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April 22, 2014

AT&T Rediscovers Broadband Infrastructure; Verizon to Follow?



By Doug Mohney
Contributing Editor



After a decade or so trying to deploy broadband on the cheap, AT&T has finally embraced the power of fiber.  Will Verizon rediscover the power of building broadband infrastructure before Google (News - Alert) can arrive?

AT&T announced yesterday it is looking at expanding its fiber network "to up to" -- in other words, tempt us, and we will come -- 100 cities and municipalities nationwide, including 21 new major metro areas.  New builds will get gigabit fiber speeds and TV services to consumers and businesses.

From its press release, AT&T (News - Alert) is taking a page from Google's PR play of getting communities to sit up and beg.   "Communities that have suitable network facilities, and show the strongest investment cases based on anticipated demand and the most receptive policies" -- more code for make it easy for the build -- "will influence selection and coverage maps within select areas."

Both AT&T and Google Fiber are now co-opting municipalities to do the heavy lifting of market research and to provide incentives to grease the skids for deployments.  The companies can pick the best markets based upon locally provided data and incentives without having to guarantee anyone gets anything.  If politicians complain they aren't getting fiber, providers are off the hook by saying the market conditions aren't right to support a major infrastructure build.

Unfortunately it smacks of sports stadium brinkmanship, where cities are forced to bid against each other for the "right" to get a franchise.  However, cities can't simply change the channel if they don't get fiber services.   I'm not sure how this will work out in the long run for AT&T, given its relative monopolistic position the markets it serves.

Eligible areas include Atlanta, Augusta (News - Alert), Charlotte, Chicago, Cleveland, Fort Worth, Fort Lauderdale, Greensboro, Houston, Jacksonville, Kansas City, Los Angeles, Miami, Nashville, Oakland, Orlando, San Antonio, San Diego, St. Louis, San Francisco, and San Jose.     If there's going to be a political backlash, I'd expect it to happen in one or more California cities who will view broadband as necessary infrastructure, rather than an option for

Google hasn't said much about accelerating its timetable for fiber deployment and it might not need to do so.  If someone else is deploying high speed broadband in larger major markets, it can fill in the "blanks" with fiber deployments among the places where AT&T isn't going. 

 Verizon also hasn't said anything about expanding its FiOS (News - Alert) footprint, most likely due to no looming challenging within its territories by Google Fiber.  It wouldn't surprise me if the company discovered AT&T's current strategy and used it to get favorable terms in some areas where it could not make a stand-alone business case for FiOS deployment, such as Baltimore and its suburbs. 

At some point, Verizon (News - Alert) will have to address the blunt fact that if it wants to get rid of copper infrastructure, it will either have to put something to replace it or effectively abandon good chunks of its rights-of-way that could be taken up by a Google Fiber or a newly expansive AT&T. 




Edited by Stefania Viscusi
 
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