Labor costs, capacity demands challenge middle mile growth

Although the growth in the middle mile has created opportunities for incumbent carriers, incumbent local exchange carriers (ILECs) and upstarts, it also has some inherent challenges -- such as labor costs and citing issues.

Not surprisingly, much of the demand for middle mile capacity is coming from wireless providers that are trying to keep up with escalating mobile broadband growth.

"We have confounding bandwidth challenges," said Scott Mispagel, vice president, network planning and engineering at Frontier Communications. "Everyone is using more bandwidth and we are adding quite a few new customers because of the markets we acquired from Verizon that were underpenetrated and underserved. This makes modeling difficult."

Frontier isn't the only carrier feeling pressure on the middle mile. According to Curt Frankenfeld, director, access strategy and development at CenturyLink, mobile broadband growth is forcing CenturyLink to upgrade its network to accommodate the demand.

"It forces us to modernize our network and gives us capital to do that." However, he noted that it's difficult for companies like CenturyLink to predict growth. "It creates stress on the middle mile. Cell providers don't necessarily want to go in that middle mile. It's a challenge because it almost becomes a custom middle mile for the cell providers."

The demand from mobile is so great that some are predicting that the middle mile fiber networks may soon be handling a lot of the mobile broadband traffic. Frankenfeld said that CenturyLink is seeing a big push for getting the traffic from mobile devices to the fixed network.

"In the next few years, we might see half of the mobile broadband traffic switched to our network. That means a rapid increase in bandwidth," Frankenfeld said.