For years, data center development was concentrated in a few major hubs, such as Northern Virginia, Silicon Valley, and parts of Texas. However, today, rising land costs, energy constraints, water availability concerns, and congestion in these traditional markets are pushing developers to explore alternatives. Secondary markets, peripheral locations, and rural regions are increasingly being considered, especially in areas with existing fiber optic infrastructure and reliable power. According to industry reports, demand for fiber connectivity in emerging data centers like Memphis and Salt Lake City has surged dramatically, with year-over-year increases exceeding 4,300% and 348% between 2023 and 2024. Atthe
heart of this shift is fiber. Regardless of geographic location or facility size, fiber delivers the capacity, reliability, and scalability that modern data centers demand. It's not simply one option among many, but the fundamental infrastructure that enables and sustains data center growth as development expands into new regions across the country.
While all of this connectivity is based on fiber, the specific fiber architectures that support data centers differ from those used in fiber-to-the-home (FTTH) networks. Data centers increasingly rely on advanced fiber designs, such as multicore and hollow fiber, to support extreme capacity, ultra-low latency, and dense interconnection between facilities. Single-mode fiber, which underpins FTTH deployments nationwide, remains the foundation of the access networks that connect homes, businesses, and communities to these data center ecosystems.

MARKET DYNAMICS DRIVING DATA CENTER EXPANSION

Several long-term trends are driving the growth in demand for data centers. Enterprises continue to migrate their workloads to the cloud, relying on off-site facilities for storage, redundancy, and application hosting. At the same time, consumer bandwidth demand has steadily increased due to video streaming, e-commerce, and hybrid work models. Bandwidth purchased for data center connectivity surged by nearly 330% between 2020 and 2024, reflecting how the growth of hyperscale and AI-related traffic is pushing the limits of existing network capacity and reinforcing the need for robust fiber infrastructure. 3

Traditional data centers are feeling the pressure. Power availability, real estate costs, and construction timelines are becoming limiting factors, leading developers to seek locations with fewer constraints. This has accelerated interest in regional and distributed facilities that can support enterprise workloads closer to users. Industry analysts predict that the data center network infrastructure alone could grow to a $20 billion market, underscoring both the scale of the opportunity and the importance of robust underlying connectivity.4

This growth is also driving increased demand for fiber between facilities, so the United States will need to increase fiber routes from 95,000 to 187,000 miles by 2029 to scale efficiently.<sup>5</sup>
According to the Zayo Bandwidth Report, US metropolitan and backbone fiber traffic has grown by more than 40% year-over-year in major emerging data centers, reflecting the growing interconnection needs. This growth highlights why traditional copper and most wireless solutions struggle to keep pace with enterprise or AI workloads, reinforcing the need to invest in fiber optics. 


WHY FIBER OPTICS IS THE RIGHT TECHNOLOGY FOR DATA CENTERS

Data centers place some of the most demanding requirements on communications infrastructure, requiring fiber optic architectures specifically designed to support massive scale, ultra-low latency, and continuous operation. Advanced fiber technologies, including multicore and hollow fiber, are particularly well-suited to meet these needs, while single-mode fiber continues to serve as the backbone connecting data centers to regional networks, enterprises, and end users.

Fiber offers unparalleled capacity and a clear upgrade path. As data center traffic grows, operators can upgrade electronic components instead of rebuilding physical networks, making fiber a scalable, long-term solution. Latency and reliability further differentiate fiber from other technologies. Data center networks are designed around redundancy and predictable performance, which rely on dense and diverse fiber paths.

Wireless and satellite solutions, while useful in specific circumstances, introduce variability that most data center applications cannot tolerate. Reflecting this trend, Corning and Meta recently announced a multiyear agreement worth up to $6 billion to accelerate the construction of U.S. data centers that support AI and next-generation applications. Corning will supply advanced fiber optics, cables, and connectivity solutions, expanding its industrial presence in North Carolina to support Meta’s AI infrastructure. This partnership demonstrates how fiber innovation and domestic manufacturing enable the creation of scalable, high-performance data centers while generating skilled jobs and strengthening regional supply chains .These
realities are reflected in how modern projects are planned. New developments, such as Nokia's innovation campus in Canada, will drive innovations in "AI-based networks, data center networks, secure quantum infrastructure, and next-generation 6G technologies," allof which rely on high-capacity, fiber-based connectivity. Emerging AI applications and edge computing models are placing unprecedented demands on network infrastructure.

AI workloads typically require real-time processing of massive data streams, demanding low-latency, high-capacity connectivity between data centers and edge nodes. Fiber makes this possible by providing dense, high-speed interconnections capable of handling multi-terabit traffic with minimal latency. Together, these fiber optic technologies pave the way for future network applications. As these technologies mature, access networks built on single-mode fiber can be seamlessly interconnected with higher-capacity data centers and interconnect fiber, ensuring long-term compatibility and protecting current infrastructure investments

ECONOMIC OPPORTUNITY FOR RURAL COMMUNITIES AND SUPPLIERS

As data center development expands beyond traditional hubs, smaller, rural communities are gaining new relevance. In many cases, these regions already possess the assets most valued by developers: available land, access to electricity and water, and fiber networks built to serve local residents and businesses. Data centers can act as economic anchors, providing long-term construction activity, technical jobs, and operational roles. They also attract related businesses looking to locate near reliable digital infrastructure. Cooperative utilities and rural internet service providers are increasingly part of this story, especially as data center developers seek trusted local partners who understand local needs and can handle high-load interconnections. Cooperatives across the country are adapting infrastructure, negotiating interconnection agreements, and positioning themselves to reap the economic benefits of this growth. 
Communities that have invested early in fiber optics are particularly well-positioned to benefit from data center expansion. Brambleton, in Loudoun County, Virginia, is a planned community located in one of the nation's fastest-growing data centers. Planners incorporated fiber optics into long-term infrastructure plans, aligning residential, commercial, and utility construction with regional digital investment trends. As a result, Brambleton's proximity to major fiber optic infrastructure and data centers has increased its attractiveness to both residents and businesses, demonstrating how early connectivity planning can help communities capitalize on economic opportunities alongside expanding digital infrastructure .

