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5G Network Deployments Require Massive Deep Fiber Investments, Deloitte Asserts

Deloitte’s Dan Littmann

When I moved from Southern California to a rural area, I was shocked at how few options I had for high-speed internet and cable. My sister, who just lives down the street from me, has even fewer options. Her main option is an unreliable WiFi device that picks up a signal from on top of her house. She gets barely a 5 Mbps download speed, and even less if the weather is bad. I have a DSL line and can obtain a bit faster speeds, but nowhere near the speed I crave.

Amid my broadband reality, it was no surprise to me to read in a recent Deloitte report titled “Communications Infrastructure Upgrade – The Need for Deep Fiber.” That report estimates approximately 10 million rural homes and 3 million urban/ suburban homes do not have broadband of at least 25 Mbps. We are definitely in that 10 million.

I see the desperate need for higher speeds across the country, but according to the report, it will be expensive and require a lot of work. The U.S. requires an investment of $130 billion to $150 billion in fiber infrastructure over the next five to seven years including an investment in deep fiber (i.e., fiber in the access network closer to the end customer), the report claims. Doing so will not only enhance broadband competition and coverage in rural areas, it can unlock the full potential of the opportunities associated with the fifth-generation mobile network (5G).

It is essential that fiber is deployed closer to all endpoints, in order to enable the next generation of wireless connectivity. This will ensure affordable high-speed connectivity across urban, suburban and rural communities. Carriers are not properly motivated to make this happen yet as this investment requires the removal of legacy regulations, faster migration to IP networks; and new monetization mechanisms that allow carriers and investors to justify upfront investment in fiber, says Dan Littmann of Deloitte.

What Can Lawmakers Do?

Some of the legacy regulations that should be considered for removal or reformation are:

  • Barriers that prevent carriers from operating a single IP network
  • Impeding deployment of additional fiber assets
  • Restrictions on the types of services that may be offered
  • Regulations that limit carrier innovation in creating new monetization mechanisms.
  • The Universal Services Administrative Company internal operations to meet broader goals of expanding fiber infrastructure and addressing rural internet access to close the digital divide.

Changing the regulations or removing some of them altogether may not be enough to encourage providers to build the necessary foundation for deep fiber, in turn assisting with 5G implementation. Bringing fiber to rural neighborhoods brings a very small return on investment, as there aren’t as many customers at the “end of the line.”

Incentives for Reaching the “End of the Line”

Carriers could try to increase revenue by offering integration, network security, and traffic management services within the increasingly complex mix of IoT devices and ecosystems. They can also attempt to partner with other investors and over the top players to fund the deployment. Fiber as leased real estate could allow carriers to maximize asset utilization, the report states.

Gartner predicts that affluent households will have up to 500 connected devices by 2022 with the addition of smart home technologies. The coming years will also see an increase in home bandwidth use as more employees choose to work remotely. It will no longer be important to live near your office, and the rural areas will see growth as homes become the office.  The report notes that deep fiber deployment will not only increase broadband service choice for residential customers, it will also be key for the national infrastructure to provide consumers high-speed broadband connections no matter where they live.

Reaching the “end of the line” will become essential, not only for 5G, but for our economic growth as a nation. The report says that despite the expected demand and potential economic benefits of fiber deployment, the U.S. currently lacks the fiber density in access networks to make the bandwidth advancements necessary to improve the pace of innovation and economic growth.

Mobile bandwidth is already reaching a threshold as more devices are connected daily. With the additions of younger and younger kids, more elderly people receiving mobile devices, and other smart devices like GPS tracking for pets, the networks are already clogged. Just attend a technology conference like CES in Las Vegas, and you will experience how congestion cripples wireless networks. The report claims that there is a projected fourfold increase in mobile data traffic between 2016 and 2021. The need for 5G is here, and deploying deep fiber can assist in bringing the network to light quickly.

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