Survey: About half of all households passed by fiber in 2024 -- with less than half of those connected.

Internet connectivity is regarded as a utility as was voice telephone service before it where most every address had service. Nevertheless as legacy telephone companies replace the twisted pair copper that delivered voice telephone service, less than half of the homes where it is available have fiber service, according to the Fiber Broadband Association’s 2024 Fiber Deployment survey by RVA LLC Market Research & Consulting (RVA).

The 2024 survey estimates suggests that fiber now passes 56.5 percent of U.S. households with a bit less than half – around 45 percent – having fiber service. With IP connectivity considered a utility, one might expect that figure to be much higher, around 90 percent or more. Particularly given the pent up demand accumulated over decades as Internet Protocol (IP)-based services such as the web, email, and streaming video accelerated and IP connectivity became an essential element of commerce, education and medical care. Also, given fiber’s high desirability for reliability and capacity.

The most likely explanation is the growth of IP service over coax cable television infrastructure that grew rapidly since the mid-2000s as telephone companies delayed the transition to fiber, instead using their existing copper networks with digital subscriber line (DSL) technology.

Another probable factor that began to take off in the following decade is the smartphone. That allowed people to gain both mobile and home IP connectivity. Over the past few years, mobile providers like Verizon and T-Mobile have rolled out fixed wireless technology that some households are using instead of higher priced cable service.

The infrastructure for this service can be put in place much faster than fiber to the home. Until it reaches a natural capacity limit due to the technical limitations of high radio frequencies to reliably deliver service, it will satisfy at least some household demand for connectivity and deemphasize the role of fiber in meeting it.

Incoming federal government could place greater emphasis on “broadband” bandwidth over fiber, cut subsidies

For the past three decades, U.S. advanced telecommunications policy has been bandwidth focused: defining and delivering “broadband” speed – and not modernizing the nation’s legacy metallic telephone and cable TV delivery infrastructure to fiber. That policy focus is likely to gain greater emphasis with a new federal government taking office in 2025.

Blair Levin, a widely quoted analyst and former U.S. Federal Communications Commission official, told Fierce Network that “the biggest question is whether the new administration will take the view that satellite broadband is equal or better than terrestrial alternatives.”

More than likely it will given president-elect Donald Trump’s indicated approval for LEO satellite internet service over subsidizing fiber to the premises (FTTP) landline infrastructure preferred by the Biden administration’s Broadband Equity, Access, and Deployment (BEAD) Program.

In an interview with podcaster Joe Rogan less than two weeks before his election, Trump impliedly suggested Congress could end subsidies for FTTP, pointing to Elon Musk’s Starlink LEO satellite Internet service. “We're spending a trillion dollars to get cables all over the country, right up to upstate areas where you have like two farms,” Trump told Rogan. “And they're spending millions of dollars [via BEAD]…Elon can do it for nothing.”

Fiber Broadband Association (FBA) President Gary Bolton holds out hope modernizing twisted pair copper and coax cable delivery infrastructure to fiber will nevertheless remain on the table in the incoming government. "We’re optimistic the new Congress and administration will provide opportunities to build out more robust rural fiber connectivity," Bolton said in a statement to Fierce Network.

Industry sponsored white paper points to public, consumer utility coop ownership of fiber telecom delivery infrastructure to achieve broad socioeconomic benefit.

In the fourth decade since telecommunications began to shift to Internet protocol-based technologies, about half the connections to U.S. homes have not yet been modernized to fiber optic lines. That’s according to a recently published white paper commissioned by the Fiber Broadband Association and Frontier Communications.

The paper points to a clear reason: excessive reliance on investor owed deployers who lack incentive to fully build out fiber. According to the paper, this is because they naturally look to benefit their own economic interests and are not directly seeking the broader socioeconomic benefits that come with fiber connections reaching most every doorstep. Those are identified in economic terms in the paper as positive externalities: unintended, incidental (i.e. external) benefits beyond the narrow economic incentive of investors to earn the highest level of profit in the shortest time. That leads to micro market segmentation as seen on so-called “broadband maps” that an East Texas local government official compared to the spotted coat of a Dalmatian. (Related story from The Texas Tribune)

 

Lonnie Hunt, with his spotted map to visualize broadband availability in East Texas, at the McKenzie-Merket Alumni Center at Texas Tech University in Lubbock on Nov. 18, 2022. Credit: Mark Rogers for The Texas Tribune  

The paper’s authors estimate deploying fiber to 56 million households that are in tracts unserved by fiber has the potential to generate at least $3.24 trillion in terms of net present value (NPV) in incremental economic impact.

“Society as a whole benefits from the positive externalities of fiber deployment,” the paper notes. “However, no group of private investors can fully capture these benefits. As a result, a private market equilibrium that balances the marginal revenue and marginal cost of fiber deployment will lead to an under-provision of fiber resources, resulting in market failure.”

The 1996 Telecom Act and the Telecommunications Infrastructure Act of 1993 before it recognized the broader socioeconomic knock on effects of ubiquitous access to advanced telecommunications infrastructure. But the flaw in both is their exclusive reliance on investor-owned providers and market forces to bring them to fruition. They overlooked the economic misalignment identified in the white paper between the more limited, short-term interests of private players and the longer-term public interest. Both failed to establish clear, well thought out public policy to balance them.

For analog voice telecommunications, public policy is to regulate them as common carrier utilities under Title II of the Communications Act of 1934 to ensure widespread, affordable access. However, even though Internet access is now seen as a de facto utility, it is still not legally recognized as such four decades after the Internet digitized and transformed telecommunications.

While the FBA/Frontier paper doesn’t do so explicitly, it makes a strong argument for public and consumer utility cooperative ownership of advanced telecommunications infrastructure. By definition, these ownership structures are affirmatively intended to realize the positive socioeconomic benefits of access and affordability. For them, these are not merely incidental externalities but an organizing principle.