Wholesale Channel - Telecom Providers to Bid on Decommissioned Utility Pipes

Posted: 09/2001

Wholesale Channel

Telecom Providers to Bid on Decommissioned
Utility Pipes
By Josh Long

AGL Resources Inc., a regional energy holding company in the Southeast, has
launched RetiredMain.com, a website where telecom companies can bid for and
lease decommissioned pipes.

Its subsidiary, Atlanta Gas Light Company, founded in 1856, has been retiring
pipes for 60 years and has more than 600 miles of decommissioned pipes.

AGL Networks, a subsidiary of AGL Resources, which is an Atlanta-based CLEC
overseeing RetiredMain.com, is negotiating 12 contracts with national utility
companies so they can submit listings of their pipes on the public auction site,
said Eric Martinez, AGL Networks vice president of corporate development, in an
interview in July. Martinez did not name the utilities.

When the partnerships are in place, telecom providers will be able to check
out available mains throughout the nation and make a bid on the decommissioned
pipes. Utility companies will set a minimum price and once a bid is placed, the
auction will last 30 days, Martinez said.

The prices will be determined based on location as well as demand along
specific routes. Leasing the retired mains would cost telecom providers roughly
$75 to $150 a foot, although the prices ultimately will depend on liquidity in
the market, he said.

The Yankee Group senior analyst Mary Regan says telecom companies can save
time obtaining rights-of-way and reduce their network construction costs by as
much as 30 percent by accessing the utility pipes.

"Obtaining rights-of-way in the U.S. metropolitan markets, compounded
with cities’ restrictions on construction projects, are significantly reducing
communications companies’ access in developing urban networks," Regan said
in a prepared statement. "RetiredMain.com assists in reducing the
complexity of gaining a basic entry point."