Cox Business: Local cable infrastructure helped win bid to build OSHEAN broadband stimulus project

A new deal with Cox Business and OSHEAN, a consortium of Rhode Island anchor institutions, illustrates what could be a new opportunity for cable operators. OSHEAN, which previously acted as a connectivity buying consortium for member organizations, won a $21.7 million broadband stimulus grant to build a 350-mile high-speed network to interconnect anchor institutions throughout the state—and the position of Cox Business as the incumbent cable operator serving 98% of the state was a big advantage in helping the company win the business.

“We already built relationships with many of their clients,” said Mark Scott, New England vice president for Cox Business, in an interview. Cox already provides Ethernet connectivity to many OSHEAN member organizations to support connectivity to the public Internet and to the Internet2 academic and research network, Scott explained.

Cox Business competed against other network operators to win the OSHEAN business but had a cost advantage over those competitors because it already has ductwork and rights of way throughout the state, Scott said.

Another advantage for Cox was that many homes and businesses in Rhode Island already use the cable company for broadband connectivity and will be able to easily interconnect with the OSHEAN network. A physician working at home, for example, might be able to use a VPN to connect to his office without ever touching the public Internet.

Not a typical stimulus winner
The primary targets for the broadband stimulus program were remote areas that lacked broadband or had broadband available only at low speeds—and Rhode Island might not appear to fit that target. But Scott said OSHEAN won the stimulus award because “the problem was affordable bandwidth.”

Asked whether Cox Business was pursuing construction bids for other broadband stimulus projects, a Cox Business spokesman said only that “if we can do creative deals that provide revenue for our company we will be interested in them.”

The OSHEAN network will have 48 strands and will pass through 38 of 39 cities in Rhode Island. Construction is scheduled to begin in May and to be completed in the spring of 2013. The agreement includes an initial 20-year indefeasible right of use (IRU) contract that can be extended for up to 40 years. Cox will be responsible for physical maintenance and cable upgrades.