The Infrastructure Investment and Jobs Act’s $65 billion in broadband funding advances one more step with the Dec. 7 confirmation of Jessica Rosenworcel as chairwoman of the Federal Communications Commission (FCC).
“Even before the global spread of COVID-19, it was apparent that broadband service is no longer a luxury but a necessity for school, jobs, healthcare and so much more in modern life,” Rosenworcel previously said in an Aug. 30 letter to U.S. Sen. Joe Manchin (D-W.Va.).
The act calls for the National Telecommunications and Information Administration (NTIA), part of the Department of Commerce, to make crucial decisions in any area where there is ambiguity in the statute, however the appointee to lead the NTIA, Alan Davidson, has not yet been approved by Congress. The NTIA is planning webinars to provide “an opportunity for the public and other stakeholders to provide input into the implementation of these new programs,” according to NTIA’s website, with the first scheduled for Dec. 15.
Even if the disbursement of the money progresses, deployments will be more expensive than initially projected due to supply chain issues, and will likely take longer than expected due to staffing constraints, industry experts told Connectivity Business.
The number of linear miles of fiber deployment planned in the U.S. will double during the next few years as funding increases sharply, Fiber Broadband Association (FBA) President and CEO Gary Bolton told Connectivity Business. Materials shortages are a concern for 68% of mid-sized and smaller providers, according to a recent survey, he said. For example, resins for fiber cables will be in short supply for the next 16 months, even if chip shortages abate in the next 12 months, Bolton added.
Demand for fiber components for network operator equipment grew by 4% in the first nine months of 2021 in North America, Europe, the Middle East and Africa, Jimmy Yu, vice president of telecom research firm Dell’Oro Group, told Connectivity Business. Sales would have been higher but for supply chain constraints, Yu added.
Global demand dropped by 2% in the first nine months as deployment in China stalled, according to Dell’Oro Group.
Shipments of ethernet adapter ports for network operator equipment dropped 11% in Q3 2021 compared to a year ago, Dell’Oro Group reported Dec. 7. “[V]endors faced various component sourcing challenges, with lead-times extending beyond 52 weeks in some extreme cases,” Baron Fung, the firm’s research director, said in a statement.
“In the short- to mid-term, we believe the pressures on the supply chain will result in potentially less buildout to bridge the digital divide,” Claude Aiken, president and CEO of the Wireless Internet Service Providers Association (WISPA) told Connectivity Business. “There will be growth in our industry. That’s what [WISPA members] are great at doing. But until the supply chain finds its feet again in the next year or two, the velocity of that growth will be less vibrant than would have otherwise been the case.”
Lead times for equipment requiring computer chips have reached two years in some cases, Aiken added.
While fiber deployments are scheduled to boom, the labor force is increasing by 15% per year, according to FBA’s Bolton. The association aims to offer a course of study in every state, starting with Wilson, N.C.-based Wilson Community College. The Fiber Optic Technician Training Program will consist of 144 hours of classroom work and 2,000 hours of apprenticeship, Bolton said.
“I know an [engineering company] that had a five-person office and lost three in the past month,” Doug Dawson, owner of Ashville, N.C.-based CCG Consulting told Connectivity Business. Small network operators won’t be able to hire a construction company to build 20 miles of fiber for local and municipal buildouts if Charter Communications (NASDAQ:CHTR) is hiring them to build 1,000 miles, Dawson said, referring to the leading broadband connectivity and cable provider.
State agencies that evaluate broadband applications will struggle to retain their own staff, Dawson said, further delaying construction funded by the IIJA.
AT&T (NYSE:T) aims to pass 5 million homes per year in the future, CEO John Stankey said on the company’s Oct. 21 earnings call. It may pass 2.5 million homes in 2021, he said, and would have passed more but for a shortage of a specific optical network component.