Brightspeed’s Plans to Invest That $2 Billion in Its Network

Brightspeed’s origin story isn’t typical for the telecommunications industry, at least not for a company of its size. It all started with an investment premise that Apollo Global Management wanted to test. That premise: “If we invested in an under-invested wireline company, could we turn it into a growth company?” Apollo negotiated a deal to buy CenturyLink’s local service business in 20 states, which appeared to be an excellent place to test the premise. Only 2 to 3 percent of the footprint that Apollo bought from CenturyLink had been upgraded to fiber when the ownership was transferred. Brightspeed’s goal is to get fiber to 50 percent of its footprint using the $2 billion in funding that Apollo made available to the company for deployments. As the company deploys fiber, it is using a rather uncommon network architecture that management expects to be more efficient, thereby maximizing the number of locations that can be upgraded. One aspect of that architecture is eliminating fiber distribution hubs. In addition, the company began using plug-and-play fiber connections as an alternative to splicing. This approach saves installation time and helps the company maintain deployment schedules, even when technicians who are adept at splicing are in short supply. Perhaps it’s too soon to determine the accuracy of Apollo’s theory that boosting fiber deployments can turn a traditional company into a growth machine. But we should get the answer within the next few years as we watch what happens with Brightspeed.