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Strains on Capital Suggest Need for Effective Use of Assets in Deploying Fiber Networks

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Screenshot taken during ADTRAN Live!

September 8, 2020 —The right time to engage in accessing funding is right now, fiber financers said during an ADTRAN webinar on Wednesday.

“The market is getting more congested and more difficult to enter,” said Peter Stokes, senior managing director at Macquarie Bank, and “it’s crucial to enter sooner rather than later. A lot of carriers realizing they need to build out networks as fast as possible.”

Stokes was joined by Bo White, vice president of global business development at Macquarie, and moderator Stuart Broome, to discuss how financers view the fiber investment landscape.

The three spoke on topics ranging from funding solutions, to the efficient utilization of capital, to why there is so little fiber infrastructure in the United States. The virtual conversation held on Wednesday was part of a week-long conference, which is held by ADTRAN annually, called ADTRAN Live.

Stokes began the conversation by detailing that investors focus on a range of different elements when deciding on whether or not to fund an infrastructure project, “more than you may expect.”

The two investors said that they aim to share the risks that come along with investing, rather than carry them all as an individual entity. “How much will it cost? Will the technology last or need to be updated? These are all questions to be taken into consideration,” White itemized.

Speaking on trends in the area, White said that a recent change in fiber investment trends is that carriers, which traditionally wanted to control all aspects of a network, now want to outsource aspects of ownership and work.

“Today, networks rely on a trusted vendor ecosystem,” said White, adding that this model is “a far more cost-effective way” to bring fiber to unserved parts of the country.

“There are so many demands on capital,” said Stokes, detailing the stress carriers can put on the capital community, “it is crucial that we be smarter with capital.”

A difficult question posed to the two Macquarie representatives by Broome, had to do with why there is so little fiber in the United States.

The investors said that part of the answer to this question may be that investors often believe investing in incumbent providers will guarantee to bring profit, while the utilization of new technology and ownership models makes banks more reluctant to invest.

“Incumbents have bankability” said Stokes. “They have the ability to organize permitting, access to contractors, and have immediate access to the technology.”

Fiber

Google Fiber Says it Welcomes Overbuilding, Competition for Lower Prices and Better Services

Comments were made at the Fiber Connect conference last week.

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Photo of [left to right] David Wade of EPB, Tarryl Clark of NACO Telecommunications and Technology, Jay Winn of Lumos/NorthState, Robert Conger of ADTRAN, and Linda Hardesty of Fierce Telecom, by Drew Clark

NASHVILLE, June 21, 2022 – A representative from Google Fiber said Wednesday at the Fiber Connect conference that the company is encouraged by competition in the fiber space because it leads to partnerships, lower costs for consumers and greater coverage.

Jessica George said that more partners and more people working in the broadband space will encourage more competition, which will drop prices and increase speeds.

She added that Google has been a long-time proponent for overbuilding, where providers build their infrastructure in areas already covered. More competition in the fiber space promotes overbuilding, which ensures greater coverage and connectivity for consumers in that area, she said.

Jay Winn, chief customer officer at fiber provider Lumos Networks, added that Lumos’s strategy is to be “first with fiber” by connecting all homes and businesses in its territory to fiber – at the cost of occasional overbuilding.

Ultimately, the conflict lies between companies that oppose greater competition in favor of protecting their territory and those that encourage competition in favor of creating more opportunities for their consumers, said George.

“What do [ISPs] really believe makes this industry, makes our world, makes our communities better?” asked George.

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Leaders of Broadband Industry Trade Groups Are Bullish on Fiber, With Some Caveats

Fiber networks have a unique capacity to keep broadband prices low for low-income communities, proponents say.

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Photo of David Grossman of CTA, Shirley Bloomfield of NTCA, Matt Polka of ACA Connects, Gary Bolton of FBA (left to right) by Drew Clark

NASHVILLE, June 16, 2022 – Leaders of the broadband industry concurred that because fiber delivers fast, affordable broadband connectivity for generations, almost all new broadband deployments will be delivered with the technology.

