AT&T may beat Google again in offering an ultra-high speed fiber network, this time in North Carolina.
AT&T, which has already built a fiber network in Austin, Texas, announced Thursday that it's in final negotiations with the North Carolina Next Generation Network or NCNGN to deliver 1 gigabit per second broadband over a new fiber network.
AT&T's announcement that it is close to finalizing a deal in North Carolina is another indication that competition to build ultra-high speed gigabit networks is heating up as demand for these speeds increases among residents in communities. Google, which first announced plans to build a gigabit fiber network in 2010, has helped set the stage for communities and private companies to come together in building new fiber networks capable of delivering ultra-high speed networks. And now cities around the country are working with private broadband providers to build such networks.
The NCNGN is a regional initiative that spans six communities in the Triangle and Piedmont Triad regions of North Carolina. The group, which issued a request for proposal for interested broadband providers, includes members of the cities' chambers of commerce, representatives from several area universities and a nonprofit group called Gig.U. The cities involved in the project include Winston-Salem, Cary, Chapel Hill, Carrboro, Durham, and Raleigh.
In February, Google said that the cities in the Triangle region were among the 34 cities it was considering for expansion of its Google Fiber business. The company launched its first Google Fiber network in Kansas City in 2012. Last year, Google announced plans for expansion in Austin and Provo, Utah. But it's still in the permitting phase in Austin.
Meanwhile, AT&T began offering its fiber service in Austin in December.
AT&T appears to be one of potentially several broadband providers negotiating a contract to build a fiber network in the North Carolina Triangle region. An AT&T spokesman confirmed the deal is not exclusive. Press reports indicate that the NCNGN is negotiating with eight different providers. Time Warner Cable could be another company that is also selected to build part of the network. The company has acknowledged its in negotiations with the NCNGN group.
AT&T said in a press release that the next step in its negotiations with the group is approval from the governing bodies of the six communities involved in the project.
AT&T's all-fiber network is expected to deliver download and upload speeds of 1-gigabit per second, which is 10 times faster than most consumer broadband available to communities today. AT&T's service will also include TV and telephony voice services.
In addition to building the residential 1 Gbps network, AT&T will also offer public Wi-Fi hotspots throughout the North Carolina GigaPower footprint as well as free access to its gigabit network in up to 100 public locations. AT&T will also offer free 3 Mbps AT&T U-verse service to 10 affordable housing complexes, which includes up to 3,000 homes.
If AT&T wins the contract to build part of the NCNGN network it will be the second community to get the company's U-verse with GigaPower fiber service. The company launched its AT&T U-verse with GigaPower service in Austin, Texas in December. Due to high demand for the service, AT&T said in January it would double its deployment in Austin. And it expects to build a similar network in parts of Dallas in 2014.
Currently, AT&T offers speeds up to 300Mbps in Austin, but it plans to upgrade the service to 1 Gbps later this year. AT&T is offering promotional rates for GigaPower in Austin at $70 per month.
While AT&T claims it has always had plans to deliver ultra high-speed broadband in places like Austin, the reality is that Google with its Google Fiber initiative has lit a fire under the feet of traditional broadband providers, both setting the stage for investments in such networks as well as providing a starting point for speeds and pricing.
"To be honest, we wouldn't have launched a 1Gbps service unless we didn't see it happening in the market," said Matt Murphy, president of Grande Communications, a small cable operator based in Texas that is also deploying a 1 Gbps fiber broadband service. "Google has definitely stirred things up in Austin. And when we saw AT&T and Time Warner Cable answering that threat, we knew we had to do something too in terms of speeds and pricing."
Phone companies like AT&T and Verizon, as well as cable operators like Comcast and Time Warner Cable, have been capable of delivering very high speed broadband services for a long time. But executives have long said there was no demand for ultra high-speed services. Speeds of 100Mbps or higher were offered in certain regions from these operators, but pricing was always high.
Google was the first to offer a 1Gbps service and also to offer the service at an affordable price tag of $70, which is about $20 more than the average broadband service.
The benefits of a gigabit fiber network
The competition or at least the threat of competition in these markets will likely benefit consumers who will not only have these ultra-high speed networks built in their communities, but will also be able to take advantage of the affordable pricing.
The hope in building these networks, regardless of the provider building them, is that they will bring many benefits to the community, including advances in telemedicine, distance learning, and new industries that will create new jobs. The Federal Communications Commission, which has been encouraging the deployment of gigabit fiber networks, says that such networks can spur economic development and attract businesses.
It said last year that a fiber network serving 170,000 homes in Chattanooga, Tenn., helped lure big companies like Volkswagen and Amazon to the community, which has created more than 3,700 new jobs over the past few years.
The NCNGN Tracy Futhey, chair of the NCNGN Steering Committee and vice president of information technology at Duke University, is hopeful that the gigabit fiber network will benefit the community.
"This kind of private sector investment is essential to ensure our regions remain competitive and at the forefront of next-generation applications that are important to all sectors of the economy," she said in a statement.