The Gigapower Gamble

Executive Summary

In 2023, AT&T announced a 50/50 joint venture with the investment firm BlackRock to form an open-access fiber network company called Gigapower, with AT&T Fiber as the anchor tenant.¹ The Communications Workers of America (CWA), which represents the majority of AT&T’s frontline workforce, has closely tracked the Gigapower build-out in several markets.

This report is the first in a series of market spotlights looking at Gigapower’s deployments nationwide, and finds the following:

Gigapower puts public safety and public assets at risk by improperly vetting the dozens of contractors building its network.
- Gigapower is using at least 35 contractors on its deployments across nine states.
- In two cities in particular – Mesa, Arizona and Bloomington, Minnesota – Gigapower contractors have been responsible for nearly 450 incidents of damage to the public right of way, and dozens of preventable underground utility hits.
Gigapower’s workforce model is fraught with exploitative, low-road employment practices.
- These practices include the use of independent contractors and temporary staffing agencies that do not provide workers safety training or personal protective equipment to build the network.
- Major Gigapower contractors have track records of labor law and safety violations.
- Gigapower itself does not appear to employ any technicians building the network.
AT&T's fiber strategy contributes to the erosion of telecom job quality and stability.
- AT&T’s aggressive strategy to partner with BlackRock to deploy fiber using networks of nonunion contractors contributes to the financialization of broadband. The short-term focus on profits through outsourcing – or fissuring – of work erodes the quality and stability of family-sustaining telecommunications careers.

These findings of widespread labor abuses and poor quality work on Gigapower projects underscore CWA’s belief that AT&T and BlackRock’s Gigapower business model is harmful to workers and communities. 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
- Broadband decision makers 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 – including how the workforce will be overseen regarding accountability for the 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 to 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 if specific terms are not met.
Commit to an oversight process
- Localities must ensure there are accessible and effective tools and resources for oversight of Gigapower and other ISPs 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.²

Introduction

AT&T’s changing approach to fiber

AT&T’s investment in fiber is not new. Tens of thousands of CWA-represented broadband technicians work in their communities to bring this crucial technology to customers and grow AT&T’s bottomline. As a result of CWA-represented broadband technician expertise and hard work, AT&T is currently the nation's largest fiber internet provider.³ The company ended 2023 with over twenty-six (26) million consumer and business locations passed with fiber and the company had added one (1) million or more AT&T Fiber customers in each of the past six years.⁴ In its latest annual report, AT&T touted that the company is on track to hit its goal of thirty (30) million-plus total consumer and business locations passed with fiber by the end of 2025.⁵

Over the past two years, AT&T has made known that it wants to continue to build fiber not only for its own customers, but also expand outside its traditional service areas to build new wholesale fiber networks it will lease to other internet service providers (ISPs) and businesses. CWA believes that AT&T wants to build fiber on the cheap using non-union contractors with questionable records – instead of working with AT&T’s own unionized workforce – and is partnering with BlackRock, the world’s largest asset manager to do so.⁶ Evidence of AT&T’s strategy include the recent announcement of new agreements with four commercial open-access providers — Boldyn Networks, Digital Infrastructure Group, PRIME FiBER, and Ubiquity — to continue its fiber expansion.⁷

The Communications Workers of America (CWA) represents tens of thousands of workers at AT&T and across the telecom industry and acts as an advocate for responsible business practices that serve the public interest. CWA has conducted extensive field work and research to document the risks of the Gigapower business model for workers and communities. The report’s findings should spur public officials to engage in more rigorous review before granting additional permits, franchise agreements, or public subsidies to Gigapower and support workers to hold lawbreaking contractors accountable.

