FCC Chairman Ajit Pai praised the news this week that Verizon has agreed to buy at least $1 billion in optical fiber from Corning. Under the agreement both companies announced, Corning will manufacture and Verizon will buy up to 12.4 million miles of fiber each year from 2018 through 2020, with a minimum purchase commitment of $1.05 billion.
The deal “heralds the construction of ‘densified’ 5G networks that will benefit American consumers,” said Pai. “It will create thousands of high-quality jobs building and laying fiber.”
The deal coincides with the FCC’s goal of closing the digital divide, added the chairman. He noted the Commission has taken action to promote spending on broadband deployment and will vote on additional proposals today to “unleash major capital expenditures on next-generation networks.”
Verizon has been upgrading its network architecture around a next-generation fiber platform that will support all of the company’s businesses. The company said the new architecture will improve its 4G LTE coverage, speed the deployment of 5G, and deliver high-speed broadband to homes and businesses. In February, Verizon finished its acquisition of XO Communications’ fiber network, which was worth about $1.8 billion. The company has also flirted with the idea of purchasing cable provider Charter Communications, reported Reuters, which would give it fiber and cable access across 49 million homes.
Over the past several months, Corning has announced plans to expand capacity and to invest more than $250 million in its optical fiber, cable and manufacturing facilities to help meet the demand of its global carrier and enterprise customers. Corning expects these capacity expansions to begin to come online in 2017, and become fully operational in 2018.
April 20, 2017