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The Infrastructure Bill is all set to transform the Fiber Optic & Data Center Industry

Updated on March 21, 2022
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In August 2021, the US Senate passed the Infrastructure Bill to revamp the dated setup responsible for latency issues and low connectivity in underserved rural communities. The bill's passing has led to great excitement amongst various sectors, chief amongst them being the telecom industry. Here’s an overview of how the Infrastructure Bill will affect the fiber optics and Data Center sectors.

What is the Infrastructure Bill and what does it entail?

The recently approved Infrastructure Bill is set to make considerable headway in bridging the great digital divide: a decade-long problem afflicting some 40 million Americans. The Senate-passed bill of $1.2 trillion hopes to improve the aging American Infrastructure and boost various sectors via increased funding and jobs. $65 billion from this grant is exclusively allocated for enhanced internet experiences in underprivileged regions.

Low bandwidth internet has been creating a great digital divide in various American states for a long time. Communities on the underprivileged side of this divide have suffered from maladjustment in the new virtual norm. Poor connectivity for these communities has meant inefficiency in carrying out routine tasks, failure in maintaining uninterrupted workflows, and severed communications. Digital solutions that have become part and parcel of many Americans, such as e-learning, telehealth, etc., are still somewhat of an anomaly for these regions.

America needs a rejuvenated infrastructure that enables these communities with a secure, high-quality, and super-fast connection.

The bill's passage is said to remove these barriers in the underserved regions. However, this will also call for a joint deliverance from all parties involved, including government bodies, the telecommunications industry, and the fiber optics/ data center sectors. These are major sectors poised to help America close the great digital divide and successfully make the virtual shift.

How will this bill affect the fiber optics and data center sector?

One of the major components of this project is the expansion of the internet infrastructure. This, along with effectively and efficiently building out in remote regions while eliminating inconsistent right-of-way rules, will result in adequate and speedy connections. There are many other complexities involved, but what the underprivileged communities, such as the Midwest, need most are 5G wireless services and robust fiber deployment.

Telecommunications and Data Center industries have always found infrastructure expansion difficult in places such as the Midwest due to natural physical barriers. These include the largely uneven landscape of mountains, roughly-cleared forests, and expanses of water. All of these have led to poor internet connections in these regions. Introducing the 5G wireless service can be a great way to overcome the handicaps of nature. But setting up these services would require vigorous fiber optic cable deployments and construction of powerful data centers.

The fiber optics sector is the chief component against which the entire digital network is buttressed. This is the network of speedy internet and empowered consumers who are facilitated 24/7 with high-quality, uninterrupted connections and modern digital services.

Modern digital services rely heavily on network densification and evolving technologies such as the blockchain, AI, and the IoT. Fiber optics is responsible for supporting most of these modernized services. Network densification is an efficient way to increase network capacity without requiring more rack space, but this also means constructing a large number of data centers in these areas.

To make the 5G technology work, the fiber optics industry will have to build data centers and cell towers in close proximity to eliminate latency problems through agile deployment. This 5G wireless fiber-based network of data centers will provide these remote regions with the resiliency and scaling needed to maintain critical speeds and higher bandwidths.

This kind of networking will also require all stakeholders, network enterprises, and local government bodies to work together and ensure that all populations can derive massive benefits from the revamped Infrastructure.

The federal government has already taken various initiatives to maximize funding for quicker broadband infrastructure deployment and more can be added to the allocated amount in the coming years. The National Digital Inclusion Alliance reported on the number of measures taken by the government to improve the digital literacy efforts and bring together pockets of communities via a compact digital resource network. As these state and federal-backed initiatives help overcome problems of connectivity caused by physical barriers, underserved populations will finally access reliable connectivity.

Some potential pitfalls to watch out for with the Infrastructure Bill

While there is a great buzz surrounding the opportunities and innovations stemming from the bill's passing, there are some potential pitfalls that both governments and industry enterprises must look out for.

The prospect of billions in federal grants means that multiple telecommunication and fiber optics enterprises will be vying for the funds. If too many telecoms in one region get access to the federal grant, the result could be an overbuilding of the digital infrastructure. This may put an excessive burden on the electrical energy sector and cause other environmental hazards.

It is also feared that the grant will keep new tech companies at bay by providing already established tech enterprises access to rural areas. The result could be a stifling of innovations in broadband internet technology.

The future of fiber optics and datacenter sector post-Infrastructure Bill

The 5G fiber technology offers the fastest internet connectivity helping businesses set greater targets and achieve better results. With the release of grants from the federal government, the industry will undoubtedly expand to accommodate the growing need for innovative solutions.

According to one study, the fiber industry will grow at 8.5% in the coming years. By 2025, the fiber optics sector is estimated to become a seven billion-dollar industry.

Numerous cities plan for a fiber-based internet network to create what Wired news calls the “internet utopia”. An ambitious network provider has already planned for an 8000-mile long submarine underwater fiber optic cable connecting Los Angeles and Hong Kong to support the increasing demand for Google and Facebook.

There is a great buzz surrounding the expansion of the 5G wireless network and what it means for the great virtual shift in the country. It will not be long before we begin seeing the role of fiber optics and data centers in newer, modern, and diversified digital applications and devices accessible by all.

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