Insights from Regional Fiber Connect
As BEAD funding gets bogged down and the initial excitement around the historic funding slowly starts to wane, industry stakeholders are grappling with a changing landscape. In the last month, conversations have been centered around delays, a few rounds of layoffs, and a hard look at the viability of some new broadband projects. Fiber Broadband Association’s Regional Fiber Connect in Des Moines, Iowa, provided a critical platform to discuss these issues and shed light on the current landscape of broadband deployment.
Here are five key takeaways:
1. Smaller Fiber Deployments of 30,000 Passings Gain Traction, in Phases
The industry is shifting to smaller, more manageable builds. In the last 18 months, investors were pushing ISPs and network operators to build homes with 100,000+ passings to capitalize on efficiencies and to reach EBITDA goals, but now that BEAD is rolling out more slowly than anticipated, a more conservative approach seems to be back in play. Several stakeholders we’ve spoken with have are now focused on projects of around 30,000 homes passed, referring to them as the “first phase.” This strategy keeps projects alive, contractors employed, and the supply chain going—albeit a bit slower than desired.
2. BEAD-Funded Projects Face Delays
Call it responsible oversight or call it bureaucratic delays — either way, it’s taking a long time for BEAD funds to reach the end user. In a best-case scenario, the BEAD funds will impact the industry 2026-2027 at the earliest (an almost two-year delay), according to a Jeffries Report commissioned by the Fiber Broadband Association. This delay is already impacting planning and implementation schedules, forcing ISPs, contractors, suppliers, and local governments to adjust. Notably, smaller ISPs and municipal projects—which were supposed to benefit from BEAD the most—are the most impacted. Incumbent Tier I and Tier II providers have been using the slow rollout of BEAD to build fiber in a defensive pattern to ward off competitors. While this may be a smart business strategy, many of the communities these incumbents are building won’t see fully completed projects soon.
3. Fixed Wireless Gains Ground as a Viable Solution
Fixed wireless is emerging as a viable last-mile solution in hard-to-reach rural areas. Offering near-gigabit speeds, it can support essential applications like precision agriculture and bring high-speed connectivity to unserved areas. While NTIA originally prioritized fiber, the FCC mapping process used the “highest advertised speeds” as data collection criteria, rendering many unserved or underserved census blocks as both “served” and therefore, ineligible for BEAD investment. While there’s plenty of money in BEAD to build fiber to unserved areas, the cost to operate those new networks might be a dealbreaker. This is why the lower cost of deployment and operation for fixed wireless makes it an attractive option, especially in rural areas with insufficient density to justify fiber infrastructure.
4. Enhancing Take Rates
Speakers at Regional Fiber Connect encouraged ISPs and network operators to adopt a broader strategy to increase take rates (the percentage of potential customers who subscribe to their service). Beyond traditional marketing efforts, factors such as construction quality, operational efficiency, and brand reputation play significant roles in influencing the take rates. A holistic approach can improve broadband projects’ financial sustainability.
5. Labor and Equipment Shortages Hinder Fiber Build-Out
The ongoing shortage of skilled labor and construction equipment remains a significant challenge. This scarcity creates bottlenecks in the broadband industry, driving up costs and extending project timelines. Addressing this challenge requires innovative solutions and investment in workforce development.
The insights from Regional Fiber Connect offer valuable perspectives on the challenges and opportunities facing the broadband industry and a glimpse into the evolving landscape. While optimism about BEAD funds may be tempered by practical realities, the shift towards smaller deployments, renewed interest in fixed wireless, and a broader perspective on take rates provide actionable pathways for stakeholders. Addressing labor and equipment shortages remains a critical priority. By navigating these complexities, the industry can progress towards a more connected future.
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