Allied Fiber, for those who don't know, is a relatively recent business that will be offering long-distance fiber in the US and colo- exchanges along the routes. This will for the first time introduce genuine competition in a market that was until now largely held by a small number of players, with the inevitable consequences on prices.
As you probably know by now, we recently released a report on what actually happens in wireline broadband networks when consumers all try to access resources at the same time (see Do data caps punish the wrong users?) One of the interesting aspects of that report was focusing on where the variable costs are in operating a broadband network. Our key assumption was that in competitive markets, only peak load demand has an impact on your costs. But not everywhere is a competitive market, even in America.
When we initiated the "bandwidth hog" debate back in late 2009, one of the things that came again and again in the comments from Wireless ISPs in particular was that the cost of long-distance fiber was such that even relatively low levels of bandwidth usage were prohibitively expensive. That's part of the market opportunity that Allied Fiber sees and Hunter is keen to bring competitive rates to those markets (an another aspect of the market opportunity is that fiber that was deployed in the 90s isn't necessarily optimal for today's communications. Even though was excess capacity was deployed back then, it doesn't translate into affordable connectivity today…)
So interestingly, I found that Hunter and I were looking in a very similar way at the two sides of a same ecosystem. Many municipalities are looking into ways to get high-quality broadband into their territory, and sometimes are willing to go so far as to invest in the infrastructure themselves. But what's the cost of aggregating all that traffic back to an internet hub if there is no competition in the market and/or if the infrastructure in place is itself strained because it's too old?
It's not every day in America that I meet people who understand the dynamics of open access dark fiber. Hunter is one of them. I had a great breakfast conversation with him and have no doubt our paths will cross again.