A new agreement announced this week between Comcast and the Colorado Department of Transportation could spur other communications service providers to explore new avenues for obtaining network capacity. Through the agreement, Comcast will lease two strands of a portion of the fiber network that the CDOT uses for electronic sign message control, traffic camera surveillance, travel time detection, weather station monitoring and other forms of communications. The lease agreement is for 20 years.

Comcast said it plans to use the network to launch advanced video, Internet and digital voice services in several Colorado mountain communities with a target rollout date of spring 2011. As part of the agrement, Comcast will provide maintenance services for the portion of the network it plans to use, covering an area between Vail and Golden, Colo. Comcast and CDOT estimate the value of Comcast’s maintenance services at $14.5 million over the next 20 years.

“We think of this as a ‘big win’ for Colorado taxpayers and we’re excited about the beginning of a strong partnership with Comcast,” said CDOT Executive Director Russell George in the announcement. “The agreement provides CDOT with a new revenue stream, and because Comcast also is providing professional engineering expertise and support, we’re able to reallocate some of our network maintenance resources to other important transportation projects, which are critical in these tough economic times.”

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This deal seems like a win/win for Comcast and CDOT. And now that tax based have dwindled on a widespread basis nationwide, it seems like other states or municipalities also might be willing to lease fiber resources such as those operated by CDOT to communications service providers like Comcast. I would think other service providers also would be more than willing to sweeten the deal by providing maintenance as Comcast has agreed to do.

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2 thoughts on “Could Comcast/Colorado DOT Fiber Deal Accelerate Public/Private Network Partnerships?

  1. Interesting…I know that the Colorado School of Mines also has a number of strands (more than two, as many as half the bundle I think) on that cable, between Golden and Denver. Unfortunately the benefits of those strands kind of stop as soon as you get off-campus, but they *do* provide a 10 Gbit link between CSM and the outside world, which is probably more bandwidth per person on campus than anywhere else in Colorado (CSM has a student + faculty + staff population of less than 6,000 I think).

    The other interesting thing is that Comcast has eschewed public-private partnerships like this before, partly because they've had their own infrastructure in place already. Which is fair…it's nice to know that the company can work with public entities in win-win situations like this.

    A few other facts:
    1. Comcast already has decent services in Vail. I'm guessing they will use the dark fiber to replace a telco fiber circuit that costs more $$$.
    2. Vail is by no means a large city (only about 5000 people live there). Maybe Comcast is angling for more business connectivity? Or maybe they're trying to grow market share in new ways other than having to compete with stiffening telco resistance?
    3. There's about 89 miles of road between Golden and Vail, and since we're talking about CDOT that's the length of the fiber between the two points. Dividing up the $14.5M over 20 years, then dividing by 12 months, then dividing by two strands, you get ~$30,200 per strand per month over that distance, or $340 per strand-mile per month. In short, by agreeing to maintain the bundle Comcast is paying a good bit for that glass. Then again, if they wanted to buy from Qwest at 10G, they would probably pay just as much for transport without the ability to put DWDM on the line and kick speeds up to Nx40G if they ever needed to do that.
    4. There's ~28,000 people within 5 miles of Vail, so if Comcast has service (or brings service) to most of those this lease starts to make sense.
    5. Comcast may be able to do fiber work cheaper than CDOT can, so the cost to Comcast may realistically be lower…

    Anything I miss? 🙂

  2. IAN-

    Thanks for reading and for sharing your insight. I think your item #5 is key to why this deal is a win/win.

    You seem to be quite familiar with the area involved in this deal. Accordingly you may want to read the original release (see hot link in the story) which details the specific Colorado communities that will be getting advanced video services from Comcast.

    Thanks,

    JOAN E

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