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.
Innovation and Opportunity
The shift to capacity-first networks will spur a range of technological innovations. Multi-duct systems are gaining traction, allowing additional fiber to be added as demand grows without requiring entirely new builds. Larger splicing vaults will become more common, enabling multiple providers to access the same infrastructure without impacting one another’s operations. These approaches allow for cost-effective scaling and encourage collaboration between network operators.
This innovation extends beyond technology into how networks are used. Hyperscale investments in middle-mile networks will benefit smaller internet service providers (ISPs) that rely on these backbones to reach end users. By building networks with future capacity in mind, providers can ensure that today’s investments deliver long-term value, whether for data centers, businesses, or residential communities.
Challenges in Transition
Despite the opportunities, transitioning to capacity-focused deployments is not without its challenges. Security is a pressing concern, particularly for multi-user systems. Access points such as manholes will require enhanced protection to prevent breaches and maintain reliability. Jurisdictional coordination is another critical factor. Efficient deployment demands alignment between governments, municipalities, and private entities, without which projects could face significant delays.
Network diversity will also demand greater attention. Competitors must collaborate to ensure that their networks remain distinct and secure, minimizing vulnerabilities and maximizing resilience. Furthermore, adapting fee structures and funding models will require balancing short-term financial pressures with long-term infrastructure needs, which could challenge traditional business models. This competition, while challenging, ultimately benefits consumers through more affordable and reliable services.
A Long-Term Perspective
The shift to capacity-driven fiber networks is not a fleeting trend but the beginning of a larger evolution. Much like the electrification efforts of the early 20th century, this transformation marks the infancy of a new utility. As fiber moves from hybrid roles to full-scale utilization, the demand for robust, scalable infrastructure will only grow.
Moreover, as new technologies such as AI and machine learning continue to advance, the pressure on fiber networks will intensify. Beyond 2025, the industry must prepare for continuous upgrades, ensuring that infrastructure can adapt to unforeseen demands. Flexibility, innovation, and collaboration will be critical for companies aiming to succeed in this evolving landscape.
2025 is set to redefine the fiber optic landscape, establishing a framework for long-term innovation and growth. By overcoming challenges and leveraging capacity-focused advancements, the industry can position itself as the backbone of the ever-expanding digital economy.
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ABOUT THE AUTHOR
Michael Underdown, President & CEO
Michael Underdown, President & CEO of Crosstown Fiber, is a seasoned executive with nearly 30 years in the telecommunications infrastructure industry. Prior to his current role, Michael enriched his expertise as the COO of Comdesco Group, Inc., focusing on construction management and consulting for fiber networks and data centers. He also founded and presided over Chicago Fiber Systems, reflecting his dedication to the technological advancement of the industry. Michael’s career is a blend of strategic leadership roles, from operations engineering to new market development in the data center and telecommunications sectors. His acumen extends to real estate, financial consulting, and venture capital, with a keen interest in nurturing early-stage startups and companies navigating pivotal growth phases. Specializing in new market development, real estate, network construction, and channel sales development, Michael melds his broad experience and innovative approach to steer companies toward success.
