Why Ma Bell could win and what it would mean
AT&T recently filed a lawsuit against the city of Louisville, Kentucky after it passed a measure to allow Google Fiber to use utility poles. Here's why it could derail the future of fiber.
The fiber internet wars have officially begun. On Thursday, AT&T filed a lawsuit in federal court against the city of Louisville, Kentucky after the city recently passed a new ordinance that would allow ISPs like Google Fiber to make use of utility poles owned by AT&T.
Louisville's relationship with Google Fiber began in September 2015 when the two started exploring options to bring gigabit internet service in the city. In early February 2016, Louisville's Metro Council voted on two separate measures to encourage the deployment of Google's service in the city.
The ordinance in question, known as "One Touch Make Ready," essentially allows Google (or any other ISP) to install its equipment on existing utility poles, including those owned and maintained by AT&T. Despite strong opposition from AT&T and Time Warner Cable, the ordinance passed with a 23-0 vote.
In response, AT&T filed its lawsuit against the city itself, stating that the ordinance has no precedent and it violates existing rules for telecom providers. The next day, Google fired back with a blog post condemning AT&T suit, and pledged its support to the city of Louisville. In a tweet directed to Google Fiber, Louisville Mayor Greg Fischer said: "We will vigorously defend the lawsuit filed today by ATT; gigabit fiber is too important to our city's future."
And, it's not just Google Fiber that would be affected by a ruling against the ordinance. Louisville Chief of Civic Innovation, Ted Smith, said that the city had conversations with three other providers about pole attachment, and two of those companies called to congratulate Louisville on passing the ordinance. There were also a host of Louisville businesses interested in the city's potential adoption of Fiber, and increased competition in the market, as they were dissatisfied with the price they paid for their current service.
"In some cases, the lack of competition has [also] created pockets in our community where businesses don't have redundancy," Smith said. "Which means there is only one commercial provider in the area and if they fail, the backup is not there."
While this lawsuit obviously carries some heavy implications for the Louisville community, it could also have a larger impact on the future of Google Fiber and gigabit internet as a whole. Let's break it down
AT&T's argument
To get an idea of what AT&T's concerns are, let's take a look at the following prepared statement from AT&T spokesman Joe Burgan:
"Louisville Metro Council's recently passed 'One Touch Make Ready' Ordinance is invalid, as the city has no jurisdiction under federal or state law to regulate pole attachments. We have filed an action to challenge the ordinance as unlawful. Google can attach to AT&T's poles once it enters into AT&T's standard Commercial Licensing Agreement, as it has in other cities. This lawsuit is not about Google. It's about the Louisville Metro Council exceeding its authority."
Gartner analyst Will Hahn said that if local government is allowed to regulate pole attachments, that becomes a problem for AT&T. Having to account for and deal with different regulations across the state will not only be frustrating, but it will also be costly.
"It's going to cost them more to remember that, in Louisville, we have this 'One Touch' rule, but maybe in Frankfort we don't. And, that's going to cause their operations to become less efficient," Hahn said.
The other main argument made by AT&T is that it simply isn't fair for them to have to carry Google's equipment on poles they manage.
"My take is it is a legitimate case and they have valid arguments," said Charles Carr, a lawyer with Bronston Legal PC. "The analogy I make is that commercial building owners cannot discriminate against telecom carriers by disallowing them access to their buildings, but they cannot allow the new carrier to tear up or move or disrupt the existing carriers facilities in the building either."
Carr went on to say that he believes that a temporary restraining order (TRO) will be granted on preemption grounds, which means when state and federal law clash, federal law wins out because it "preempts" the state law. He also said that the standard for notice required was too subjective and wouldn't really prevent any new carrier from "accidentally" cutting AT&T's lines during installation. So, his guess is that AT&T will prevail.
Also, AT&T's resources cannot be underestimated in this battle. There's an old saying in the telecom world that AT&T is the world's largest lobbying firm that also happens to provide telecommunications services, so they are well equipped for battles like this and shouldn't be underestimated.
Google's plan
When it initially approved the One Touch Make Ready ordinance, Louisville city officials set ground rules for how a new ISP would have to conduct itself to use the poles. Essentially, if any ISP provider who wants to set up lines on an existing pole needs to shift or move existing lines, they must contact the incumbent provider and formally request that the existing lines be moved to make space. If the incumbent company doesn't respond in 30 days, the new provider can hire a contractor to move the lines. Also, that new company is responsible for any damage that may be incurred on existing providers' equipment.
For Google, using existing utility poles would be the fastest and easiest way for to deploy Fiber in Louisville. So far, Google has targeted cities where the local government itself owns much of the telecom infrastructure. That makes Louisville an important test case for how much Google will put up with to get its service into a city.
Many of the top 10 largest cities in the US are in a similar position, with the ownership of utility poles often being a hodgepodge of utility companies, service providers like AT&T, and joint associations. This is true for cities such as New York, San Francisco, Seattle, and San Antonio.
Hahn said, to his knowledge, there's been no other litigation directly related to Google Fiber thus far. How far Google ends up taking it depends entirely on their end goal for Google Fiber. As I have written before, Google's overall strategy still isn't clear. It could be setting up Fiber to become a serious pillar of its business, or it could just be using the success of Fiber to spur incumbents into providing faster internet service. This happened with Time Warner Cable in Charlotte, North Carolina in early 2015. Just a few short months after Charlotte was announced as a potential city for Google Fiber, Time Warner Cable announced it was bumping some customers up to 300 mbps at no charge.
Either way, it's a win-win for Google.
