Gigapower Vision

AT&T expects to see BEAD funding flow from the federal government to the states and expects the “more aggressive” states to award some of that funding to broadband projects before year-end, said AT&T CEO John Stankey on the company’s fourth quarter earnings call today.

The BEAD program has a budget of $42.5 billion to cover some of the costs of making broadband available to unserved and underserved areas nationwide.

Citing the 80/20 rule, Stankey said, “The bigger states that are going to have the bulk of the funding are pretty zoned in on this and are moving pretty aggressively to get the process underway,” he said.

Smaller states, he said, may “take a little bit longer to get their act together” and may be waiting to see what the more aggressive states do. The smaller states, he said, may use a “fast follower” approach to BEAD.

In the third quarter of the year, Stankey said, “There’s going to be monies starting to flow down from the federal government.”

He cautioned that, we “won’t see substantial shovels in the ground or customers served this year but I do think that you’re going to see projects and monies awarded before we exit this year.”

He also expects to see some customers brought online at locations deployed through the BEAD program in some of the more aggressive states in 2024.

As of now, he said, those states “are just trying to get the data to fit into the process.” That was an apparent reference to data about broadband serviceable locations and broadband availability data.

Broadband providers are in the process of submitting availability data based on a location database created by a contractor to the FCC. Some stakeholders have questioned the accuracy of some of that data, but NTIA has said it will not delay its plan to determine how much BEAD funding will go to each state based on this data.

The original target date for making those allocations was June 30, 2023, although NTIA sometimes has simply referenced summer 2023 as the allocation date.

Gigapower Joint Venture

Also on today’s earnings call, Stankey offered a few more details on the Gigapower fiber network joint venture that the company announced with BlackRock in late December. That venture aims to deploy an open access fiber network outside AT&T’s traditional local service territory.

Stankey noted that some people have questioned why AT&T is investing over $1 billion to serve 1.5 million locations but said that if the first 12 to 18 months are successful, the number of locations served will increase.

AT&T, he said, views Gigapower as “a vehicle that’s set up so that we can move very quickly to increase the amount of funding and the amount of capacity that’s in that entity” if the provider determines that it needs scale and needs to move faster.

A replay of the earnings call is available at this link.

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