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AT&T vs. Google: A fight over fiber

Thefight over fiber is getting worse in Tennessee.

WhileChattanooga in the southeast corner of the state has been making headlines overits municipal broadbandbattle, now Nashville is similarly making news in the north.

recently filedsuit against the city's government, including Nashville Mayor Megan Barry,arguing that a newly adopted city ordinance centered on communicationsequipment on utility poles violates not only state law, but also the U.S.Constitution and FCC regulations.

Theordinance in question enables a third-party "attacher" likeAlphabet Inc.'sGoogle Fiber to get permission from a utility pole owner — like NashvilleElectric Service — to perform all of the "make-ready work" requiredto rearrange or relocate pre-existing wires and pole attachments, even when theequipment being moved belongs to another communications provider, such asAT&T.

AsAT&T said in its lawsuit, once Google Fiber gets NES approval to attachits equipment to an NES pole, Google is able to "transfer, relocate,rearrange, or alter AT&T's facilities" without AT&T's consent.

Notably,this only applies to poles owned by public utilities like NES. Google Fiberwould still need to get permission to perform make-ready work on polesprivately owned by AT&T. It is estimated that NES owns roughly 80% of thepoles in Nashville, while AT&T owns the remaining 20%.

In astatement,Barry said the ordinance, known as "one touch make ready," is a"common-sense way of speeding up the deployment of high-speedinternet."

Sheadded that she hoped any legal disputes connected to the ordinance "can beresolved quickly."

AGoogle Fiber representative declined to comment on the record, but FleurKnowlsey, senior counsel of the Alphabet Access group that leads Google Fiber,was quoted in TheTennessean as saying Google would "share the capabilities of itsin-house and outside attorneys" to help the city fight the case.

Moreover,the company defended the ordinance in a blogpost, saying the old make-ready system — which required each existingprovider on a pole to send out a separate crew, one by one, to move its ownline to make room for a new one — was outdated and cumbersome.

"Thismay have worked a generation ago when there were only one or two attachers, butit's extremely time consuming — not to mention disruptive to residents ofNashville — to do this with the numerous attachers we have today," Googlesaid in its post.

Thecompany estimated it will need to attach Google Fiber to 88,000 poles inNashville in order to roll out its high-speed service, and that 44,000 of thosepoles require make-ready work. And though Google Fiber first announced itslaunch in Nashville in April, as of Sept. 1, only 33 poles had been made readythus far.

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AT&T,however, argues the Nashville ordinance and others like it deprive the companyof an opportunity to assess the potential impact of the work being done.

"Ifa copper feeder cable were damaged, 1,000 or more residential customers couldlose service, and business customers without redundant service would also loseservice," AT&T said.

Additionally,the company noted some of its aerial fiber facilities are used to providehigh-capacity switched Ethernet services to police and fire stations."Damage to these facilities could knock out service to emergencyresponders, and take a cell tower out of service," AT&T said.

Toprotect against an outage, the ordinance states that before an attacher like GoogleFiber can perform "complex" make-ready work — or works that"would reasonably be expected to cause a customer outage" — theattacher must provide a pre-existing operator like AT&T at least 30 dayswritten notice.

Accordingto Blair Levin — a nonresident fellow at the Washington think-tank theBrookings Institution — AT&T's opposition to "one touch makeready" proposals is not without merit. In a recent blogpost that he noted that safety is "a critical issue" and fairnessis important.

Buthe also warned, "Incumbents always have an incentive to delay newcompetitors, and regulators and legislators should always question such efforts."

InNashville, data from SNL Kagan, an offering of S&P Global MarketIntelligence, shows that CharterCommunications Inc. and Comcast Corp. are the top pay TV providers in more thanhalf of the 280 zip codes in and around the Nashville designated market area.It is likely those cable companies also serve as the top broadband providers inthose zip codes, though Comcast has also reportedhaving problems accessing utility poles, a problem it blamed on NES rather thanAT&T.

Interestingly,AT&T’s DIRECTV serves as the top pay TV provider in almost 120 of those zipcodes, though that does not necessarily mean that those households alsosubscribe to AT&T for internet. But the prevalence of DIRECTV in thosemarkets does give AT&T the opportunity to upsell those customers on abundle that combines DIRECTV video with AT&T broadband.

Anothermarket where AT&T is fighting a similar legal battle is Louisville, Ky.Much like Nashville, the city passed a one touch make-ready ordinance, and waspromptly met by an AT&T lawsuit.

Followingthat suit, FTTH Council, a nonprofit association dedicated to fiber-to–the-homedeployment, said the ordinance "is reasonable, balanced, and enlightenedpublic policy," and predicted AT&T would lose the case.

"Thelawsuit presents the opportunity for the federal courts, especially those inhome-rule states, to put to rest the notion that municipalities do not have theauthority to adopt rules governing the work in their public streets … simplybecause that work impacts communications providers that separately may beregulated by the FCC or State public utility commissions," the group said.

IfNashville is looking to Louisville for guidance as to how the case will playout, however, the news thus far has not been overly encouraging for the city.

Louisvilleinitially sought to have the case dismissed, but that motion was denied.AT&T subsequently filed a motion for summary judgment, and Louisville nowhas until early October to respond.