Not only does fiber increase the power and capability of the home, but it also adds to the overall value of the real estate and its ability to be sold more quickly as buyers look for reliable high-speed broadband for work-from-home, telehealth, gaming, streaming, and smart home devices such as security cameras and personal assistance.

According to Adtran, consumer needs for more broadband are growing every year. U.S. Internet adoption has increased to 81% of households, telehealth popularity has doubled year-over-year since 2020, e-commerce is expected to reach $8.1 trillion by 2026, and in-home devices have increased to 22 per home in 2024.

“We know trends are growing,” said Amanda Scherer, Director of Solutions Marketing, Adtran. “The adoption per home is increasing. We know people are consuming more, but sometimes seeing it placed like this really emphasizes just how much subscribers, year over year, quarter over quarter, are enhancing what they’re doing in the home.”

Additional research from Adtran shows both business and residential consumption have increased since 2017, with an overall 21.2% CAGR for residents. This is attributed to the influx of 2K/4K security cameras, cloud gaming, smart appliances, home offices, connected kitchens, automobile charging, and streaming in 4K/8K.

By enabling all of these applications to be run on high-speed, low-latency broadband, fiber increases the value of the home, according to platforms such as Doorify MLS. The MLS service, the 33rd largest in the U.S., provides competing real estate and brokers to share information about houses, land, and buildings, such as size, amenities, and internet access.

Once Doorify MLS receives information on a home from a broker, they input the data from sources like FiberHomes, which is a platform that connects fiber broadband providers with the real estate industry. FiberHomes certifies fiber availability to the address provided to help local real estate agents and brokers reach new movers. Seeing where fiber is and where fiber will be deployed in the future is crucial when home shopping. FBA’s 2023 research showed that fiber brought 4.9% in home value, condo value increased by 3.2%, while rent is about 12.8% higher with fiber.

For more on how fiber brings value to real estate, listen to the latest Fiber for Breakfast podcast.

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Navigating the permitting process requires plenty of advanced planning, but one of the most powerful tools to facilitate the process isn’t software or consulting, but a continued effort to communicate with agencies who own the process to make sure they understand the requirements and needs of construction projects. This requires a low-tech, high touch approach, one that isn’t delivered via email or web portal. 

On this week’s Fiber for Breakfast episode, Ryan Kudera, Manager, Client Services, Finley Engineering, noted, “We’re seeing a lot more electric submissions, a lot more electronic interaction [on permitting]. The one thing we don’t see is your pizza timer [showing when things are done]. You make the order, you watch the timer for when it’s going to get to your house. That just doesn’t exist in permitting. You throw the permit in, it’s in the oven, and most the time it comes out burnt. There is no specific viewpoint of figuring out where the process is, and this is where the relationships come in.” 

Kudera’s experiences in building networks in Wyoming emphasize the need to build relationships with permitting agencies and the people there doing the heavy lifting, not to simply show up when you want an answer. This requires taking the time to sit down with the permitting staff before you begin, once you submit permits, and checking in on a regular basis, preferably by using the power of hospitality. 

“They can’t take donations, but they can accept donuts and coffee,” said Kudera. “Believe me, 20 bucks for donuts and coffee once a month goes a long way when it comes to understanding where your permitting process may be.” 

Kudera outlined four steps for navigating the permitting process successfully. Step 1 is analyzing the fiber route and the permitting requirements needed along it. Step 2 is building the proposed route maps and having the various land ownership and easement records associated with it. 

Step 3 is understanding the regulations that exist around the needed permits and why they are there. “You have to understand the agency, or agencies, responsible for processing the permit,” said Kudera. “You have to understand how they work, what they’re doing. When we have to request meetings with personnel to seek additional information on regulations, process, and unpublished issues, my go to is go in and say, ‘Hey, I’m the stupidest guy here. Can you help me understand this?’ And most people are very helpful and will try and help you get through whatever needs to be done.”  

