Hunter Newby, the CEO of fiber company Allied Fiber, believes the policies of the Federal Reserve Bank of the United States are impeding investment in telecom infrastructure -- and it may be creating a crisis in the world of "dark fiber."
Dark fiber is the building block of networks. It's fiber cable that has been laid in the ground but not yet "lit" by being connected to networking equipment and services. Think of it as a digital Interstate system. Newby says that Fed's 0% rate policies have driven money into other asset classes and diverted money away from more challenging infrastructure projects, which have longer term benefits. He says we need a more aggressive national fiber infrastructure policy.
His arguments make sense. Investment in infrastructure can have beneficial results. Recently the Rayno Report published research results showing that investment in gigabit broadband can boost GDP. I've also written here about the puzzle of the plummeting money velocity: Since the Fed has implemented 0% interest rates and injected $4 trillion into the banking system, money velocity has collapsed. See the chart below from the St. Louis Fed, for proof.