Small broadband service providers (BSPs) and electric cooperatives are uniquely positioned to use their fiber assets to meet demand for data center capacity, according to a new report from a fiber advocacy group.

The Fiber Broadband Association (FBA) is encouraging rural BSPs to explore opportunities in distributed AI and edge computing.

Opportunities for interconnection, co-location, and edge computing exist despite the construction of massive data centers nationwide, according to the report. That’s because these centers need real estate, power, water, and network resources to operate, and all three are in short supply.

To prove its point, the report gave figures about rentals of colocation data center space. Vacancy rates are below 2%, and space in new builds is booked out years in advance.

Small BSPs and electrical cooperatives could meet this demand by repurposing assets they already own, including fiber, central-office white space, land easements, and substation headroom, the report said. These assets could be turned into small data centers that could be available within months.

BSPs and electrical co-ops could profit from taking advantage of this ecosystem, but members and communities may also benefit. Data centers could buy power at off-peak rates and use backup batteries or diesel generators during emergencies. That could improve grid stability and lower costs for everyone.

Data centers could also spur renewable integration, and that could further stabilize the grid and lower prices.

The paper suggests four business models that may make sense for BSPs and electrical cooperatives:

• Immediate, low-risk: Rack space and server leasing
• High-margin, strategic: Secure edge artificial intelligence (AI) inferencing and application-as-a-service
• Capital-intensive but lucrative: GPU leasing
• Niche: Federated AI learning and crypto mining validation (with caution)

Cooperatives and BSPs can get started by understanding the local landscape and analyzing their assets, including network infrastructure, access to power, and real estate (including properties that could be acquired near existing substations and fiber routes).

The complete data center report, “Opportunities for Rural Providers in the Age of Distributed AI and Edge Compute,” is available on the FBA’s website.