Morgan Lewis’ Andrew Lipman surfaces the top trends to watch in 2026 at Metro Connect
With the show floor packed with fiber connectivity players, data center providers, and software folks with all their financial backers, Metro Connect 2026 was a full house.
The keynote sessions and panel discussions were loaded with commentaries and insights, bold predictions, and sometimes light-hearted banter (“If AI is sexy, data centers are X-rated”) which were great on their own, but they also somewhat made up for the interminably long wait to get into the venue on Day1.
Andrew Lipman, partner and head of telecom practice at Morgan Lewis, a law firm, and who is many years associated with the event, set the stage by surfacing the most prominent trends to watch in 2026.
Lipman said that 2026 presents an “optimistic macro environment” for broadband. “It looks like President Trump’s aspirational soft-landing story is happening,” he said. “Our tax structure is also very favorable for the industry with bonus depreciation, R&D tax credits. The antitrust environment is much better than it has been.”
BEAD, a $43 billion opportunity
Lipman segued to the Broadband Equity, Access, and Deployment (BEAD) program — a $42.45 billion federal initiative for pushing broadband access to underserved areas in the United States — which has remained a topic of much speculation.
Although funds were pledged early, BEAD money was long in the coming. The program suffered multiple bottlenecks, including delay in deployment of dollars, federal approvals, and regulatory hurdles — driving up demand and cost of fiber network buildouts.
Finally, late last year, Louisiana received funding approval for $1.36 billion, becoming the first state to see BEAD infrastructure dollars. In February, it disbursed $43 million in BEAD contracts,10% of the $430 million it has signed so far.
“Finally, the BEAD money is starting to dribble out. Congratulations to Louisiana,” Lipman cheered.
The National Telecommunications and Information Administration (NTIA) has so far approved $23 billion in state awards with $20 billion more slated to follow. Based on samples, it appears that in a majority of the locations, the money is going toward fiber. Analysts tracking BEAD awards found that roughly 65% of the locations are set for fiber deployments, with satellite and fixed wireless trailing at 21% and 12% respectively.
“The hyperscalers are definitely the VIPs of this program,” he continued. “They generate enormous opportunity. One hyperscaler exec said, ‘Our model in the AI race seems to be if you’ve got the money, spend it’.”
Lipman hopes that combined with other state broadband programs, like R-Block 2, ACAM 2 and Reconnect, funding may reach an accumulated $80 billion to $90 billion.
AI’s one big fallout
AI serves as a major accelerant for both fiber deployments and data center constructions. Its surge has driven up demand for fiber networks and need for data centers builds across the country which has created a bottleneck: skill shortage.
Lipman reflected, “A client told me recently that there’s no one in the United States under 50 years who knows how to splice cable,” and urged, “We need to do better training. We need to get more minorities. We need to get more women into the workforce.”
M&A continues
2025 was a good year in terms of mergers and acquisitions (M&A) with several high-profile transactions closing, like the merger of Charter and Cox communications, AT&T’s acquisition of Lumen’s fiber division, T-Mobile’s purchase of UScellular, and Verizon’s acquisition of Starry.
Lipman predicted the momentum to continue in 2026 with the current administration being more supportive of such transactions. “Scale has always been really important in this industry,” he said. “We have a new Department of Justice, new FTC, new FCC, much more willing for consolidation than we saw under the Biden administration. We’re seeing more deals done. We’re seeing more conditions. We’re seeing fewer second requests.”
Additionally, he predicted strong demand in the fiber-to-the-home (FTTH) market. “Fiber-to-the-home was hot last year, remains very big. In the U.S., it’s a $125 billion market, perhaps larger than any other market…Even today, nearly 65% of U.S. homes lack access to fiber. So, huge demand for fiber-to-the-home. I think we’ll see some changes in that sector today,” he said.
Data centers face backlash
Addressing the public backlash over data centers’ growing power demands, Lipman warned investors and operators to be wary of the implications.
“What is the one thing that concerns me, that keeps me up at night, and that is this percolating concern in local communities, now getting into Congress, almost thought of as a Luddite approach…We are witnessing some populist sentiment against data centers, much of which is misfounded, much of which is not based in reality. But I think it’s incumbent on us and it’s incumbent on the industry to have a counter message.”
Lipman rounded off the session with the AI supercycle and its “tsunami effect”. While the AI boom has spurred data center construction and rapid fiber deployment across the country, he cautioned that businesses and banks must look beyond the hype to ensure their investments are well placed.
The questions we should all be asking, Lipman said, are: “Will AI be bigger than social media? Will AI be bigger than smartphones? And finally, will AI even be bigger than fire?”
He concluded saying that the trick lies in one’s ability to see clearly separating the myth from the hype.
