GFiber, formerly Google Fiber, and Stonepeak announced earlier this month an agreement to merge GFiber with Astound Broadband, forming an independent fiber provider.
Stonepeak, an investment firm specializing in infrastructure and real assets, will be the majority stakeholder in the new company. Google’s parent Alphabet will remain a significant minority shareholder.
GFiber first broke ground on its Des Moines network in 2022. In January, Des Moines and West Des Moines were the first U.S. cities the company upgraded to multi-gig speeds.
A spokesperson for GFiber declined to comment on the merger.
Curtis Dean, executive director of Community Broadband Action Network, or CBAN, a nonprofit membership organization helping communities achieve their broadband goals, told the Business Record that there are several aspects of the deal leaders and consumers should be watching as the transition unfolds.
Here is what he shared.
Continued expansion: “What does this mean for GFiber’s continued expansion and bringing fiber networks into communities that don’t have them?” Dean said. “Will that continue? Because GFiber has been slowly growing and they’ve been adding new markets throughout the country, with Des Moines area being one of the most recent.”
Dean said one aspect of the deal that gives him a “bit of pause” is that Astound’s current networks are mostly cable.
“One might speculate that with this merged organization, instead of going into new markets, they might be using the available capital to rebuild old markets, the Astound markets elsewhere in the country to fiber, and if that happens, there probably won’t [be] a huge impact on Iowans, other than the fact that GFiber probably won’t grow any more than it already has. So it could mean that it’s used as a strategy for Astound to upgrade their networks in places where they still have cable.”
Rural Iowa access: “The areas where … good, high quality access is still a challenge is in smaller communities and rural areas, and some of that is being taken care of through various grant programs, including [Broadband Equity Access and Deployment], the federal grant program, which will bring better broadband to a lot of rural areas. But we still have county seat-style towns where they’re still left with a duopoly of cable company and a phone company, and so we probably won’t see those towns getting all fiber access for maybe yet some number of years.”
Pricing: A key consumer focus will be on pricing. Dean said. “GFiber has generally had one of the lowest price structures of any ISP in the country, and especially among fiber providers. They’ve been very aggressive in offering lower cost broadband than maybe some of their competitors,” he said. He said it’s yet to be determined if and how the pricing structure will change under the new merged company.
Dean said he expects other companies in the region are going to be “very aggressive” on marketing.
He said there could also be a name change coming.
“There hasn’t been any clarity yet on what this new merged company will be called,” he said.
Reliability: “I don’t see any big impact on quality of service, reliability, all of those elements that have made GFiber a good, strong competitor in the area, unless, of course, as part of the consolidation of these two companies, they decide to downsize customer service staffs, or no longer have as many technicians,” he said. “Those are the kind of consumer-impacting decisions that might get made that the consumer won’t probably even know about it until something bad happens.”