Wiring Los Angeles Part 4 – WilCon’s Path to the Future
November 9, 2009 Leave a comment
This is the fourth article in a series of interviews with Eric Bender, President of Wilshire Connection (WilCon), the largest independent telecom carrier in Los Angeles. In this segment Eric discusses the future of WilCon, including expansion outside of Los Angeles, wireless topics, relations with local utilities, and some great examples of WilCon’s flexibility in delivering telecom solutions to the LA community.
Pacific Tier: Outside of downtown LA , what is your expansion strategy for going to place like El Segundo, Las Vegas, or other cities, parts of the city?
Eric Bender: We’ve leased dark fiber from other carriers to get to other off-net locations such as El Segundo. We connect Equinix on Maple, so we can do lit transport into that facility. We’re working on a plan that would extend from there to the 365 Main location in El Segundo, and then with a second route back to downtown.
We’ve acquired several 10Gbps wavelengths from LA to Las Vegas, and into the Switch NAP facilities, so we can connect with all their switches and facilities, including the Super NAP, which is a 400,000sqft monster of a data center facility. So we do just backhaul or transport to Vegas. We’ve got approximately 10 gigs of traffic back and forth between here and there now.
I don’t see us building on a long haul type arrangement where we would build far outside of downtown LA. We’ll go off-net by structuring deals with existing customers and partners that we have to get fiber and connectivity into other locations. One of the things we are working on is connecting our buildings in LA to Phoenix, there’s a couple of different data centers in Phoenix – there is I/O, (etc).
Then we might go from Phoenix to Las Vegas, and from Las Vegas we already have to LA (which we already have), but also Las Vegas to San Jose/Santa Clara, and then back down to LA. So we basically have a ring from LA to Phoenix, to Las Vegas, San Jose, back to LA.
Pacific Tier: So would you have arrangements with Edison (Southern California Edison), or Burbank Power, or people like that to extend into Hollywood or Burbank or Glendale?
Eric Bender: Well, we do work with Edison and DWP (Los Angeles Department of Water and Power), and have used them to get to further out locations from downtown. The city of Burbank, we’ve not been successful and have not really chased hard to try and make a deal with them. Our initial efforts to work with them were rebuffed without comment – they had no interest in working with us, which surprised me.
I think we can be creative in building, like at 900 N. Alameda which we now have connected with dark fiber, and there is a variety of ways we can do that. We have connection and interconnection agreements AT&T to use their infrastructure so we can theoretically deploy assets throughout the city and state in coordination with AT&T’s network.
Pacific Tier: Would you consider for example going to San Diego using a capacity swap with Edison where they gave you a pair of fibers to San Diego?
Eric Bender: We do that already, well not to San Diego, but we have done a variety of barters, trades, or however you want to call it, with companies like Edison. With Equinix, with DWP I’d like to – but they have no interest and can’t by law (they are a public utility), and can’t really do that. Level 3, we’ve had discussions with them to do the same thing.
Because I’ve got all this infrastructure, whether it’s the conduit, or the fiber, and it’s all there, it’s paid for, there’s no debt, there’s no cost of capital to me – it’s there, so if I need to allocate a couple pairs of fiber going here or there on my network, and I can get something that I can generate revenue off of on somebody else’s network – we’ve done that many, many times and it’s worked out very well with a variety of companies.
Pacific Tier: Expanding a bit more on WilCon’s flexibility…
Eric Bender: We have no rigidity with anything we do. I think that one of the reasons we’ve been successful, and have continued to grow every month, basically where we’ve continued to grow over the previous month is because we’re not rigid and have a straight line approach to things.
I think the advantage of not being a telecom guy by trade or training and education is that we look at things by how do we get the customers the things they need? When a customer needs something my first response is to say “OK,” and the second response is to call my technical guys and say “I just committed us to doing this by a certain point in time, make it happen.” And they do.
We’re a small company so we don’t have all the various layers of engineering groups and planning groups to say from here it has to pass from point “A,” to point “B,” to point “C,” before you can be told it can be done, or not be done, or how to do it. We just make it happen and get it done.
The story I tell that kind of tied the real estate to the telecom all together well for me is at one of our buildings, 700 Wilshire we had a t4enant in the building. This goes back to about early 1999. We had put conduit in the ground already, so it was probably early 1999, had already connected the conduit to One Wilshire, as well as 700 (Wilshire Blvd), and we had leased space to this tenant.
Part of their requirement was they needed a couple of DS3s between the meet me room at One Wilshire and their premises they had leased at 700. At that point we were only doing conduit deals with our carrier customers. They were going to Level 3 for this DS3, and Level 3 hadn’t really built out their network yet. Because we put Level 3’s first conduit in the ground in LA (it was conduit we’d installed in our trench and gave them, basically), and Level 3 was provisioning this DS3 through PacBell (now AT&T) or someone, and they were re-provisioning (the DS3) through them.
The timing for the tenant was going to be 90 days, or 120 days wait for the tenant to provision this DS3. The tenant came to us and knew we had started Wilshire Connection. So they came to us and said “we really need this, is there anything you can do for us?”
I didn’t know what to do, I mean we just had conduit between the buildings. So the customer said “all you have to do is this. We have the equipment, you’ve got fiber cable already (because we’d already deployed that), you need this piece of equipment, you’ve got this box on this end, that box on that end, and we’ll tell you how to do it and what works well.”
