AI dominates headlines but fiber still has a huge role to play in the future. We chatted with Fiber Broadband Association’s VP of Public Policy Marissa Mitrovitch and BNP Paribas’ Sam McHugh about BEAD, broadband, workforce issues and the next wave of infrastructure.
Catch the video at top, listen to the audio edition and read our transcript with embedded story links below, or watch this and future episodes on YouTube.
To learn more about the topics in this episode, check out:
- Fiber suppliers pledge support for BEAD — but can they deliver?
- Is BEAD turning into a dud? Voices raise various concerns about the program
- Opinion: We've given huge hunks of BEAD to satellite. Now what?
- The Five Nine: Fiber vendors torn between data center expansion and BEAD funding
- Here's how big the fiber shortage really is
- Fiber vendors strategize for huge demand from AI in 2026
- Data centers will need 92000 miles of new fiber
- The U.S. needs 58k more workers to deploy broadband
This podcast is written and hosted by Diana Goovaerts. It is edited by Diana Goovaerts and Matt Rickman. Liz Coyne is our executive producer. Special thanks to guests Marissa Mitrovitch and Sam McHugh.
Diana Goovaerts, Fierce Network: A few years ago, the $42.5 billion BEAD program was all anyone in the telecom industry could talk about. But now, broadband feels like a footnote in a much bigger story about AI. So, what exactly does the future hold for fiber?
I’m Diana Goovaerts and this is The Five Nine.
It’s been a strange few years for the broadband industry. In 2021, fiber, and more specifically home broadband, was at the heart of political and popular conversations in the U.S., thanks in large part to the passage of the BEAD program. But then ChatGPT dropped in late 2022 and the world’s axis shifted. All eyes are now on AI, but that doesn’t mean fiber is out of the picture. Far from it.
We’re here with the Fiber Broadband Association’s VP of Public Policy Marie-SA Mitrovich, and BNP Paribas’s Telecom and Cable Sector Head Sam McHugh to talk about the current state of the market and where things are headed.
But before we get into the conversation, make sure wherever you are listening or watching you like and subscribe so you can tap into the latest industry insights each week. With that out of the way, let’s get to it.
So, let's start with a baseline for our conversation. You know, we know fiber investments were previously focused on broadband.
This was both via private investment and public programs, like RDOF, USDA Reconnect, BEAD especially. So, Marisa, is broadband still the number one focus, or has the focus for fiber providers shifted? You know, put that another way. What is the current strategic direction for fiber deployment today?
Marissa Mitrovich, VP Public Policy, Fiber Broadband Association: What we're seeing at the Fiber Broadband Association right now is the fiber investment for broadband has not let up, in fact, but we are seeing the largest investment cycle in fiber history to date.
And that has to do a lot with connectivity, B2B, AI , data centers, but the bottom line is, is that people need the best, most reliable connectivity possible in order to take advantage of emerging technologies. And so, until every community and person is connected with fiber – that at this point is the technology that's going to be bringing you into the next generation and beyond – there's no slow up of funding from the perspective we are seeing.
DG: Okay, Sam, I want to dig into something she mentioned, which is AI and some of the technology advancements that are happening. So, my question for you is, what forces are you seeing change where infrastructure investment is happening, and why are those changes happening?
Sam McHugh, Sector Head Telecom/Cable Research, BNP Paribas: I mean in, the public space that I cover, you're seeing a huge push towards both fiber to the home – so we can, we can talk about that in a second – and also kind of connecting data centers are the two big areas of investment from the public telcos.
And the forces that are driving on the consumer side, I mean, it's the same things we've seen from for many years now, which is, you know, the cable companies have very high market share in the domestic broadband industry and have pushed prices pretty to elevated levels, creating a nice economic umbrella for the AT&Ts, the Verizons of the world to come in and basically take market share and ultimately grow revenues and EBITDA and free cash flow, all the thing that investors want them to do.
So there's a genuine growth angle for a lot of the legacy telcos. Like if you think about these businesses, they were declining for years with DSL that was being eroded and competed away by the cable companies. So, fiber is just a new growth angle for those companies. And I'd say that's really been accelerated by M&A.
So you've seen AT&T buying assets from Lumen, Verizon acquiring Frontier this year. And I'd say that's really put an accelerant force behind the fiber bills that we're seeing in the U.S. on the, on the residential side. And then secondly, you have companies like Lumen who are seeing huge demand to connect data centers.
And obviously this is very much related to the AI boom and the hyperscalers. So you have really strong forces on both sides, kind of very strong economic rationale to see this massive acceleration in fiber that we've seen.
