U.S. Fiber Optic Infrastructure Expands

Fiber optic infrastructure is booming, as digital transformation, wireless technology, and the move to remote work continue. Fiber also is required to support the robust broadband required to bring underserved communities in the U.S. to a level that supports advancements in employment, education, health care, public safety, and smart utilities.

The momentum behind fiber is evidenced by a series of recent trends:

• In the U.S., local utilities are bringing fiber to rural areas or small cities, using the same model deployed decades ago to provide electric and gas services.
• Fiber infrastructure is encouraged by the Biden administration’s broadband infrastructure bill, which has incentivized telcos and ISPs to extend fiber to areas once considered too sparsely populated to support broadband services.
• Telcos are building out fiber networks following their massive investment in spectrum for 5G wireless networks.
• Demand for fiber is exceeding expectations, as fiber manufacturers grapple with order backlogs.

Let’s take a closer look.

Pulling Fiber to Remote Sites

Not long ago, the U.S. Census reported that 17.3% of Americans have no access to broadband services, and according to some estimates, over 20% of U.S. households lack any home Internet access at all.

Faced with ISPs unwilling to extend services to these underserved and unserved areas, some municipalities have turned to their local utilities to extend fiber just as they did electricity years ago. One such case is Douglas Fast Net (DFN), a subsidiary of Douglas Electric Cooperative (DEC) in Douglas County, Oregon.

Beginning by extending fiber to its own electric facilities, DEC responded to local dissatisfaction with Internet services by creating a subsidiary that would use its trucks, poles, and technicians to create a fiber network.

Since 2003, DFN has installed 2,799 miles of fiber across Douglas County. It now serves over 12,531 subscribers, delivering up to 1-Gbit/s connectivity to nearly one-third of the county’s entire population. The result has brought over $28 million in annual benefit to the county in terms of education, public safety, and health care.

DFN, like many other utility-sponsored broadband efforts, has relied on government funding from sources such as the U.S. Federal Communications Commission’s Rural Digital Opportunity Fund (RDOF) or Connect America Fund II. Utilities looking to fund similar projects can now benefit from the $65 billion broadband funding advanced by the White House last year, as well as recent enhancements to broadband benefits for low income populations.

Notably, in DFN’s case as well as in others, the nearly immediate payback from fiber has enabled the network to be profitable in a short period and to remain self-sustaining.

The Wireless Factor

As 5G services expand, so does the requirement for fiber optic cabling to link up the terrestrial cell sites that support wireless access for business and residential customers. This fiber isn’t just about delivering faster Internet services; it’s also needed for the private wireless networks taking off in enterprise networks.

The leading U.S. telcos – AT&T (NYSE: T), Verizon (NYSE: VZ), and T-Mobile (Nasdaq: TMUS) have increased capital spending dramatically over the past two years to support the fiber “fronthaul” to 5G cell sites. Of course, the goal is also to improve Internet performance overall, ensuring optimal subscriber numbers.

Fiber In Demand

Fiber demand is reflected in supplier earnings. Leading cable provider Corning (NYSE: GLW) reported revenue growth of $1.2 billion for the first quarter of 2022, up 28% year over year. EVP and CFO Ed Schlesinger credited “increased spending on 5G and broadband projects, along with the accelerated pace of data center builds as applications rapidly move to the cloud.” And he said the company expects demand to continue.

Indeed, fiber manufacturers are having trouble keeping up with demand. “If we could make more, we could sell more,” said Corning CEO Wendell Weeks on the company’s earnings call. Corning is focused on meeting current orders while carefully exploring the extension of manufacturing facilities worldwide, Weeks said.

An Industry Event

Clearly, only fiber can provide the foundation for expanding vital broadband across the U.S. and beyond. That's the topic at the heart of Fiber Connect 2022, an upcoming event sponsored by the Fiber Broadband Association that is taking place June 12 – 15 in Nashville, Tennessee.

This conference will bring together network operators, government representatives, municipal utilities and their fiber subsidiaries, investors, equipment providers, and customers of all kinds to explore the progress and challenges of fiber optic infrastructure. Futuriom will be attending and presenting research at the conference. We hope to see you in Nashville!