As COVID-19 has shown us all, having reliable internet is no longer a luxury. Connectivity has become a vital part of the U.S. economy and beyond, but access isn’t as widely available as it should be.
One of the misconceptions about large-scale fiber access is prohibitive costs. Without doing any credible analysis, some industry commenters often shoot from the hip guessing that building fiber to a majority of Americans is impossible and would cost untold amounts of money even trillions. But, consistent with other in-depth research and analysis that the Association is known for, the Fiber Broadband Association did do the math. At the latest installment of the “Fiber for Breakfast” live video series, experts discussed the FBA fiber cost study and how funding fiber networks across the country is more attainable than many think.
In 2009, the Fiber Broadband Association first collaborated with Cartesian to publish a fiber deployment cost study. At the time, only 10% of American households—or about 12 million homes—had access to fiber internet. The study concluded it would take $70 billion beyond planned investments to build fiber to 80% of U.S. households.
Since then, more than 40 million homes have fiber access, with nearly half of those being connected to a network. Last year, the FBA and Cartesian updated that cost study and released an updated study in 2019, which revealed fiber providers could pass over the same percentage of homes for $52 billion. Even more importantly, that same study concluded we can build out fiber to 90% of U.S. households by 2029 for $70 billion. This is attainable.
Sam Kornstein, vice president of strategy & analytics at Cartesian, said there are a lot of factors contributing to the affordability of fiber. Initially, many thought large fiber buildouts were unfeasible, but due to innovation in technology and products, efficient construction and deployment techniques, and a strong interest and uptake in fiber from consumers, the investment is a lot lower than once predicted.
“While it’s a lot of investment and a serious undertaking, it’s not at the scale many people believe the cost of fiber would be,” he said.
Bob Whitman, vice president of market development at Corning, said innovation has been extremely important to lowering fiber costs. In the early 2000s, fiber installment could cost up to $4,000 per home but today can be just under $1,000. As part of that Optical Network Interface (ONT) deployment can now be as low as $200. Not only is the cost lower, advancements in construction and fiber deployment skills have reduced the time it takes to get a fiber network operating.
“Overtime, there have been many incremental innovations from Corning and others in the industry,” he said. “These innovations have really helped drive that cost down over time.”
COVID-19 has exposed the great need for fiber. Even before the international pandemic, interest in fiber was growing exponentially. Tom Cohen, partner at Kelley Drye & Warren LLP, said with more support from individuals, communities, businesses and government entities, that $70 billion figure doesn’t seem like such a huge leap.
“Fiber is even hotter out there, and people who want it have turned the discussion into ‘Why not get fiber everywhere?’” Cohen said.
Specifically for rural areas, fiber could be a game changer. He said FBA and Cartesian have brought the study to government officials to show the importance and feasibility of fiber deployment everywhere, and were pleased when the Federal Communications Commission adopted rules for the new Rural Digital Opportunity Fund to impose an auction system that favors fiber.
“They’ve heard the message that it’s time to pivot and say to rural America, ‘You don’t have anything—so we’ll get you something,’ to ‘No, we’ll get you fiber.”
Join us for the next Fiber for Breakfast live video at 10 a.m. on April 29. The topic: Localized Telemedicine and Keeping Patients First.