Biden's $2 Trillion Infrastructure Bill Could Boost Demand For Rural Data Centers
President Joe Biden unveiled a massive infrastructure bill that, among other things, allocates $100B to what the White House dubs the new electricity: broadband internet access.
“Americans pay too much for internet,” Biden said in a speech in Pittsburgh on Wednesday. “We’re going to drive down the price for families that have service now and make it easier for families that don’t have access to get it now.”
Biden's $2 trillion jobs and infrastructure plan also includes $100B to upgrade the U.S. electrical grid, along with billions more in allocations for transportation, manufacturing, water, housing retrofits and more. The White House described it as the most ambitious investment in U.S. infrastructure since the country built the interstate highway system starting in the 1950s.
The bill is the latest proposal aimed at expanding and modernizing the country’s digital infrastructure and blanketing every corner of the country with broadband. Congressional Democrats will likely begin writing the bill in May, House Speaker Nancy Pelosi told reporters on Thursday.
If passed roughly in its current form, the bill's digital infrastructure investments could mean an immediate boost for builders of fiber networks and, over time, a boost in demand for data centers and other cloud services.
“Because of the expense of building and maintaining physical pipeline to extremely remote areas, we may also see the last mile covered by low-altitude satellites, requiring some base station infrastructure that may rely on federal subsidies to construct,” said Phil Kenney, CEO of NFINIT, a San Diego-based colocation and cloud services provider. “Where we expect the infrastructure bill to impact us the most is through a boost in demand for certain IT services. Operators will need expert partners to manage their expanded, and increasingly complex and vulnerable, infrastructure.”
About 35% of rural Americans lack access to broadband at minimally acceptable speeds, according to the White House. The high costs of building and maintaining networks in farther-flung areas also inflates prices, a disparity that Biden’s plan aims to address with subsidies in the short term and incentivizing adoption in the longer term to bring prices down. The plan also calls for building “future-proof” broadband. Although the bill doesn’t define minimum requirements for download and upload speeds, some lawmakers have called for investment in upload and download speeds of 100 megabits per second nationwide.
"Expanding access to unserved and underserved communities will drive even more bandwidth consumption for applications like distance learning and telehealth,” said Jim Nolte, CEO of Bandwidth IG, which provides underground fiber networks to mission-critical data centers, hyperscalers and enterprises. “All those applications reside in data centers, and connections between those critical sites will need to be prepared to scale to meet this next wave of users.”
Rising data consumption by rural consumers could drive a bumper crop of smaller edge data centers outside of the large, dense markets that host the majority of data center capacity in the U.S. PricewaterhouseCoopers estimates that the market for edge data centers will triple between 2017 and 2024 to $13.5B. It could even influence where hyperscalers such as Microsoft, Amazon and Facebook choose to build new data center sites.
“It is a good opportunity for edge data center providers to move into secondary or tertiary markets and be closer to the end user. Although Serverfarm is not an internet provider, we still provide the infrastructure backbone necessary to make the internet run,” said Mario Calderone, VP of real estate at data center operator Serverfarm.
“We will be keeping an eye on our hyperscale customers,” he said. “Serverfarm will provide quick and efficient capacity where our customers need to be. Our customers are the ones looking at where the consumers need additional capacity. If the hyperscalers see the need to move into these secondary and tertiary markets to provide better services for rural customers, then we will be there to support them.”
CORRECTION, APRIL 5, 2:50 P.M. ET: A previous version of this story contained an incorrect spelling of Bandwidth IG CEO Jim Nolte’s name. The story has been updated.