AT&T and BlackRock have identified several US markets that will be targeted early on as the pair plow ahead with a fiber joint venture that will initially bring open access networks to about 1.5 million locations outside AT&T's legacy wireline footprint.

As part of that phase one network build, the Gigapower JV will bring fiber-fueled services to Las Vegas, three cities in Arizona (Mesa, Chandler and Gilbert), parts of northeastern Pennsylvania (including Wilkes-Barre and Scranton) and segments of Alabama and Florida that fall outside AT&T's current wireline service areas.

More markets will be added to the list to reach the first 1.5 million fiber locations, but AT&T and BlackRock expect the phase one build to be completed sometime in 2025. The Gigapower deployments fall outside the 30 million-plus fiber locations AT&T expects to build in its traditional service areas by the end of 2025.

Figure 1: (Source: Vittaya Sinlapasart/Alamy Stock Photo)

Regarding criteria for the locations being selected by the JV, the idea is to focus on areas where Gigapower is "the first fiber provider to the home," said Gigapower CEO Bill Hogg on a press call Thursday.

"We've been very targeted in that regard because we think [Gigapower's] product is superior technology-wise to anything that cable can offer in that space... In areas where we've selected, people are hungry for choice," he said.

'Opportunities to expand'

The Gigapower network will use XGS-PON technology and will be software-upgradable to deliver up to 20 Gbit/s, execs said.

Gigapower is taking shape as cable operators such as Cox Communications, which serves Las Vegas, are moving ahead with DOCSIS 4.0 upgrades that enable symmetrical multi-gigabit speeds over their widely deployed hybrid fiber-coax (HFC) networks.

It's possible that Gigapower will expand beyond its initial target of 1.5 million fiber locations.

"If this model proves out the way we think it will, there will be plenty of opportunities to expand this well beyond what we've initially announced," Hogg said. "We have big plans to take this even further."

Gigapower is being billed as a "capital-light" approach, but the JV didn't announce an average cost per passing for its coming fiber network buildouts. However, execs expect those costs to vary by market and be determined by how much plant can be built aerially or underground.

"Based on the business case we've done thus far, we believe the returns are there for the costs per passing that we anticipate," Hogg said.

Bullish on the open access model

AT&T will be the first anchor tenant on the Gigapower networks. AT&T's broadband offerings for Gigapower will largely mirror the kind of speeds and pricing it offers on fiber networks within AT&T's own footprint. Today, AT&T offers symmetrical speeds up to 5 Gbit/s on its in-footprint fiber network.

"We will be the first selling into this, but it's being built as an open access network," said Bob Lagrone, SVP of AT&T corporate strategy. "We believe that's a better way to drive the utilization of that network up and to reach segments that AT&T might not be able to reach."

Gigapower expects to see multiple Internet service providers (ISPs) tap into the JV's open access model.

"We've been approached by several ISPs outside of AT&T that are interested in providing service over our network," Hogg said. When asked if T-Mobile, which has fiber ambitions of its own, would represent a potential tenant, he said, "Absolutely."

Hogg thinks Gigapower's open access model has solid potential and is a prime example of how the model can be developed without regulatory intervention.

"We think a commercial open access platform is the way to go," he said. "I think we'll prove that this model, at scale, will be the country's largest open access provider without one regulator getting involved at all."

BEAD potential

The Gigapower JV also believes its approach with open access and public/private partnerships creates a vehicle for potential participation in the $42.45 billion Broadband Equity, Access, and Deployment (BEAD) program.

"Communities don't have to pick winners and losers in terms of their BEAD funding," Hogg said. "They can pick a platform like Gigapower and offer that and bring multiple ISPs to the table that provide competition in a particular market."

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— Jeff Baumgartner, Senior Editor, Light Reading