Originally posted on VMBlog
Industry executives and experts share their predictions for 2025. Read them in this 17th annual VMblog.com series exclusive.
By Michael Underdown, President & CEO of Crosstown Fiber
The fiber optic industry is undergoing a transformation as it adapts to the growing demands of modern applications. For decades, the focus has been on expanding availability-bringing connections to more locations. Yet, the challenge of the coming years isn’t just about connecting more places but about ensuring networks can handle the unprecedented volume of data being transmitted. The shift from availability to capacity will be a defining trend in 2025 and beyond.
Fiber networks in urban, suburban, and rural areas are at or near capacity, even where coverage appears widespread. Large-scale data centers are moving into suburban and rural areas, requiring high-capacity fiber infrastructure to support their operations. This move isn’t just about cloud services-it’s also about data-intensive applications like artificial intelligence (AI) and machine learning (ML), which demand significant bandwidth for real-time data processing. Much of the current fiber infrastructure was not designed with these demands in mind, and the industry must evolve to meet the challenge.
The Case for Capacity
As data centers shift to more remote areas, the lack of middle-mile and backbone connectivity is becoming increasingly evident. While government broadband initiatives aim to improve rural access, these efforts often prioritize last-mile solutions and overlook the middle-mile capacity needed to connect data centers and large networks to the broader internet. The construction of these high-capacity networks will likely fall to hyperscale providers, who invest heavily in infrastructure for their own operations. These investments create secondary opportunities, as providers can extend additional ducts or capacity to local communities, enabling more competitive broadband offerings for homes and businesses.
Another important development is the growing use of Indefeasible Right of Use (IRU) contracts. These long-term agreements allow organizations to secure capacity on existing fiber networks through upfront payments rather than ongoing monthly fees. Unlike traditional leases, IRUs enable the purchaser to treat the fiber as a depreciable asset, offering both financial predictability and a path to building infrastructure that might otherwise remain unviable. This model will play a critical role in making large-scale deployments financially viable in underserved areas.
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