Step 4 is fostering a community of effort to ease the process for all involved, including the agencies and builders. It requires maintaining the relationships started with permitting agencies and government which (hopefully) started at Step 1 and making sure that permitting is a collaborative effort instead an adversarial one.  

“Once submitted, keep communicating,” said Kudera. “Don’t just set it and forget it. You know what? We all love grandma’s cookies, but even she set the timer.”  

To learn more about the process of permitting and the power of donuts, tune into the latest Fiber For Breakfast.  

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According to a recent report published by the Center on Rural Innovation (CORI) titled “Beyond Connectivity: The Role of Broadband in Rural Economic Growth and Resilience,” there has been a widening divide since 1980 between rural and non-rural areas. There are fewer jobs in 2021 than in 2001 and rural per capita income lags behind the national average by more than 20%. The loss of employment and wage stagnation can lead to significant population decline, with growth remaining stagnant at 0% over the past decade. 

“We have heard about a lot of global economic trends, and they have all disproportionately negatively impacted rural areas. From automation and globalization… and also the decline in entrepreneurship we have seen across the U.S.,” said Dr. Amanda Weinstein, Director of Research, Knowledge, and Evaluation, Center on Rural Innovation at CORI.

Analyzing the economics of rural areas reveals a reliance on three sectors: tradeable goods, tradeable services, and local services. Rural economies thrive on the tradeable sector, meaning that globalization and automation disproportionately affect them.

CORI’s study indicated a decade ago, there was a 30-percentage point gap in broadband access between rural and non-rural communities; today, that gap has narrowed to less than ten percentage points. With increasing access to fiber broadband services, rural areas benefit from enhanced tradeable economies, adding value to local economies. 

Despite the rise of technology and connectivity, one would expect entrepreneurship to flourish; however, the reality is quite the opposite. A decline in entrepreneurship has resulted in fewer small businesses nationwide, raising significant concerns for rural areas that typically thrive on “mom-and-pop” businesses. 

Enhanced broadband access in these communities could lead to a resurgence in entrepreneurship. Rural communities with high broadband utilization tend to experience an increase in the number of businesses, while similar communities with low broadband utilization often see a decline. Research shows that communities with high broadband utilization experience a GDP growth rate of 44%, alongside an 18% increased per capita income.

Studies have demonstrated that increased broadband access fosters innovation and facilitates access to markets, resources, and services that rural entrepreneurs require. The presence of reliable broadband is leading to enhanced remote work opportunities, e-commerce capabilities, and access to online education and training programs, which are vital for entrepreneurship and economic growth.

A CORI case study on Bemidji in Beltrami County, Minnesota, illustrates the positive economic impact high-broadband adoption has on rural communities. This northern county, with around 46,000 people, has been serviced by local ISP, Paul Bunyan Communications, which has played an important role in driving broadband adoption.

“These little ISPs [like Paul Bunyan] play critical roles in driving adoption and access, and a big part of the reason why is because they operate under a different model mindset,” said Dr. Adam Dewbury, Researcher, Center on Rural Innovation. “A big part of the reason why is because they operate under a different model mindset than large, publicly traded ISPs. These cooperatives are really focused on doing what’s right for their communities.”

In 2004, Paul Bunyan Communications made the strategic decision to invest in an all-fiber network, recognizing it as the best long-term solution for both their residential and business customers. They also provide free public Wi-Fi throughout the city, which supported the rollout of gigabit service in 2014.

The results have been transformative. Between 2010 and 2021, 120 new businesses were established in Bemidji, many attributing their growth to high-speed fiber broadband. For example, Erik Hokuf, General Manager of AirCorps Aviation, noted that fiber broadband helped his company generate $4 million in annual revenue – a significant increase from the estimated $300,000 – $400,000 they would have achieved without this connectivity.

For more on the true value of reliable broadband in non-metro locations and how rural areas can truly become a community, listen to the latest Fiber for Breakfast podcast.

