The new web will need a new network

It’s been more than a decade since the large construction of fiber networks crisscrossing the world in response to the first web boom, and since then, the Internet has grown to become interwoven with every aspect of our daily lives. Billions now have a web connection, from  either a mobile phone or a fiber to the home connection, if not both. Now the fiber boom is back, but the next generation network isn’t just more fiber; it’s an entirely new type of network that fits what we now expect the web to do: Be smarter and be everywhere we are.

To do that, Allied Fiber is building a new kind of fiber network that combines not just network materials, but also data centers, to bring connectivity at competitive places over more and more of the country. Within the next three weeks, Allied Fiber will order its fiber cable, and six months later, the network will begin taking traffic. The premise is radical in that founder Hunter Newby has envisioned a way to bring terabyte connections across a certain swath of America by building out a new type of infrastructure, and leasing it out to other providers.

Here are the details:

  • It will connect New York City, Chicago and Ashburn, Va. and cost $140 million to build the first phase.
  • There will be 19 data centers spaced every 60 miles along the fiber pipe.
  • The eventual network will cover more than 11,000 miles across the country.
  • The long portion contains 528-fiber cable with a 216-fiber short-haul cable.
  • Allied Fiber will interconnect its long-haul assets with partners such as Sidera Networks, which offers metro fiber networks.

Newby helped build out Telex, which changed the way the original web companies connected to the old-school copper access network. Now he’s trying to change connections again. Not only is his network going to bring competition; it’s also going to be custom-built for early customers. Newby told me last May that construction would begin by the end of 2010, but he said customers have moved more slowly than he anticipated.

Because Allied Fiber is building out custom networks for the first few customers, getting the details right and approvals in place took time. However, until everything is done, Newby declined to name the customers.

Those customers that got in early dictated some of the design elements, such as the type of backup power in the data centers and exactly how many threads of fiber they would need. For their early buy-in to the project, they get cheaper rates as well as what amounts to a custom network, kind of like being able to add your personal finishes to a new home in a planned community as it’s being built out.

The network will still have room for newcomers to lease the dark fiber then use their own equipment in the data centers to light it up. Allied Fiber isn’t a carrier. It only wants to serve carriers by providing the physical infrastructure, which means it’s really out to bring infrastructure to areas that will compete with networks currently owned by companies such as Verizon Communications (s vz), Level 3 (s lvlt) and others. Instead of contracting with Verizon for getting fiber backhaul closer to its cellular towers, for example, a mobile operator such as Sprint (s S) could work with Allied Fiber, or even an Allied Fiber customer.

Given that we’ve written about the coming terabit age and the bandwidth-intensive nature of providing backhaul access for wireless networks as well as capacity to support cloud computing, Allied’s Model is pretty exciting. Newby says, “We have enough in committed contracts that will generate revenue that exceeds what we need in our financial models. This thing is building momentum, and if you read anything in the news you know the need for fiber for not going away it’s only increasing.”

Newby hopes that by bringing the infrastructure for fiber networks to more places it will help lower the costs for rural and regional Internet service providers (wired or wireless) to provide cheaper and better services to their customers. He compares what wholesale providers charge for access — about 50 cents per megabit — to the up to $300 per megabit some rural carriers have to pay to get circuits that will eventually bring their traffic out to a large backhaul provider and sees an opportunity.

And because the benefits of interconnection are still more than the benefits of building out a network to cover the entire country for each operator, Newby is confident that he will entice most of the large players, including the big fish such as Verizon or AT&T to see the advantage of connecting into Allied Fiber’s data center and network. After all, it will lower their costs for interconnection even as it makes the environment more competitive.

This should help keep carriers honest, or at least the national broadband market more competitive, Newby suggests. “This idea isn’t new and radical and it’s completely and totally necessary. To date there is no one that is responsible for the physical fiber and colo infrastructure for the country.” Maybe Allied Fiber is about to do what the Federal Communication Commission can’t seem to figure out: help make American broadband just a bit more competitive.