Bloomberg News

AT&T Plans to Expand Fast Web Service in Race Against Google (2)

April 21, 2014

AT&T Inc. (T:US) plans to extend its fastest fiber-optic Internet service to 21 major cities, further ramping up competition with Google Inc. (GOOG:US) and cable providers.

The largest U.S. phone company said in a statement today that it plans to expand its GigaPower fiber-optic service to as many as 100 cities and municipalities. To provide service in select communities, AT&T will have to get approval from local officials. AT&T’s proposal is to deliver Internet speeds of as fast as 1 gigabit a second, about 100 times faster than standard Web access, along with U-verse television and other services to residents and businesses.

AT&T is racing against Google and cable companies to bring higher-speed fiber services to customers within its network operation areas. Earlier this month, AT&T announced plans to bring GigaPower to six cities in North Carolina. That move followed plans announced a year ago for faster service in Austin, Texas, where Google is also expanding its Google Fiber offering.

“We are excited to bring GigaPower to 100 cities and towns,” Lori Lee, head of AT&T’s U-verse unit, said in a phone interview. “We will work with local officials as we look for areas of strong demand and pro-investment policy.”

The 21 major cities up for consideration include Atlanta, Houston, Los Angeles and San Francisco.

AT&T doesn’t disclose how many GigaPower subscribers it has. The push to expand GigaPower won’t change AT&T’s 2014 capital spending plans, Lee said.

Google Fiber

Google Fiber began as a showcase for what people can do with dramatically faster Internet speeds. The project also was meant to stimulate competition among broadband providers.

Google, based in Mountain View, California, started its service in Kansas City, Missouri, in 2012. It is expanding to Provo, Utah, and Austin, and announced plans to add other markets, including Charlotte, Raleigh and Durham in North Carolina.

In Provo, Google offers Gigabit Internet service for $70 a month, plus a $30 construction fee. A combined Internet and TV service costs $120 a month, plus the construction fee and local taxes, according to Google’s website.

In Austin, AT&T’s GigaPower service ranges from $70 a month to $150 when phone and TV are included, according to the company’s website.

AT&T shares were little changed at $36.06. As of last week, the stock had increased 2.5 percent this year. The Dallas-based company plans to report first-quarter earnings results after U.S. markets close tomorrow.

To contact the reporter on this story: Scott Moritz in New York at smoritz6@bloomberg.net

To contact the editors responsible for this story: Sarah Rabil at srabil@bloomberg.net Crayton Harrison


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