On Tuesday, Verizon Wireless took further steps toward fulfilling its fifth-generation (5G) network ambitions with the signing of a $1.05 billion purchase agreement with Corning that will provide Verizon with up to 12.4 million miles of optical fiber infrastructure each year from 2018 through 2020. The Corning deal compliments Verizon’s recently completed $1.8 billion acquisition of fiber optic network assets held by XO Communications. Combined with a separate, but related lease of XO spectrum assets that was approved by the FCC last summer, the XO transaction gave Verizon access to (1) a national, inter-city fiber network which spans 20,000 route miles and includes fiber rings in 45 of the top 50 U.S. markets and (2) FCC licenses in the 28 GHz and 39 GHz bands that cover 45% of the U.S. population.
According to a Verizon spokesman, the Corning purchase is intended to help Verizon pursue “growth opportunities in 5G” that include “fixed 1 GB service, smart cities and low-latency applications for commercial use in transportation and other industries” as well as “4G LTE densification to add network capacity nationwide.” Pointing to Verizon’s plan to conduct 5G technology trials in eleven markets and to his company’s ongoing “One Fiber” initiative which began last year with a $300 million, six-year long commitment to replace Boston’s aging copper network lines with fiber infrastructure, Verizon chief supply chain officer Viju Menon also noted that “securing the required volume of optical fiber and hardware solutions with Corning will ensure we meet our planned rollout schedules.”
Meanwhile, funds from the Verizon deal are expected to offset Corning’s projected $250 million cost of expanding and updating its optical fiber, cable and solutions manufacturing facilities “to help meet the demand of its global carrier and enterprise customers.” A Corning spokesman informed reporters that work on the expansion project will begin later this year with the goal of bringing all manufacturing facilities into full operation during 2018. In a press statement praising the deal, FCC Chairman Ajit Pai predicted that the agreement “will create thousands of high-quality jobs building and laying fiber” that will “go a long way toward closing the digital divide.” Asserting that “a forward-thinking approach” which “relies on market incentives” is “the best way to deliver digital opportunity,” Pai promised that the FCC “will continue to focus on creating a regulatory climate that favors greater investment.”