Gigapower Locations

Launching Gigapower: A new type of broadband provider with an aggressive strategy

In May 2023, AT&T and BlackRock announced the launch of their joint venture Gigapower LLC, a new company intended to deliver access to fiber-optic network infrastructure for internet service providers and other businesses using a commercial wholesale open access platform. AT&T would be Gigapower’s anchor tenant and planned to use Gigapower to expand the reach of its AT&T Fiber service outside the company’s traditional service areas.⁸

As of October 2024, Gigapower is authorized to provide service in nine states and is building its network in at least thirty-seven (37) cities.⁹Some markets have a concentration of multiple neighboring cities, such as the Minneapolis suburbs with ten (10) cities, while most markets have builds in only one or a few cities in a region. Each market is in different stages of build-out, but Gigapower executives have indicated that the company’s Phase 1 builds are expected to be completed by the end of 2025.¹⁰

Gigapower executives have said that in a second phase of deployment the company intends to expand the network into unnamed new markets and seek out BEAD funding for locations adjacent to current builds.

The financialization of broadband

The entrance of private capital like BlackRock into any industry is oftentimes followed by cost cutting that harms workers and communities. In an effort to guarantee higher than average returns in the short term before selling off their acquisitions, typically within five years, the private equity model seeks to reduce wages, benefits, and the number of employees.¹¹ A 2019 study published by Harvard University found average job losses of 4.4 percent within the two years after a company was bought by private equity, relative to control companies.¹² Private equity-owned companies are also twice as likely to go bankrupt as public companies, further contributing to increased instability for workers.¹³ Unlike public companies, which are regulated by the Securities and Exchange Commission (SEC), private equity firms are able to simultaneously enact sweeping changes at acquired or controlled companies without regulator oversight, while leaving the company and its workers, not the private equity firm, which has limited liability, on the hook.¹⁴

In recent years, private equity firms have become increasingly active in the broadband industry. In 2021, Stonepeak Infrastructure Partners acquired Astound Broadband, the sixth largest cable operator in the U.S. for $8.1 billion.¹⁵ Apollo Global Management acquired Lumen’s telecom network assets across twenty states in August 2022 for $7.5 billion and turned it into a new company known as Brightspeed.¹⁶ There are even private equity firms, like Wave Division Capital, that are primarily focused on the broadband industry and own ISPs such as Ziply¹⁷, MetroNet, and Consolidated Communications.¹⁸

Today, broadband is an essential service and the public should be concerned that private equity is taking an ever-larger ownership share of the industry. AT&T’s decision to partner with BlackRock for Gigapower’s fiber deployment and use a multi-layered matrix of non-union contractors has the potential to undercut wages and working conditions negotiated over decades by the company’s unionized workforce. AT&T and BlackRock’s model likely degrades standards in the telecom industry by demanding contractors bid against each other in a race to the bottom. In the process they are transforming jobs that previously offered family-sustaining wages, proper training, worker empowerment to ensure a safe working environment, affordable healthcare, adequate paid time off, and robust retirement benefits into precarious gig work. Furthermore, Gigapower has publicly stated intention to seek public funds through the federal Infrastructure Act’s Broadband Equity, Access, and Deployment (BEAD) program.¹⁹

Tracking Gigapower’s network deployment on the ground

CWA has closely tracked the Gigapower build-out in several markets and found evidence that Gigapower does not appear to employ any technicians or telecommunications workers building the network. Fiber deployment requires dangerous and technical construction work in the public right of way, including excavation, drilling, trenching, restoration, working near electric lines and operating at heights. This work presents safety risks for the public and workers if not performed by trained, qualified professionals who are familiar with the area infrastructure and terrain.

CWA is conducting ongoing field investigations and desk research into Gigapower’s markets to understand how its low-road business model is impacting city infrastructure, residents, and workers. In the markets CWA is tracking, Gigapower is using a convoluted network of at least thirty-five (35) different contractors for network construction and home installation.

In an early look into the Bloomington, Minnesota market, in just four months, between April and July 2024, Gigapower and its contractors were cited more than 400 times for damaging the public right of way during deployment. For at least 100 locations across Bloomington, Gigapower contractors were cited multiple times for each location, only weeks apart – suggesting that Gigapower was made aware of the citations, but may have failed to respond and rectify the bad quality work in a timely manner.²⁰ In the same timeframe, Gigapower’s contractors in Bloomington hit underground utilities -- including gas, water, and electric lines -- at least twenty-three (23) times.²¹

This report provides a detailed market spotlight focused on another early Gigapower market, Mesa, Arizona. The results tell a concerning story of dangerous deployment practices and poor quality work performed by an opaque network of contractors.