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Access to affordable, reliable, high-speed internet is the latest investment in American infrastructure that will deliver immeasurable value, especially in rural areas. The Broadband, Equity, Access, and Deployment (BEAD) program provides funding to accomplish this, following other historic investments for infrastructure like paved roadways in the late 1800s and electricity in the 1930s.

During this week’s Fiber for Breakfast episode, Andy Berke, administrator of the U.S. Department of Agriculture’s Rural Utilities Service (RUS), noted that the Biden-Harris Administration’s “Internet for All” movement is similar to the investments made by FDR when he invested in electricity for all in 1935. “We unleashed the power of our country to become the dominant player of the 20th century, and those investments are still paying off today,” noted Berke.

RUS is responsible for ReConnect, a federally funded program providing loans, grants, and loan-grant combinations to help bring broadband to rural areas. Berke recalled an encounter with an elderly farmer that remembered the impact electricity had on his childhood farm and how internet is just as essential today. Berke recalled, “He said, ‘My dad wired the whole barn before it happened. And then the day that we knew we would have electricity, he worked until late and then he brought us all out to the barn and flipped the switch, and the light came on…I think about that all the time, because that’s what internet is for me today. My high-speed internet puts tools in my hand.’ Then he showed me his little farm black book. He said, ‘This is where my dad and I used to keep all of our information about our farming. That’s nothing compared to my Precision Ag on my tractor.’”

Precision Ag is just one of the many applications that can bring real, long-lasting value to rural locations. With reliable, high-speed connectivity, residents can gain access to remote health care, education, work, manufacturing, shopping, entertainment, and more.

The National Telecommunications and Information Administration (NTIA) recently proposed alternative technologies for broadband beyond fiber, including low Earth orbit (LEO) satellites or fixed wireless services. These technologies could leave some rural communities with unreliable internet connections and require continuous upgrades in the future, which will continue to cost additional funding while maintaining a digital divide. As FBA President and CEO Gary Bolton said, “…if you can get power to someone’s house, you can get fiber there.”

Bolton asked for Berke’s advice on how to ensure that Americans aren’t shortchanged by “good enough for now” broadband connections. Berke offered that the RUS mandate will ensure that people with unreliable internet (less than 25/3 Mbps) are reached by its funding to provide reliable, high-speed internet that allows citizens to participate in the modern economy. “You can’t tell your employer if it’s raining, ‘I can’t work today.” Or, if the wind’s blowing too hard and something’s happening with the trees, ‘I can’t work today,’” he added.

Burke commented that the end goal of the Administration’s “Internet for All” philosophy is future-proof connectivity and that while these historical investments might be extensive, “Infrastructure is never done. We want to keep reminding leaders in Congress that this work will continue.”

For more on RUS and connecting every American to affordable, reliable, and high-speed fiber broadband, listen to the latest Fiber for Breakfast podcast.

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Internet service providers (ISPs) must continue seeking ways to differentiate beyond offering faster speeds for the same prices, especially with the increasingly competitive gigabit broadband market. Value-added services present a significant revenue opportunity for North American digital service providers. According to research conducted by Omdia, it is expected that by 2028, the home market will be worth $632 billion, with a 17% growth in annual revenue since 2023. Fixed broadband remains the largest market in this sector and is expected to be worth $128 billion by 2028, while online video will be worth $89 billion.

“[If we] dive a little deeper into the fixed customer broadband market, we can see in the forecast that subscriptions and revenue growth over the five years will be quite significant [in growth], even though the North American market is quite saturated and developed, said Alzbeta Fellenbaum, 5G & Broadband, Pricing & Strategy, Omdia. “But we still expect the subscriptions to grow from 144 million in 2023 to 260 million in 2028, now that fiber and FWA are going to be the fastest-growing access technologies. We also forecast the residential broadband penetration to reach 97% of North American households.”

Subscriber households will grow from using an average of 588 megabits per second in 2023 to 1.4 gigabits in 2028, showing a considerable growth in speed. With more and more homes subscribing to faster services, the number of providers offering broadband with multi-gig and 10-gigabit services has increased as well.

