I wish I could say I was surprised. The current round of federal funding was crafted to avoid repeating
the mistakes from previous funding attempts. So while lots of money is offered, you have to put up
a portion of matching funds (and the auction price) as a bond - only released once you can demonstrate
that you provide the promised service. That's overall a good thing, but too many companies took the
"shoot for the moon" approach of taking way too many areas when interest rates were low - and banks
were lining up to finance bonds. A lot of companies over-borrowed, often at adjustable rates - so now
that rates are high, the bond-finance payments are coming home to roost.
It makes sense when I look back over my time in the industry (since 1998). QWest famously
complied with a huge grant by connecting a single building in Columbia (I live in Columbia, MO) and
single buildings in a couple of neighboring towns - and never building out to the rest of town. QWest
over-borrowed, and suddenly are part of Level 3 - in an "asset only" purchase that left the debt behind.
A while later, CenturyLink buys out Level 3 (in a panic move, they couldn't fulfill a DoD contract
without their backbone) and goes on a fiber build-out spree (flush with grant money). They
built out a massive network across town, all hung on city utility poles. Turns out, they never
paid the usage fee and were just found guilty of breach of contract - owing the city millions.
It also turns out that they did the exact same thing all over the place. Boom - they are now
Lumen and Quantum Fiber, in an asset-only purchase. That didn't quite work, so the
fiber is off to another company now. (In the meantime, our city built an entire fiber system
going just about everywhere, and can't turn it on because the legislature banned "chattanooga"
style build-outs)
The upside is that the companies who took a responsible approach are doing well. A local
ISP (they were 5 guys in a room when I started in town, just after I moved here from England)
is slowly building out fiber one subdivision at a time, using fixed-rate (20 year!) mortgages to buy the
infrastructure and only going for grant money for the areas they were going to build anyway.
They are thriving, and their service is great. So it can be done.
It goes in cycles. Big funding rounds tend to lead to "tulip fever" style overbuild, and then
it settles down. It keeps the lawyers busy.