Fiber industry talks about fiber broadband business models

NASHVILLE — There’s an energy in the air at this year’s Fiber Connect conference, hosted by the Fiber Broadband Association. People are talking about “historic infrastructure event” and “once in a life-time opportunity.”

All the buzz is due to the U.S. government’s Infrastructure Investment & Jobs Act (IIJA), which has allocated $45 billion for broadband deployments. And the National Telecommunications and Information Administration (NTIA) recently unveiled the rules that will apply to the funding, expressing a preference for fiber broadband.

Members of the FBA and the fiber community in general are living in high-times. They’re practically dancing through the hallways to all the country music piped into the Gaylord Opryland hotel here in Nashville.

FBA President Gary Bolton said there are more than 3,000 attendees at this year’s conference. And the FBA had to turn away 93 companies that wanted to exhibit because it reached its exhibitor cap of 187.


Despite the good-mood vibe, there are a lot of issues to be resolved when it comes to embarking on a multi-year project to bring fiber broadband to all unserved areas in the U.S.

There’s the supply-chain issue of getting enough fiber-optic cable to deploy. 

Different people in the industry have talked about a supply crunch for the fiber optics part of fiber; others have talked about a supply shortage for the resin cables that surround the fiber optics. And there are also supply chain issues with the electronics needed for fiber broadband. All in all, Bolton said, “We’re typically seeing 52-week lead times.”

He said the 52 weeks can work out okay for companies that plan their fiber deployments carefully. By the time they apply for a government grant, design their networks and do other planning, they’re going to need at least 52 weeks, anyway.

But he said people have been behaving the same as hoarders during the pandemic. Afraid they won’t get any toilet paper (or fiber optics) they’re placing orders with more than one distributor. Bolton said fiber distributors are having a hard time gauging real demand.

There’s also a well-known shortage of workers to deploy fiber. And unlike the Great Depression when the Civilian Conservation Corps (CCC) put millions of young men to work on infrastructure projects, there are currently not millions of unemployed people looking for skilled-labor type jobs.

At the Wireless Infrastructure Association’s Connect(X) conference a few weeks ago, a retired military man gave a 15-minute presentation, encouraging wireless tower executives to train veterans for tower work.

For its part, the FBA has created its Optical Telecom Installation Certification program. It’s engaged with 28 schools in 25 states to offer the program.

The business model

Even though people are excited by the prospect of IIJA funds, they still have to make a viable business case for any fiber deployments.

The NTIA has indicated that areas unserved with broadband will be the top priority. However, those states that can demonstrate in their broadband plans that they will reach all the unserved will also be able to use funding for underserved areas as well.

There’s still quite a lot of confusion about this, which will have to be sorted out by each respective state’s broadband office. And accurate maps will play a crucial role, as well. But people at the Fiber Connect conference are already talking about business models. They’re tossing costs around such as $1,000 per home passed to as much as $8,500 per home passed on a five-year return on investment.

The cost and the ROI are both reasons why some areas of the U.S. have remained unserved by broadband. Is it possible that no one will want to deploy fiber broadband to some areas?

Bolton said, “The money’s prioritized for unserved. It will all be for unserved first.” He rationalizes that costs for companies that deploy broadband will be averaged. There will be some places in their grants that will have lower costs and some areas that have higher costs. And they’ll have to determine if the average results in a desirable ROI.

He noted that the private equity firm Apollo Global Management, which is buying copper assets from Lumen Technologies, has determined that it’s going to spend an average of $1,300 per line to upgrade the copper network, and it expects to create $6 billion of added valuation.

Brightspeed is the company Apollo set up to overbuild the assets from Lumen.