Put a Buy on Fiber

By Lisa R. Youngers, President and CEO, Fiber Broadband Association

A new neighbor is moving in down the street from my home in Northern Virginia: Amazon.

Amazon just announced it will build a second set of headquarters in Crystal City, Va., and Long Island City, N.Y. In addition to a bevy of highly skilled tech workers and many transportation options, these two locations also have something else in common: fiber optic connectivity. In fact, when Amazon issued its first request for proposals for HQ2, the company identified "optimal fiber connectivity" as a prerequisite.

But Amazon is not the only corporation acknowledging the economic value of fiber. Earlier this month, Bloomberg reported that Zayo Group, a large independent fiber owner, is fielding multiple takeover offers from the likes of Blackstone and other venture capital groups. The reason is simple: access to reliable, high-speed broadband is essential to any modern business and so fiber network assets are increasing in value. The average US employee wastes a week each year waiting on their company's network to respond, Sandisk estimates. Think of the implication for the bottom line -- not to mention employee morale. And as cloud-based applications and VOIP telephony continue to grow, high-speed, fiber-fed networks must match pace.

The financial benefits of fiber-fed connections are not limited to traditional offices; in fact, one key use case is agriculture. Forbes predicts use of precision agriculture tools like smart tractors and yield monitoring will grow by 14% in the US alone by 2022. These technologies will vastly improve efficiency and productivity for farms.

To foster this economic benefit and to become smart cities, many communities are investing in fiber networks on a macro level, either on their own or increasingly as part of public-private partnerships or other arrangements where they share financing and operating the network with a private partner. This has proven to be a shrewd investment: the benefits of fiber deployment far outweigh its upfront costs. Because fiber provides so many economic -- not to mention educational and entertainment -- opportunities, it provides a high ROI. The economic value generated from fiber far outpaced the cost of installing and maintaining the infrastructure, a University of Tennessee study found the. Fiber is a win-win. It is, therefore, no wonder that communities with gigabit connections like fiber have a 1.1% higher GDP than similarly situated communities without it.

As our networks evolve to support 5G applications, services and experiences, fiber will become even more valuable. Blanketing the country in networks that provide high throughput rates, low latency and the bandwidth to simultaneously support hundreds of devices will require a lot more fiber and investment than we currently have. According to our research at the Fiber Broadband Association, the top 25 metro areas in the US will need to lay down 1.4 million miles of fiber cable to support 5G. Likewise, Deloitte estimates that the US needs to invest more than $130 billion in fiber deployment in the next few years to keep up with the 5G rollout. So as fiber needs grow, so too does the value of fiber and the fiber industry. (See US Needs Accurate Broadband Map and Deloitte: Invest $150B in Deep Fiber or Else.)

Now more than ever, fiber's stock is on the rise. It seems analysts and investors alike have come to understand that fiber is the network of the future. High-speed, future-proof connectivity is vital to our economy -- and the time to invest in fiber is now.

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— Lisa R. Youngers is President and CEO of the Fiber Broadband Association (FBA), the only all-fiber trade association in the Americas. Follow them on Twitter @fiberbroadband.