Answering the need for internet speed

11 / 04 / 23 - 5 minute read

The Economist magazine loves the King James version of the Bible. So did the authors Saul Bellow, William Faulkner, Herman Melville and George Orwell. The richness and dignity of the language of the 400-year-old version of the bible still cause its musical sentences to ring out through the ages.

If you’re now curious about the attraction of the King James Bible, you can download its 750 pages free from the internet in under 15 seconds on a good broadband connection. If you’d tried it on a dialup 28.8 kbits/s modem prevalent until the late 1990s, it would have taken you one hour and 22 minutes – if the connection didn’t break and you had to start again.

The need for speed in our modern world demands ever-greater pipelines of connectivity to match our digital work-and-play worlds. Residents in the US town of Kenosha will soon enjoy up to 10 gigabit per second (GBPS), which means, if residents are so inclined, they can download the King James Bible almost instantaneously.

However, as the internet has become a lifestyle requirement, residents are more likely to use their powerful new connectivity for business, health and entertainment needs, such as streaming films or gaming. Remote work and education also require fast internet. Zoom and Teams video conferencing have become standard work tools. At the same time, applications like Oracle, Salesforce, SAP and many other customer relationship management software demand a fast and reliable internet connection to function correctly.

The fibre-to-the-premises (FTTP - also known as ultrafast full-fibre broadband ) being rolled out to Kenosha residents and businesses as part of the recently announced FiberCity network project is also future-proof.

Kenosha’s fit with SiFi

In case you are not familiar with Kenosha, it is a city of a tad under 100,000 residents anchored on the shoreline of Lake Michigan, some 60 miles north of Chicago. Once an industrial town that had grown prosperous on producing cars and trucks, Kenosha firmly became part of the rust belt when the last factories closed in the early 1980s. It has since transitioned to be a bedroom community where weary workers lay their heads after taking advantage of the city’s proximity to Chicago and Milwaukee for work commutes.

“When you think of the US, naturally, cities like New York and Los Angeles are what first spring to mind,” says Phoebe Smith. “But cities like Kenosha fit with SiFi’s business model, which is to target what the company describes as tier 2 and 3 cities.”

SiFi Networks is a fibre network provider making a name for itself by privately funding, building and operating city-wide, open-access, 100% fibre networks. This is a European-style model, explains Phoebe, a Senior Director at PATRIZIA Infrastructure.

“SiFi was one of the first open-access network providers in the US. That's still not a common model there, and we were excited by the opportunity to bring that model to a new market because we think it fundamentally makes sense. That's how you should be building infrastructure.”

The opportunities SiFi Networks identified include that fibre coverage in the US is still reasonably low for a developed market. Its approach to making city-wide agreements married well with the philosophy of PATRIZIA to create smart cities.

“This includes closing the digital divide by providing fast fibre to every premise within the city, not just picking the wealthy or central neighbourhoods,” notes Phoebe.

SiFi targets tier 2 and tier 3 cities, which are often overlooked by big network providers. The need there for faster communication networks can be more acute because no significant fibre footprint exists.

This includes closing the digital divide by providing fast fibre to every premise within the city, not just picking the wealthy or central neighbourhoods

Phoebe Smith, Senior Director at PATRIZIA Infrastructure

Phoebe Smith

From Fullerton and beyond

The relationship between PATRIZIA and SiFi Networks started in 2019 with an investment in Fullerton, California, which lies to the south-east of Los Angeles near Orange County. The investment in Fullerton was a precursor to further projects in Placentia, Simi Valley and Rancho Cordova, before the latest deal in Kenosha.

“The attraction for us was that it was open access on a whole city level,” says Phoebe. “This means it is open to multiple ISPs (internet service providers), and the city itself can be a customer on the network. Having connected homes and offices with government functions, you can then enter an agreement with the city to provide smart city services.”

Having a network that reaches the entire city area means SiFi Networks is in a solid position to offer a full range of smart city services to the community. Without that scope, any sensors installed, for example, to measure traffic flows or air quality, will only be measuring selected locations.

When complete, the Kenosha FiberCity project will provide 10 gigabit-enabled speeds to 40,000 residents and businesses. Construction of the approximately 700 miles of fibre is expected to be completed by November 2025.

Among the benefits this will provide is that it will enable consumers to have a greater choice of internet providers and pave the way for Kenosha to become a smart city. With nearly half of its population under the age of 35, high-speed internet will be vital for supporting the economy in Kenosha, which is transitioning to become a services-based economy.

PATRIZIA is financing the project through its Smart Cities Infrastructure Fund (SCIF) – the world’s first dedicated smart city infrastructure strategy, backed by a €250 million commitment from the Dutch pension fund APG Group in 2018. APG added to its original position with a €500m commitment three years later.

‘Telecoms projects need to be future-proofed’

With PATRIZIA embarking on this pioneering strategy, you could be forgiven for thinking that this was the investment manager’s first involvement with broadband infrastructure. This is not the case, however, as Matteo Andreoletti – PATRIZIA’s Head of Infrastructure Equity, Europe and North America explains: “Telecoms and broadband infrastructure has been on our radar as far back as the early 2000s when we backed some highly innovative communications companies.

“Our first fibre investments were in 2002 when we backed a project in Australia, to provide fibre connectivity across the Australian Capital Territory region and the state of Victoria.

“Around the same time, we also backed the creation of the leading media infrastructure and technology company in the UK that provides much of the infrastructure behind television, radio and wireless communication in the country.

“From these experiences, we’ve identified telecoms as an essential service to get the economy running.

“We’ve been following the evolution of telecoms, from the dot-com bubble of the late 1990s, to the turbulence of the global financial crisis of 2007-2008, and now most recently through the global COVID-19 pandemic. We’ve seen that telecoms projects need to be future-proofed.”

Long-term relationship

And working with SiFi, PATRIZIA is actively future-proofing such projects.

SiFi has already identified more than 200 cities that could become FiberCities in the future and bring fibre to over 10 million households across the US. PATRIZIA’s relationship with SiFi is not simply project-related, as Phoebe attests.

“We have become long-term partners with SiFi and are delighted to be continuing our relationship with this fifth city in Kenosha,” says Phoebe.