Two weeks later we had that DS3 traffic up and running between the buildings. So we got into the transport business. But that was because we were flexible, somebody needed something, (we had the resources), and we got it done.
If we can see there’s a reasonable return on investment and payback on the infrastructure or cost to deploy new equipment, we’ll do it. We got all this MRV DWDM equipment (dense wave division multiplexing) because we had a very limited amount of fiber into the (particular) building, so the only way I could provision this service (lit bandwidth) was with the DWDM gear – so we went out and bought it.
So the equipment was paid for within a year. The customers can come and go – it doesn’t really make any difference (other than we want to keep customers), because it is already paid for. So we’ll continue to do that, and that’s how we’ve continued to grow into the buildings that we have, as well as the transport circuits that we do between all these buildings, as well as connecting into Vegas, and the same to Phoenix, Santa Clara, and other cities.
Pacific Tier: So what is the future of WilCon, where do you go from what you have today?
Eric Bender: several years ago we had some strategy discussions, and (since) we are a dominant carrier in LA, we’re known around the world as the provider of choice, the connector of choice here in LA. We have a great relationship with Equinix, and CoreSite now (CRG), so we get a lot of referral business from those guys. We’ve provided such good service to our customers that big carriers such as TATA, PCCW, and others that they just come straight to us when they have new requirements.
So we had this discussion “let’s go and expand, and into other markets” and we took a very quick and dirty analysis and determined that it costs so much to build out and deploy in these other markets, and we know other companies have been doing similar kinds of things, and we might be providing a similar type of service. In order to do that (expanding into other markets) we’d have to take on an additional equity investor, or venture funding, and then all we’re doing is servicing somebody else’s debt.
So, does that make sense (expanding) or should we continue to be the provider here, and continue to grow which has made us a profitable company. So we said “we are gong to do that, and we’ll expand and provide services outside of LA in various ways that make sense, and does not require a huge capital outlay, and we’ll do some – but we’re not going to spend millions of dollars to deploy.”
The reason many companies went bankrupt was because they built these massive networks, and there was no r4evenue to service the debt on them.
So our future is to grow in selected and strategic ways. It will probably be between LA and other cities by usi9ng lit waves, and then establishing a POP (point of presence) in a couple buildings, and then maybe in some cases building a bit in those markets to connect those buildings.
In Dallas we’ve looked at buying an existing network, but there’s really no need to connect between those facilities – there’s no business with that. Chicago was no different. San Francisco, San Jose, Santa Clara are all so spread out its hard to justify a new build or new construction.
I think working with companies like Allied Fiber which is building their long haul network, and working with them to be the local metro piece to what they’re selling to their customers on the long haul – we can tag along with them, working well with them in LA, and possibly duplicate that with them in other markets.
Pacific Tier: Is there any wireless in WilCon’s future?
Eric Bender: I don’t really see that. We did look at partnering with some wireless, WiMAX, or other guys using Terrabeam or some of these free space optics. It seemed like they just had such a long way to go before it would make it worthwhile, and that in LA maybe it’s a problem. Trying to negotiate the line of sight, and rooftop antenna rights and those things,… that we didn’t really get anywhere. It became cost prohibitive I think.
So it would be nice to do something like that. We looked at that (wireless) to support NANOG (North American network Operator’s group) several years ago when they were here. We were in Library Tower (the US Bank Building) on the 56th floor. I had a line of sight directly from my window to the hotel, but it was too far. We would have needed a couple of hops to be able to deliver a gig (Gigabit connection), and it was a disaster for them to have it there (at that hotel).
They had to go buy a DS3 from AT&T (PacBell). If they had done the conference downtown I could have connected them with no issues.
Pacific Tier: Any final words you would like to say to the global telecom or Internet community, or Los Angeles? Why LA, or with WilCon, downtown LA is an attractive place to do business?
Eric Bender: We’re number one!
I think LA is a great place to do business. From a location perspective its perfect, as its the gateway to the US. You can get anywhere from LA, whether its physical transportation, or from a telecom infrastructure perspective. I think if you come to LA as a carrier, as a provider, as a bandwidth user, in this industry – and you’re going to locate in one of the half a dozen facilities (in downtown LA), whether an Equinix, Level 3’s gateway, One Wilshire, or TELX Carrier center.
Any of the main big facilities here (and Switch and Data) you are going to need, ultimately, to connect to customers that are in one of the other facilities – somehow you’re going to find us. You may be referred to us, do your research – ultimately you are going to find we can provide that connectivity.
We are really easy to do business with, as any of our customers will tell you. And I think that in all the years we’ve been in business, since 1998, I think there are maybe two deals we’ve lost because of price, that we were not the lower cost provider for that particular deal. And, we try to provision within 24~48 hours (of an order).
Pacific Tier: That is outstanding. Words for the global telecom and internet community from Eric Bender, President of Wilshire Connection. Thank you very much.
John Savageau for Pacific Tier Communications, Long Beach
This concludes our interview with Eric Bender, President of Wilshire Connection in Los Angeles. you can contact Eric at firstname.lastname@example.org for more information on Wilshire Connection.
The entire interview is available online.
Previous entries in this series include: