to ask is how good are the poles?

Was That Fiber Construction?

One way that I know that there is a lot of fiber construction occurring is that many of the people I talk to tell me that they’ve seen fiber construction in their neighborhood. I always ask about the type of construction they are seeing, and many folks can’t define it. I thought today I’d talk briefly about the primary methods of fiber construction.

Aerial Fiber. The aerial fiber construction process starts with steps most folks don’t recognize as being fiber-related. Technicians will use cherry pickers or climb poles for make-ready work that prepares the poles to accept new fiber. There might even be some poles replaced, but most people wouldn’t associate that with fiber construction. The construction process of hanging the fiber can be hard to distinguish from the process of adding wires for other utilities. There are generally some cherry pickers and a vehicle involved that holds a reel of fiber wire. The aerial construction process can move quickly after the poles have been properly prepared, and many folks won’t even realize that fiber has been added along their street.

Trenching. Trenching fiber is the best-named construction method because it exactly describes the construction process. With trenching, a construction crew will open a ditch with a backhoe and lay conduit or fiber into the open hole. Trenching is usually chosen in two circumstances. First, it is often the least expensive way to bury conduit along stretches of a road that don’t have impediments like driveways. When a contractor builds fiber in a whole city, trenching might be used along streets that have not yet been developed and that don’t yet have sidewalks. Trenching is usually the preferred construction method when putting fiber into a new subdivision – the ditches are excavated, and conduit is placed before the streets are paved.

Plowing. Cable plowing is a construction method that uses a heavy vehicle called a cable plow to directly bury fiber into the ground as the plow drives along the right-of-way. Fiber plowing is done almost exclusively when burying fiber cable along a route where the fiber will be placed in unpaved rights-of-way, such as along a country road. The right-of-way must be open and not wooded to allow access to the cable plow.

A cable plow is an unmistakable piece of equipment. It’s a bulldozer-sized vehicle that holds a large spool of fiber. It’s unmistakable to see a cable plow because folks will inevitably wonder what the contraption is moving along a country road. But the plowing work can proceed quickly, and the more noticeable crews are the ones boring underneath driveways and intersections along the plowing construction route.

Boring. Also called horizontal boring, trenchless digging, or directional drilling, this is a construction method that uses drills to push or pull rods horizontally underground to create a temporary hole large enough to accommodate a conduit. This is the technique used to place fiber under paved streets, driveways, and sidewalks.

Boring rigs come in a variety of sizes based on the length of the expected drill path. Small boring rigs might be mounted on the back of a truck. Large boring rigs are standalone heavy equipment that are often mounted on treads (like a tank) instead of wheels to accommodate a wide variety of terrain. It’s fairly easy to identify a fiber boring operation because there will be vehicles of all sorts around the area and usually large reels of brightly colored conduit nearby. The chances are that if you see fiber construction in a town, it is using boring.

Microtrenching. This construction process is unmistakable. A heavy piece of equipment that contains a giant saw cuts a narrow trench in the street. The saw is usually followed by trucks that haul away the removed street materials. The cutting process is loud and draws everybody’s attention. Microtrenching can be finished in a day in ideal circumstances where the hole is cut, side connections are made with a high-pressure water drill to get fiber under the streets and sidewalks, and the narrow trench is refilled and capped.

Predicting Financial Success

I’m often asked to provide a rule-of-thumb metric to predict the financial success of a broadband business plan. The two most commonly requested metrics are customer density (how many households are needed per mile of road) or the percentage of customers needed (penetration rate) to make a fiber business plan work.

After having done hundreds of feasibility studies I’ve stopped boiling success down to any simple metric – it’s never that simple. The reality is that there are a number of important variables that have a major impact on operating a successful broadband business plan. Every ISP and every market is different, and one or two variables can have a huge positive or negative impact on a given business plan.

Following are the major variables that can make a difference when building fiber. A similar list can be made for deploying fixed wireless or other technologies.

