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Business Fiber Deployment Accelerates with New Competition and Investment-Friendly Policies

05.30.2018

Thanks to ongoing efforts by the Federal Communications Commission (FCC) under Chairman Pai’s leadership to facilitate investment and accelerate the transition to next generation broadband networks, the number of U.S. businesses that can enjoy the benefits of fiber networks and newer technologies is growing faster than ever.

In 2017, U.S. commercial buildings with 20 or more employees added more new fiber optic connections than in any other year, according to market research firm Vertical Systems Group. As of 2017, Vertical Systems Group reports that 54.8 percent of commercial buildings with 20 or more employees had lit fiber connections, up 5.2 percentage points from its previous report of 49.6 percent in 2016. Business fiber penetration was only 10.9 percent in 2004, when Vertical Systems Group began tracking this metric. Vertical Systems Group reported that fiber connections were growing for all categories of building sizes, with the most significant growth coming in the small and medium-sized business segment. Vertical Systems Group expects accelerated deployments of fiber to business sites to continue.

 

According to Vertical Systems Group research (subscription required), there are ten fiber providers with 10,000 or more connected commercial buildings, including four cable operators and two competitive fiber providers that are unaffiliated with incumbent telecom providers. There are twelve fiber providers with 2,000-9,999 connected commercial buildings and more than two hundred fiber providers with less than 2,000 connected commercial buildings. Providers with less than 2,000 buildings serve about one-fifth of connected commercial buildings.

In 2017, recognizing the widespread deployment of business services by cable operators and competitive fiber providers, the FCC reformed its Business Data Services (BDS) rules. For those areas where the FCC found competitive deployment had occurred or was feasible, new entrants would not get new discounts for leasing legacy copper technology. Rather, the new rules would encourage new entrants to deploy their own network connections to buildings using modern fiber, Ethernet, and Internet Protocol (IP) technologies. The FCC also acted last year to ease the transition to modern technologies by streamlining its rules for retiring copper, discontinuing legacy services, and notifying customers of network changes.

The increasing growth in commercial fiber deployment across a broad range of fiber builders is more evidence that FCC Chairman Pai’s future-focused vision – moving the FCC’s regulatory framework into the 21st century to increase investment in new and better technologies and increase competition— is working. In a similar vein, USTelecom recently filed a petition asking the FCC to eliminate another set of redundant rules that hamper investment and competition in the business space. The petition outlines how FCC action will unleash new investment and better services. The FCC’s leadership is fostering a policy environment that is enabling our members, and all fiber providers, to bring new and better broadband services to businesses throughout the country.