Speaking on a panel on the closing day of Fiber Connect on Wednesday, however, this group of trade association leaders differed with each other on how quickly cable and wireless providers would pivot away from those technologies and to all-fiber deployments.

Bringing rival groups together, including the National Rural Electric Cooperative Association, the rural broadband telecom association NTCA and the cable industry group ACA Connects, Fiber Broadband Association CEO Gary Bolton said the purpose was to “unite everyone in the industry to do things for generations to come.”

Fiber networks are uniquely positioned for investing in the future as they have capacity to support higher speeds without replacement or upgrades to the infrastructure, Bolton said. That can keep costs low for customers in future generations. He was not contradicted on the essence of those points by this cohort of trade group leaders.

He also said that fiber will help solve the affordability barrier that exists for low-income families, and the future investments were essential as demands for speed will increase.

Shirley Bloomfield, CEO of NTCA, agreed that the Biden administration’s decision to favor fiber in broadband investment was appropriate.

“There is still some competitiveness among technologies,” she said. “Even after the [Notice of Funding Opportunity] on the [Broadband Equity, Access and Deployment program], I still got some kind of snarky comments from other folks in the industry” who believe that it is not right to push fiber everywhere.

ACA Connect leader differed slightly with the everything-must-be-fiber approach

America’s Communications Association Connects CEO Matt Polka differed a bit with Bolton’s everything-must-be-fiber approach.

Cable industry providers have demonstrated during the pandemic “the ability to keep this country connected with broadband with capacity to spare because of the prior investment that occurred in the four to five years before that.”

Cognizant that he was speaking at Fiber Connect, Polka said, “there is a bias toward fiber.”

But he instead urged that “whatever the technology is needed in that community, we will find a way to” provide it, he said.

“Oftentimes [Internet Service Providers] will increase speeds to customers without raising prices,” added Paul Breakman, vice president of business and technology strategies at the National Rural Electric Cooperative Association. Giving customers more speed makes the cost of broadband come down everywhere.

“That’s the kind of thing that we can do with this [fiber] technology with greater capacity,” he said.

“We have proved that you cannot, in many ways, survive unless you have broadband in the home,” Breakman continued, adding that affordability is essential for low-income families who need the benefits of broadband connection but could not otherwise afford it.

Reporter Teralyn Whipple contributed to this article.

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AT&T Says Gigabit Download Speed Demand Continues to Grow

‘We’re projecting a 5x increase in data consumption from 2021 to 2025.’

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Photo of Next-Tech’s Jimmy Todd, Reed Nelson of Frontier, Trent Fellers of Windstream, Ashley Church of Google Fiber, Chris Altomari of AT&T, and Moderator Stephen Hardy of Lightwave by Drew Clark (left to right)

NASHVILLE, June 15, 2022 – The demand for gigabit-speed fiber connectivity continues to grow, said company representatives during a Fiber Connect conference session on Tuesday, as some companies are testing download speeds beyond what’s currently available.

“We’re projecting a 5x increase in data consumption from 2021 to 2025,” said Chris Altomari, vice president of broadband network product management for AT&T. “There’s no evidence that suggests it’s going to slow down in the next couple of years.”

The comments come after AT&T announced Friday that it has reached 20 Gigabits per second symmetric speeds on its network in a test. The company said in a press release that the speeds were achieved with “minimal infrastructure upgrades” and runs on the same fiber optic cables that it currently uses.

“Fiber is the answer and multi-gigabit speeds are the answer,” Altomari added. “I’m seeing the need for multi-gig and maybe not just the need, but reliance.”

The comments also come after an official from the Commerce Department’s National Telecommunications and Information Administration said the agency, which is handling $42.5 billion in broadband infrastructure funds to give to the states, has a preference for fiber infrastructure versus other technologies, such as wireless or fixed-wireless.

Ashley Church, a general manager at Google Fiber, added that fiber demand is increasing as customers find innovative ways to use the internet that require the faster speeds that fiber can provide. “The internet has become what it has become because of these increasing speeds.”

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