DG: That's very interesting that you mentioned Lumen. I've had some really interesting conversations with CEO Kate Johnson over the time and most recently at MWC, where she was kind of talking about how the fiber backbone needs to adapt and change to support AI. But talk to me for a quick second about fiber to the home. You mentioned that you wanted to dig into that a little bit.
SM: Yeah, I mean, like I said, you're only just past about 50% coverage of homes in the U.S. with fiber and if you look at the number of passings that we're adding a year, you know, we're just probably breaching kind of 10 million additional homes past per annum at the moment. And if you go back, you know, four or five years pre-COVID, you know, that was running at maybe 4 or 5 million homes.
And so what fiber has done for AT&T or for Verizon, like I said, it's given a huge new growth angle. So almost every drop of excess capital that these companies have is going towards building more fiber. Like it's become a real strategic imperative for them. And the narrative in, um, the telecom cable space has really shifted towards convergence.
So this is selling wireless together with home internet and fiber is really a big strategic imperative for, you know, Verizon, AT&T has been convergence and fiber is kind of an underpinning element of that strategy. So strategically it's just become massively important to the big telcos.
DG: Obviously also massively important, at least here in the U.S. is BEAD. So Marissa, I wanna throw things back to you. Are fiber players still excited about the program? I mean, there have been several delays – that is typical with any government program. Are they still excited? Where do you see things heading from your perspective?
MM: Fiber providers are still excited about the BEAD program. In fact, very happy that NTIA has approved 53 of the 56 proposals to date. What's crucial to that is that 39 states have actually signed their final BEAD agreements with NTIA. So that means money can finally flow to providers and deployment can begin, which is what we've all really been waiting for.
And so while there has been different steps throughout the process and rewrites and changes, you know, the good news is that throughout the time, what we've seen is through private capital and other government programs, more people connected to fiber. But that means we can now focus this program on really reaching some of the hardest to reach Americans and communities with fiber through BEAD.
DG: That plays back to your comment earlier about everybody needing to be connected to take advantage of, you know, technologies like AI. I hate to keep talking about AI, but here it is again. Sam, do you think BEAD will potentially, move the needle on that 10 million number you mentioned in terms of additional passings or how do you see that playing into the market? Are there other factors perhaps that are more important to the passings rate?
SM: BEAD will play into it. I'd say it's relatively immaterial relative to maybe where our expectations were three or four years ago. You've seen a bigger amount of the dollars allocated to low earth orbit satellite, which I'm sure is again a topic we can touch on with AI in a minute.
So, BEAD will help. You're looking at kind of hundreds of thousands of additional passings per annum from BEAD. So, you know, kind of a relatively small part, but a very important part because these are the underserved communities in America that have lacked decent connections for many years.
So, it's helpful, but like I said, I think the, the bigger trend and, you know, maybe one of the things that's very much in focus from my side at the moment is satellite. I think Starlink and Amazon both won a decent chunk of the subsidies. Indeed, I'd say there's growing angst amongst public side investors in terms of the impact satellite will have on the broadband market.
And this is one of the reasons I think that the telcos are so keen to accelerate fiber build as fast as possible. Because fiber relative to say DSL or even cable is a truly kind of unique technology. It's like the best kind of end state technology you could have for home internet and that differentiates them more against satellite.
There's definitely a bit of nervousness that the cable companies and the DSL providers will suffer at the hands of satellite. So sorry to shift the topic from BEAD to satellite, but they are very much related.
DG: You were ahead of the curve. Satellite is where we're heading anyway, Marissa, I have questions for you. Obviously, there was some back and forth over how much of BEAD should be allocated to satellite. There were also concerns, I believe, from not just the fiber community, but anybody who has been looking at the way trends have been headed in terms of can satellite handle rising bandwidth demand, will it have the uplink capacity needed to handle, AI applications.
Marissa, how are fiber players and FBA thinking about satellite? Is it a compliment? Is it competition? Is it both? Is it something else entirely?
MM: I think right now we still are gonna see about two thirds of the BEAD funds go to fiber, which is good news. We also know that there may be, and we've heard, maybe some satellite companies aren't going to be able to serve what they originally thought.
So we're hopeful, and we didn't talk about there's this approximately $21 billion leftover that was going to go to deployment that isn't called a non-deployment or a leftover BEAD fund. And that money is, we hope, some of it will be used for a cleanup type round to make sure people are being connected.
