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Originally, long-haul networks crossed the whole U.S.
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These days, the line between long-haul and middle-mile is blurred
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BEAD and AI are driving more demand for transport networks
When the internet was new, people talked a lot about long-haul networks in the United States. That’s because a lot of the early data centers were on the East and West coasts, and they needed to be connected.
These days long-haul networks are largely overshadowed by last mile builds. There’s a lot of existing long-haul and middle-mile fiber that can be patched together to create the desired routes for any business.
But there’s still a lot of fiber being laid on longer routes, whatever you want to call it.
For instance, ZB8 Infra is a company that plans to start building a fiber backbone in Virginia this summer. Mark Adams, chief development officer with ZB8, said, “There’s a lot of fiber in the ground in the U.S. But a lot of it dates back to the end of the 90’s, and it’s showing its age.”
He said there hasn’t been a new national network built since that time. But now, he thinks long-haul is at the “bottom of 10-year super-cycle kicked off by AI.”
“Whatever’s in the ground isn’t going to be enough,” said Adams. “If you look at what hyperscalers are announcing, there isn’t enough fiber in the ground to support it. Moving these huge data loads is going to require a lot of long-haul fiber.”
Adams also said many long-haul routes are “patched together with a number of different operators,” but “hyperscalers want one single network to get from A to Z.”
FiberLight
Bill Major, who’s been the CEO of FiberLight for one year, said there will always be a continued demand for new long-haul fiber. "What has changed is back in 2010-2012 there were all these fiber routes being built for financial institutions. But now everybody is interconnecting. You don’t have to build from New York City to L.A. anymore.”
For its part, FiberLight is adding laterals to it 19,000-route-mile backbone network to connect data centers.
“We just won a large conglomeration of school districts in the Panhandle of Texas,” said Major. “We’re going to be deploying 500 miles around Amarillo. Today that infrastructure does not exist.” He said the network will extend all the way to the last mile, providing fiber-to-the-home.
Long-haul players
Asked who the main long-haul builders are in the U.S., Adams named “the descendants of Level 3,” including Lumen Technologies. And he also named Zayo and Windstream. Meanwhile, AT&T, Verizon and T-Mobile also have dark fiber networks for their own use as do the big hyperscalers, including Meta, Amazon, Microsoft and Google. There are also regional players, like C Spire, building their own long haul and middle mile routes.
But Adams said even if the hyperscalers own their own long-haul networks they also require multiple redundant routes in case of a fiber cut or some other kind of disaster. “There’s an opportunity for us,” he said.
Major said FiberLight considers its main competitors to be the incumbent LEC and cable operators in its markets. In addition he mentioned regional business fiber providers such as FirstLight, Segra, Everstream and Bluebird.
BEAD
Fierce asked both Adams and Major whether their companies would benefit from all the last-mile fiber that’s expected to be deployed via the Broadband Equity, Access and Deployment (BEAD) fund. Adams said, “Only in the sense that the more middle-mile networks there are, the more our long-haul network will be required. The BEAD program is great for us because the more fiber, the more transport required.”
Major was more interested in the consolidation that he thinks will happen due to all the players entering the market because of BEAD.
FiberLight, which is owned by the private equity firm H.R.L. Morrison & Co., is keeping an eye out for possible acquisitions of other fiber companies.
“There has to be some rigor and discipline to not allow everybody to overbuild themselves,” Major said. He thinks a lot of the newer players who haven’t built fiber networks before will enter the market because of BEAD, but then they will make mistakes and get themselves into financially untenable situations. FiberLight will be looking for those distressed companies.
“If we’re patient with our dry powder, it gives us a huge opportunity to buy up those assets,” he concluded.