“This practice, if not done right, can actually harm the market and lead to cannibalization of the high premiums that these multiple 10-gigabit offers should be associated with. If service providers are not careful, they will get dragged into promotional frenzies that can see them offering premium speeds for only marginal price increases,” noted Fellenbaum.

Looking at Canadian and US markets, where broadband has seen growth over the last five years, there is still a disproportionate trend between the two. In the US, speeds are growing by 500% and Canadian speeds are growing at 600%, largely because of decades-long marketing focusing on speed and price.

Fellenbaum recommends that service providers focus more on the quality of service and experience over simple price and speed offerings to avoid a race to the bottom on price. Previous Omdia research found that consumers value a highly reliable and consistent connection. ISPs should turn their attention to providing and marketing an overall superior quality of broadband service that meets all of these requirements, allowing them the potential to capture greater market share and convince many customers to pay more.

In addition, offering value-added services such as lower latency for gaming, dedicated wildfire traffic streams for prioritization, and parental controls are products that can add revenue and offer marketplace differentiation. New services continue to be developed, such as Wi-Fi sensing, which allows users to keep an eye on activity in the home, such as being able to monitor “age in place” adults and serve as a home security monitor.

For more on the key trends in the North American residential broadband and connected home markets, listen to the latest Fiber for Breakfast podcast.

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As states gear up to allocate BEAD money, the challenges of permitting are top-of-mind for all parties involved in the process. To ensure that local governments and Internet Service Providers (ISPs) can reduce broadband network construction challenges, The Benton Institute for Broadband & Society, in partnership with the Georgetown Law Institute for Technology Law & Policy, the American Association for Public Broadband, Fiber Broadband Association, Brightspeed, and GFiber, held a summit earlier this year to discuss the issues and recommend solutions for increasing the speed of permitting. 

“We invited all thirty of the nation’s leading permitting experts, local permitting experts, to Georgetown, and these experts represented all the stakeholders that we think are important to the permitting process,” said Drew Garner, Director of Policy Engagement, Benton Institute for Broadband & Society. “We had local governments represented. We had public-private landowners represented. We had federal agencies represented, state offices represented, and then nonprofit experts.”

From the day-long discussions, three key findings emerged from the assembled group: Interactions and partnerships should rise between the ISP and local government, how to improve the permitting process itself, and the need for additional resources.

“The most universal theme and area of consensus across our members was that for local broadband offices to manage the upcoming wave of BEAD applications, they’re going to need a consummate increase in resources because it takes work and resources to permit,” noted Garner.

Follow-up work from the group was published earlier this month in the form of a white paper outlining issues and areas for permitting improvement. Titled “Permitting Success: Closing the Digital Divide Through Local Broadband Permitting,”  the paper also shared insight on maximizing investments in broadband connectivity for all Americans.

Participants in the roundtable shared their experiences and desires to improve permitting across the county. The City of Mesa’s town council decided that good internet connectivity wasn’t enough and that it was time for a change. 

“We wanted internet connectivity at Mesa, and so we really set out to see what we could do as a city, as a regulatory body, to entice companies to come in,” said Ian Linssen, Assistant to the City Manager, City of Mesa.”One of the big components is the permitting process. It’s ensuring that there’s a transparent process that folks know what to expect when they’re working with us and that they have certainty on turnaround times.”

For more on permitting, the permitting white paper, and how it will help local governments and ISPs navigate broadband network construction challenges, listen to the latest Fiber for Breakfast podcast.

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Like the Fiber Broadband Association (FBA), the Canadian Telecommunications Association (CTA), previously known as the Canadian Wireless Telecommunications Association, prioritizes helping its members connect and invest in communities to create a path to better economic futures through high-speed broadband connectivity.

“How do we connect more people and ensure that there’s an equitable playing field when it comes to connectivity?” said Robert Ghiz, President and CEO of the Canadian Telecommunications Association.

