Google Fiber recently paused its efforts to provide services in several cities in order to revamp its expansion approach. But in Nashville and Louisville, where Google Fiber’s progress was further along, Fiber hit a different kind of snag: legal challenges from other ISPs. This post focuses on the challenges brought in Nashville and their possible effects. The challenges, brought by AT&T and Comcast, are not against Google directly but against Nashville. Nashville’s Metro Council recently approved the “One Touch Make Ready” ordinance, which allows more efficient establishment of new utility lines on existing utility poles.

 

Usually, utility poles are owned by one entity, which also owns utility lines on the pole. So, AT&T may own both the pole and the lines that bring AT&T services into consumers’ homes. Other entities also attach their lines to these same poles. So, Comcast may have a utility line on the AT&T-owned pole.

 

When a company wants to add a utility line, the existing lines have to be moved to make room. Under Nashville’s previous rule, the owner of each individual, existing line moved that line. Only once the existing lines were moved could an entity add a new line. This system ensures that only a contractor chosen by a line’s owner may move that line. But it also means installation of new lines can take a long time and can disturb citizens with frequent construction.

 

Google Fiber successfully lobbied for an ordinance called “One Touch Make Ready,” which allows a single contractor (approved by the pole owner) to move all the lines and then install the new one. The provision was intended to allow more efficient addition of utility lines and faster availability of Google Fiber services to Nashville residents. Rather than three or four construction crews taking turns on the pole, one crew does all the work. In the wake of the Council’s decision, AT&T, which owns utility poles and lines in Nashville, asking the court to strike down the ordinance. Comcast did the same shortly thereafter.

 

In the short term, a judgment for Nashville could provide Google with helpful precedent when expanding in other markets. Other ISPs, however, would still have a political recourse and could lobby for city councils to require owners to move their own lines individually.

 

A judgment for AT&T and Comcast could further slow Google’s expansion into new markets by establishing precedent that ordinances like One Touch Make Ready are not allowed. Assuming Google Fiber begins to move forward with providing services in new markets, it will take them longer without the ability to get One Touch Make Ready ordinances.

 

In the long term, a judgment for Nashville could present issues for Google. For example, if new ISPs wish to enter the Nashville market, they will be able to move Google’s utility lines and begin providing services quickly. Additionally, removing roadblocks to providing services through utility lines reduces incentives for companies to develop new ways to provide services without relying on utility poles—such as Wi-Fi satellites. And the long-term effects of a judgment for AT&T and Comcast could actually incentivize companies like Google to seek alternative means of providing services, which may provide low-cost competition in the future.

 

Nashville recently moved to dismiss the AT&T suit. Time will tell whether courts will uphold One Touch Make Ready ordinances. But Google’s decision to pause expansion efforts are well-timed because the outcome of this litigation will likely effect their expansion model in other markets.

 

 

http://googlefiberblog.blogspot.com/2016/10/advancing-our-amazing-bet.html

http://arstechnica.com/information-technology/2016/10/google-fiber-laying-off-9-of-staff-will-pause-plans-for-10-cities/

http://www.bizjournals.com/nashville/news/2016/10/25/comcast-files-suit-over-nashvilles-one-touch-make.html

https://www.cnet.com/news/comcast-sues-nashville-over-google-fiber-law/

www.tennessean.com/story/news/local/2016/11/14/metro-files-motion-dismiss-t-lawsuit/93819716/

 

 

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