Gigapower CEO says open access network is ‘picking up speed’ as JV expands to NM

Just over a year has passed since AT&T and asset management firm BlackRock formed Gigapower, a joint venture that’s providing a wholesale open access fiber network to AT&T’s out-of-footprint territory.

Gigapower announced on Tuesday plans to build in Albuquerque, New Mexico. CEO Bill Hogg said the JV is currently constructing networks in five states; Alabama, Arizona, Florida, Nevada and Pennsylvania (all of which were previously disclosed).

AT&T, which is serving as Gigapower’s anchor tenant, is offering service on the network in Arizona, Florida and Nevada.

Hogg told Fierce Gigapower is still planning to reach 1.5 million initial passings over a three-year period but declined to share the JV’s current passings.

“But I can say we’re picking up speed as we continue to identify and move forward with markets,” he said. “I think it’s still an open item as to when the right time is to raise that number.”

Aside from Albuquerque, Gigapower has publicly announced markets in Arizona (Chandler, Gilbert and Mesa), Pennsylvania (Scranton, Wilkes-Barre) and Las Vegas, Nevada. It has yet to disclose where it’s looking to build in Alabama and Florida, though Hogg hinted that’s “coming soon.”

So far, AT&T is the only tenant on Gigapower’s network. However, Hogg said the company is in “detailed discussions with several other ISPs that have strong interest in riding on the Gigapower network.”

In terms of service plans, Gigapower offers “a variety of speeds” from 300 Mbps to 5 Gbps. Hogg declined to comment on the rates Gigapower is charging but noted “we have the capability to offer higher [speeds] if the ISP is interested.”

Asked whether Gigapower is seeing higher take rates for a particular speed, Hogg said “it seems to be pretty evenly distributed across the plans that we offer.”

“We are seeing a little bit of a skew to higher speeds. Just need to expect that as an industry that customers are now choosing higher speeds because of the additional household demand on broadband data,” he said.

Why open access?

Hogg believes “there are a lot of benefits” to a commercial wholesale open access network.

He said it’s an efficient way to deploy capital and “it gives ISPs the benefit of a shared network economics as opposed to single owner economics. And that’s certainly attractive to ISPs.”

Open access networks are also “less disruptive to municipalities” with only one provider building the network, “as opposed to multiple providers that are tearing up the streets and disrupting traffic.”

“I think the other big advantage for Gigapower is we’re able to operate a network with higher utilization as opposed to a single operator model,” said Hogg. “When you have multiple ISPs that are riding on your network, you’re able to run with a higher utilization in your network.”

“And from a capital investment perspective, that’s attractive to us because you’re getting more return on the investment you made.”

Although open access fiber networks are picking up in the U.S., Hogg noted Gigapower isn’t seeing a lot of areas “where we’re right on top of another open access provider.”

“Only because the key to being successful in this space is to have multiple ISPs on your network,” he said. “So if you have multiple open access providers, then it’s difficult to attract enough ISPs to make it interesting for a single provider.”

One challenge of running an open access network is recognizing each ISP “is just a little different” and “trying to standardize and reduce the variability that happens between ISPs,” Hogg went on to say.

For example, one ISP might want speeds of 500 Mbps, whereas other ISPs on the network say they want 600 or 550 Mbps.

“Just the variability of the plans they’re trying to put in increases the catalog of what you have to offer over your platform,” he said. “It’s not anything that can’t be managed. But standardization is obviously more efficient than a snowflake approach to each ISP that can be highly customized.”

Hogg added both AT&T and BlackRock “have been very supportive of the work that we’re doing.”

“They’re very engaged in terms of the market selections and the business cases that go with them,” he said. “That part has been a real positive. They bring insights from their experiences and the infrastructure domain, which is always good.”

AT&T execs have hinted Gigapower plans to chase Broadband Equity, Access and Deployment (BEAD) funding. Hogg said the company will be eyeing opportunities “that are in or adjacent to where we’re already building,” as there’s “critical scale that you want to accomplish in a particular geography.”

“We’ve talked to a number of state broadband directors about BEAD. They really like our platform and the model of not having to choose winners or losers but a single network being built” with multiple ISPs providing service to an area, he said.

This story has been updated to clarify BlackRock is an asset management firm.