Larger-scale partnerships, such as Corning and Meta’s $6 billion commitment to expand data center infrastructure and fiber optic production in the United States, also highlight the potential of fiber-related investments to create skilled jobs and stimulate local economies in communities hosting manufacturing facilities or data centers. FBA research on opportunities for rural suppliers highlights how communities that already have fiber, access to the power grid, and real estate are increasingly collaborating with developers to support the deployment of regional and edge data centers. By leveraging fiber networks and cooperative-owned utility infrastructure, these communities can attract data-intensive businesses while creating new revenue opportunities for local suppliers. 9

The growth of smaller regional facilities, including micro data centers and edge locations, further expands opportunities. Local internet service providers and electric cooperatives can leverage existing fiber, substations, and buildings to support new data center models and diversify revenue streams. This dynamic creates a reinforcing cycle. Investment in fiber makes regions more attractive to data center developers. Once established, data centers drive further demand, which strengthens local networks and supports long-term growth.

CHALLENGE AND CONSIDERATIONS

Despite the opportunity, several challenges can slow data center development. Power availability is often the most immediate constraint, especially as facilities grow and increase their energy density. Labor shortages also remain a concern, as both fiber optic deployment and data center operations rely on skilled technicians and engineers. Intermediate-mile connectivity is critical. Communities with robust local fiber optic networks may still struggle to attract data centers without sufficient regional transport. FBA research on intermediate-mile investment highlights how deficiencies in long-distance connectivity can limit economic development, increase costs for consumers, raise latency, reduce speed, and leave rural areas disconnected. ,
and developers. Communities that plan ahead by mapping fiber optic assets, assessing power capacity, and investing in intermediate-mile routes are better positioned to compete.

CONCLUSION

The data center market is evolving, and its next phase of growth won't be limited to a few established centers. As demand increases and restrictions tighten in traditional markets, new regions, many of them rural, are emerging as viable and attractive locations for data center development. Fiber, including advanced types like hollow fiber and multicore fiber, is the driving force behind this expansion. Its capacity, reliability, and upgradeability provide the foundation that modern data centers need, regardless of size or location. For rural communities and service providers, fiber represents more than just connectivity; it's an economic development asset that can support employment, attract investment, and enable long-term growth.
With careful planning and strong partnerships, fiber and data centers can reinforce each other, creating a lasting digital infrastructure that will benefit communities for decades to come.

REFERENCES

  1. Cooperative.com. The Rise of Data Centers. December 2025. https://www.cooperative.com/remagazine/articles/pages/the-rise-of-data-centers.aspx
  2. 2. Zayo Group. Zayo Bandwidth Report: Key Trends Driving the Bandwidth Boom. June 2025. https://www.businesswire.com/news/home/20250624662736/en/Exploding-Data-Consumption-Signals-New-Era-for-Fiber-Infrastructure-Zayo-Report-Finds
  3. 3. Data Center Online. Data center bandwidth soars 330% driven by AI demand. July 2025. https://www.datacenterknowledge.com/networking/data-center-bandwidth-soars-330-driven-by-ai-demand
  4. 4. Lightwave Online. Dycom predicts that data center network infrastructure will be a $20 billion market. August 2025. https://www.lightwaveonline.com/home/article/55312114/dycom-forecasts-that-data-centernetwork-infrastruct-ture-will-be-a-20-billion-market
  5. 5. Fiber Broadband Partnership. The underappreciated need to enable AI and data center growth: more numerous and strategic fiber interconnections. July 2025. https://fiberbroadband.org/resources/theunderappreciated-need-to-en-able-ai-and-data-center-growth-increased-and-more-strategic-fiber-interconnections/
  6. 6. Corning Incorporated Meta Platforms, Inc., Corning, and Meta announce a multiyear agreement of up to $6 billion to accelerate U.S. data center buildout. January 2026. https://www.corning.com/worldwide/en/aboutus/news-events/news-releases/2026/01/corning-and-meta-announce-multiyear-up-to-6-billion-agreement-to-accelerate-usdata-center-buildout.html
  7. 7. Light Reading. Nokia Canada begins construction of its innovation campus. November 2025. https://www.lightreading.com/ai-machine-learning/nokia-canada-breaks-ground-on-innovation-campus-
  8. 8. Fiber Broadband Association. Master-planned communities and the data center boom: Lessons from Brambleton. October 2025. https://fiberbroadband.org/resources/fba-presents-master-planned-communities-and-the-data-center-boom-lessons-from-brambleton/
  9. 9. Fiber Broadband Partnership. Opportunities for rural providers in the age of distributed AI and edge computing. December 2025. https://fiberbroadband.org/resources/opportunities-for-rural-providers-in-the-age-of-distributed-ai-and-edge-compute/
  10. 10. Fiber Broadband Association. Bridging the Gap: Why Congress Must Invest in In-Middle-Mile Broadband Networks. June 2025. https://fiberbroadband.org/resources/bridging-the-gap-why-congress-mustinvest-in-middle-mile-broad-band-networks/