Analyst Insight: Utility Fiber Deployments and the Utelco Model

Broadband access is generally excellent across the US, but gaps still exist in states with a large proportion of rural communities. These areas are often more costly and less profitable for internet service providers (ISPs) to operate in, because building the middle-mile infrastructure in them requires extensive fiber deployments.

At the same time, utilities are increasingly deploying fiber to make the grid smarter, more sustainable, and resilient. Utelco models—in which a power utility also provides telecom/broadband services—offer utilities an opportunity to earn additional profit from their fiber deployments by leasing excess fiber capacity to ISPs or by becoming an ISP themselves. Many cooperative, public, and private utilities have entered the telecommunications sphere, and some have received federal funding aimed at expanding broadband access to rural communities across the nation.

This Analyst Insight, based on the Guidehouse Insights Smart Grid Networking and Communications Database 1Q23, focuses on utility fiber deployments and how the Utelco model can deliver new revenue streams for utilities. The report, which focuses on the US, illustrates business models for Utelcos, examines the current policy environment for broadband access, analyzes recent case studies to identify pivotal trends, and provides key recommendations for utilities and policy makers.