Google Fiber brings AT&T, CenturyLink to the FTTH table - Year in Review 2013
The news: Google Fiber (Nasdaq: GOOG) may be a new broadband player, but its presence has driven two of the largest telcos AT&T (NYSE: T) and CenturyLink (NYSE: CTL) to serve up their own 1 Gbps fiber to the home (FTTH) service.
Google Fiber installers in Provo. (Source: Google)
CenturyLink (NYSE: CTL) has traditionally favored a hybrid fiber to the node (FTTN) architecture. However, the telco changed its tune when it announced it would conduct a fiber to the home (FTTH) trial in its Omaha, Neb. market that leveraged an existing fiber network built by its predecessor US West for a HFC-based video service.
After seeing positive results in Omaha, CenturyLink began offering the fiber-based broadband service in Las Vegas this fall. It is planning on conducting further buildouts in the city in 2014.
Rolling out the service in Las Vegas makes sense for CenturyLink. It is one of the first markets where it rolled out its Prism IPTV service and is a growing tech-savvy area. Similar to the process it is taking in Omaha, subscribers can now bundle the TV offering with the higher speed service. Similar to Google Fiber, CenturyLink is encouraging area residents to sign up for service on their www.centurylink.com/gigabit Web page.
It appears that Omaha and Las Vegas are just the tip of the iceberg for CenturyLink. In addition to rolling out FTTH in new housing developments in markets like Iowa, the telco reiterated the idea that it would look at bringing FTTH to other parts of its footprint.
AT&T will begin offering its 1 Gbps service in January in Austin beating out Google Fiber. The service provider started offering its U-verse with GigaPower service at 300 Mbps in Austin just this past week. Although it announced Austin as a gigabit destination literally hours after Google Fiber announced their plans, AT&T maintains that it already had a FTTH plan in place.
Randall Stephenson, CEO and chairman of AT&T, said during the recent UBS financial conference that Google Fiber's move into Austin made it easier for them to get local approvals to build a FTTH network.
"We were headed down the path to to go deploy in Austin and from our standpoint it was good news because we went to the Austin regulators and city managers and said "we will take one of those," he said.
Why it was significant: Regardless whether there is an immediate need for a 1 Gbps consumer service or how far it will scale the service, Google has changed the broadband status quo. The main challenge that these two telcos will face as they look to extend FTTH into other locations is they will have to break out of the traditional incumbent provider shell and act as a community broadband partner.
Their moves also come at a time when they are seeing growth in broadband and video service subscribers. During the third quarter, AT&T reported that it added 655,000 new U-verse broadband subscribers, while CenturyLink added 33,000 new subscribers. They could potentially target their FTTH plans in markets where they have a large density of copper-based broadband customers.
- Google Fiber brings AT&T, CenturyLink to the FTTH table - Year in Review 2013