AT&T bringing ultra-fast gigabit internet to Reno

Updated with breaking news Dec. 7 at 11:30 a.m.

Northern Nevadans are getting faster Internet in their homes.

Today, AT&T announced they will bring their AT&T U-Verse with GigaPower service to Reno homes and businesses along with 38 other cities. Anyone already connected to AT&T U-Verse services should start to receive GigaPower service by the end of 2016.

"It's a great pleasure to see that Reno is now in the line-up to receive our fastest speeds available, especially given the significant economic development underway; this can only enhance those opportunities for growth," Stephanie Tyler, president of AT&T Nevada said in a press release.

Fiber-optic Internet is more than 10 times faster than the highest speed currently available to homes in the Reno area, ranging from 100 megabits per second to 10 gigabits per second compared to the current top speed of 120 megabits per second offered to some consumers. In addition to break-neck speeds, fiber optics allow more simultaneous use, alleviating slowdowns caused by high traffic.

"Faster access for our businesses and the city is critical to the economic vitality of our city as we compete for business and jobs in our area," Mayor Hillary Schieve said in a press release. "Today's announcement is a game changer in delivering our goals to keep Reno moving forward."

In the coming months, Reno-based fiber-optic company Lightcore Group is also building extremely high-speed Internet into new residential developments in downtown Sparks. Those include C Street Lofts in the former Old Silver Club Hotel and The Yard, formerly Bourbon Square Casino, said Sparks City Manager Steve Driscoll.

In both Reno and Sparks, the fiber companies will be funded privately and work with developers to install the network instead of using taxpayer money.

Other cities with gigabit-speed Internet have attracted significant investment and experienced growth as a result of the technology. In other words, like the Tesla Effect, gigabit Internet could help improve the perception of Reno and its economy, backers say.

Lightcore Group owner Lance Douglas said fiber-connected houses would raise home values and create jobs and businesses to support people moving to Reno. Schieve and Mike Kazmierski, president and CEO of the Economic Development Authority of Western Nevada, want fiber to bring new technology companies and industries in for the same reason.

"Our view is any fiber is good fiber," Kazmierski said.

He's not the only one.

"What the Startup Row banners (on First Street) do for us, fiber would do for the city," said Reno Collective owner Colin Loretz. "It's future-proofing Reno."

Why does Reno need fiber?

In the coming years, Americans will need faster Internet because up to 50 Internet-connected devices and appliances will compete for bandwidth in a single home. If Johnny and Sally are watching two different Netflix movies on their phones while Mom watches HBO Go on the TV, it may slow down Dad working remotely on his laptop.

Outside of home use, "the sky is the limit" for what fiber Internet can achieve, Douglas said. Some Reno businesses already have fiber but not many.

In the "smart city" of the future, thousands of sensors could stream weather, air quality, earthquake and traffic data to early warning systems, smart phones and automated cars. These are all part of a larger technology trend called the Internet of Things, where everyday objects connect to the Internet to provide real-time feedback and streaming data. The city's Internet infrastructure will determine how well that connectivity operates.

Reno is working toward that goal. A local company, Filament, wants to deploy a network across the city to facilitate these types of sensors in the future. Owner Eric Jennings said a fiber-optic network would make Reno "pretty unstoppable."

Chattanooga, Tenn., is the first fully connected gigabit city and realized many of these benefits five years ago. Chattanooga now calls itself GIG City as a way to attract more technology companies and startup money.

"Chattanooga has gone from close to zero venture capital in 2009 to more than five organized funds with investable capital over $50 million in 2014 — not bad for a city of 171,000 people," the Guardian wrote in a 2014 story about the town's tech boom.

Chattanooga attracted $4 billion in additional outside investment since it turned into the GIG City, according to The Gig Tank, a startup accelerator for businesses that need gigabit-speed Internet.

Some cities only have gigabit speeds in a few neighborhoods. EDAWN Vice President Doug Erwin visited one called the Kansas City Startup Village last year. The village centers around a Google Fiber hub. He said it served as a lightning rod to bring in new businesses.

