Minnesota is once again directly experiencing big changes in the tech sector. In addition to data center construction (and controversy), the state has become a major-league playing field for fiber optic industry consolidation.

In February, AT&T made itself a major fiber player in the Twin Cities metro by closing on its acquisition of Quantum Fiber, the consumer fiber business operated by Louisiana-based Lumen Technologies. (Lumen also is the parent company of telecom provider CenturyLink, which continues to operate.)

AT&T also is building its metro-area fiber presence via Gigapower, a fiber-network joint venture it established in 2022 with New York-based BlackRock, the world’s largest institutional asset manager. (BlackRock’s Global Infrastructure Partners subsidiary acquired Duluth-based electric utility Allete last October.)

This deal follows on the heels of two other fiber company acquisitions. In January, Verizon purchased Dallas-based Frontier Communications, which offers fiber connectivity in the Twin Cities region and elsewhere in the state. And last September, Indiana-based Metronet acquired Minnetonka-based U.S. Internet (USI), which provided high-speed internet to about 140,000 commercial and residential customers in and around the Twin Cities. At the time of its USI purchase, Metronet also delivered fiber connectivity to parts of the metro, along with customers in Owatonna, Faribault, and Rochester. Like Gigapower, Metronet is a joint venture between a telecom and a large investment firm—in this case, T-Mobile and KKR, respectively.

These acquisitions are happening while Minnesota continues to pursue border-to-border broadband access. Will fiber consolidation help or hinder those efforts? And will business and residential customers benefit?

The fiber opportunity

Gigapower has a distinctive business model. It designs, builds, and operates scalable high-speed fiber networks, but it’s not itself an internet service provider. The company’s infrastructure is “open access,” meaning that any ISP can “lease” its fiber. The idea, the company says, is to expand access to high-quality connectivity while supporting a more competitive broadband ecosystem in areas that have had limited fiber investment.

In the metro, Gigapower’s “anchor tenant” will be AT&T. The joint venture is focusing its network expansion on communities in the south metro, including Apple Valley, Bloomington, Burnsville, Chaska, Chanhassen, Eagan, Prior Lake, Rosemount, and Shakopee. These are cities, the company says, where “true fiber broadband competition has been limited.”

And in fact, there are still plenty of places in the seven-county metro where fiber can be installed. Research conducted by Ann Treacy, a consultant and blogger who posts regularly on the “Blandin on Broadband” blog under the auspices of the Grand Rapids-based Blandin Foundation, identified the percentage of households and businesses in each metro county that has access to speeds of 1,000 megabits per second (Mbps) download and upload, which would be considered “ultra-fast” internet speeds ideal for evolving bandwidth needs:

• Anoka: 27.76%
• Carver: 57.31%
• Dakota: 53.24%
• Hennepin: 59.83%
• Ramsey: 59.77%
• Scott: 62.91%
• Washington: 27.61%

Access to 1-gig speeds isn’t necessarily synonymous with fiber connectivity. But as Treacy notes, “once you look for the higher speeds, you can eliminate most of the other options.”

Indeed, parts of Greater Minnesota are further along in developing high-speed fiber networks. “I have a number of members that have completed fiber-to-the-premises installations already,” says Brent Christensen, president and CEO of the Minnesota Telecom Alliance, a Madelia-headquartered trade association that represents 40 Minnesota telecommunications companies, most of which are smaller providers in Greater Minnesota. “And the vast majority are either done or just about done building out fiber.”

It’s not only small-town telecoms that are installing fiber. This month, the Bois Forte Band of Ojibwe in northern Minnesota began construction on a fiber optic expansion project intended to connect more than 2,000 Tribal residents. (Also in the Great North: Iowa-based ImOn Communications recently announced plans to build a fiber network in Duluth. This would be ImOn’s first foray into Minnesota.)

In the Twin Cities region, several companies have pursued opportunities to deliver fiber connectivity. Missouri-based Gateway Fiber entered the metro market in September 2023 with installations in Blaine and Coon Rapids. And in recent years, Comcast has completed fiber installations in 10 metro-area cities.

But this doesn’t explain the consolidation in the metro market. Why are larger fiber companies buying smaller ones?

High-speed consolidation

Fiber is certainly not a new technology. But, despite being considered the gold standard for high-speed broadband, fiber hasn’t ruled the internet access market. The dotcom bubble’s burst in 2001 slowed fiber network construction and deployment for nearly a decade, resulting in miles and miles of unused “dark fiber.” Until fairly recently, connectivity providers have considered copper landlines, coax cable, and fixed wireless networks more cost-effective platforms.

But with the rise of cloud computing, video conferencing, online gaming, telehealth, and AI applications, demand for fiber has been booming. A study released in September 2025 by Cincinnati-based broadband consultant CostQuest Associates determined that fiber services are now available to more than half of all “broadband serviceable locations” (BSLs) in the U.S. (BSLs are businesses and residences where broadband service is or can be installed.)

Though demand has been rising, construction costs remain high. This can make it challenging for smaller fiber firms to get projects going. These companies do have access to funding via the $42.45 billion federal Broadband Equity, Access, and Deployment (BEAD) program. But managing the BEAD grant process is complex, and it requires companies to manage multi-projects. These are capabilities that larger entities with more resources are better equipped to handle.

In a report published in late February, New York City-based financial advisory firm AlixPartners predicted that consolidation in the U.S. fiber industry will accelerate in the next 12 months. The report’s authors base this conclusion on a survey of 100 fiber company executives, industry investors, and funders. According to AlixPartners, larger entities are looking to acquire smaller, “underscaled” fiber providers that are facing headwinds to expansion.

“Survey data shows that half of operators have reduced investment in new market expansion, while another 16% have stopped entirely,” the report says. In addition, “skilled labor shortages, permitting constraints, and supply chain friction have slowed deployment timelines and inflated capital expenditure.” In other words, smaller companies don’t have the scale and investor support to make new fiber installations pencil out satisfactorily.

By contrast, “larger players can engineer strategic consolidation to secure network density, optimize cost structures, and command long-term wallet share.” In sum, “there is consensus on the inevitability of consolidation to improve scale and reduce liquidity challenges.” Smaller operators in markets with limited competition from larger fiber companies are particularly attractive acquisition prospects.

The Minnesota Telecom Alliance’s Christensen notes that consolidation has a long history in the telecom business. “I’ve been in the industry for 30 years, and we always seem to have these ebbs and flows of consolidations, mergers, and acquisitions,” he says. “It’s not a big deal—it’s something that happens from time to time.” Christensen doesn’t expect the current wave to have much effect on his mostly outstate membership.

Still, the question remains of how—and if—this consolidation benefits business and residential ISP customers in the metro. The amalgamation of smaller entities into larger entities could help finance more fiber project construction. And Gigapower’s open access model may open up a more competitive market for high-speed broadband ISPs.

“My hope is that the consolidations can help leverage the resources to ensure that all Minnesotans receive the most affordable, reliable broadband that the companies can bring to their customers,” says Bree Maki, executive director of the State of Minnesota’s Office of Broadband Development. “It could potentially improve network reliability and quality because there are more resources for maintenance and upgrades. They can also invest in redundancy and advance infrastructure. Economies of scale do lead to potential lower costs—operational savings which can be passed on to consumers.”