We are increasingly seeing school districts move away from requesting a fixed speed for their WAN (and often on their dedicated internet access too). For example, instead of requesting 1 Gbps or 10 Gbps, we are seeing requests with a range like 1 – 100 Gbps, providing districts the ability to easily increase speeds later in the contract term rather than being stuck at a specific speed for the rest of the contract duration. In general, the WAN speed requested is also increasing. It almost appears that 10 Gig WANs are becoming the standard even in smaller districts, and we proposed a 100 Gig WAN to a medium sized district last month, which was usually only something we would see from larger districts a couple of years ago.

When the Federal Communications Commission (FCC) adopted the Second E-rate Modernization Order in 2014, we definitely saw an increase in requests from districts for dark fiber. So far this E-rate season is very similar as we are observing plenty of dark fiber pricing requests (in addition to the required request for lit fiber pricing). When visiting with school districts, the two reasons we commonly hear for moving from lit to dark fiber WANs appears to be (1) a strong desire to have more control over their network and (2) wanting fiber strands to be for their district’s WAN traffic only and not potentially shared among multiple customers. We always believed this was more desirable and would become more common. So, we offer fiber strands not only dedicated to each district but to each individual school in the district, which homerun back to their hub site(s).

Five to ten years ago, we saw a lot of school districts requesting a bundled solution with their WAN and dedicated internet access (DIA) together from the same provider. Over the past decade, especially the past few years, we are observing districts seemingly changing their strategy though by awarding the WAN to one provider and the internet to another, when they deem it to be in their best interest. While we don’t know every district’s reason for this, one possibility is they see the value of having an “A” grade provider for their WAN and a different “A” grade provider for their DIA instead of having a single provider that may really excel at one service, while being considered by the district as just average for the other service.

Another trend we have been watching unfold over the past decade for WANs is that more districts are choosing to lock in longer term lengths. For example, we previously saw a lot of 12-month, 36-month, and some 60-month terms, but now we are seeing 60-months often being the minimum term length considered and oftentimes there is also a request for a 120-month term. We even bid on a 240-month (20-years) network at the end of November.

We have also definitely seen an increase in requests for voluntary extension term pricing. This seems to tie in not only with longer term lengths being desired but districts wanting the ability to better evaluate long-term cost effectiveness. We often see requests for 60 and 120-month (often both) initial terms and then a request for two 60-month terms or a single 120-month extension term in RFPs. We do still see some 36-month term requests for sure, but again, the pattern among districts appears to be looking longer-term.

With that said, for dedicated internet access, we still see shorter terms like 36-months regularly, and our best guess is that this is likely because the price per Megabit or Gigabit decreases over time and districts can refresh their pricing and increase their internet bandwidth more frequently on a shorter term.