Broadband Facing a Failing Fiber Fight With Data Centers

The maximum U.S. fiber manufacturing capacity is 121 million fiber kilometers annually, and 183 million is needed to meet BEAD and data center build demand, said Kate Lummus, business development manager for fiber-optic cable maker Superior Essex. While data centers don't have the Build America, Buy America materials requirements that BEAD projects do, data centers also represent a more lucrative opportunity for domestic fiber producers, she said Wednesday. "We're battling the 800-pound gorilla" of data centers.

By 2029, 573 additional data centers are to be built in the U.S., requiring 77,000 route-miles of fiber-optic cable, Lummus said. Data center cables are also far thicker than broadband cables, packed with a lot more fibers, she noted. BEAD deployments will use 144- to 288-count cables, though some could go as low as 96, but data centers require, at minimum, 1,728-count cables.

While Tier 1 ISPs will likely be supplied quickly with the fiber they need, most of those in Tier 2 and probably all in Tier 3 could face wait times of a year or more, and prices will go up significantly, Lummus said. She added that there are indications that other materials required for BEAD deployments are being diverted for data center needs as well.

Lummus also told us that tariffs are compounding the fiber supply issue, as importing glass has become more expensive, so U.S. suppliers are less likely to use foreign-made glass to meet demand in projects that don't have made-in-America requirements.

Ryan O'Sullivan, commercial sales director for telecommunications equipment provider AFL, said data centers got the jump on the supply chain due to BEAD program delays, and manufacturing capacity has been shifting from BEAD fiber to fiber for AI needs. That could create a scarcity problem for broadband deployments, he said.

Alisha Remek, AT&T's vice president of access construction and engineering, said the carrier has concerns about having to compete with the likes of Meta for fiber. AT&T is in constant communication with its main fiber supplier, she said, though that supplier is struggling to keep up with demand. She predicted that the broadband/data center fight for fiber resources will continue for years.

Rural fiber rollouts will be part of AT&T’s effort to reach 60 million locations by fiber by 2030, Remek added. Yet while fiber is far cheaper to operate than the company's legacy copper network, it doesn't make financial sense to build out fiber everywhere that copper runs today, she said, noting that in those areas, fixed wireless access will fill in.

Municipal Broadband

State attempts to bar municipal broadband are often misguided efforts to prevent uneven competition in areas that are already served, when instead it forestalls service in areas lacking providers, municipal broadband officials said.

Fairlawn, Ohio, Public Service Director Ernie Staten said the state has home rule, with cities enjoying the right to form utilities, but it has chipped away at that over the years. A recent state effort to outlaw municipal broadband, driven by providers’ lobbying, ultimately was unsuccessful, he noted. The Ohio legislature doesn’t understand that municipalities have a responsibility “to explore whatever our residents and businesses want,” and there was overwhelming resident support for a municipal broadband network. Fairlawn operates its own fiber-to-the-home service, FairlawnGig.

Angela Bennink, general manager of the Kitsap Public Utility District in Washington, said a big challenge of state legislative efforts to bar municipal broadband is that the communities “know people don’t have access,” but the bills are aimed at areas where there's already a competitive broadband marketplace. She said preventing utility districts from providing service in areas that don’t enjoy competition ends up preventing access to many of those residents.

A lot of state restrictions are driven by incumbent providers trying to protect their revenues in competitive areas, said Bennink, who's also chair of the American Association for Public Broadband. “They’re not evil,” but municipal broadband operators need to continue to push for public ownership of infrastructure, she said.

Tribal Ready CEO Joe Valandra said the FCC fabric represents many tribal locations as served, “but the service isn't actually there.” Providers will portray tribal areas as served because they have a grant, right or spectrum to serve those areas, he said, adding that tribes increasingly are looking at building and operating their own networks as a utility.

BEAD

The Benefit of the Bargain (BoB) version of BEAD expedited bureaucratic processes and ultimately meant greater broadband provider participation in Arizona, said state Broadband Director Nicholas Capozzi. Arizona had run one round of competitive solicitations in January, under the previous iteration of BEAD, but it ultimately saw more competition in the BoB round, with about 40% more applications, Capozzi said. Applicants also put up more matching funds to make their submissions more competitive, he said. “A lot of providers have a lot of skin in the game.” Brian Mitchell, Nevada's broadband director, said the BoB iteration also brought costs down in his state.

After NTIA announced Tuesday that it had approved a first wave of 18 final BEAD proposals (see 2511180001), the Nevada and Arizona officials said they hope to be in a second wave that comes quickly. Capozzi said he was confident the state would be able to start executing agreements with providers by year-end and see shovels in the ground in 2026.

Asked about the timing of BEAD approvals, Mitchell said every state's final proposal is different and going through a bespoke review process by NTIA. Nevada hopes for approval soon, and many states “are in the same boat.” Capozzi added that it seems likely that the majority of final proposals will be approved this year.

Even when NTIA approves a final proposal, there’s still approval needed by the National Institute of Standards and Technology as the grant administrator before contracts can be negotiated and work started, Mitchell said, noting that NTIA has indicated that the NIST review will be expedited.

Capozzi and Mitchell said they hope their states are able to retain their full federal BEAD allocations, not just what’s spent on deployment. Capozzi said there’s a litany of broadband needs in Arizona, such as more middle-mile fiber infrastructure. That could help support the data center boom the state is seeing, he said. Both he and Mitchell also cited a need for broadband-related workforce training.