Since Ghiz was brought into the organization in 2017, keeping this question in mind has aided the association in its primary objective of creating an economic and regulatory environment that promotes broadband for all Canadians and one that has proven to be effective over the years with 93.1% of Canadians in Canada are connected to broadband as of 2024, with the North at 57.5%, rural areas at 67.4%, and First Nations around 50%.

He noted that there’s a lot more work to be done, with some challenges unique to Canada. One is that the country is larger than the United States but has the population of California, meaning that its citizens are vastly spread out across a much larger land mass.

In addition to physical challenges, Canada faces both political and security issues when it prepares for mass deployments, just as other nations around the globe do. A secure and reliable connection is only possible when national security is prioritized, something that both the U.S. and Canada take very seriously. To protect its digital infrastructure from cyber attacks, Canada takes pride in banning services and software that pose a threat.

“Security is something that is vitally important,” noted Ghiz. “That’s why our members and our government make those decisions that they do, and we’re happy to follow suit.”

For more on the similarities between FBA and CTA and how CTA is ensuring that every Canadian has a secure and reliable internet connection, listen to the latest Fiber for Breakfast podcast.

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The Indigenous Connectivity Institute, established in 2022, is a community of Indigenous leaders sharing knowledge, shaping policy, and building the skills needed to lead their digital futures. It is the first Indigenous-led organization dedicated to digital equity in Indigenous communities in the United States and Canada and is led by a 10-member advisory committee of Indigenous experts supporting First Nations, Inuit, Métis, American Indian, Alaska Native, and Native Hawaiian communities.

Putting communities first and approaching connectivity in a holistic manner, they believe that partnerships are the key to bridging the digital divide that Indigenous communities are experiencing, especially as these communities are facing unique challenges relative to the general population such as remoteness and small population.

“In [Canada], there are about 1.8 million people who identify as Indigenous,” said Mark Buell, Director of Indigenous Programs, Indigenous Connectivity Institute. “So it’s about 5% of Canada’s total population, so a little higher than in the U.S. which is around 2%, but one thing to note about the population here is that it’s very young, and it’s growing much faster than the general Canadian population.”

As of 2022, 622 First Nation communities have a fiber backbone in place, leaving 126 with no fiber backbone and 97 with no backbone. Yukon, Northwest Territories, and Nunavut are almost entirely satellite dependent, with little to no plans on bringing fiber to the area which poses a great connectivity challenge.

“The real barriers to deploying high-quality and affordable access in Canada’s remote communities with low population density simple is that no one’s going to be deploying high-quality internet service out to a candidate 1,000 miles away from the next communities with a population of 300, so there’s no real return on investment,” noted Buell.

Although there are many obstacles with deploying fiber to these communities, such as a lack of qualified and skilled people and technical support being many miles away, posing the risk of days or weeks with outages, fiber connectivity in these Indigenous communities can help young people continue their high school education without having to leave their families or communities. Connectivity can also help to save the culture of the tribes.

“I’m of the generation where not many of my group [speak the language],” said Frank Horn Director – Workforce Development, Indigenous Connectivity Institute. “It was never taught to me as a young child, but to make up for lost time, my mom and her sister have weekly Zoom calls to teach myself and my brother and sisters to start revitalizing the language. That couldn’t have happened without my family having access to internet.”

To learn more about how The Indigenous Connectivity Institute is leading the charge to help these communities receive the education and resources to build their own interest networks, listen to the latest Fiber for Breakfast podcast.

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FTTH deployment adoption in Europe has been on the rise since 2017 due to the fact that it is the most reliable form of connectivity in terms of durability and longevity. The evolution of fixed broadband technologies across Europe can be charted with the use of copper networks and cables, from HFC networks all the way to full fiber networks and fixed wireless access networks, with HFC and copper networks decreasing as the demand for fiber continues to increase.

“There’s still a long way to go, but the share of cable HFC network is slightly reducing,” said Vincent Garnier, Director General, FTTH Council Europe. “The share of copper networks is falling due to the rise of full fiber networks and, to a lesser extent, fixed wireless access.”