Market Spotlight:
Mesa, Arizona

Mesa, Arizona was one of the first Gigapower markets announced by AT&T and BlackRock Executives. The new entity began deployment in Mesa around January 2023, several months before Gigapower legally came into being. Gigapower’s early municipal deployment agreements and state regulatory approvals were negotiated and signed by then-current AT&T officials reflecting that AT&T was highly involved in the network’s deployment operations prior to BlackRock’s partnership.

Gigapower selected as its prime contractor for Mesa the telecom construction specialist Ansco & Associates, a subsidiary of Dycom. Ansco further subcontracted the deployment infrastructure work to at least nineteen different contractors.

In just eighteen (18) months of work in Mesa, public agencies cited Gigapower’s contractors for at least forty underground utility hits, including electric, gas, water/sewer, and telecommunications, accruing almost $135,000 in damages, according to public records. Reports on the utility hits state that the “Contractor did not follow careful and prudent manner.” and “Contractor failed to maintain clearance [of other underground utilities while excavating],” and “Contractor failed to pothole to verify location of marked utility.”²²

A number of Gigapower’s subcontractors appear to be newly formed, unregistered, unlicensed, and with a minimal track record of construction or telecom infrastructure experience. For example:

AJ’s Evolution Cable Services was responsible for hitting a gas line in June 2024.²³ At the time of the gas line hit, AJ's was not a registered business entity in the State of Arizona.²⁴ The company does not appear to have ever registered for a license with the Arizona Registrar of Contractors.²⁵
Precision Drilling LLC is not a Licensed Contractor in the State of Arizona, and does not appear to have ever registered for a license with the Arizona Registrar of Contractors.²⁶
Droz and Company Drilling LLC was formed in Alabama in April 2024.²⁷ The company registered in Arizona in June 2024, and became licensed to work in Arizona on July 2, 2024.²⁸ On July 22, less than three weeks after becoming licensed to start working in Mesa, the company hit an underground water main due to failing to pothole to verify location of a marked utility.²⁹
10-4 Utility Construction was responsible for three (3) distinct hits to underground gas lines between January and April 2024. The company ultimately voluntarily canceled two of its licenses, and the third was suspended by the Arizona Registrar of Contractors due to “Lack of Qualifying Party” working under the approved license.³⁰

Additionally, at least three contractors on the Mesa Gigapower build, including prime contractor Ansco and Associates, have outstanding complaints filed with the Registrar of Contractors.³¹

Ansco and Associates' poor track record of utility and right-of-way damage and poor contractor selection is well documented. In a previous AT&T deployment project in North Carolina, Ansco used a network of more than eighty (80) subcontractors to build AT&T Fiber, and was responsible for almost 700 utility incidents over just four years.³² Further, Ansco and its parent company Dycom have a history of OSHA violations and using subcontractors accused of misclassifying workers as independent contractors, contributing to alleged wage theft and unsafe working conditions.³³ Despite Ansco’s poor record, AT&T and BlackRock still chose Ansco to oversee the Gigapower deployment in multiple markets.³⁴

Gigapower contractors use temporary staffing firms and appear to misclassify workers across multiple markets

CWA has also tracked Gigapower’s deployment in two additional markets and found a pattern of technicians being hired under 1099 independent contractor arrangements.³⁵ Independent contractors do not have the protections of OSHA or workers compensation insurance, which means the employer does not have to provide proper safety equipment and does not have to cover the cost of treatment if a worker is injured on the job. Independent contractors are also excluded from wage and hour laws, so they are not entitled to minimum wage or overtime, and do not qualify for unemployment insurance.