"We have to suspect that they're not really in it for the access money and the exchange that an AT&T or Verizon is in it for," Hahn said. "Google could just be wanting to see what people do with data to fuel their core business, which is search and advertising."
For Google, Fiber could simply be a sandbox. Google might just want to see what people do with gigabit speeds. But, if Google really wants to make Fiber work in Louisville, and AT&T wins its lawsuit, it will require work.
The clearest option, although much more expensive, would be to bury the cables underground. With this plan, Google could avoid the legal issues and create a network that is more more resistant to inclement weather and natural disasters. Whether Google builds it or not, Hahn said, fiber internet is definitely the future, it's just a question of whose schedule it will come on.
One thing is for certain, though—much of the Louisville tech community isn't happy with AT&T's actions.
"The One-Touch Make-Ready measure passed unanimously and was visibly and vocally supported by many people in our community with very little, if any, vocal support to the contrary," said Jason Falls, president of the Louisville Digital Association. "That AT&T would try and jockey for profiteering when, at least in my mind, the public right of way makes their issue a moot measure, is sad."
To get an idea of what AT&T's concerns are, let's take a look at the following prepared statement from AT&T spokesman Joe Burgan:
"Louisville Metro Council's recently passed 'One Touch Make Ready' Ordinance is invalid, as the city has no jurisdiction under federal or state law to regulate pole attachments. We have filed an action to challenge the ordinance as unlawful. Google can attach to AT&T's poles once it enters into AT&T's standard Commercial Licensing Agreement, as it has in other cities. This lawsuit is not about Google. It's about the Louisville Metro Council exceeding its authority."
Gartner analyst Will Hahn said that if local government is allowed to regulate pole attachments, that becomes a problem for AT&T. Having to account for and deal with different regulations across the state will not only be frustrating, but it will also be costly.
"It's going to cost them more to remember that, in Louisville, we have this 'One Touch' rule, but maybe in Frankfort we don't. And, that's going to cause their operations to become less efficient," Hahn said.
The other main argument made by AT&T is that it simply isn't fair for them to have to carry Google's equipment on poles they manage.
"My take is it is a legitimate case and they have valid arguments," said Charles Carr, a lawyer with Bronston Legal PC. "The analogy I make is that commercial building owners cannot discriminate against telecom carriers by disallowing them access to their buildings, but they cannot allow the new carrier to tear up or move or disrupt the existing carriers facilities in the building either."
Carr went on to say that he believes that a temporary restraining order (TRO) will be granted on preemption grounds, which means when state and federal law clash, federal law wins out because it "preempts" the state law. He also said that the standard for notice required was too subjective and wouldn't really prevent any new carrier from "accidentally" cutting AT&T's lines during installation. So, his guess is that AT&T will prevail.
Also, AT&T's resources cannot be underestimated in this battle. There's an old saying in the telecom world that AT&T is the world's largest lobbying firm that also happens to provide telecommunications services, so they are well equipped for battles like this and shouldn't be underestimated.
Google's plan
When it initially approved the One Touch Make Ready ordinance, Louisville city officials set ground rules for how a new ISP would have to conduct itself to use the poles. Essentially, if any ISP provider who wants to set up lines on an existing pole needs to shift or move existing lines, they must contact the incumbent provider and formally request that the existing lines be moved to make space. If the incumbent company doesn't respond in 30 days, the new provider can hire a contractor to move the lines. Also, that new company is responsible for any damage that may be incurred on existing providers' equipment.
For Google, using existing utility poles would be the fastest and easiest way for to deploy Fiber in Louisville. So far, Google has targeted cities where the local government itself owns much of the telecom infrastructure. That makes Louisville an important test case for how much Google will put up with to get its service into a city.
Many of the top 10 largest cities in the US are in a similar position, with the ownership of utility poles often being a hodgepodge of utility companies, service providers like AT&T, and joint associations. This is true for cities such as New York, San Francisco, Seattle, and San Antonio.
Hahn said, to his knowledge, there's been no other litigation directly related to Google Fiber thus far. How far Google ends up taking it depends entirely on their end goal for Google Fiber. As I have written before, Google's overall strategy still isn't clear. It could be setting up Fiber to become a serious pillar of its business, or it could just be using the success of Fiber to spur incumbents into providing faster internet service. This happened with Time Warner Cable in Charlotte, North Carolina in early 2015. Just a few short months after Charlotte was announced as a potential city for Google Fiber, Time Warner Cable announced it was bumping some customers up to 300 mbps at no charge.
Either way, it's a win-win for Google.
"We have to suspect that they're not really in it for the access money and the exchange that an AT&T or Verizon is in it for," Hahn said. "Google could just be wanting to see what people do with data to fuel their core business, which is search and advertising."
For Google, Fiber could simply be a sandbox. Google might just want to see what people do with gigabit speeds. But, if Google really wants to make Fiber work in Louisville, and AT&T wins its lawsuit, it will require work.
The clearest option, although much more expensive, would be to bury the cables underground. With this plan, Google could avoid the legal issues and create a network that is more more resistant to inclement weather and natural disasters. Whether Google builds it or not, Hahn said, fiber internet is definitely the future, it's just a question of whose schedule it will come on.
One thing is for certain, though—much of the Louisville tech community isn't happy with AT&T's actions.
"The One-Touch Make-Ready measure passed unanimously and was visibly and vocally supported by many people in our community with very little, if any, vocal support to the contrary," said Jason Falls, president of the Louisville Digital Association. "That AT&T would try and jockey for profiteering when, at least in my mind, the public right of way makes their issue a moot measure, is sad."
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