- Tilson is suing Gigapower for over $200 million in unpaid fiber construction work
- Gigapower faces scrutiny from CWA over labor practices
- Litigation comes as the state of Gigapower’s expansion remains uncertain
Network construction company Tilson has a bone to pick with AT&T’s Gigapower joint venture, alleging it owes Tilson employees more than $200 million in payments for fiber work.
Tilson on July 24 filed a lawsuit claiming Gigapower terminated its contract “for convenience,” forcing Tilson to file for Chapter 11 bankruptcy to try to recoup its finances.
Gigapower initially enlisted Tilson in 2022 to construct fiber networks that cost approximately $600 million in Nevada and Arizona – a contract that made Gigapower Tilson’s largest customer, Tilson noted in its complaint.
But in the years since that contract was signed, “Gigapower delayed, and at times withheld, payment as a tactic to gain leverage over Tilson and to force Tilson to renegotiate rates,” wrote Tilson. The company said Gigapower wanted a newer contract with “lower payments” and a “reduced scope of work.”
Gigapower denied Tilson’s allegations.
“It is unfortunate that we have arrived at this point and will vigorously defend ourselves in court,” a spokesperson told Fierce. “Until that process is complete, we will refrain from saying anything more.”
It’s not the first time a fiber construction company has run into financial problems. Grain Management-backed Trueline actually went out of business earlier this year and had to immediately let go of most of its employees. Aspire/Highline, one of Trueline’s major service provider clients, dropped Trueline’s contract not long before the company shuttered.
CWA calls out Gigapower
The situation with Tilson and Gigapower underscores deeper issues around broadband workforce practices, according to Communications Workers of America (CWA).
Although AT&T employs tens of thousands of “highly-trained,” unionized fiber technicians, “Gigapower has chosen to rely on an almost entirely subcontracted non-union workforce for its deployments,” said CWA Research Economist Bianca Garcia.
The organization, which has also called to attention declining wages and training standards across the wider broadband industry, has been tracking Gigapower’s deployments in various markets.
CWA found “numerous concerning workforce arrangements, including multiple layers of subcontracting, poor contractor license and registration verification, and usage of potentially misclassified independent contractors,” Garcia told Fierce.
What’s going on with Gigapower anyway?
The litigation against Gigapower comes as AT&T seeks to reach over 60 million fiber locations by 2030 – a goal that includes the Gigapower out-of-network footprint.
AT&T previously stated it expects to add more than 5 million locations via Gigapower’s open access network. The JV has publicly announced fiber builds across several states, including Alabama, Arizona, Florida, Minnesota, North Carolina, Nevada, Pennsylvania and South Carolina.
But aside from that, AT&T hasn’t really delved deeper into how the venture is progressing and where it expects to pick up more open access opportunities. Analysts speculate that perhaps not all is going according to plan at Gigapower.
“We suspect that Gigapower has fallen short of expectations so far,” said NSR analyst Jonathan Chaplin in a note to investors last week. “As far as we have seen, the company still isn’t disclosing Gigapower locations, which means they are still too small to matter after over two years of being in business.”
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