While Gigapower—the joint fiber venture launched by AT&T and private equity investment giant BlackRock—seeks to expand its footprint across the country, a new report from CWA investigates its latest deployment in Chandler, Ariz.
The report, “Gigapower’s Chandler Conundrum,” documents how poor contractor selection, substandard field supervision, and questionable project management practices are resulting in damage to critical utility infrastructure and work stoppages over public safety concerns. The findings underscore CWA’s belief that Gigapower’s questionable workforce model puts workers and communities at risk and contributes to the erosion of telecom job quality and stability.
“I believe we are witnessing in real-time how Gigapower’s dangerous, corner-cutting business model endangers workers and dismantles local telecommunication careers in cities like Chandler, Arizona,” said Fernando Roman, CWA District 7 Campaign Lead and a broadband technician of 25 years. “This is why highly trained, union broadband technicians have continuously raised the alarm over this dangerous partnership. Policymakers and investors must take action to ensure Gigapower’s fiber deployments support good jobs and protect communities.”
CWA is recommending several steps for policymakers and investors, including gaining a deeper understanding of Gigapower’s workforce plan, contract language for a standardized agreement between the project and municipalities on right-of-way, and increased oversight mechanisms.
Click here to read the full report.
Executive Summary
Gigapower, the open access fiber network joint venture launched by AT&T and BlackRock in May 20231, is experiencing significant challenges in its phase I deployment. Gigapower’s prime contractor in several states, Tilson Technology Management, blamed Gigapower for driving it into bankruptcy, a development that is just the most extreme of numerous problems stemming from Gigapower’s business model.
A review of internal City correspondence, daily construction logs, City utility incident reports, and state contractor and business registration records shows a joint venture that appears to be struggling with operational challenges stemming from poor contractor selection, substandard field supervision, and questionable project management practices leading to an increased burden on City resources, adverse impacts to City infrastructure, and deployment delays. Ultimately, Gigapower’s dismissal of Tilson from the project and Tilson’s subsequent bankruptcy filing has likely jeopardized Gigapower’s on-time Arizona market buildout and according to some small business owners, threatens Arizona’s local economy, leaving hundreds of workers and dozens of local small businesses in the lurch.2
The Communications Workers of America (CWA), which represents tens of thousands of frontline technicians at AT&T, has closely tracked the Gigapower build-out in various markets. Based on CWA’s analysis of public records and field investigations, CWA discovered that Gigapower’s deployment in Chandler potentially suffered from the following operational deficiencies:
- Poor Contractor Verification Procedures
- Nearly one-fifth of Gigapower’s subcontractors identified via City correspondence and daily construction logs – 5 out of 28 – did not have a license with the Arizona Registrar of Contractors (ROC) while working on the project; and
- Two Gigapower subcontractors were not registered business entities in the state of Arizona while working on the project.
- Deployment Delays
- Five shutdowns and pauses of deployment work within a year because of public safety and restoration issues.
- Poor Quality Work
- Multiple underground utility hits to critical infrastructure, such as water, internet, sewer, and electrical power lines; and
- Recurring restoration issues and delayed corrective action.
- Substandard Field Supervision
- Subcontractors operating without traffic control plans;
- Subcontractors operating outside of approved work hours even after verbal warnings from the City;
- Subcontractors performing work prohibited by City code; and
- Recurring failure to ensure that subcontractors perform timely corrective action after being informed by the City of operational shortcomings.
- Questionable Project Management Practices
- Recurring failure to sign permit applications;
- Poor quality control on permit application submissions;
- Delayed invoice payment; and
- Combative and dismissive communication with City inspectors.
The findings in this report underscore CWA’s belief that Gigapower’s fraught workforce model puts workers and communities at risk and contributes to the erosion of telecom job quality and stability. Additionally, the joint venture’s operational shortcomings and current legal challenges should be of particular concern for investors. As such, CWA recommends policymakers and investors take the following steps to ensure that Gigapower’s fiber deployments support good jobs, protect communities, and provide long-term value creation:
- Understand Gigapower’s workforce plan
- Public officials should be vigilant and require Gigapower to present a robust and detailed Workforce Plan ahead of any agreement, permit, or funding issuance. This Workforce Plan should include provisions requiring disclosures about Gigapower’s contracted workforce, including each contractor’s training and safety program, information regarding the quality of jobs, mechanisms for accountability for subcontractors, and each contractors’ record of compliance with applicable labor laws and regulations.
- Require an agreement prior to commencing deployment
- Jurisdictions considering partnership with Gigapower or other internet service providers (ISPs) should execute agreements that create a standardized system for authorizing the terms and conditions for use of the rights of way. CWA recommends that agreements contain provisions regarding contractor disclosures and transparency requirements, monitoring of agreement benchmarks and provisions, and “claw-back” mechanisms to give jurisdictions the ability to revise or terminate agreements to ensure specific terms are met.
- Commit to an oversight process
- Localities must ensure there are accessible and effective tools and resources for oversight of Gigapower and other ISP fiber deployments. Governing bodies should regularly convene stakeholders to reflect on deployment progress, hear resident feedback and City staff reports, and make adjustments to improve deployment moving-forward.
- Scrutinize workforce practices for potential investment risk factors
- Institutional investors and fund trustees should integrate scrutiny of workforce practices into their analysis of risk factors utilizing frameworks such as the Principles of Responsible Workforce Management in Private Equity when considering investing in Gigapower.
- Investors may also consider recommending the following concrete actions to AT&T and BlackRock to improve Gigapower’s risk management:
- Establish minimum labor standards for all subcontractors;
- Enhance Gigapower leadership-level oversight of labor risks and operational performance with regular reporting mechanisms; and
- Conduct a feasibility assessment of transitioning to a direct employment model and increasing utilization of unionized contractors.
