Editor's Corner: Is the fiber hangover real?

Analysts have been in a tizzy the past few weeks, warning that fiber players across the board are slowing their network deployments after a record build year in 2022. But is the fiber hangover actually real? Or are actual build figures still expected to increase?

The big issue seems to focus on the fact that some operators have lowered their estimate passings targets for 2023. AT&T cut its guidance from 3.5 million passings to between 2 million and 2.5 million while Frontier Communications lowered its own from 1.6 million to 1.3 million and Altice USA scaled its ambition down from 1.6 million passings to 900,000. Lumen Technologies, meanwhile, cut its multi-year fiber build target from 12 million to between 8 million and 10 million.

But there’s more to the story than just estimates. Indeed, Fiber Broadband Association CEO Gary Bolton told Fierce that the reduced estimates are “not indicative” of the overall trend in fiber deployments. “I think these are just short-term adjustments, but everything we’re seeing is foot on the gas,” he said.

Frontier CEO Nick Jeffrey made a similar argument in a recent interview with Fierce. He acknowledged that its fiber build estimate had changed but insisted that construction is actually accelerating in 2023 in absolute terms. The operator added 1.2 million new passings in 2022, meaning it expects to pass 100,000 more than last year in 2023. The difference between its original target and its new goal, he said, is a function of the fact that Frontier’s build went faster in 2022 than expected, giving it leeway to move a bit slower in 2023.

Plenty of others are also stepping up their fiber builds. MetroNet is looking to add well over half a million passings in 2023, TDS Telecom is looking to boost its build pace from 133,000 in 2022 to 175,000 in 2023, and Charter Communications is looking to hit as many as 300,000 subsidized fiber passings this year. Elsewhere, Ziply Fiber hit the halfway mark in its quest to blanket up to 85% of the legacy copper footprint it acquired from Frontier with fiber, and is planning to hit even more locations through a new edge out strategy.

And while some have suggested Brightspeed was among those cutting back on its fiber build, the operator told Fierce that’s not the case. “Brightspeed is still planning to reach 1 million or more fiber passings by the end of 2023. We have not slowed our pace nor investment in any way,” a representative told Fierce.

According to FBA data, U.S. operators added 7.9 million new passings in 2022. All told, Bolton said deployments between 2022 and 2026 are expected to reach 76.8 million homes passed, meaning that there will be roughly 137 million passings completed by the end of the forecast period. That figure will be up from 68 million passings in the U.S. as of the end of 2022.

Fierce’s informal tally of 2023 build plans suggests operators plan to build at least 7.1 million new passings in 2023 – and that figure doesn’t include expected passings from AT&T’s Gigapower joint venture (which is targeting a total of 1.5 million passings), Clearwave Fiber (which is aiming to reach 500,000 locations by 2026), Ziply Fiber (looking to cover more than 1.3 million passings, not including edge outs) or WideOpenWest (which is tackling greenfield builds to 400,000 locations over the next few years). It also doesn’t include passings targets from the likes of Nextlink Internet, Omni Fiber, Lumos or the dozens of other regional and local players.

So, is the fiber hangover real? Only time will tell. But it’s also worth noting that any slowdown or recalibration in 2023 will likely be more than offset in the years that follow with the influx of $42.5 billion in funding from the Broadband Equity, Access, and Deployment (BEAD) Program and billions in funding from other federal, state and local grant programs.