Back to satellite – satellite certainly going to play a role in connecting the unconnected in this country. But you asked a lot of questions leading up: What are satellite's capabilities? I think we still don't know. There's a lot of unknowns.
And so we're dealing with what do we know right now? And what we know right now is that consumers are demanding lower latency. They're looking for reliable, resilient infrastructure. They want to adopt technologies, emerging technologies. And what we know does that is fiber. And we know that's also the long-term investment that makes sense because, once it's in the ground, it's quite easy to upgrade and the cost is just minimal compared to other technologies.
DG: Yeah, absolutely. My follow up question is, tell me a little bit more about that cleanup fund that you mentioned. What do you guys want to see done with that $20-some-odd billion that's left over?
MM: One, we just know that these funds were allocated to support the BEAD project, so we'd like to see them used for that purpose.
I think there's a lot of places, once we get to deployment, we're gonna look to permitting. We don't wanna have any slowdowns on infrastructure builds and that’s the grid lock. We have to avoid it. So, we'd love to see some of these funds go to staffing up permitting offices, maybe implementing AI in order to expedite and make permitting more efficient.
Certainly that drives cost savings. Additionally, we do wanna make sure these dollars are used to connect as many people as possible. So that's why a cleanup round makes sense. Workforce development: another area we would love to see the funds go to. We know we need workers and, to date, there's programs out there.
People are thinking about it. FBA is thinking about it. But we need some funding to go towards that, too.
DG: I want to touch on the workforce issue a bit more in just a second, but Sam, I want to toss things back to you. So, with BEAD and satellite and all of the existing investments that are in play, does that change broadband penetration rates at all? How does that impact the market?
SM: Broadband penetration is, you know, pushing 90% plus in the U.S. and the, the last vestiges of penetration really do skew towards the rural markets where I think BEAD can be very helpful at pushing those last people onto to broadband.
It's also a low-income affordability problem. We had the Affordable Connectivity Program that disappeared two years ago now, which was this low end subsidy program, $30 discounts on broadband bills. And so one of the things I know has been talked about is whether some of those BEAD subsidies could be reused to kind of relaunch some kind of ACP program, which would maybe help on the, the penetration side in the rural markets.
And one side question I'd love to get Marissa's perspective on this is, you know, a lot of people I talk to worry about shortages on fiber. We have some pretty big fiber builders and suppliers in the U.S. in the shape of Corning and others, but obviously there's a ton of demand for building fiber, not just for homes but also in data centers.
And so one of the things I'd wondered about is whether we could see subsidy being used to actually, you know, buffer some of the supply of fiber, for example.
Marissa Mitrovich, VP Public Policy, Fiber Broadband Association: I don't think we've actually thought about using the subsidy to help buffer the fiber availability. But certainly it's an issue we've been hyperfocused on as far as ensuring the demand is met. I know the members that are part of our association, you know, are committed to making sure BEAD is met and also beyond.
And I think really it is something we need to put our heads together and address making sure everyone is able to be served. We know these projects need to be built, especially for competition. It's so key to our economy and America's competitive edge. And so, we are focused on that through, you know, we have supply chain people dedicated to supply chain within our organization looking at how we just ensure we don't have delays and bottlenecks like we saw back in COVID times.
DG: I'm actually over here smiling because I have the answer to that question because I did a podcast on it recently with Corning and Dell’Oro Group. The answer from Corning was that they actually – the demand for data centers and last mile fiber, they are different kinds of fiber. So, what I was given to understand from Corning's per perspective is there may be a slight delays, but they don't expect there to be outright shortages, if that makes sense.
And they are working with industry associations to make sure that rural providers also can get what they need, so some of the smaller companies who may not have the sort of bargaining power that an AT&T or a Verizon has to get those big fiber deals through. But that also brings me back to the workforce question.
Because during that conversation with Corning and Dell’Oro Group, both of them suggested to me that the actual problem would be not fiber shortages, but workforce shortages. They said that that'll be the biggest bottleneck, not just the number of workers, but making sure those workers are where they need to be.
It's a lot harder to get a hundred people to work on a fiber project in the middle of nowhere, middle America versus, you know, some of these metro hubs that are popular for data centers. So, Marissa, can you talk to me a little bit about what FBA is doing around the workforce issue?
MM: We have, we have established our own workforce training program, Fiber OpTIC Path, and we are partnering with community colleges, local organizations to train workforce.
Now we did this before the AI boom and the data centers, but we had thought 73,000 was like a conservative great number of how many workers we would need fiber optic technicians to help deploy all the fiber for the demand coming. I don't think that's changed too much, but we are working with partners in the education space, veterans organizations, trying to make sure that we do provide opportunity because these are really good jobs and they do pay well.
