Hours After Google Announces Google Fiber In Austin, AT&T Pretends It, Too, Will Build A 1 Gigabit Network There
from the so...-competition-works? dept
As you’ve probably heard, this morning Google confirmed the rumors that Austin, Texas would be the second city in which Google Fiber is rolled out. Google still appears to be treating this as an experiment, rolling it out in just a few areas, but it’s still worth watching what happens. For example, within hours of Google making the announcement, AT&T rushed out a somewhat hilarious press release insisting that it, too, would build a 1 gigabit fiber network in Austin. No one actually believes this is true. What you’re seeing is a bit of gamesmanship, but which reveals something interesting. First up, AT&T is clearly using this to complain about the deal terms by which Google got the rights of way in Austin. Google, famously, got Kansas City to kick in all sorts of concessions that made it extra favorable for Google to build its network there. No doubt, the city of Austin offered similar benefits to Google to be city number two. And, so, within AT&T’s press release, there’s this little tidbit:
Today, AT&T announced that in conjunction with its previously announced Project VIP expansion of broadband access, it is prepared to build an advanced fiber optic infrastructure in Austin, Texas, capable of delivering speeds up to 1 gigabit per second. AT&T’s expanded fiber plans in Austin anticipate it will be granted the same terms and conditions as Google on issues such as geographic scope of offerings, rights of way, permitting, state licenses and any investment incentives.
In other words, sure, sure we’ll build a 1 gigabit fiber network. Just give us the same favorable terms you gave Google. Basically, AT&T’s announcement has little to do with actually offering a competing service, but much more about calling attention to the favorable terms that cities are giving Google to get Google Fiber. Now, this is something that deserves reasonable scrutiny. Some are quite understandably concerned that it’s not right if Google gets extra-favorable terms. But, let’s look at the real history here. Municipalities have been giving AT&T and other incumbents incredibly favorable deals for years, and AT&T has tended to return the favor by providing the bare minimum in quality of service to its broadband customers, while focusing most of its efforts on trying to block any hint of competition from showing up.
Google, on the other hand, seems to be using these incentives to offer a much higher level of service, and the early reviews from Kansas City have been fantastic. In short, both companies have been able to squeeze concessions and favorable deals out of the cities in question. One of them pocketed the cash and gave customers the bare minimum. The other focused on providing a truly impressive level of service.
The other oddity in all of this is just how much this press release makes AT&T look bad. Beyond the petty “hey, give us what Google got” statement, this press release more or less confirms exactly the message that AT&T has been trying to deny for years: that when there’s real competition, then AT&T will invest in making a better service. Without the competition, AT&T is happy to provide crappy service. But within hours of real competition showing up, it suddenly claims it’ll offer a better level of service? Is that really the message it wants to send? If I’m any city, state or federal government in the US at this point, I look at today’s announcement and say, “well, AT&T just admitted that they’ll offer better service if there’s real competition, so how do we make sure there’s real competition?” Given how hard AT&T has fought back against real competition in the broadband space for the past decade, it’s not clear this is the message AT&T really should be spreading.