AT&T and BlackRock JV will start in Mesa, Arizona

Over the holidays, AT&T announced it had formed a joint venture with the private equity company BlackRock Alternatives to provide a wholesale fiber network across the U.S.

Now that everyone’s back to work, Fierce was able to get a few more details about this JV, which is named Gigapower.

AT&T said it wasn’t prepared yet to talk about locations and build plans for the new wholesale fiber network. However, a spokesperson said, “Gigapower is expected to help AT&T bring fiber service to the Mesa, Arizona area, with commercialization expected to begin in 2023.”

AT&T was active in the Mesa market in the second half of 2022. In August, Corning said it would build a new factory in Gilbert, Arizona, to manufacture optical cable. And it was doing this to support demand for cable from AT&T and others.

Concurrent with Corning’s announcement, AT&T announced plans to deploy fiber service in Mesa, making it the sixth operator to target the Phoenix suburb.

A few of the operators targeting the Mesa market are planning to build open-access fiber networks, which they can lease to other providers. AT&T’s work in Mesa will fall into the open-access category.

Recently, AT&T COO Jeff McElfresh indicated the operator is experimenting in markets like Mesa to see what happens when it deploys fiber outside of its traditional ILEC footprint.

Fierce asked if Gigapower already has an experienced management team in place or if the team is all brand new and recently hired.
AT&T said Gigapower “has a management team that represents decades of experience in telecommunications.” The team will develop and operate the Gigapower network separate from AT&T. Bill Hogg, CEO of Gigapower, spent about 20 years at AT&T before retiring as President of Technology Operations in 2018.

Why does AT&T want to build out of footprint while it’s still aiming toward 30 million locations in footprint?
AT&T said there is high customer demand for fiber, and it wants to satisfy the demand both in and out of its footprint “provided we can earn an appropriate return on our investment.”
“When expanding outside our existing wireline service area, it’s likely to be in both rural and metropolitan communities – but the commonality will be that these areas are not places currently widely served with fiber,” said AT&T. “Such fiber deployments will also support our wireless business.”

There’s a lot of money about to be distributed to states via the Broadband Equity, Access and Deployment (BEAD) program to deploy fiber broadband. AT&T acknowledged that Gigapower is working with state and local governments to create public-private partnerships to build broadband networks, using federal money allocated for that purpose.

The elephant in the room is: virtually every industry in America is experiencing worker shortages right now. Typically, when incumbent service providers are asked if they have enough workers to deploy all this new fiber infrastructure, their answer is that they have long planning horizons and have lined up the necessary workers far in advance.

But Gigapower is a new entity.

When asked about the worker pipeline, AT&T said, “We are confident in the ability of the Gigapower team to meet the build goals that they have set, deploying a reliable, multi-gig fiber network to an initial 1.5 million customer locations across the nation using a commercial open access platform.”