A survey conducted by FTTH Council Europe measured different types of data, including coverage and uptake. As of today, there is approximately 70% coverage, or homes passed, across Europe, but the study predicts that by 2029, coverage will be at 87%. To get to 70% coverage cost Europe roughly 115 billion Euros, with the vast majority of these funds coming from the private sector.

“The situation in Europe is extremely diverse,” noted Garnier. “Some countries are really well advanced, and they are at a similar level compared to the best in class… You talk about Spain, Portugal, some Baltic states, and even some countries like Romania or Bulgaria; they are in a very good situation. France has recently progressed tremendously, but countries like Germany, Belgium, the United Kingdom, and Italy are lagging behind, despite strong growth during the last years.”

Garnier said extending coverage in Europe is expected to cost billions more Euros to reach 90% or greater penetration by 2030 and will require substantially more public and private investment as fiber is extended beyond easy-to-reach urban centers into more rural areas of the continent. Estimates by Analysis Mason for ETNO, an industry association, run in the range of another 115 billion Euros to reach 91% coverage, and to reach 99% coverage will require almost another 60 billion more on top of it due to the economics of deploying in low-population areas.

The European Union has set a target to bring 1 Gbps connectivity to every single EU citizen by 2030, with fiber being the only media capable of providing such speeds at scale and relatively affordable.

For more on the current status of Fiber in Europe and around the globe, listen to the latest Fiber for Breakfast podcast.

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Laying the foundation for a smooth and successful fiber deployment must be strategically planned at many levels. This planning starts with financial modeling, risk mitigation and partnership strategies, investor expectations, and OSS/BSS selection and includes scenario analyses for potential delays and quicker penetration rates. Proper planning and anticipating potential obstacles at the very beginning helps to mitigate early challenges before deployment.

“If you think about fiber deployment, a lot of the work actually starts well in advance of actually doing the deployment,” said Joe Hickey, President of PomeGran Inc. “The first thing you need to be working on as you look to raise funds for your project is developing a very robust financial model. Some of the things that project financers, private equity firms, etc, look for is a 20 to 30-year time horizon. Fiber projects have a life expectancy of 30 plus years.”

The deployment phase unveils a new set of challenges, but these can be looked at and overcome with tools designed to help with high-level and detailed design.“There are a lot of tools available [for the design stage], advanced GIS models, as well as LIDAR technologies,” said Hickey. “We really like LIDAR because it enables us to create a digital twin and representation of the network.”

Other deployment challenges include make-ready applications and local community engagement. Taking the critical steps to prepare documentation and applications for utility companies and engaging with community leaders early can set you up for a successful and efficient deployment, Hickey stated, but even with these practices, there are still some risks with deploying fiber, many of which cannot be controlled, such as permitting and weather delays, technical challenges, material supply issues, cost overruns, etc. In order to mitigate these risks, contingency plans should be made to keep the process running smoothly.

Once deployment starts and the network comes up, it’s time to start looking at adoption strategies, including a comprehensive marketing strategy that aligns with initial market entry and continued growth, which means reaching into the technology toolbox to measure and use data to effectively sign up customers.

“The key takeaways we see in writing the rules of [successful] fiber broadband [deployment] is you got to build and on time,” said Hickey. “It seems intuitive, but it is harder done than said. You need to ramp quickly, so as you are building, you have to be connecting, and you have to have an integrated field team for marketing, to sales, to engagement model, and always be engaging at the front end during the build and post-build,” noted Hickey.

For more on key strategies for successful broadband deployment and examples of what PomeGran has done in rural markets, listen to the latest Fiber for Breakfast podcast.

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Fiber ecosystem players are strengthening their investments in artificial intelligence while more fiber is being deployed to support AI. In order to improve business outcomes and customer experiences, companies must administer complex architectures that provide greater capacity and fulfill evolving customer needs and are utilizing AI tools and capabilities to do so, driving the need for more fiber to support ever-increasing bandwidth demand.

