CenturyLink says dark fiber for E-Rate applications should not be treated as "special construction"

CenturyLink (NYSE: CTL) says that a request made by the Illinois Department of Innovation and Technology (Illinois DoIT) to classify dark fiber leases or indefeasible rights of use (IRU) agreements as special construction could have grave consequences.

In an FCC filing, CenturyLink said it disagrees with the Illinois DoIT claim that leased dark fiber or IRU should be reclassified as "special construction" if the applicant or the provider chooses to swap them in the midst of a network build.

"Although Illinois DoIT's suggestion is doubtless well-intentioned, the Commission must especially be cautious with applications for self-provisioning," CenturyLink said in an FCC filing. "There can be no back door exceptions to program rules that require competitive procurement and responsible estimation of project costs. Giving parties the advance option -- mid-project -- of substituting leased dark fiber or IRUs for special construction could undermine the program by enabling parties to bypass or give short shrift to Commission rules requiring cost-effectiveness showing fair and competitive procurement for these self-provisioned services."

The Illinois DoIT argues that identifying dark fiber substitutions would prevent unplanned costs for financially strapped school districts.

"We recommend that dark fiber obtained via lease or IRU as part of a special construction project, with the goal of reducing the overall construction cost, be classified as special construction," the DoITT said in its FCC filing. "Otherwise, projects may be deterred from obtaining available dark fiber during a construction project, because there would be no means to recover the cost of the dark fiber lease or IRU. This is because the original funding request would not have accounted for the cost of the dark fiber lease or IRU."

More school districts are turning to dark fiber solutions due in part to the FCC's revamp of the E-Rate program.

Under the FCC's E-Rate order that was issued in 2015, the regulator amended the eligible services list to support the equal treatment of lit and dark fiber services. What this means is that local school districts will be able to purchase either kind of service depending on their specific needs via an FCC Form 470 application.

As part of that process, the FCC requires any applicant that issues RFPs for dark fiber to seek bids for lit services like wavelengths over the same time period. Additionally, applicants have to include network equipment and maintenance costs associated with lighting dark fiber in the same application with the dark fiber lease. 

Similar to other traditional telcos, CenturyLink isn't an advocate of dark fiber, preferring to sell its E-Rate customers and other business customers managed services such as optical wavelengths and Ethernet.

CenturyLink maintains that school districts don't have the technical wherewithal to light their own fiber nor the necessary equipment to deliver services to their constituency.

"CenturyLink has cautioned that funding for dark fiber and self-provisioning in E-rate is demonstrably a bad idea," CenturyLink said. "As a general rule, building, operating, managing and maintaining networks for schools and libraries is very difficult, made even more so by the growing demand for bandwidth and the highly dynamic nature of broadband usage and applications. With too few exceptions, publicly operated broadband systems have a poor track record for both cost and performance."

However, Fatbeam, a competitive provider that focuses on serving a mix of school districts and businesses in the Pacific Northwest, has seen dark fiber orders from school districts rise over the past year.

The service provider told FierceTelecom in a previous interview that dark fiber adoption by schools in its serving area increased by 63 percent.  

For more:
- see CenturyLink's FCC filing (PDF)
- here's Illinois DoIT's filing (PDF)

Special report: AT&T, Verizon, and competitive providers remain divided on dark fiber, but interest is rising

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Fatbeam says 63 percent of its E-Rate customers are using dark fiber