google vs attLeawood, Kansas is an example of the interesting competitive dynamics forming around gigabit Internet and AT&T versus Google. Google recently decided to opt out of an agreement to build Google Fiber in the Kansas community and AT&T has now come in behind them and agreed to fill the gigabit void with their U-verse Gigapower service. The Leawood, Kansas city council was to vote on the new AT&T proposal as early as yesterday evening, according to a story in the Kansas City Star.

Google Fiber Opts Out
The debate apparently centers on rights-of-way issues. The local paper reports that Google requested rights-of-way to existing poles for the construction of Google Fiber, but apparently was denied, although the details haven’t been revealed as to exactly what the dispute was about. As a result, Google decided to pull out and not build in the Kansas community.

Seeing an opening, AT&T, who as the incumbent provider already has rights-of-way and existing infrastructure, seized on the opportunity to step in and build gigabit infrastructure.

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The move is indicative of the evolving marketplace for gigabit services. Google has changed the game for overbuilding by extracting demands from communities to build their Google Fiber infrastructure. It allows them to be very choosy about what communities they serve and how they build their network in them.

With Leawood, they are demonstrating they are not afraid to pull out if those demands aren’t met. It’s an exercise that Google hopes other communities take note of, as they look to aggressively expand their Google Fiber footprint by inviting a slew of other markets to basically ‘bid’ for the right for Google to build Google Fiber.

AT&T Sees an Opening
You might argue that the competitive threat of Google Fiber awakened AT&T, who shortly after Google’s announcement to expand Google Fiber out of Kansas City into Austin, embarked on an aggressive gigabit FTTH initiative of their own. That initiative may ultimately see them in 100 markets with Gigapower.

In Leawood, AT&T sees an opportunity not only to defend their turf, but also to get some positive PR by ‘coming to the gigabit rescue.’ In fact, AT&T and Google are set to become pretty fierce rivals in the broadband space in multiple markets. AT&T got to market first in Austin with Gigapower and has targeted several markets on Google Fiber’s expansion list to bring their version of gigabit Internet as well. It should make for an interesting competitive battle.

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9 thoughts on “Google Fiber Opts Out, AT&T Steps In

    1. True Fred, but the story also highlights the looming and growing competitive battle between Google and AT&T in markets like Austin and soon to be others. Additionally, while they won't compete in Leawood directly, it is a part of the Kansas City metro area, where in varying degrees, they are competing. The point is Google and AT&T are and will be competing on many levels in Kansas and other markets to come.

  1. It does not make economic sense to duplicate the local physical access cables to each home or business In a local area. We did not do this when we had the plain old telephone service (POTS) service on copper twisted pairs access network. Broadband is just the "new" highway we need to build to each home or business. As an example we do not build multiple access roadways to your home or business. What we do is build a single network of access roads and the roads are shared by all our neighbours and all companies that offer services to the local households and businesses. No single business owns the access roadways in the neighbourhoods. What we need is a common shared fibre optic access network over which all companies like Google, AT&T, Netflix and others offer services. Our current business model is allowing the first company to establish a broadband service to become the local "monopoly". This is bad for the customer and for the economy.

    1. Nice to talk about, but completely unrealistic. What would you do with all of the existing investment? Both telco and cable have built infrastructure to the home already. This might have some merit if you were starting from scratch, but that ship sailed decades ago…

        1. So you're going to take taxpayer money (I assume) and build yet a third pipe to each and every home? What happens to the investment made to bring the previous two pipes? In your analogy, that would be like having two or three roads on top of each other to every home. That wouldn't make sense either.

          1. You should have separate organisations for the physical infrastructure and companies that provide services. Companies that provide services would pay the company who own physical infrastructure for access to the customer's premise. Hopefully then we do not have this perpetual net neutrality debate. Yes you do end up with a toll road charge to access the customer's premise but all service providers pay the same charge and compete by providing the services the customer needs and is will to pay for. This is basically what the FCC is currently debating by regulating part of an ISP operation

  2. In Austin, Texas, Grande Communications beat both AT&T and Google to market with Gigabit services (Feb 2014). The article may lead readers to believe that AT&T was first to market Gigabit services in Austin. They were not.

    1. The catch there is that neither company serves much territory, though from what I'm seeing Grande has a larger service area than AT&T. I've used gigabit GigaPower…a friend's upscale, brand new apartment complex just south of the river has it…and it's every bit as good as what's advertised. But it's also unavailable in most of town, so TWC's 300/20 is a much surer bet (albeit a more expensive one).

      Again, Grande is better, but Grande isn't available at all in a fair chunk of town. And in other parts of town, 110/11 is the best you can get, albeit at an attractive $45 per month (far less than TWC's standard tier at 50/5, which is $58/mo plus modem rental plus some sales tax). Though at that point you can go faster by using TWC.*

      * Subject to interconnection issues, which have gotten a lot better anyway.

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