“There’s a surging demand for AI and that certainly applies to AI workloads, and fundamentally, this is good for the fiber ecosystem,” said Ron Westfall, Research Director, The Futurum Group. “It’s driving demand for more fiber builds, and certainly playing a key role in this, along with other important content.

This surge in demand is creating a challenge. Can we keep up with the surging demand that AI is creating? The short answer is yes, as AI can assist with the overall process, focusing on areas like automation, streamlining operations, etc. The big takeaway with AI and fiber is going to be the benefits that it provides to the deployment process.

According to a survey conducted by The Futurum Group’s Intelligence Team to better understand AI trends, companies expect to enhance customer experience, reduce costs, improve employee productivity, improve network operations, and meet revenue targets with the use of AI.

Workforce, customer, and partner experiences can all be positively impacted by AI in fiber; it can trigger other benefits, such as improving time to value, time to markets, and optimizing costs.

Take a look at chatbots. The use of AI to assist customers in navigating through issues has improved customer satisfaction by increasing efficiency and decreasing the time used on the call. AI applications have become essential in the digital age, proving that AI in fiber can take things further.

“It’s important to understand that AI and fiber are meant for each other,” noted Westfall. “They’re mutually reinforcing and beneficial as AI is driving the demand for more fiber, both in terms of broadband fiber, but also fiber deployments throughout the entire networks, certainly data centers, the WAN, metro rings, and so forth.”

For more on how AI can impact the fiber ecosystem, listen to the latest Fiber for Breakfast podcast.

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Early North American sales numbers for PON equipment are up in the second quarter of this year, making for a “surprising” upside, according to the latest industry research. Future years for PON are expected to be up over the next five years. DOCSIS equipment sales are expected to peak in the next two to three years as cable providers continue their shift to all-fiber networks.

“When it comes to equipment sales into service provider networks, things have been relatively slow in 2023, and also extending in the first quarter of 2024,” said Jeff Heynen, Vice President Broadband Access and Home Networking, Dell’Oro Group. “We’re expecting 2024 total spend to drop about 9% [due to inventory drawdowns in 1H24]. I’m going to raise that a little bit, so maybe it will decline about 7%, but clearly there’s a lot that’s going to happen in 2025 and beyond, with BEAD funding shovel-ready projects and a reinvestment cycle now that Tier 1 operators have gone through their inventory correction.”

Heynen expects continued growth in the North American PON equipment sector, comprised of OLTs and ONTs, to be up 2% year over year over the next five years, due to $130 billion in federal spending on fiber broadband by 2030 with private capital by investment firms and operators “dwarfing” that amount, continued growth in data consumption at a normalized 18% compound annual growth rate from 2027 through 2026, more use cases for PON including IoT and edge transport, and the unknown impact of generative AI and other data-intensive applications.

DOCSIS equipment makers are a more modest run, with Tier 1 cable providers investing in DOCSIS 3.1+ and DOCSIS 4.0 through 2027 as they replace legacy equipment and upgrade their outside plant to compete with fiber offerings, but the future beyond that is much less optimistic as cable providers overbuild their own territories with fiber due to competitive and economic reasons.

“We expect cable share to decline from 64% of total broadband subs in 2022 to around 55% by 2028,” said Heynen. “The reason being in the Tier 2 and Tier 3 market. We hear a lot about smaller cable operators moving away from having to make the decision with DOCSIS 3.1 to DOCSIS 4.0, taking advantage of the reduced operational costs that PON and fiber networks bring, going ahead, making sure that they protect their existing territory by having a fiber offering. Too many variables for them to risk jeopardizing their business by not moving to fiber.”

If that wasn’t enough to make cable equipment manufactures worry, Heynen said that MSOs survey their outside plant every year and 3% to 5% find that their equipment has aged to the point where it becomes “cost parity” to replace everything with fiber rather than refreshing everything with coax and its associated electronics.

To learn more about PON’s bright future and cable’s steady embrace of fiber, listen to the latest Fiber for Breakfast.

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