Just shy of four years after Google Fiber picked Kansas City for its first foray into the FTTH world, and two and a half years since they followed through and started hooking up fiberhoods, the incumbent is responding in force. AT&T yesterday launched its GigaPower offering in parts of Kansas City and its suburbs.
As part of the move, they are going into neighborhoods and towns where Google Fiber hasn’t yet managed to reach, and planning to expand west to Shawnee KS and east to Independence MO. While they are touting ‘strong investment cases and receptive customers’, it’s pretty clear that this move is aimed more at not conceding more ground to Google just as it was in Austin. Otherwise, they’d have put their money somewhere where there isn’t any, you know, competition.
An interesting dichotomy is that AT&T is making its move in Kansas City just as the FCC is moving to extend Title II to consumer broadband. After Obama’s call for just that in November, AT&T angrily made noises about cutting back its fiber buildout plans in responses. But they not only quickly walked that back, they’ve now chosen to invest money in a competitive market just as the Title II necklace is about to be put around its neck.
Could it be that despite all the noise, the incumbents really aren’t as stressed out over Title II and net neutrality as they would like us to believe? Or is AT&T simply finally ready to rumble when it comes to FTTH? Either way, I expect this spring will see launches in their other nascent FTTH markets, with the announcements coming out one by one to keep up the momentum.
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Categories: FTTH · Government Regulations
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T2 presents a real investment issue for small, independent providers.
Why?
basic regulatory issues, ie. cost of compliance, etc. and pressure on margins? is that the primary reason? just curious and would appreciate your insight
Cost of compliance is the big one for me. Just the paperwork involved and risks of not being in compliance are huge. Not that I would intentionally be out of compliance, but out of 332 pages, there’s certainly something to fowl up.
The guilty until innocent mentality of having to defend against every uneducated consumer’s perception of their being an issue would be costly.
Then due to all of the above, the already difficult task of getting money from investors is now more difficult.
Indeed. Consumers who watched an ignorant and one sided tv show to learn about T2 will be pretty shocked over the next few years exactly what they asked for.
Agreed. It’s already difficult enough to convince investors to put money into a risky market. Add regulatory compliance to that beast and it will for sure turn investors away, which is the driving force behind faster speeds.
The small ISPs will suffer. The big ISPs will now get to put their political donations to work.
Wow that’s cooll. Nice one AT&T!
Are there any regulators out there getting this? Obviously, the fixed line duopoly regulators permitted will not stimulate new investment until a new entrant threatens to introduce improved bandwidth solutions.
This seems so crazily obvious that it shouldn’t require pointing out. However, our regulators today are far more concerned about their next job in the private sector that they’re willing to countenance sub-optimal public interest outcomes.
(It seems like our regulators use a “can’t prove a negative” philosophy to restrict competition-friendly policies. In other words, you can’t prove more fixed line internet competition will produce better consumer outcomes, so we, the regulators, don’t have to promote policies that promote it. That works, of course, until a deep-pocketed company like Google steps in to confirm what Adam Smith taught us 239 years ago.)