First with fiber: Private capital maneuvers for first mover advantage

Some critics, including telecom writer Karl Bode, have characterized Tier 1 players’ sudden embrace of public-private partnerships, including those based upon an open access approach, as a strategic move to capture federal subsidies before smaller players can. In comments on Broadband Breakfast’s website, Bode said that this shift was less about promoting competition and more about securing government funding while maintaining market dominance.

“Now that there's billions of dollars of potential subsidies there for them to glom onto, they want to get a hold of this cash before a municipality, cooperative, or city-owned utility does,” Bode said. “I find the flip funny given their historical, often virulent lobbying opposition to both open access policies, open access networks, and open competition – especially municipal or cooperatives – more generally.”

https://broadbandbreakfast.com/exclusive-series-at-t-t-mobile-bet-big-on-open-access/?ref=alerts-newsletter

Bode's analysis goes to the fundamental tension between investor owned advanced telecom infrastructure and the socialization that tends to occur when the availability of private investment capital is insufficient relative to market demand for advanced telecom services. Private investment capital however realizes the long term value is in owning the fiber connection to homes and other premises as well as first mover advantage that accrues to whomever first installs it.

That's what's attracting private equity as in the case of AT&T's Gigapower joint venture with BlackRock, mentioned in this article. That infuses private capital to finance those fiber connections that AT&T couldn't otherwise without displeasing its current and future investors. AT&T gets help with the sizeable capital expenditures needed and BlackRock retains the option to sell out its stake in the future to AT&T or other network assets consolidator. 

Private capital also wants to foreclose public and consumer utility cooperative ownership since it too would benefit from first mover advantage and disadvantage private investment over the long term.