2Q 2018

Building the Fiber Backbone for Utility Networking Needs Today and Tomorrow

Fiber optic networking throughout a utility’s territory is more than a simple technology choice—it is a strategic imperative for long-term success. Utilities that make calculated investments in fiber optic networking today, as well as tactical partnerships across and around their operating territories, stand to be well-positioned as the energy economy shifts to a more distributed, competitive model.

Smart grid investments and applications will be optimized thanks to access to high capacity fiber networks, and there will be many opportunities for new revenue generation. Utilities are positioned to use their existing infrastructure and rights of way to economically deploy fiber capacity—and to capitalize on it via wholesale leasing or even retail broadband service offerings.

This Navigant Research report provides an overview of why utilities should carefully consider building a private fiber network—or leasing local capacity—despite its relatively high costs. It describes the multiple revenue streams that a private fiber network can enable and how smart grid networks and applications can be optimized. Cost estimates for various types of installations are provided. The report also describes the utelco business model and includes case studies of various utility fiber projects. Finally, recommendations for utilities evaluating fiber optic networks and their use cases are included.

Pages 18
Tables | Charts | Figures 5

  • Why should a utility deploy a fiber optic network?
  • What new business models and revenue streams can fiber enable?
  • How does fiber compare to alternatives such as microwave point-to-point networks?
  • How does fiber enhance smart grid application effectiveness?
  • What is the utelco model?
  • What are some examples of utilities embracing fiber deployment and the utelco model?

  • Utilities
  • Utility regulators
  • Communications infrastructure vendors
  • Communications regulators
  • Communications service providers
  • Smart grid solutions vendors
  • Investor community

Spark

Context

Recommendations

Utility Connectivity Needs Are Shifting Today—and Will Change Even More Dramatically in the Future

Why Adopt a Fiber Backbone?

Types of Fiber Used by Utilities

Optical Ground Wire

All-Dielectric Self-Supporting Cable

Utility Use of Fiber Is on the Rise

Multiple Factors Are Driving Utility Investment in Fiber

The IP Transition: Telcos Are Sunsetting Legacy Networks

Smart Grid, Edge Networks, and Backhaul

Data Security

The Utelco Model Changes Everything—for Those That Can Play

Municipal Utility Case Study: EPB, Chattanooga, Tennessee

Municipal Utility Case Study: Concord, Massachusetts

Cooperative Case Study: BARC Electric Cooperative, Millboro, Virginia

Wholesale Capacity Case Study: Enel, Italy

European Case Studies: Utilities Moving Aggressively into Fiber and Broadband Service Provision

Barriers and Other Risks to Utility Fiber Deployment Remain

Fiber Costs Are High

Microwave Has Become More Competitive

There Will Be Opposition to the Utelco Business Model—and Fierce Competition

Value Matters, Not Cost

Hybrid Solutions May Provide the Answer

Case Study: Comparison of Fiber Options and Microwave, DEA, Farmington, Minnesota

A Fiber Backbone Presents Multiple New Revenue Stream Opportunities

Build-Own-Operate

Build-Operate-Transfer

5G Fronthaul and Backhaul

Real-Time Energy Trading

Fiber Enhances Smart Grid Applications and Leaves Room for More

Inter-Utility Data and Network Sharing

Fiber Optics Is a Credible Long-Term Utility Network Backbone Option

Do Not Rule Out Fiber Out Based Merely on Cost—Analyze the Value

Consider a Retail Broadband Strategy, but Be Ready for the Backlash

Rural Cooperatives and Munis Should Consider Federal Funding

Explore Partnerships

The Best Defense Is a Good Offense

  • Number of Utilities Using a Single Medium for More Than 50% of Their Network, by Medium, Now and in 3-5 Years
  • Utility Spend for Smart Grid Fiber and Networking Equipment by Region, World Markets: 2018-2025
  • Percentage of Surveyed Utilities Reporting Sunset by 2020 by Medium
  • Fiber Is the Most Economical Solution Up to 4 Miles

  • Electric Utility Fiber Ventures across Europe

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