Fiber Internet Expansion: 2016 State of the Market

Four years after Google Fiber announced its first market, the fiber-optic internet landscape in America looks very different than most people expected. Google Fiber has expanded, but slower than anticipated. AT&T has emerged as an aggressive fiber competitor. Municipal networks are multiplying. And the definition of "fast internet" has shifted from megabits to gigabits in the public consciousness.

Let's survey the current state of fiber in America.

Google Fiber: Growing Pains

When Google Fiber launched in Kansas City in 2012, it seemed like the beginning of a rapid national expansion. Google announced a string of new cities — Austin, Provo, Atlanta, Nashville, Charlotte, Raleigh-Durham, Salt Lake City, and San Antonio — generating enormous excitement in each market.

But the reality of building fiber networks has proven more challenging than Google anticipated. Construction has been slow and expensive. The company has faced permitting battles, utility pole disputes, and the fundamental difficulty of digging trenches and stringing fiber through established neighborhoods.

As of mid-2016, Google Fiber is fully operational in Kansas City, Austin, Provo, and Atlanta. Other announced cities are in various stages of planning and construction, with some running years behind initial timelines. Nashville has been particularly challenging, with AT&T and Comcast filing legal objections to the "one-touch make-ready" pole attachment rules that Google needs for efficient construction.

Google has recently reorganized Fiber into a separate business unit within Alphabet, its parent company. This signals both a commitment to the project and an expectation of better financial discipline. Whether this means faster or slower expansion is unclear.

AT&T Fiber: The Incumbent Strikes Back

The most significant fiber development of the past two years has been AT&T's aggressive expansion of its GigaPower (now called AT&T Fiber) service. AT&T has announced or launched gigabit fiber in dozens of metro areas, leveraging its existing infrastructure and right-of-way agreements to build faster than Google in many cases.

AT&T Fiber is currently available or under construction in major markets including Atlanta, Austin, Dallas, Houston, Miami, Nashville, San Francisco, and Chicago. The company claims to have passed more than 4 million locations with fiber and plans to reach 12.5 million by mid-2019.

AT&T's pricing is competitive with Google Fiber at $70 per month for gigabit service, though the base price requires participation in AT&T's "Internet Preferences" program, which allows AT&T to use your browsing data for targeted advertising. Opting out of the data program adds $29 per month.

Municipal Fiber: Communities Build Their Own

Some of the most successful fiber deployments haven't come from tech giants or telecom corporations — they've come from cities and towns building their own networks.

Chattanooga, Tennessee's EPB network has become the poster child for municipal fiber. Launched in 2010, EPB offers 1 Gbps service for $70 per month and has recently upgraded to offer 10 Gbps service — the fastest residential internet available anywhere in the Western Hemisphere. The network has been credited with attracting businesses, creating jobs, and revitalizing the local economy.

Other notable municipal fiber networks include:

• Longmont, Colorado — NextLight offers 1 Gbps for $50 per month
• Lafayette, Louisiana — LUS Fiber offers gigabit service
• Wilson, North Carolina — Greenlight Community Broadband
• Cedar Falls, Iowa — Cedar Falls Utilities

These networks consistently rank among the top ISPs in customer satisfaction surveys, and their presence in the market has forced incumbent providers to improve their offerings.

However, municipal broadband faces political headwinds. About 20 states have laws restricting or prohibiting municipal broadband networks, many passed at the urging of incumbent ISPs. The FCC attempted to preempt two such state laws in 2015, but a federal court overturned that action, leaving the state-level restrictions intact.

The Competitive Impact

Perhaps the most important effect of fiber expansion has been on competition. In markets where Google Fiber, AT&T Fiber, or municipal networks have launched, incumbent cable providers have responded with significant upgrades:

• Comcast has upgraded many markets to offer 2 Gbps DOCSIS 3.1 service and has cut prices on lower tiers
• Charter/Time Warner Cable (now Spectrum) has increased base speeds to 60 to 100 Mbps in many markets
• Cox has launched gigabit cable service in several cities

The pattern is consistent: where fiber competition exists, all providers improve. Where it doesn't, customers often still have only one or two choices and limited incentive for those providers to upgrade.

Who Can Get Fiber Today?

Despite the expansion, fiber-to-the-home remains available to a minority of American households. The Fiber Broadband Association estimates that about 25 percent of U.S. homes have access to a fiber connection, and actual subscribership is much lower.

If you're interested in fiber, check availability from:

1. Google Fiber — available in select cities in the South and Midwest
2. AT&T Fiber — the broadest fiber footprint, available in 40+ metro areas
3. Verizon FiOS — available in parts of the Northeast and Mid-Atlantic
4. CenturyLink Fiber — available in select neighborhoods in several cities
5. Your local utility or municipal network — check if your city has its own fiber service

Looking Forward

Fiber expansion continues, but the pace has been uneven. The economics of fiber construction — $500 to $1,500 per home passed — remain challenging, and providers are increasingly selective about where they build. Wealthy, dense neighborhoods get fiber first; rural areas and lower-income communities are often left waiting.

The next few years will be critical. If fiber competition continues to spread, the entire broadband market improves. If it stalls, most Americans will remain dependent on their local cable monopoly for high-speed internet. The stakes for consumers are enormous.