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AT&T Announces Its Own “Gigabit Fiber Network” for Austin; Details Leave Wiggle Room

att-logo-221x300On the heels of today’s announcement from Google that it intends to make Austin, Tex. the next home for Google Fiber, AT&T issued a press release claiming it was suddenly interested in building a gigabit fiber network in Austin too.

Today, AT&T announced that in conjunction with its previously announced Project VIP expansion of broadband access, it is prepared to build an advanced fiber optic infrastructure in Austin, Texas, capable of delivering speeds up to 1 gigabit per second.  AT&T’s expanded fiber plans in Austin anticipate it will be granted the same terms and conditions as Google on issues such as geographic scope of offerings, rights of way, permitting, state licenses and any investment incentives. This expanded investment is not expected to materially alter AT&T’s anticipated 2013 capital expenditures.

Currently, AT&T’s U-verse system in Austin — a fiber to the neighborhood system — cannot exceed 25Mbps as it is now configured. GigaOm’s Stacy Higginbotham reports AT&T told her it would build its own fiber to the premises system in Austin to support faster speeds.

But AT&T’s announcement does not come without plenty of wiggle room which could make today’s announcement little more than a publicity stunt:

  1. AT&T claims it will build “infrastructure” capable of delivering “up to” 1Gbps. This could mean a network that supports a maximum of 1Gbps of shared Internet traffic, not 1Gbps to each home or business;
  2. AT&T does not say it intends this network for residential customers, nor did it suggest a monthly price for gigabit service. Its Project VIP expansion describes planned broadband speed upgrades for residential U-verse customers of up to 75Mbps and for U-verse IPDSLAM to speeds of up to 45Mbps, not 1Gbps;
  3. AT&T’s Project VIP already specifies fiber network build outs, but they are destined for cell towers, large business complexes, and multi-dwelling units that will share a fiber connection;
  4. AT&T wants the same terms and conditions Google has received, including investment incentives. But AT&T could have applied for those incentives, and potentially could have already received them, if it specified plans for a gigabit network of its own. Instead, AT&T executives have always believed residential customers do not want or need gigabit broadband speeds. In fact, AT&T still doesn’t believe fiber to the home service makes economic sense, which is why it invested in a cheaper fiber to the neighborhood system that still relies on old copper wiring. AT&T also warns that, “Our potential capital investment will depend on the extent we can reach satisfactory agreements” with local officials on those incentives;
  5. Wiring a city of Austin will cost tens of millions to reach every resident with service. Such an expense might be considered materially relevant to shareholders, requiring disclosure. Building a much lesser network, like a gigabit middle mile network or only offering fiber service to institutional or commercial customers would cost far less and could escape reporting requirements.

AT&T also did not miss an opportunity to promote its deregulatory agenda, which has so far not proved to be of much help to broadband speed enthusiasts stuck with DSL or U-verse.

“Most encouraging is the recognition by government officials that policies which eliminate unnecessary regulation, lower costs and speed infrastructure deployment, can be a meaningful catalyst to additional investment in advanced networks which drives employment and economic growth,” said Randall Stephenson, AT&T chairman and CEO.

AT&T’s agenda might result in a meaningful catalyst of a different kind — the end of rural landline telephone and broadband service.

Currently there are 5 comments on this Article:

  1. tacitus says:

    Sounds to me as if they want to make Austin’s deal with Google more difficult and more expensive to consummate by demanding the same level of tax breaks and regulatory favoritism as Google.

    The implication is clear — they will sue if they don’t get the same deal as Google.

    I hope Austin doesn’t fall for this. If AT&T wants the same deal, they need to contractually guarantee that they will provide the same level of service as Google at the end of it, with some form of penalty for reneging on the deal later.

    • Scott says:

      They can stomp their feet and cry all they want about Google’s deal but it’s apples and oranges. AT&T isn’t offering to wire fiber to the home across all of Austin, they want the same breaks as Google but don’t want to spend any of the money for the same infrastructure.

      Their media relations team and lobbyists will try and make it sound otherwise but they won’t be able to back any of it up.

      • txpatriot says:

        Scott writes: “AT&T isn’t offering to wire fiber to the home across all of Austin, they want the same breaks as Google but don’t want to spend any of the money for the same infrastructure.”

        You imply google is offering to wire fiber to the home across ALL of Austin — but there is no evidence whatsoever to support that claim.

        Ask the folks in KC. ONLY those neighborhoods that guaranteed a sufficient subscription percentage were awarded with promises of FTTH. Those neighborhoods that didn’t promise enough customers were red-lined out of the project.

        You can bet your bottom dollar AT&T would LOVE to be able to pick and choose its fiber deployment that way.

        • Political pressure is making Google also do some of those poor city neighborhoods which are likely to only take them up on the free 5Mbps accounts. But they won’t be first.

          AT&T can redline all they want for broadband-only service, which does not require a franchise agreement. Texas has a loosely written statewide video franchise agreement that will let AT&T spend years deploying U-verse (it is still not available everywhere it is planned to be), so nothing would change for fiber rollouts.

          This is clearly an AT&T smokescreen because AT&T has consistently argued consumers don’t need or want gigabit speeds and their shareholders were convinced the company was not going to spend money on fiber to the home, unlike Verizon.

          AT&T will never deliver a true equivalent to Google Fiber. They will weasel out of it or call their 1GB middle mile network and institutional, MDU, and commercial fiber connections “gigabit fiber” and call it a day.

          Time Warner Cable can’t deliver gigabit fiber over their existing coax network. If they tried for far faster download speeds, they’d have to convert most of the TV lineup to digital to open up bandwidth. TWC also says consumers don’t need or want those speeds.

  2. elfonblog says:

    Hey, AT&T: BWAHAHAHAHAHAHAHAHAHAHAHAHAHAAH!!!

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