Here is why Google is AT&T’s New Best Friend

Written by on May 20, 2015 in Opinion with 0 Comments

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Amongst the rhetoric, brinkmanship and glimpses of common sense over the past couple of days, generated by the debate over Net Neutrality, Randall Stephenson said something incredibly interesting. He was talking at a J.P Morgan conference this week about a strange anomaly – and opportunity – created by Google. He put the success of their Austin, Texas, fibre roll out down to Google.

Both companies are targeting specific US cities with specific investment plans for fibre roll out. Google’s roll out in Kansas is much discussed, but they have also targeted Austin. So has AT&T. Google went to the city and asked to roll out fibre to specific areas – called ‘fibrehoods’ of course – and got the agreement of the city. This created the precedent for AT&T, who asked – and got – the same terms. Up to now, according to Stephenson, if you wanted to roll out fibre in Austin, you had to fibre up the whole city. And this, he said, was too heavy an investment to make. By being able to target areas that will provide a quick return on investment, fibre can be rolled out incrementally, and cost effectively. Interestingly, AT&T is live in Austin, Google with less experience of rolling out fibre, is not.

This goes right to the heart of the ‘them and us’ arguments about the advantages that digital service providers (DSPs) have over traditional telecoms operators. Unburdened, goes the argument, with regulation, duty of care and universal coverage they can pick and choose their markets and outflank the more cumbersome telcos.

Until now.

This decision by Austin might well be a defining moment, a moment when telcos can take advantage of what unregulated DSPs are able to do.

One scenario is that Google targets a city, say Denver, and gets approval for its ‘fibrehood’ approach. In goes AT&T or Verizon and gets the same deal and maybe targets different neighbourhoods. Overall, the result is good for the city and customers.

If the Regulator, as is reasonably likely, says to AT&T, ‘actually no, you have to provide coverage for the whole of Denver’ then AT&T can say ‘well, thanks, but I’ll head to Des Moines.’ Or AT&T (other providers are available) could challenge the city’s decision and – by a slightly round about way – get regulators to impose on Google the same rules that it imposes on AT&T.

Either way, the playing field for investment in infrastructure could be levelling out.

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Alex Leslie

About the Author

About the Author: Alex was Founder and CEO of the Global Billing Association (GBA), a trade body focused on the communications sector. He is a sought after speaker and chairman at leading industry conferences, and is widely published in communications magazines around the world. Until it closed, he was Contributing Editor, OSS/BSS for Connected Planet. He is publisher of DisruptiveViews and previously BillingViews. .

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