- Some hyperscalers are putting clauses in their contracts with fiber builders to prohibit off-ramps to towns and cities on the fiber route
- Hyperscalers prefer pristine, straight paths with no breakout other than for in-line amplifiers
- Have we missed a key opportunity again to leverage an infrastructure investment cycle that we've never seen before to close the divide?
Hyperscalers are prohibiting fiber off-ramps to towns and cities as they build their networks to data centers, according to a telecom attorney and a telecom investor who spoke at Mountain Connect this week in Denver.
The choice to by-pass the off-ramps is intentional. Some hyperscalers are putting clauses in their contracts with fiber builders to prohibit off-ramps to towns and cities on the fiber route.
“They control it. They've invested in it. They don't want anybody else to use it,” said Casey Lide, partner with the Washington, DC law firm Keller & Heckman.
Hyperscalers are not only putting clauses in their contracts, prohibiting anyone else from tapping that conduit for fiber spurs, but they’re also prohibiting their contractors from installing shadow conduit that could be used to serve communities, said Jeffrey Casey, director at the engineering consultancy Burns & McDonnell. Casey's primary focus is investing at the nexus of data, power and large-scale infrastructure.
“If fiber to serve edge AI data centers goes through rural America and the underserved and unserved parts of America, and it doesn't go into and serve those communities, have we missed a key opportunity again to leverage an infrastructure investment cycle that we've never seen before to close the divide?” Casey asked.
Before contracts are in place, Casey said communities have the biggest opportunity to insist that hyperscaler fiber be allowed to serve their residents. “Your optionality decreases as soon as permits are in place, land is secured, power is secured and the facility is built,” he said. “If you're in proximity to a data center, proximity doesn't mean you participate.”
Why don't hyperscalers want to share their fiber?
What is the logic behind hyperscalers' fiber stinginess?
“Speed to market for data centers is the most important thing, followed closely by cost,” said Casey. “Adding a disinterested third party into the mix that you have to negotiate with….I think it becomes one extra step that probably isn't worth it if you're not forced to create community benefit.”
Mike Sicoli, CEO of DQE Communications, a regional fiber operator supporting the AI-era buildout in Western Pennsylvania, told Fierce, "They really want this fiber to be like a super highway with no exits. Because the more you have splicing, the more points of failure you introduce into the network. They prefer pristine, straight paths, only for them, no breakout other than at in-line amplifiers."
What are Zayo and Verizon doing with their fiber builds?
Fierce reached out to both Zayo and Verizon because these operators have recently announced massive fiber builds for hyperscalers.
Last week, Zayo said that Nvidia is the anchor tenant for 8,000 more route miles of fiber.
A Zayo spokesperson told Fierce, “We do not have restrictions like this in our agreements. In fact, we actively look for opportunities to provide connectivity to cities, towns, and communities where we have points of presence to interconnect. This approach also helps bring high-capacity connectivity to underserved communities along these routes that might otherwise be bypassed. For example, Nevada chose Zayo to build over 800 miles of open-access fiber optic middle-mile network with NTIA funding to bring network connectivity to unserved and underserved communities.”
Verizon’s CEO also said during its second quarter 2026 earnings call, that Verizon signed an agreement with Google that is “well in excess of a billion dollars” for Google to use Verizon’s dark fiber to connect data centers.
In response to Fierce’s inquiry about allowing spurs on this fiber for Google, a Verizon spokesperson said, “We do not share any details of contracts with our customers.”
At a time when a lot of U.S. citizens are angry with hyperscalers for building data centers in their backyards, wouldn’t it make sense for hyperscalers to combat all the anger about new data centers with something positive?
Lide said, “I've been surprised, so far, to not hear instances of hyperscalers, when they're in the face of community opposition, say, ‘Hey, you know what? We're going to use our vast networking capabilities here to hook up these rural communities here.' You'd think there'd be enough PR power to do it."
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