Stimulus winners stick with current gear vendors

During the first part of this year, my inbox was full of announcements about broadband stimulus award wins. That activity has died down now that all Round 1 awards have been made and Round 2 awards have not yet been determined. But in their place I’m now receiving a lot of announcements about companies whose equipment either has been approved for use in stimulus infrastructure projects or chosen by a stimulus winner.

After several weeks of receiving this material, a pattern is beginning to emerge: Award winners are sticking with equipment they’ve used in the past.

I recently spoke with five different companies that won awards for broadband infrastructure projects — and almost all of them were planning to use the same equipment they had deployed previously. No surprise really. Award winners were chosen, in part, based on their expertise in building broadband networks — and if they’re already familiar with installing and operating a certain manufacturer’s equipment and are happy with the results, there’s no reason to switch.

The majority of stimulus projects are fiber-based and that also may be fueling the trend toward keeping the status quo on the vendor side. Broadband wireless, where more new technologies and suppliers are emerging, is not so prevalent among stimulus winners.

Calix, which provides fiber transmission equipment to a lot of rural telcos, already has announced wins involving eight different stimulus projects, and many of these were with companies with which the manufacturer already had a supplier relationship. Calix senior director of corporate marketing Geoff Burke told me the company wrote letters in support of stimulus applications for numerous customers.

My view may be somewhat skewed by the fact that I tend to focus more on, and hear more about, telcos than municipalities or other types of organizations that won stimulus funding. But rural telcos won the lion’s share of awards from the Rural Utilities Service. And although telcos weren’t quite so dominant among the National Telecommunications and Information Agency infrastructure winners, they made a strong showing there, too.

Not every stimulus winner is set on keeping the status quo on the equipment side. Burke told me small companies that won big projects are most likely to opt to go through a formal bidding process. And the less complex a product is, it seems, the more open stimulus winners may be to using new suppliers. For example, although Mid-Atlantic Broadband Cooperative plans to stick with its previous supplier (Infinera) for transmission equipment to support its stimulus project in Virginia, the company plans to let its contractors choose their own fiber cabling as long as it conforms to MBC’s specifications.

Fiber seems to be one of the last supplier decisions that stimulus winners are making. “It’s only within the last 60 days that we’ve started to feel something is really coming,” said Greg Williams, director of marketing for fiber manufacturer Draka Communications- Americas. Recently the company, whose fiber has been approved for both RUS and NTIA projects, has been doing “a lot of quoting activity for contractors and distributors,” Williams said. Based on past experience, he said, Draka normally sees a lag time of about 90 days between when a quote is issued and an order is placed.

Not every manufacturer whose equipment is approved for use in broadband stimulus projects is talking about its wins. But in addition to Calix and Infinera, I’m aware of wins for Occam Networks and Adtran.

And while winning telcos seem to be leaning toward their favorite suppliers, not all of them have made commitments yet. Said Adtran vice president of global marketing Gary Bolton, “We’re highly active in a large number of projects.”