Private Equity Borrows Billions to Bring You Broadband Internet

Wall Street is churning out billions of dollars in complex bonds to bankroll construction of broadband fiber-optic networks, part of a nationwide push to widen high-speed internet access. Telecommunications companies have already sold more than triple the number of so-called fiber bonds they borrowed in all of 2022. That has helped pay for expanding high-speed internet into small and midsize cities where residents and businesses previously had only one choice—expensive and spotty service from cable monopolies. Private-equity firms see money to be made: They have stakes in all of the companies issuing the bonds and have the most to gain from the borrowing boom. Leaders in the communities that are affected say the internet upgrade can’t come fast enough. AI and driverless taxis are transforming American cities, but many small towns and rural areas still lack a staple of modern life: reliable high-speed internet. Satellite and cellular phone networks that cover remote areas can’t transmit large amounts of data as reliably as fiber-optic cable, creating a digital divide across the country. The private-equity push into broadband is part of a broad shift by investment firms over the past decade toward renewable energy and technology projects. Private infrastructure investments likely will hit $1.9 trillion by 2026, overtaking real-estate investments, according to research firm Preqin.