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When it comes to broadband competition, this week has been a big one. AT&T on Monday announced plans to expand its high-speed fiber service, known as GigaPower, to some three-dozen new markets, including Detroit, Memphis and San Francisco. A day later, Google Fiber said it was weighing whether to bring its own ultra-fast broadband to Chicago and Los Angeles.
These are exciting developments for the Internet, not least because for millions of Americans, it may mean finally getting access to gigabit speeds. That's roughly equivalent to 1,000 Mbps, fast enough to download a full HD movie in about seven seconds. That tremendous capacity will become even more important as we connect more smart, data-hungry devices to the Web. (What it'll cost is another matter; AT&T has vowed to set prices that are "competitive" for each market.)
But this week's announcements aren't just an ordinary broadband milestone. Consider this: The number of cities where Google Fiber has actually been switched on can be counted on your fingers, whereas AT&T GigaPower is already up and running in some 20 metropolitan areas. Where many of Google's prospective expansions are still in the discussion phase, AT&T has made concrete — though critics might say "limited" — investments in many more markets.
"We're not just announcing candidate cities," said Jim Cicconi, a senior policy exec at AT&T. "We've made the decision, we're investing the capital. We're going in."
In short, AT&T is out-building Google Fiber. That's a sign of a broader shift in the industry. What we're seeing now is Google's early lead in the fiber race being eaten away by AT&T's traditional advantage in building networks. Though Google deserves much of the credit for jump-starting the competition in the first place, not to mention blazing a trail for AT&T in important ways, AT&T is on pace to beat Google to many cities in America. And this is why.
AT&T is benefiting tremendously from a chain reaction that Google initially began. By now, it's a familiar story: Google went around to cities and basically got them to compete for Google Fiber, handing out a standardized checklist to municipalities laying out all the things they could do to make themselves more attractive to the search giant.
In so doing, Google drew attention to many local regulatory processes that otherwise slow down investments in infrastructure. Now, mayors everywhere are scrambling over each other to attract Google. And that has had knock-on benefits for AT&T, said Blair Levin, a former senior official at the Federal Communications Commission.
"It has both local teams and local rights already in place so that once Google establishes certain rights, AT&T can easily take advantage of those rights for their own upgrades," said Levin.
In plain English, when Google gets a good deal, so can AT&T.
But getting the rights to dig up streets or string fiber along telephone poles is only part of the equation. Then there's the matter of actually doing it. And it can take a long time — in Google's case, as many as 18 months in Kansas City, according to Hunter Newby, chief executive of the company Allied Fiber. And in Austin, Texas, AT&T says it beat Google to market by roughly two years, even though the two companies announced their projects within days of each other. Google declined to comment.
Part of what's going on is that AT&T is leaning on decades of expertise in building networks. It has spent $140 billion laying down new fiber optic cables over the last six years, and it's likely to spend even more as it expands to markets like Asheville, N.C., Louisville, Ky., and St. Louis, Mo.
"We're pretty good at this, and we've had a lot of years to get good at it," said Cicconi. But, he added, AT&T is well aware of Google's enabling role when it comes to city relationships.
"We've been butting our heads against that wall for many years without a lot of success," he said. "Because of Google's image and PR skills, they've been able to help bring a lot of those barriers down, and frankly, raise awareness on the part of mayors and others."
Many analysts say that Google aims to invest just enough into fiber to encourage more traditional providers to build out their own networks. Then, when consumers subscribe to the better service and take heavier advantage of Google services, Google's core business benefits. In that respect, Google isn't so much going toe-to-toe with AT&T as nudging it to expand.
AT&T's core business is building and operating communications pipes. While it took Google to make the initial push, AT&T's second-mover advantage is giving it a major boost as it accelerates into a new phase of construction.
Brian Fung covers technology for The Washington Post, focusing on telecommunications and the Internet. Before joining the Post, he was the technology correspondent for National Journal and an associate editor at the Atlantic.