They see leasing and dark fiber as "no-risk" ventures, with more upside potential.
Few seem ready to predict when demand might wane for rights-of-way for long-haul telecommunications. The consensus suggests a long-lived market - with interstate natural gas pipelines primed to take advantage. The question seems not so much whether to dive in, but how deeply to get involved.
Should pipelines stick to leasing rights-of-way to carriers? Or should they lay fiber and perhaps offer their own long-haul services?
"Essentially what you get today is an insatiable demand for bandwidth," says Bill Moroney, president of the United Telecom Council. He attributes the burgeoning demand to the Internet, both for entertainment and business-to-business communications. "All of this," Moroney says, "just burns up bandwidth."
In January the UTC completed a study[Fn.1] indicating that significant opportunities exist for entering the telecommunications market as a (1) carrier's carrier, (2) a dark fiber provider, or (3) only as a lessor of rights-of-way. Known years ago as the Utilities Telecommunications Council, the group shortened its name to better reflect a wider membership including gas pipelines.
Of course, it's nothing new for pipelines to lease rights-of-way for secondary purposes. Such uses "go back a long time," says Joe Kraemer, senior vice president at Hagler Bailly. "I think it would be impossible to find a pipeline that has not done a right-of-way deal."
Yet Kraemer sees a subtle change occurring in just the last 24 to 36 months. He believes pipelines are no longer sitting passively, waiting for a lessee, but instead are taking initiative to build a business in rights-of-way.
"The consciousness, the visibility, the awareness is up," says Kraemer.