Slow going for York rockers' fiber-optic business

Early last year, members of the popular 1990s band Live announced a new project in their hometown, York, Pa., with fanfare befitting rock stars.

The trio said they would spend nearly $200 million on a fiber-optic network snaking through Pennsylvania on a 363-mile arc from New York City to Northern Virginia. The plan included putting data storage centers in Reading, York, Allentown, and Lancaster - struggling cities where the network could be used to attract high-tech businesses.

But nearly two years later, the network has not yet reached Pennsylvania. The storage centers proposed for Lancaster and Reading are off the table, while the two other cities are waiting for the project to take hold.

And the band members, who say they have poured tens of millions of dollars into the venture, have discovered that their foray into high-tech can be as challenging, if not more, than producing a multiplatinum record.

"When you start a new company, you are excited, and you want to tell everyone about it," said Chad Taylor, the band's 44-year-old lead guitarist. "That also leads to setting false expectations, even among ourselves."

Live members Taylor, Chad Gracey, and Pat Dahlheimer began making music together in junior high school. By the mid-1990s, they had hit the big time.

Fronted by lead singer Ed Kowalczyk, Live's album Throwing Copper sold millions of copies. Singles such as "Lightning Crashes," "I Alone," and "Selling the Drama" remain touchstones of '90s rock, and their success carried the band members for more than a decade.

Then the spotlight faded. In 2009, Kowalczyk split from the group.

"I had such a great, long run with Live," Taylor said, "and when it ended, I was depressed and resentful."

With a new lead singer, ex-Unified Theory front man Chris Shinn, the reconstituted band this fall put out its first album in eight years.

But Taylor, Gracey, and Dahlheimer had other interests as well. For 15 years, they had invested in private equity, and they set out to be entrepreneurs. "I found new life in my hometown, in York, in building these companies," Taylor said.

Their company Think Loud now occupies a once-abandoned warehouse in York. Mayor Kim Bracey credited the business and the founders' purchase of decaying properties with creating jobs and helping revitalize the city's northeast side.

Think Loud Holdings is what they call the "family office" for several ventures, including United Fiber & Data, which has proposed building and maintaining the multistate network.

Most major data lines run along the I-95 corridor through major East Coast cities. A natural disaster or terrorist attack could cripple operations for financial, health care, and business interests.

United Fiber & Data's plan offers an appealing alternative, its backers say, because its network and data centers in Pennsylvania would be valuable backups safely out of range of a catastrophe.

According to Taylor, the bandmates have so far invested $24 million. "This project is so capital-intensive that if anybody in the world was afraid of zeroes, this was not the business to go into," he said.

The big risks holds potential big payoffs, though. Companies can pay millions for 20-year contracts for the right to use fiber optic pathways.

For cities in the network's path, the project could attract businesses that require high-speed, high-capacity data transmission, such as Wall Street financial firms. That could be a boon to the four smaller Pennsylvania cities, each of which has struggled with unemployment and poverty rates above the state average.

"They're building something that's really unique that will allow Allentown to grow," said Mayor Ed Pawlowski.

But the timetable - and scope - of the project seems to have changed.

Lancaster was dropped as a home for one of the data centers. United Fiber & Data owns land in Reading that was planned as a data center site as recently as July. The plans there are on hold, according to Bill Hynes, a business partner and a United Fiber & Data founder.

"We have heard nothing from them," said Adam Mukerji, executive director of the Reading Redevelopment Authority.

The founders had hoped to have much of the network in place in 2014. But not until September did United Fiber & Data activate the first link, a 30-mile loop of cable around Lower Manhattan. It's now in use by customers. The next step is installing the network through Pennsylvania and into Virginia, and getting its data storage centers operating.

According to Taylor, a major obstacle was obtaining local rights of way along the planned network's hundreds of miles. This past summer, he said, Think Loud secured the 158 approvals needed to string fiber optic lines from telephone poles through every municipality along the route.

There's also no guarantee the network will draw customers.

"How much value is in it depends on how much demand is there for a customer," said Larry Coleman, president of the Pennsylvania telecom company Sunesys.

Distance matters. Even with data traveling at the speed of light, a few nanoseconds of additional speed can offer a competitive advantage.

Allentown, the city with a proposed data center closest to New York City, is about 90 miles away from that city's financial centers. Generally, 62 miles away from a place of business is a desirable distance for a facility to back up data, Coleman said.

United Fiber & Data has signed some clients, Taylor said, including one company that made a 20-year commitment. Confidentiality agreements prevent him from identifying them, he said.

A revised timeline has the network coming through Pennsylvania in 2015 and two data centers done by late 2016.

Taylor said he and his partners remain committed not just for the possible profits, but for the venture's potential as a regional job creator and development driver.

"I can't do that as a rock band," he said. "That's just a reality."

York's mayor is not worried.

"I know these guys get the job done," Bracey said.

Her counterpart in Allentown wants also to believe. Pawlowski said the project will be worth the wait if it contributes to his vision of the city as an emerging tech hub.

An approaching deadline there might demonstrate the company's commitment. After making a down payment on a tract for the proposed data center along the Lehigh River, United Fiber & Data has until early 2015 to buy the land.

The mayor said the city could put the land back out for new bids - or grant an extension if United Fiber & Data shows progress.

Said Pawlowski: "As long as it's going to happen at some point."

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