  • Customer penetration rate. An area with low density might still have great financial results if the penetration rates are high enough. I’ve seen expected penetration rates vary from 40% in some large markets to over 90% in markets with no existing broadband. Changing the expected penetration just a few percentage points can have a big impact on cash flow. This is why we think it’s mandatory to do a survey to understand customer interest in fiber broadband.
  • Labor rates. The cost of staffing varies widely across the country and between companies. and there are places where labor costs twice as much as in other parts of the country. Labor costs also include taxes and benefits which vary widely by state and between ISPs. The staffing structure of the ISP also comes into play since companies vary between lean and staff heavy.
  • Borrowing costs. The interest rates and the term of a loan (15-years versus 25-years) can have a huge impact on a fiber project since the size of the borrowing is usually significant. Things that mitigate borrowing costs such using some equity, getting grants, etc. can have a big positive impact.
  • Prices. Broadband prices can have a big impact. We know that most customers will buy the lowest priced broadband that has a reasonable speed. There is a big difference if this primary product is at $50 versus $60.
  • Cost of the Network. The metric I’m often asked about is the minimum number of households needed per road mile. While customer density is an important factor, there are many other issues that can have a big impact. The cost of building fiber varies widely across the country due to some of the following:
    • The mix of aerial and buried fiber has a giant impact.
    • For buried fiber, the type of soil matters, because the presence of rock adds big costs.
    • Again labor rates, meaning the cost of construction crews. We’ve also seen projects that took federal money that had to pay prevailing wages for rural construction that killed the project.
    • The condition of the poles and the effort and cost needed for make-ready can be a huge factor.
    • The difference between building in the power space versus the communications space on poles can be significant.
    • Choosing PON versus active Ethernet can have a difference, with Active E having larger fiber bundles needing more splicing.
    • One of the biggest impacts is the cost of fiber drops – the two important factors are 1) average distance customers are from the road, and 2) who builds the drops (we’ve seen the labor costs for drops vary by several hundred percent).
    • Building in phases versus building as quickly as possible can sometimes make a big difference.
    • Customer density is important, but the above factors can matter a lot more. Density can also be a tricky number. Consider two examples of companies that would have the same average density but significantly different costs: Company A has no towns and the rural areas average 10 households per road mile. Company B includes one decent sized town but is surrounded by big farms but still averages 10 households per road mile.

Clients always want me to predict the outcome of a business plan before we undertake the needed business models. I’ve learned to not predict. I’ve worked on projects that look to be far more profitable than I would have expected and looked at others that don’t look feasible for some reason. As an example, I recently finished a business plan model where it turns out that the existing poles in the new market were nearly unusable and the alternative of going underground was impractical because of rock. This one factor made it hard to justify building fiber in a market that otherwise would have passed the sniff test using high-level metrics.

The Broadband Battle in Nashville

PoleThere is a regulatory battle going on in Nashville that is the poster child for the difficulty of building new fiber networks in urban areas. The battle involves Google Fiber, AT&T, Comcast, and the Metro Council and Mayor of Nashville, all fighting over access to poles.

Google Fiber wants to come to Nashville and needs access to existing poles. About 80% of the current poles are owned by the city-owned Nashville Electric Service with the other 20% belonging to AT&T.

The Metro Council recently enacted a new ordinance called the One Touch Make Ready (OTMR) law. This law would speed up the process called make-ready, which is the process for making room for a new wire to be hung on poles. Under the new rules, Google Fiber or other new pole attachers would be free to move wires belonging to another utility to make room for their new wires. And the new attacher must pay for the needed changes, at whatever rate the other wire owners bill them.

The FCC took a stab at this problem a few years ago and they allow a new attacher to add their cables to a pole without approval if the paperwork process takes too long. But those rules only apply to poles that don’t need any make-ready work – and in an urban area most poles need some amount of make-ready work to make room for a new wire.

Current make-ready rules require that the owner of each existing wire be notified so that they can move their own wire, as needed. As you might imagine, this means an overbuilder must issue  a separate request for multiple wire owners for each individual pole that needs to be modified, including detailed instruction the changes that must be made. Other pole owners are giving an opportunity to disagree with the recommended changes. And this whole paperwork process can’t even begin until the pole owner has first inspected each pole and decided on a make-ready solution.

As you can easily imagine, since many of the other companies with wires on poles don’t want competition from Google Fiber or any other new competitor, they do everything legally possible to delay this process.

What I find ironic about this process is that the current wire owners can drag their feet even if their own existing wires are in violation of code. The various industry codes dictate a specified distance between different kinds of wires in order to make it safe for a technician to work on the wires, particularly during bad weather. I’ve found that most poles in an urban area have at least one existing code violation.

It’s also ironic that the cable company can drag their feet in this process. I’ve heard numerous stories about how the installers for the original cable networks often went rogue and installed their wires without getting formal permission from the pole owners. At that time the telcos and cable companies were not competitors and so nobody made a big fuss about this.

