AT&T’s plan to expand its U-verse (CD Apr 22...
AT&T’s plan to expand its U-verse (CD Apr 22 p8) with GigaPower fiber network into 21 additional metropolitan areas including San Antonio was welcomed by that city’s Chief Technology Officer Hugh Miller on Monday. The city is also in discussions…
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to get Google Fiber, putting San Antonio in the position of having two companies laying high-speed broadband and competing for customers. That could lead to lower prices for city residents and businesses, Miller said. He said the city is in the process of gathering the deployment data and topographical information Google wants. Unlike Portland, Ore., which last week signed a franchise agreement (CD Apr 21 p16) to let Google build on public rights of way, in Texas, utilities need only register with the state to be able to be permitted to build, he said. AT&T’s GigaPower expansion may help Comcast’s proposed buy of Time Warner Cable get approval, analyst Paul Gallant of Guggenheim Partners wrote in a research note Monday. Regulators have concerns because Comcast/TWC would have about 42 percent of the U.S. broadband market, he wrote, “but (also) because that number appears poised to go higher as cable operators collectively continue to take share from telcos. But AT&T’s announcement -- on top of Google Fiber’s recent expansion -- may begin to chip away at the idea of Comcast-TWC inevitably taking share from telcos. AT&T’s announcement won’t prevent the FCC and DOJ from applying potentially tough conditions on Comcast-TWC, but we think it could start to allay the instinctive concerns that Democratic regulators harbor with the cable merger.” An increase in cities where telcos can match cable broadband speed will lower the risk of regulators dismissing cable’s urban-based pricing, Gallant wrote. AT&T’s ability to “cherry pick” which neighborhoods to target for GigaPower “ensures AT&T an attractive incremental return since, by definition, the company would only build where it made financial sense, but it also acts as a check on the scope of any build-out,” wrote MoffettNathanson analyst Craig Moffett Tuesday. But Moffett also said GigaPower is “one [offering] that is unlikely to dramatically increase the company’s value.” Time Warner Cable has the most potential exposure to GigaPower, with Los Angeles being the single largest target, Moffett estimated. Comcast also faces exposure in major areas like Chicago, the Bay Area and Houston. However, many cities might not accept AT&T’s terms, reducing the impact, Moffett wrote.