Gigapower's Troubled Expansion: A Risky Business Model

The joint fiber venture between AT&T and BlackRock, Gigapower, has been making headlines for all the wrong reasons. A recent report from the Communications Workers of America (CWA) has shed light on the operational challenges and legal issues plaguing Gigapower's expansion, particularly in Chandler, Arizona. The report, titled “Gigapower’s Chandler Conundrum,” reveals a disturbing pattern of disturbances, delays, and dismissals that have left workers and communities at risk.

The CWA report documents numerous issues, including unlicensed and unregistered subcontractors performing work prohibited by City code, poor oversight and quality control, and other practices that undermine high-quality fiber deployment workforce standards. These issues have resulted in damage to critical utility infrastructure and work stoppages over public safety concerns. The report also highlights that Gigapower is currently being sued by Tilson Technology Management, its former prime contractor in several states, for an alleged breach of contract. Tilson's recent Chapter 11 bankruptcy filing further jeopardizes Gigapower’s on-time Arizona market buildout, leaving hundreds of workers and dozens of small businesses in the lurch.

The CWA's findings are not isolated to Chandler. A previous report from 2024 exposed how Gigapower’s reliance on inadequately trained, non-union contractors and substandard workforce oversight contributed to $135,000 in damage to the Mesa, Arizona, area. This pattern of issues suggests that the problems at Gigapower are systemic and deeply rooted in the company’s structure and business model.

Fernando Roman, CWA District 7 campaign lead and a broadband technician of 25 years, expressed his concerns: “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. 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.”

The financial and reputational risks for investors in Gigapower are significant. The reliance on poorly trained subcontractors increases the likelihood of construction errors and utility strikes, leading to costly repairs and regulatory penalties. The venture's workforce model, which eschews direct employment in favor of non-union, independent contractors, further exacerbates risks. Many workers are classified as 1099 contractors, denying them basic protections like overtime pay and workers' compensation. This creates a precarious labor environment where safety protocols are often neglected, leading to preventable accidents and reputational harm.

The CWA report also highlights the regulatory and policy uncertainty surrounding Gigapower. Local governments are increasingly wary of projects that bypass traditional oversight. In Phoenix, Arizona, proposed code changes to allow non-union contractors in public rights-of-way have been met with fierce opposition from labor groups. Such policy shifts could delay deployments or force costly revisions, further impacting the financial viability of the project.

In conclusion, Gigapower's business model, which relies heavily on non-union contractors and substandard workforce oversight, poses significant risks to the long-term sustainability and reliability of its fiber deployments. These risks include infrastructure quality issues, labor compliance problems, regulatory uncertainties, and systemic risks for investors. Policymakers and investors must take action to ensure that Gigapower's fiber deployments support good jobs and protect communities. The future of infrastructure investment hinges not just on speed and scale, but on sustainability, accountability, and the protection of both workers and communities.