Some technicians working on the Gigapower deployment have been hired using 1099 independent contractor forms through corporate staffing agency websites, like StarTek Workforce Solutions, which boasts “The technicians bring their own tools, resources, and independent judgment and discretion to each job based on their experience as independent contractors.” StarTek, however, does not provide training, and does not appear to require training or certifications.³⁶ Further, StarTek pays workers piece-rate, meaning compensation is based on how quickly workers build the network. In contrast to regular hourly wages, piece-rate incentivizes workers to rush through jobs and put at risk the safety and quality of work.³⁷ Some 1099 workers appeared to be migrant workers who reported that they are recruited from states all over the country, reside in motels during the Gigapower jobs, and have allegedly been paid with personal checks.³⁸

Alongside hiring workers under 1099 arrangements, Gigapower’s contractors appear to follow another widespread practice of using temporary staffing agencies to source workers for critical infrastructure work. Workers on Gigapower projects have reported they are employed by staffing agencies such as PeopleReady and LaborFinders.³⁹ Across the economy, only about 7 percent of temp jobs ultimately convert to full-time.⁴⁰

A report from the National Employment Law Project concluded that the system of temporary staffing “insulates the host companies from workers’ compensation claims, unemployment taxes, union drives, and the duty to ensure that their workers are citizens or legal immigrants, allows host companies to control many working conditions without being responsible for them. The result is that temporary staffing agencies and host companies can more easily exploit temporary workers.”⁴¹

These reports of widespread labor abuses and poor quality work on Gigapower projects underscore CWA’s belief that AT&T and BlackRock’s Gigapower business model is harmful to workers and the communities. CWA invites community leaders to join us in holding Gigapower and its corporate owners accountable to improve its business practices moving forward.

Recommendations

For State and Local Policymakers

Understand Gigapower’s workforce plan

As this market spotlight demonstrates, Gigapower’s failure to conduct due diligence in selecting its contractor workforce is contributing to dangerous deployment practices that have caused damage to public infrastructure. When engaging with Gigapower, broadband decision makers should be vigilant about requiring Gigapower to present a robust and detailed Workforce Plan ahead of any agreement, permit, or funding issuance.⁴² This Workforce Plan should include at a minimum the following information:

Training and Safety - For each job title that will carry out the proposed work, a description of safety training, certification, and/or licensure requirements. Verification of all contractors’ registration, licensing, workers’ compensation insurance, and liability insurance.
Job Quality - For each job title that will carry out the proposed work, a description of wages, wage scales and minimum wage rates, overtime rates, and benefits.
Accountability and Subcontracting - Will the workforce be directly employed by the company? If not, will the company subcontract the work to another entity? Will the contractors use W2 employees or further subcontract to 1099 independent contractors? If the workforce will be subcontracted, the applicant should disclose the identities of the company’s prime contractors, subcontractors, and any independent contractors. Describe the Workforce Plan for the subcontracted workforce as well and describe how the applicant will ensure the subcontractor is held accountable for labor law compliance and abiding by the commitments in the Workforce Plan.
Record of Labor Compliance - Disclosures of investigations and violations of federal law including the Occupational Safety and Health Act, Fair Labor Standards Act, National Labor Relations Act, and Title VII of the Civil Rights Act of 1964. Disclosures of whether or not workers are required to or requested to execute arbitration agreements with any employers involved in the project, and if so, a copy of the arbitration agreements.

Require an agreement prior to commencing deployment

In order to facilitate safe and effective right of way management during fiber deployment, all jurisdictions considering partnership with Gigapower or other internet service providers should create a standardized system for authorizing the terms and conditions for use of the rights of way via franchise agreements, right of way use agreements, licenses, or a similar contractual agreement. Such agreements can provide a mechanism for administrative approval of deployments to ensure private companies undertaking construction are accountable to meet specific criteria and requirements for working in the rights of way to deploy broadband infrastructure. CWA recommends that agreements contain provisions regarding disclosures and transparency requirements cited in Recommendation A above, a requirement that all contractors provide the aforementioned disclosures to the relevant bodies upon request, clauses to allow regular monitoring of agreement benchmarks and provisions by relevant bodies, and “claw-back” mechanisms to give jurisdictions the ability to revise or terminate agreements if specific terms are not met.⁴³