It’s been reported that one City Council member tried to stop the new law from going into effect by introducing an alternate proposal – which supposedly was written by AT&T. That alternative law gave the incumbents 45 days to make changes, but also limited the fast pole response to 125 poles per week. In a City the size of Nashville there are tens of thousands, and possibly even more than 100,000 poles that might need to be changed – and so that limit basically means that it would take many years, even possibly decades for a new fiber provider to build a city-wide network.

The new One Touch rule would allow Google Fiber or others to make the necessary changes to poles if the incumbent wire owners don’t act quickly enough to move their wires. AT&T has already sued the City to block the new ordinance. They argue that the City has no authority to order this for the AT&T-owned poles. They also argue that this change will disrupt their service and put their customers out of business. The lawsuit is, of course, another delaying tactic, even should the City prevail.

There is little way to predict how the courts might decide on this. It’s a messy topic involving a complex set of existing and technical industry practices. Both sides have some valid concerns and good arguments to make to a court. Both sides also have access to the best lawyers and it will be an interesting court fight. But perhaps the most important thing to consider is that the existing rules can mean that it’s not economically feasible to build a new fiber network in a City – if so then something needs to change.

Who Controls Access to Poles?

telephone cablesAT&T has sued the City of Louisville, KY over a recent ordinance that amends the rules about providing access to poles to a carrier that wants to build fiber. Louisville is hoping to attract Google or some other fiber overbuilder to the city.

But there has been no announcement that any such deal is in place. It seems the city is trying to make it more attractive for a fiber overbuilder to come to the city and so they passed an ordinance that allows a new fiber builder relatively fast access to poles. The ordinance gives a new fiber builder the right to rearrange or relocate existing wires on poles if the other wire owners on the poles don’t act to do so within 30 days.

AT&T opposes the measure, and their court case says, “The Ordinance thus purports to permit a third party… to temporarily seize AT&T’s property, and to alter or relocate AT&T’s property, without AT&T’s consent and, in most circumstances, without prior notice to AT&T.” They argue that a new attacher will cause service outages and create other problems with their network.

The real issue at hand in the case is if a City has the right to make rules concerning poles. Today there are basic pole rules issued by the FCC that lays forth the fact that a competitive telecom provider must be given access to existing poles, ducts and conduits. Such rights were provided by the Telecommunications Act of 1996. In reading the FCC rules you might think that a new attacher already has the rights that are being granted by Louisville. The FCC rules allow a new attacher to go ahead and put their wires on poles if the pole owners don’t act quickly enough to process the needed paperwork to allow this.

But the rub comes in when there is not a clear space on an existing pole. There are FCC and national electrical standards that require that there be certain spacing between different kinds of cables on poles, mostly to protect the safety of those that have to work in that space. If you’ve ever looked up at poles much you’ll notice that it’s not unusual for the distances between the different utilities to vary widely from pole to pole, meaning that whoever hung the cables was not paying a lot of attention to the spacing.

In the industry, when there is not enough of a gap to accommodate a new attacher, the existing wire owners have to move their wires to create the needed space. If there is not enough space after such a rearrangement then a new taller pole must be erected and the wires all moved to the new pole. The new attacher is on the hook for all rearrangement costs. This process is called ‘make ready’ work and is one of the major costs of getting onto poles in busy urban environments.

The FCC has granted states the right to make additional rules concerning pole attachments, and many states have done so. This lawsuit asks if a city has the same right to make pole attachment rules as is granted to the states – and so this is basically a jurisdiction issue. It’s the kind of issue that probably is going to have to eventually go to the Supreme Court if the loser of this first suit doesn’t like the court’s answer.

To put all of this into perspective, pole issues have often been one of the biggest problems for new telecom providers. Back in the late 1990s I had one client that wanted to get on about 10,000 poles and was told by the local electric company that they were only willing to process paperwork for about a hundred poles per week. I had another client back in that same time frame that was told by a rural electric company that they just didn’t have the time to process any pole attachment requests.

And as you can imagine, when getting on poles bogs down, a new fiber project also bogs down. This can be extremely costly for the company making the expansion because they will have already begun spending the money to build the new network and they will have a pressing need to start generating revenues to pay for it.

Across the country the conditions of poles vary widely. In some cities the poles are relatively short and they are crammed full of wires. In other cities the poles are taller and do not require much make ready work for a new attacher. But when the poles are not ready for a new attacher this can be a costly and time-consuming process. It’s going to be interesting to see if the courts allow a city to get involved in this issue in the same way that states can.