The story behind the infrastructure Newark’s transformation to a fertile fiber optic hub was decades in the making

Joshua Burd//July 27, 2015//

The story behind the infrastructure Newark’s transformation to a fertile fiber optic hub was decades in the making

Joshua Burd//July 27, 2015//

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Newark is “where the Internet comes up for air.”

But as he and other business leaders will point out, that’s only scratching the surface.

Newark always has been a magnet for commerce and infrastructure — from shipping lines to rail lines to telephone lines — but experts say the push for ultra-fast Internet and data transmission in recent years has led utilities and other ventures to develop one of the best fiber networks in the country. That has resulted in a wealth of “dark,” or unused, fiber throughout the city, an asset that could be a boon to the business community and attract new types of investment.

“You can’t help but make the intuitive conclusion that, as moving data becomes more important to industry, the infrastructure that can safely and efficiently move that data is going to become more and more valuable,” said Dudley Ryan, a senior vice president with the real estate brokerage CBRE. “And that’s what we’ve got in Newark — we’ve got an infrastructure that’s already built to accommodate that, and that’s a big win.”

Here’s how it happened — and why others cities can’t easily copy the formula.

Because of its proximity to New York City, many utility and high-tech companies opened or expanded offices here in the past two decades. While doing so, they not only were able to install state-of-the-art fiber networks, they were encouraged by the city to install more than was needed, creating a surplus of dark fiber others can benefit from.

Ryan, the leasing agent for the 2 Gateway office tower, and city officials are hoping to now take advantage of that surplus infrastructure at the 780,000-square-foot office building. Under a recently launched pilot program, landlord C&K Properties has connected directly to the city’s fiber infrastructure and is preparing to offer tenants “the highest bandwidth … (for) the lowest cost in the market.”

Ryan declined to say how much of a discount 2 Gateway would offer, but said the savings would come from being able to hook into the network without paying for a provider to install the equipment and then have to amortize its capital investment. The infrastructure is set up to provide a tenant with connectivity of 10 gigabits per second, a speed that dwarfs typical Internet connections.

By comparison, 10 gigabits is nearly 250 times faster than the average broadband speed in New Jersey, 40.4 megabits per second, according to the website broadbandnow.com.

Ryan said the building’s management team is now in discussions with prospective tenants, including a 7,500-square-foot technology tenant, that would use this service. Meantime, “we’ve got some existing tenants in our building realizing that the windfall of this low-cost bandwidth of connectivity, and they’re increasing their communications systems.”

“Literally, the light switch is just being thrown,” Ryan said.

It’s largely the same infrastructure that will support the accelerator space unveiled last week with the launch of the $50 million Newark Venture Partners.

Supported by Audible, Prudential Financial and other Newark business leaders, the fund will bring dozens of startups yearly to an incubator that’s downstairs from Audible’s headquarters at One Washington Place — giving them 10-gigabit-per-second Wi-Fi at no cost in order to help draw them to Newark.

And Seth Wainer, the city’s chief information officer, said that’s only “the first push at seeing gigabit connectivity work for small tech companies in Newark.”

“What we’re trying to do is open this up a little bit so that Newark provides gigabit-speed service at a very competitive price to other sectors of the market — to the innovation parts of the market that really can’t afford the very high prices of gigabit bandwidth right now,” Wainer said, later turning to the accelerator: “And it’s part of the story and it’s only one of our first steps in getting there.”

Fiber-optic networks, viewed as the highest-performing communications technology available, use small pulses of light to transfer data and video signals across their lines.

Wainer said the citywide fiber network, a mix of publicly and privately owned infrastructure, is tough to quantify by length or volume, but has been developing in earnest since the dot-com era of the late 1990s, with utilities and wholesale data distributors eyeing Newark for its strategic location between Manhattan and the rest of country.

That means dozens of entities — from Verizon to data service companies such as Level 3 Communications — have been responsible for installing fiber in recent years.

“Newark, for us, is a critical junction,” said Christopher Lodge, president and chief operating officer of United Fiber & Data, a carrier that plans to run some 15 miles of fiber through the city. “You hear a lot of people in real estate say, ‘location, location, location’ — that’s a huge component for Newark.”

For the York, Pennsylvania-based company, the build-out is part of a larger project to connect Manhattan to Ashburn, Virginia.

The city has its own build-out plans.

With the infrastructure in place — and with 2 Gateway serving as a pilot — Wainer said the city is “looking in the next two or three months to expand to additional buildings based on our learnings and our findings” at the Market Street building.

The city plans to use its own resources, including its own economic development office and partners in the business community, to “push this out as a really exciting, innovating product,” he said.

“Because if we can do it in 10, 20, 50 buildings in Newark, there’s quite a bit then that Newark has to offer to the next generation of companies, whether they’re engineering firms, law firms or tech companies that Brooklyn really doesn’t have.”

As a practical example, Wainer pointed to the engineering and design industry’s shift toward sophisticated 3-D modeling, which uses “an outrageous amount of data” — something Newark will have.

“In practicality, what it means is you never have to worry about what you’re doing requiring more juice,” he said.

Wainer conceded that there’s nothing pioneering about using high bandwidth to try to jumpstart a city’s local economy. He pointed to Google Fiber’s high-profile entrance to the Kansas City area or efforts by officials in Chattanooga, Tenn., to install a citywide fiber-optic network five years ago.

“The question is really: How do cities compete in offering the right products that attract the right businesses?” Wainer said. “And we in Newark are very fortunate that this legacy of a lasting infrastructure for the last 150 years plays out now in a way that we can (do) all that other good stuff.”

How Newark got so fast

It’s no accident that Newark sits on a figurative goldmine of “dark” or unused fiber, an asset that other cities may covet. Here’s how it happened:

  1. It is in the heart of the Northeast Corridor and between New York City and the rest of the country.
  2. Since it has been a longtime hub of infrastructure (from railroads to telegraph lines to telephone lines), many utility and high-tech companies are in Newark.
  3. In the past 20 years, those companies (such as Verizon, data services providers and utilities) have invested heavily in fiber.
  4. At times, the city has asked those companies to install more than was needed, creating a surplus of dark fiber for future use.