- Speakers at Datacloud USA/Metro Connect Fall said data center development is a challenge even without community opposition, because of resource shortages
- For the networking side of the data center buildout, materials and labor are major constraints
- Providers are sourcing more fiber from outside the U.S., speakers said
Attendees of the Datacloud USA/Metro Connect Fall event in Austin last week received an unexpected message the afternoon before the show. “We have been made aware that a peaceful demonstration is scheduled to take place,” the email read. The conference organizers suggested attendees remove their badges when leaving the hotel, and asked everyone to refrain from engaging with demonstrators.
The next day, the protest against AI data centers started out strong but lost momentum as the Austin temperatures climbed throughout the morning. The impact was significant: the demonstration made the front page of Austin’s top newspaper, appeared on local TV news and was shared widely on social media.
For conference attendees, community pushback was just one of several issues speakers highlighted as obstacles faced by the companies trying to satisfy AI’s voracious appetite for data center capacity. For developers, access to capital and power are top concerns. Some said that without a signed lease from a hyperscaler, funding is not available. Access to power varies by region, but there is a growing emphasis on “bring your own power” or “behind-the-meter” solutions.
For the broadband industry, there are several interconnected challenges: labor shortages, material shortages, permitting delays and inadequate infrastructure. First and foremost, speakers said there simply isn’t enough fiber.
“It is a shocking situation when you think about it: we’re going to be able to send 16x the amount of data across a pair of fiber as we did as little as four to five years ago, and we still don’t have enough fiber,” said Timothy Parker, chief growth officer at Assured Communications. Parker spoke on a panel entitled Rewriting the fiber growth playbook – Delivering fiber for the AI age.
Dave Schaeffer, founder and CEO at Cogent Communications, explained one reason for the shortage is exploding demand for metro fiber. He said hyperscalers cannot build new gigawatt data centers in major metros, so they build two or three smaller ones in a 30-35 mile circumference and “make them act as one. The fiber is a cross connect, not a transport.” Schaeffer, who spoke on a panel called Are today's networks fit for an inference-led world?, said this is creating “enormous demand” and significant construction projects. “We are talking about a trench three feet wide and six feet deep,” he said.
These trenches are getting the attention of municipalities. “Permitting seems to be stricter, there seems to be more parties involved that want to have their say in the matter as we want to go build new fiber routes and they make it more difficult,” said Justin Melkinoff, strategic advisor and board member at MOX Networks, LLC. “It is too cumbersome, it is too expensive, and there are too many people that have a say in being able to stop something that we’ve been doing now for decades. Whether we are putting in sewer and water pipes or whether we are putting in telecom fiber, it all should be a very straightforward process, with one or two level agencies, not the cumbersome process of 15 different departments you need to go get approval and pay,” he said.
While builders jockey for permits, they are also scrambling for labor. “In the U.S. and maybe in other nations too, we are seeing a huge, huge problem with skilled technicians,” said Parker. “You just can’t find people to do that job right now. It’s not glamorous, it’s not programming AI, it’s doing the work that we need done.”
Sourcing fiber overseas
Speakers said the fiber shortage is driving providers to expand their supplier base. “We have found and are continuing to find new sources of these scarce resources,” said Melnikoff. “Maybe we’re going to have to find vendors in locations and from countries we maybe at one time would not have ever used,” he said. “MOX is not the only company that’s having to look far and wide. The biggest ,most advanced, throw their weight around the most folks are also looking overseas and are using a lot of these same places.” Melkinoff emphasized the need for testing and due diligence as fiber providers engage new vendors.
Panelists said manufacturers are working hard to scale up domestic production, but struggle to find workers to staff new factories. Once the fiber is manufactured, finding people to get it into the ground can be even harder. Speakers on several panels said more trained technicians will be mandatory as the fiber industry prepares for unprecedented demand.
“Our current infrastructure was not built to handle the scale that we have out there,” said Parker. “We don’t have enough conduit in the ground, we don’t have enough room in the ILAs, we don’t have enough diversity in the routes, and we don’t have enough fiber.”
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