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Economic Catalyst: Telecom Right-of-Way Access

February 21, 2012 - 4 Comments

By Steven Shepard, Contributing Columnist

I have always loved trains. Never knew why, but I think I just discovered the reason. They’re part of the industry I work in – or at least played a founding role here in the United States. And, they gave us much of the terminology that infuses our telecom vocabulary: switches routers, hubs, trunks, lines, etc.

But one railroad in particular played a fundamental role in the development of the industry and, more importantly, in the development of a truly competitive U.S. telecommunications industry.

Southern Pacific Communications Company was a division of Southern Pacific Railroad. All railroads, by definition, have rights-of-way, the land over which they build their railway tracks.

In the 1970s a brilliant realization came to Southern Pacific: Since they had right-of-way, couldn’t they install a communications network along it, creating a massive, nationwide network? Of course they could.  After all, they already had a significant microwave network along the track system for corporate communications and signaling – why not take advantage of it?

Foundation for Free Market Competition

In 1976, thanks to Microwave Communications, Incorporated (better known as MCI), the Federal Government issued its Execunet Decision. This was the first time that open competition was allowed in the telecom industry, a decision that made private line communications fully competitive while restricting companies like MCI from offering local telephony – and allowed AT&T to refuse to interconnect with competitors’ networks.

MCI appealed the decision, and in 1978 the courts issued Execunet II, which forced AT&T to interconnect and also allowed companies like Southern Pacific Communications to offer switched services. Once that decision came down, Southern Pacific Communications Company began providing long-distance telephone service.

Shortly thereafter, they also began to bury optical fiber along their rights-of-way, and when they discovered that they had excess capacity, they began selling it to corporations, driving a crack into the AT&T bastion of power.

Once they found themselves in what was a new and rather exciting business, they decided that Southern Pacific Communications needed a new name to represent its voice service.

They decided on SPRINT, an acronym for Switched PRIvate Network Telecommunications (some references indicate that the acronym actually stands for Southern Pacific Railroad Internal Network for Telecommunications) — either one is fine.

Fiber-laying rail car. Photo by G. Gerard

One additional point of interest — to speed up the process and efficiency of installing the fiber along the rail beds, SPRINT relied on special rail cars such as the one shown above.

The equipment on board digs the trench, spools out the fiber, and buries it – while the train is rolling down the track. It may not sprint, but it’s faster than shovels and backhoes.

This story demonstrates why telecom right-of way matters to those interested in utilizing telecom infrastructure as a catalyst for economic development. Clearly, all facilities-based communication service providers are dependent upon pro-investment public policy. It also sheds light on why utility companies have pursued telecom services as a potential growth strategy — since they also have right-of-way access.

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  1. Informative story.You guys are our elders who have laid foundation to the telecom infrastructure that brings us so much benefits. Telecom has revolutionized our lives and minimized cultural and geographical barriers. I was born in early 1990's so its quite good to see the photo of fiber laying rail car that looks so elegant. In todays world one can't even imagine of accomplishing hard tasks so innovatively.

    • @Usman, I also enjoy Steve Shepard's historical stories. It's an amazing heritage, when you look back to the numerous telecom-related advances -- that collectively have had such a positive impact all over the world.

  2. I visited SPCC in the early eighties and the biggest impression I had at the time was that SPRINT was soon to be bigger than its parent, Southern Pacific Railroad. That didn't seem to be a good fit to me. And I guess it didn't feel right to the railroad either, given that Sprint was sold to GTE shortly thereafter. To this day, I'm not aware of too many cases where the intrapreneurial start-up outgrew the parent so quickly. In today's marketplace, intracompany politics are driven more by wireless versus wireline, voice versus data, and, with the emergence of the cloud, service versus equipment. It pays to be on the right side of these marketplace shifts.

    • @Steve, I remember those times -- back in the early eighties -- when the Danray and Rockwell-Collins class-4 LD voice switches were the building blocks of disruptive innovation at the inter-exchange carriers. Much has changed since then, but the memories linger.