Commit to an oversight process

Localities must ensure there are accessible and effective tools and resources for oversight of Gigapower and other ISPs’ fiber deployments. One example is the City of Bloomington’s recently-implemented Fiber Installation Incident Report form, created to give Bloomington residents a platform to submit complaints and concerns, or to raise questions about how fiber is being deployed in their neighborhoods.⁴⁴

When Gigapower and ISPs are actively deploying fiber, governing bodies should regularly convene stakeholders to reflect on deployment progress, hear resident feedback and City staff reports, and adjust construction standards and assess enforcement options to improve deployment moving-forward. Stakeholders should represent a diverse variety of constituencies, including residents, municipal staff (i.e. permitting, inspections, engineering), agencies that protect the interests of workers (such as Offices of Labor Standards and Offices of Immigrant Affairs), unions representing workers in the respective industries, digital equity advocates, and industry representatives. These convenings should be reported out to the City Council (or other relevant governing body) and should have opportunity for public input.

For Investors and Fund Trustees

Scrutinize workforce practices for potential investment risk factors

Institutional investors and fund trustees should endeavor to exert due diligence regarding Gigapower’s workforce elements that may pose risks for successful market deployment launches and long-term value creation. Recurring damage to public rights-of-way, wage theft, and 1099 misclassification are not just bad business practices that harm workers and the public; they are risk factors for sound investment as they can potentially make Gigapower more vulnerable to deployment delays, litigation, investigation, and reputational damage. The information outlined in this report is only a small spotlight into the inner workings of the Gigapower project, deployment of which will continue for a number of years. CWA recommends that investors and fund trustees 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.

