There’s too much fiber in our broadband diet
We’ve all been told to put more fiber in our diets. But we also know what happens with too much fiber in your diet. It isn’t pretty. The same is true for broadband policy.
As U.S. policymakers at every level of government look to spend tens of billions of dollars to connect Americans to high-speed internet, aka broadband, they are far too focused on using a single technology to get the job done: fiber optic cable. This myopia runs the risk of cost overruns and delayed buildout that will see rural Americans, in particular, waiting even longer for connectivity.
To be clear, fiber is great! It’s the backbone of America’s broadband networks — from cable to 5G to satellite. And, in densely populated areas, it often makes economic sense to deliver fiber directly into homes and businesses. The problem isn’t fiber itself, it’s that many policymakers at every level of government, from President Biden to mayors and county commissioners, are operating on the false notion that fiber is “future-proof” and unconditionally better than everything else.
“Future-proof” is a catchy slogan. The idea that you can put the fiber in the ground once and forget about it is appealing to politicians and their constituents, who, justifiably, don’t want heavy equipment forever digging up their streets. Fiber broadband consultants, who have a financial incentive to steer as many taxpayer dollars to their preferred technology, have pushed the narrative about future-proofing very effectively.
But it just isn’t true. Fiber has a shelf life of about 25 years, as Marc Ganzi, CEO of DigitalBridge, a broadband infrastructure company, stated during an interview at the annual Technology Policy Institute Aspen Forum. He even alluded to the widespread misunderstanding in his remarks, “Believe it or not, fiber does have a finite life to it. … it does because physically it’s glass and it ultimately ages and the casing that’s on the outside of it sometimes ages as well.”
Apart from natural degradation over time, other factors can reduce fiber’s lifespan. Infinitesimal surface cracks that go undetected at the time of installation can expand over time. Elevated temperatures and interaction with water can cause “stress corrosion” that grows the cracks. Moreover, every network has upgrade cycles. To claim that one technology does not is misleading at best.
So why should policymakers care if fiber isn’t immortal? They still want the highest broadband speeds, and putting fiber directly into the home is the best way to do that, right? Unfortunately, fiber-to-the-premise (FTTP) happens to be the most expensive and time- and labor-intensive way to deliver connectivity.
On average, the cost of laying fiber is over $40,000 per mile. In rural and remote areas with rugged terrain, where there can be one or fewer homes per mile the cost-benefit analysis should obviously weigh against using a fiber-only approach. Relying on low-Earth orbit satellite providers like Starlink, or fixed wireless providers that can beam connectivity from a fiber-connected highway into homes miles away from the road are often far more cost-effective and faster ways to connect rural Americans.
Broadband subsidies, although currently more copious than ever, are still limited. If you try to put fiber everywhere, even where it isn’t cost-effective, you will find yourself leaving more areas out in the cold when money runs out before it would have with a more sensible mix of technologies.
Cost problems are real. Broadband projects of all stripes are also grappling with inflation, supply chain disruptions and workforce shortages that will raise costs and delay connectivity, especially if policymakers insist on FTTP. Corning, the leading manufacturer of optic fiber, is already crowing about increased demand and prices for its product.
Moreover, fiber networks take time to build. If the COVID-19 pandemic demonstrated the importance and urgency of connecting the unconnected, then why would policymakers tell some constituents to wait five to seven years for a fiber connection when a fixed wireless connection might be able to get them online in weeks or months?
The alternative to a fiber-only diet is a holistic approach that relies on data and analyzes the costs and benefits of all last-mile broadband technologies. The most “future-proof” technology in any given area will be the one that yields the largest expected net benefits, which is how much consumers value it minus the net present value of the cost of installation and operation. No evidence suggests fiber wins that calculus in every situation. Instead, the best technology will depend on a large number of factors.
This approach should also have the humility to understand that no one, from business leaders to government officials, can accurately predict the future. Asking taxpayers to shoulder the risk of costly projects under the false premise that they are “future-proof” is irresponsible — and could see Americans paying off debt far past the useful life span of the network they paid for.
Scott Wallsten is president of the Technology Policy Institute. Previously, he served as the economics director for the FCC’s National Broadband Plan. He holds a Ph.D. in economics from Stanford University.