Boom!  It is finally done.  On Friday (11/5) night, Congress passed the long- awaited Infrastructure Investment and Jobs Act.  This bill allocates $43 billion for broadband infrastructure, and an incremental $23 billion for “projects and funding bearing upon digital inclusion.” $65 billion earmarked for broadband in total.   No surprise, this represents the largest single federal investment EVER in broadband.  
 
So the question becomes – now what?  A lot it seems.   One of the common threads in our write up has been that the pivot to fiber is happening at tremendous pace.  Giants such as AT&T have more than woken up to the fiber theme (note: the word ‘fiber’ was mentioned 37 times in its Q3’21 earnings call).  The smaller players have showed their fiber enthusiasm as well (note: Shentel’s recent move to ditch FWA in favor of a more ambitious fiber build).  
 
While some of these are recent pivots, the fact is the industry have been moving down this fiber deep broadband path for the past several years.  According to USTelecom’s data, US Broadband Provider Cap-x for the last three years has been in the range of ~ $80B EACH year….even in the face of a pandemic.  By layering on the significant funding coming from this bill, what will the broadband world look like years from now with the pedal-to-the-metal at breakneck speed? 
 
A company CEO recently said to me when observing all this fiber push – “I am saying this because you may be one of the few that remember….we are entering 1999 again.”  It was a curious comment because not only do I remember 1999 but I (vividly) remember the telecom balloon going ‘pop’ two years after.  And it was….ummm…not fun. 
 
For those who don’t remember…the catalyst for the telecom bubble burst was the discovery of Worldcom’s fraud but there really was much more carnage looming about.  During that time it seemed like anyone with a pretty PowerPoint and snazzy marketing campaign could raise capital to build broadband.  Companies such as Covad, PSINet and Rhythms NetConnections were Wall Street darlings in the late 1990s (I remember being an associate analyst following them!).  At the time, these players were perceived to be viable alternatives to the Baby Bells (there were still about six of them at the time) for services like high-speed Internet access.  But all these players (as well as a host of others) ended up filing for bankruptcy protection in 2001.   
 
While the CLEC problem was they had to lease copper lines leased to them by larger carriers, the bigger picture issue was it was somewhat of a cowboy ‘build it and it will come’ mentality.  There are many facts which suggest that this time is much different.  Data from AT&T’s Q3’21 trending schedule shows that the only broadband adds that are in the black are the fiber ones (Non-Fiber and DSL continue to bleed red).    AT&T is not alone in this regard.    The demand for faster broadband speeds is very much there.
 
So can we just calmly say “That was then, and this is now?”  The answer: maybe.  
 
I fully acknowledge the idea of a broadband stimulus is nothing but good.  Who does not want to close the digital and homework divide?  We all know how heartbreaking it was seeing the pictures of kids sitting outside fast food restaurants at the height of COVID to grab on to their WiFi connection.  But the question to watch is how this money gets allocated and does it get into the right hands?
 
In my view, the key horses to watch will be the ones doing ‘think outside the box’ type moves.  Watch the likes of Conexon and other models that partner with the Co-ops (both electric and telecom) to become a more meaningful player in the market.   Another important trend to watch will be open networks.  The Europeans have embraced this model – yet, over on this side of the pond, they have been welcomed with much less fanfare.  But with billions of dollars raining down from the broadband gods….one has to wonder if these type of models finally find their sea legs.    If the capital is allocated in a way which will drive effective broadband builds in both underserved rural and urban (note: I live 14 miles north of Chicago and basically have the choice of one broadband provider!)  then a 2001-like event won’t happen.
 
However, if the ‘horses’ I describe above or ones like it get trampled or don’t get a chance to gallop out of the gates and the capital gets allocated to players who have the ‘broadband white board’ and not much else….then the ghosts of 2001 could come back to roost. 
 
So Washington can have a chest thumping moment for now – but how execution of the plan goes from here will be critical to say the least.