Endnotes

AT&T Press Release, Gigapower Joint Venture from AT&T and BlackRock Launches May 11, 2023
Private Equity Stakeholder Project. Principles of Responsible Workforce Management in Private Equity. https://pestakeholder.org/wp-content/uploads/2023/11/Principles-of-Responsible-Workforce-Management-in-Private-Equity.pdf Accessed November 4, 2024.
AT&T Press Release. May 11, 2023. Gigapower Joint Venture from AT&T and BlackRock Launches.
AT&T. 2023 Annual Report.
AT&T. 2023 Annual Report.
Basil, A.K., and Barbuscia, D. October 11, 2024. BlackRock's assets hit record $11.5 trillion amid private market push.
AT&T Press Release. September 9, 2024. AT&T Strengthens Fiber Leadership with Plans to Bring High-Speed Internet to More People Through New and Expanded Third-Party Relationships
AT&T Press Release. May 11, 2023. Gigapower Joint Venture from AT&T and BlackRock Launches.
Unreported cities identified via public records requests to state departments of transportation for permits for work in state-owned/managed rights of way.
Baumgartner, J. May 11, 2024. AT&T-BlackRock fiber JV IDs initial wave of build markets.
Popular Democracy. Pirate Equity: How Wall Street Firms are Pillaging American Retail. July 2019
Davis, Steven J. and Haltiwanger, John C. and Handley, Kyle and Lipsius, Ben and Lerner, Josh and Miranda, Javier. The Economic Effects of Private Equity Buyouts. July 8, 2021.
Weber, Lauren. Fact Check: Does Private Equity Kill Jobs?. Wall Street Journal. April 25, 2014.
American Bankruptcy Institute. Private Equity's Abuse of Limited Liability.
Astound Broadband Press Release. Stonepeak Closes Acquisition of Astound Broadband. August 19, 2021.
Brightspeed Press Release. Apollo Funds to Acquire U.S.-Based Telecom Platform from Lumen Technologies. August 3, 2022.
Reuters. November 4, 2024. Canada's BCE to acquire US internet firm Ziply for $3.6 bln.
Wave Division Capital website. https://www.wavedc.com/. Accessed 10/30/2024.
Hern, Ted. Gigapower CEO Sees BEAD Flowing to Open Access. June 5, 2024.
Public Data Requests to the City of Bloomington; Request Number 2024-274, submitted July 1, 2024; Request Number 2024-275, submitted July 1, 2024; Request Number: 2024-332, submitted August 2, 2024; Request Number: 2024-371, submitted August 23, 2024
Ibid.
CWA Public Records Request to City of Mesa. Request number: R004491-071924. Submitted July 19, 2024
CWA Public Records Request to City of Mesa. Request number: R004491-071924. Submitted July 19, 2024
AJs Evolution Cable Services, Arizona Corporations Commission filing showing Formation Date of July 29, 2024
Based on searches of the Arizona Registrar of Contractors search engine, using various spellings of AJs Evolution Cable Services, and using the title provided on the State business registration - The RoC maintains records of companies that have held and lost/suspended/canceled licenses. Searches re: AJs Evolution Cable Services yield no results.
Based on searches of the Arizona Registrar of Contractors search engine, using various spellings of Precision Drilling, and using the title provided on the State business registration - The RoC maintains records of companies that have held and lost/suspended/canceled licenses. Searches re: Precision Drilling yield no results.
DROZ & CO LLC DBA DROZ & CO DRILLING. Alabama Secretary of State business filing. April 25, 2024.
DROZ & CO DRILLING LLC. Arizona Corporation Commission business filing showing formation date of July 26, 2024; Droz & Co Drilling LLC. Arizona Registrar of Contractors filing LICENSE NUMBER ROC 353150, License Issued July 7, 2024
CWA Public Records Request to City of Mesa. Request number: R004491-071924. Submitted July 19, 2024
Arizona Registrator of Contractors. License numbers ROC 338000 - Voluntary cancellation 2024-04-16; ROC 346674 - Voluntary cancellation 2024-04-19; ROC 350821 - Suspended 2024-07-11, Sub Status: Lack of Qualifying Party
Tilson Technology Management Complaint number 2024-10495 ; Ansco & Associates, Complaint number 2024-07476 ; 10-4 Construction, Complaint numbers 2023-06533 and 2024-08593
Communications Workers of America. AT&T’s Web of Subcontractors: Building Next-Generation Networks with Low-Wage Labor. October 2020; Stoogenke, J., WSOC TV, “Action 9: Fiber crews charged $1.5M for damage over the years,” July 16, 2018.
Communications Workers of America. AT&T’s Web of Subcontractors: Building Next-Generation Networks with Low-Wage Labor. October 2020; Ansco & Associates. OSHA Establishment Search conducted November 13, 2024;
Locke, M. Raleigh News & Observer. “In AT&T fiber project, workers claim loss of pay - and one loses a finger.”
December 9, 2016. https://www.newsobserver.com/news/politics-government/article119895793.html
Ansco & Associates listed on permits in Mesa, Gilbert, and Chandler Arizona; Confirmed by CWA members field work and photos of jobsites with Ansco & Gigapower on construction signs beginning in July of 2024.
Evidence from CWA member field visits in April 2024 in Winter Park, Florida, and in May 2024 in Apopka, and Lake Spier in Baldwin Park, Florida.
Starktek website. About. https://strteks.com/about-us/.
Evidence from CWA member field visits in April 2024 in Winter Park, Florida, and in May 2024 in Apopka, and Lake Spier in Baldwin Park, Florida.
Evidence from CWA member field visits in Bloomington, Minnesota beginning in July 2024.
Evidence from Field work from CWA member in Las Vegas, Nevada, August 2024.
Rindlisbacher, Emma. How Temp Agencies Keep Their Workers’ Wages Low. The American Prospect. July 22, 2021.
National Employment Law Project Policy Brief. Lasting Solutions for America’s Temporary Workers. April 2019.
More information on workforce plans and best practices in broadband permitting and granting is available in CWA’s report, “Broadband Investments that Go the Distance: Incorporating High Road Labor Standards and Future-Proof Infrastructure into a State or Locality’s Broadband Plan,” available at https://buildbroadbandbetter.org/resources.
National League of Cities and National Association of Telecommunications Officers and Advisors. MODEL CODE FOR MUNICIPALITIES. August 2018
City of Bloomington, MN. Fiber installation incident report.