The Costs for Deploying Fiber

How much does it cost to construct a fiber network? Anyone with experience in the field would first answer, “It depends,” listing factors affecting expenditures that include labor, underground vs. aerial, what region of the country, and rural vs. urban settings. Some variables are less determinate, such as potential supply chain shortages or rising prices due to inflation. 

Nevertheless, quantifying the costs to construct a fiber network is necessary to help fiber broadband service providers and their contractors evaluate their budgets and identify areas of inefficiency.  In January 2024, the Fiber Broadband Association (FBA) announced the results of its first Fiber Deployment Cost Study. Conducted by Cartesian, the 2023 study provides the industry’s benchmark for costs across the fiber deployment ecosystem in the United States.

“As broadband providers across the country look to leverage public and private funding to connect communities to high-quality broadband services, understanding the cost variables of deployment remains a vital component to broadband plans and proposals,” said Deborah Kish, Vice President of Research and Workforce Development at the Fiber Broadband Association. “Our annual Fiber Deployment Survey uncovers fiber cost benchmarks and how costs change over time—information that is critical for broadband providers and state broadband offices as they prepare competitive applications for NTIA BEAD funding to connect their communities to reliable fiber broadband services.” 

FBA’s comprehensive study surveyed network operators, municipal broadband providers, utility/electric cooperatives, prime contractors, and subcontractors, exploring many factors that influence cost but often make it challenging to compare costs across deployments. There’s no cookie cutter approach to network construction with labor and materials, build scenarios such as terrain and housing density, and the choice of construction methods are all unique to a particular network build.

It’s All About the Labor

Sifting through the data collected through phone interviews and an online survey from respondents representing 35 states in total, the 2023 Fiber Deployment Cost Survey found that, on average, labor contributed to 73% of underground build costs and 67% of aerial costs. This should be no surprise since previous studies by Corning and others have identified labor makes up the majority of costs in a fiber build. 

With labor’s share of costs roughly twice that of materials, network builders are looking to find the most efficiencies there, with aerial enabling construction crews to deploy fiber faster over existing infrastructure than having to move dirt, deploy conduit, and pour concrete in underground builds. 

Other common themes across deployment projects were clear as well, with many seeming self-evident. The cost per foot of aerial deployment is less than half of underground, at a cost from $4 to $9 per foot, as compared to $11 to $24 per foot for underground deployment with the median cost of deploying fiber underground over twice that of deploying fiber aerially.

Choosing between aerial or underground was driven by factors including access to poles, risk of adverse weather events, and deployment costs. Underground deployment was viewed as more resilient and better protected against adverse weather, such as hurricanes, tornados, high winds, and ice storms.  

Using aerial is, of course, dependent upon physical access to poles, with economic factors playing a role as well and, in some cases, skewing projects towards underground. Make-ready costs can vary significantly, with some study participants estimating that make-ready costs can add $5 to $6 per foot to unit costs while other estimates added anywhere from $500 to $5,000 per pole, depending on the amount of preparatory rework required to do such things as reposition power lines. 

Where available, a choice of underground construction methods can reduce cost. Trenching had the lowest reported median cost at $12 per foot and plowing the highest median cost at $17 per foot. Directional boring fell in the middle at a median of over $15 per foot, but also had the highest reported costs of any method.

Geography and Terrain 

Population density has a large impact on the cost per foot of aerial and underground builds, with median costs increasing with density. Extremely rural areas represent the lowest median costs, with $5 per foot for aerial and $12.50 per foot for underground. Urban areas had the highest median costs at $6.54 per foot for aerial and a whopping $23.25 per foot for underground. 

Factors increasing underground costs with increasing population density include the presence of roads and sidewalks, which have to be displaced and then repaired. Building in more dense areas also requires more caution with locates and the use of heavy equipment due to other underground utilities likely to be present. 

Terrain plays a significant factor in costs, with underground costs especially affected. The denser and harder the terrain is, the more costly it becomes to dig under the surface, regardless of the method involved. Underground deployments have a median cost of $10 per square foot in soft earth and double that in rocky terrain at $20 per square foot. Rocky terrain is more expensive as it requires more cutting and drilling, with slower progress. It also had the top-end of reported underground costs at over $70 per square foot.

The 2023 study also considered deployment costs by four U.S. regions: Northeast, South, Midwest, and West. The Northeast had the lowest costs for aerial and underground with the West being the most expensive, with regional cost variations attributed to topography and the extent of rocky ground. Aerial costs in the Northeast fell between roughly $4 to $5.95 per foot using the 25% to 75% percentile for cost per foot on labor and materials while the West aerial range ran from $6 to $12.50 per foot and $15 to $29 per foot for underground deployments.

Cost Trends and Future Cost Optimism

Almost half of respondents reported significant costs increases from 2022 to 2023. Of those with rising costs, the majority reported increases of at least 10% with the most often citied factors being labor and materials. For aerial deployments, make-ready was the third most cited cost driver while engineering and permitting were the third and fourth most cited cost drivers in underground projects. 

While labor and materials are anticipated to increase costs over the next year, that impact is expected to be less steep than in 2023. Improved economic indicators and increased preparation efforts are creating good conditions for increased fiber deployment, with less uncertainty around inflation and interest rates. Early BEAD projects are expected to break ground towards the end of 2024 while private investors are continuing to back fiber projects. Manufacturers are ramping up domestic production in response to Buy America Build America (BABA) provisions and the industry is looking to reform rules around permitting and make-ready to reduce costs and delays.