The formation of Gigapower LLC, a joint venture between Dallas-based AT&T and BlackRock Alternatives, aims at increasing internet access to communities across the United States. The commercial fiber platform could also revolutionize the industry’s business model by operating as an open-access platform.
The venture plans to bring advanced fiber access technologies to internet service providers and businesses across the U.S., AT&T said in an announcement of the deal yesterday.
The impact on communities would be beneficial, the telecom giant says, as the new venture seeks to bolster the country’s digital infrastructure and, ultimately, lead to greater choice and affordability for customers.
AT&T CEO John Stankey. [Photo: AT&T]
“Now more than ever, people are recognizing that connecting changes everything,” said John Stankey, CEO of AT&T, in a statement. “The Gigapower joint venture offers customers and communities outside of our traditional service areas the social and economic benefits of world-class technology and access to all the internet has to offer.”
Bridging the “digital divide” with fiber
The expansion of broadband access can build more bridges across the so-called “digital divide.”
Mark Florian [Photo: BlackRock]
Mark Florian, global head of diversified infrastructure at BlackRock, shared his enthusiasm for the joint venture: “With Gigapower’s fiber infrastructure designed as a commercial open-access platform, we can more efficiently connect communities throughout the United States with dependable broadband services—helping bridge the digital divide.”
Florian, who is managing director and head of BlackRock Global Infrastructure Funds, started the BGIF franchise in 2008.
BlackRock will support Gigapower’s fiber deployment plans and shared infrastructure business model, and AT&T plans to leverage its nationwide wireless sales capabilities. Together, the companies say, the partnership is poised to drive innovation, create jobs, and stimulate economic growth in the communities it connects.
AT&T will be Gigapower’s first wholesale tenant
The formation of Gigapower could be groundbreaking in the broadband industry in terms of the business model it employs.
Operating as a commercial open-access platform, Gigapower will allow multiple companies to rent or lease its fiber network, which potentially could increase competition in the industry and lower prices for fiber access.
AT&T will be the first company to rent or lease the fiber network from Gigapower, giving them the chance to trial the service ahead of other businesses.
As well as providing an essential income for Gigapower’s expansion plans, having AT&T as an anchor tenant means customers in areas outside of the company’s traditional service footprint could receive fiber services.
The venture gives the telecom giant a wider customer base when combined with AT&T’s current 21-state footprint, the company said.
Gigapower CEO named
The new company will be helmed by AT&T veteran Bill Hogg, who is excited about what the network can do for users.
“Fiber is at the heart of digital commerce; our mission is to help local service providers gain fiber connectivity and provide multi-gig capabilities in underserved areas,” Hogg, the CEO of Gigapower, said in a statement.
“We’re developing a scalable commercial open-access wireline fiber network that will better serve these locations,” he said.
Fiber nation
The joint venture’s success would expand AT&T’s current goal of providing over 30 million-plus locations with fiber by 2025—something greatly needed by people across the U.S., per the telecom giant.
AT&T and BlackRock will own and govern Gigapower together. The venture is subject to regulatory approval and other closing conditions. AT&T said it will not consolidate its financial results until it announces fourth-quarter 2022 results in January
2023.
BlackRock Alternatives is a part of the larger BlackRock organization and specializes in providing unique investment opportunities across multiple asset classes. This includes real estate, infrastructure, energy, commodities, and private equity. The Diversified Infrastructure business within BlackRock Alternatives manages a fund that invests in global infrastructure assets such as transportation, utilities, and communications.
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