Zayo preps for data center, AI and broadband boom with middle mile focus

• Zayo is building middle mile “off-ramps” to connect rural communities

• If networks aren’t connected to a middle mile, “it’s like building a suburb that’s not connected to any other roads,” Zayo’s Bill Long told Fierce

• The middle mile isn’t just important for broadband, but for AI and data centers, too

There’s a lot of government funding going around for rural broadband, but it won’t mean much if those last mile networks aren’t connected to the rest of the network, according to Bill Long, chief product and strategy officer at Zayo Group.

Zayo is a seasoned player in the long-haul networking space. Its main routes include one that serves California, Nevada and Oregon, a route from Dallas to El Paso as well as one from Dallas to Atlanta. It’s also one of the operators that’s building out Nevada’s open access middle mile network.

Building rural broadband networks is important, but if those networks aren’t connected to a middle mile, “it’s like building a suburb that’s not connected to any other roads,” Long told Fierce. The same thing goes for data centers, which are popping up like weeds.

As a result, the company wants to make it “economically viable” to build last mile “off-ramps,” said Long, not just for itself but for the ISPs looking to use the Zayo’s infrastructure. For starters, it’s increasing rural access points to reduce the amount of fiber construction required to connect to Zayo’s middle mile network – via “incremental breakouts.”

“Think of like conduits in the ground, tubes in the ground full of fiber,” Long explained. With these breakouts, “we allow a couple of those fibers to be pulled out and to be able to serve a local community.”

“So you can hop onto or off the network in order to access those markets,” he said. Hence the highway analogy.

Zayo is also launching a program to help local ISPs apply for government funding like Broadband Equity, Access and Deployment (BEAD), because many rural providers don’t have a dedicated team for that. “It’s not a muscle that they have resources [for] or know how to flex,” said Long.

There are “so many creative local ISPs out there,” he added, whether it’s wireless internet service providers or municipal networks. “We wanted to make sure that this model works with sort of the grassroots efforts” as well as with the larger telcos.

Not enough middle mile funding

In addition to the $42.5 billion in BEAD money, NTIA’s allocated $1 billion for middle mile infrastructure projects.

Zayo last year was the only big-name provider to snag NTIA middle mile funding, receiving grants totaling nearly $93 million.

But while the funding made available so far is “a great start,” Long said we’re going to need a lot more money to bridge last mile coverage gaps. He referred to a problem called a “network access doom loop.”

“If you want to entice big businesses to come into your rural community, one of the things they’ll look at is, what level of connectivity you have?” he said. “And if you don’t have good internet access, you can’t attract the big businesses.”

ISPs face the same conundrum. They don’t want to build networks where there aren’t any businesses.

“Absolutely, the digital divide for serving households is important,” Long said. “But I think [what’s] more important is the internet to serve businesses. Because ultimately, attracting those businesses is going to attract the people.”

We’re also going to need more middle mile funding to support “some of these new use cases with AI”, he added, as well as “huge bandwidth consumers” like hyperscalers.

More bandwidth, please

Zayo’s middle mile investment in Nevada, for instance, will also focus on providing more bandwidth and AI processing between Las Vegas and Reno, as both markets are “major AI data center hubs.”

Historically, data centers have been built in markets with large populations, Long explained, since it’s easier to get employees in these cities.

But things have changed. Power has become a scarce resource, so hyperscalers are “now placing data centers approximate to where there’s available power.” And of course, there aren’t typically many power plants in major metro areas.

“What we’re doing is we’re working with the land developers and the hyperscalers that are building these large data center campuses [and] we’re making sure we’re putting those breakouts proximate” to where there’s large power availability, said Long.

Nevada and West Texas are areas where there’s “lots of interesting available power.” They may not have too many data centers built just yet, but the space is still “a good investment” for Zayo.

“If you just build a data center in the middle of nowhere and it can’t connect to the rest of the world, it’s just a super expensive refrigerator,” Long stated.

“Having the connectivity and the long-haul network to connect it is a critical part,” he added.

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