The other thing that's important about these jobs, and I'm pitching a little bit here because there's so much demand, is you don't have to get college debt. You know, it's not a two year credential. It's a really – you can do this in a minimal amount of time and you can do it from so many places.
So yes, we are focused on it. We do need partners though. I mean, there's no question there's a need for resources to be dedicated to this. But absolutely we're gonna need to see more workforce.
DG: Yeah. And I think this issue is something that has also grabbed the national spotlight, right?
Meta recently, one of their executives said that they believe there will be half a million electricians that are needed to build out some of the data center infrastructure. So, we know that that's not necessarily fiber technicians, but we do know that fiber is a component of their builds, not just fiber between data centers, but fiber within data centers.
So, I do think that workforce is going to be an increasingly important issue. But I wanted to see if there's anything else that you guys have on your minds. I mean, what is one big thing, Sam, that you think more people need to be thinking about or talking about when it comes to the future of fiber?
SM: Yeah, I mean, I was gonna say two things. First, on your point on the labor, I mean – doing Marissa's job again on like lobbying for more people to take these jobs – is like AI's not going to take the job of a fiber engineer. And obviously, you know, one of the things I see a lot in my job is kind of worries across the equity markets around software. You know, people basically being replaced by AI agents.
In terms of what I think people are focused on, the biggest questions I think for the fiber community in the U.S. is there's obviously a huge opportunity of growth ahead of them and they're executing incredibly well against it right now. I think as they look at the opportunity and execute against it, one of the things we're seeing is that the competitive response from the cable companies, the incumbents in broadband. And you know, in the last, I would say three to six months, you've seen a pretty, pretty negative inflection in terms of industry pricing trends, in terms of ARPU growth, the amount of money that people have to pay for their home internet.
It's good for consumers, prices are coming down, but I think the thing that's coming into focus a lot is the ability for the whole industry, frankly, to grow pricing and revenue. So you have a lot of spreadsheets out there with different penetration targets, different kind of ARPU assumptions, and I think increasingly kind of both public and private investors are asking whether the pricing assumptions are right.
Just because fiber's been so successful, it's elicited this competitive response from cable companies.
I think maybe to give a couple of tangible examples, but Comcast and Charter are the two biggest cable companies. [They] typically would raise price once, maybe twice a year on broadband. And in early 26, both of them have said, ‘look, we're not in a position to raise prices in the way that we have done in the past.’ So you have Comcast out there saying, ARPU, you know, price per customer, is gonna fall low single digits this year.
And so I think the opportunity on pricing has got a bit tougher. And I think that will be increasingly in focus both on my side and on the private side over the next kind of 12 to 18 months. To me, it's the biggest debate that's out there right now on the industry.
DG: What's the biggest focus for FBA right now, Marissa?
MM: Yeah, I'm gonna, um, really lean into my public policy plea right here. When we talk about data centers, you hear about semiconductors, you think about energy and electricians, you know, and cooling, but fiber connectivity is essential for the transmission of these massive amounts of data.
And so when I am out talking with legislators, you hear them focus on all of the other things I mentioned. You hear them excited about 6G wireless or, you know, what can satellite do? But I really wanna encourage people, what we're trying to do is just encourage, fiber is here, fiber is in front of us, it's doing the job.
There's a reason so much investment is going to fiber and it's important to remember fiber in these conversations. We do see it as a really exciting opportunity. For example, we know, in Wisconsin, Microsoft has a big data center build and part of that build means they're connecting people in that community to broadband.
It's not just an exciting time because of the data center builds, it's because of what it's gonna do for communities. And so, where we sit and, you know, where we're focused, while there's a lot of different issues, I think just making sure people remember fiber needs to be at the table for these conversations.
DG: That’s kind of the everlasting struggle of telecom operators, kind of always the backbone is ignored. And I think one of the things that I think about when I think about connectivity and why it's necessary and not just 6G, right, is that a lot of mobile connections are on Wi-Fi. That is a fixed connection to a home. A lot of people sit in their house to use their phone.
So if you're talking about wanting to use AI or edge inferencing. You need a connection to do that. And the most likely one that they'll be on is their home broadband connection.
So again, not to lean into the lobby because that's not my intent at all. To me, that's just kind of an objective truth. I'm not supporting any in, particular home connection. But, yeah, definitely something to keep in mind as we have these conversations. But I think that's a great place to leave it. Thank you both so much for your time. It's been really enlightening.