Tech startups moved to Kansas City and converted houses into businesses instead of renting office space because it was cheaper. Loretz said tech companies moved to the village for fiber, which in some ways is better than waiting for them to start from scratch. He said Reno could benefit from the same thing.

How would Reno get fiber-to-home?

Usually, fiber-optic services set up networks in neighborhoods and not entire cities. Customers who live within the network then pay standard monthly rates to an Internet service provider, which then uses the fiber-optic network to deliver the Internet to the home.

This is how AT&T GigaPower works. Prices have not yet been announced for Reno but in Cupertino, Calif. the service ranges from $110 to $180 for 1 Gbps with various TV and phone bundles.

Chattanooga went a different route and brought its fiber through a public utility, which is why the whole city received it. Customers pay for fiber through the power company. They offer 100 Mbps for $57 per month.

Lightcore's model would differ from other companies that offer fiber networks.

Lightcore lays the fiber-optic cables throughout the city. Internet providers would then lease bandwidth from Lightcore to provide faster Internet to their customers. Douglas' dream is that a customer's current Internet provider will call to say "you've been upgraded to fiber, congratulations!" This dream and business model is not new, it happens all the time in the cellular phone world.

Verizon, AT&T, Sprint and T-Mobile rarely set up their own towers, they all lease cell-phone bandwidth from other companies. It's more efficient for the city, customers and providers to use one tower instead of three identical towers next to each other. In some cases, tower companies bought and leased the bandwidth back to the provider.

Loretz said he's most excited that Lightcore could create price competition and more options for Internet service. Lightcore's idea would even the playing field so that no single company can hold a monopoly on Internet service. Instead, they will compete over pricing instead of who owns the network.

This is similar to cell phone data battles. When Sprint announced unlimited smart phone data, others followed. Customers suddenly received more data for the same price.

Right now, a few fiber optic providers only serve some businesses and charge $1,000 to $2,000 per month. Douglas said he's signing on new providers that would further diversify the Reno market. If those providers brought in 200 Mbps service for $60 a month, for example, it would make the current 60 Mbps offered to homes overpriced. The market would adjust.

"Our goal is to change the industry," Douglas said.

What happens next?

It's unclear what will happen with Lightcore's pilot project in Sparks while AT&T moves into Reno. Douglas said it would cost him $600 million and up to three years to build a fiber-to-home network throughout the entire region. He's looking at a long-term 20 to 30-year investment cycle, much longer than a standard start up. Neither Sparks nor Reno governments will help pay for that, said Schieve and Sparks City Manager Steve Driscoll.

The Southeast Connector project, for comparison, cost $290 million and it's one of the most expensive and controversial infrastructure projects in the region.

Douglas knows he could lose the market to an existing provider if they move faster with more investment, but he wants a chance to make fiber available to everyone.

"It can be done for citizens and everyone makes money," he said. "It doesn't have to be a monopoly or a dictatorship like it is in some places."

Here’s the full list of cities slated to get fiber service through AT&T:

The 38 metro areas that AT&T will be entering, starting with the launch of service in parts of the Los Angeles and West Palm Beach metro areas today, are:

Alabama: Birmingham, Huntsville, Mobile and Montgomery

Arkansas: Fort Smith/Northwest Arkansas and Little Rock

California: Bakersfield, Fresno, Los Angeles, Oakland, Sacramento, San Diego, San Francisco and San Jose

Florida: Pensacola and West Palm Beach

Georgia: Augusta

Indiana: Indianapolis

Kansas: Wichita

Kentucky: Louisville

Louisiana: Baton Rouge, Shreveport-Bossier, Jefferson Parish region and the Northshore

Mississippi: Jackson

Missouri: St. Louis

Michigan: Detroit

Nevada: Reno

North Carolina: Asheville

Ohio: Cleveland and Columbus

Oklahoma: Oklahoma City and Tulsa

South Carolina: Charleston, Columbia and Greenville

Tennessee: Memphis

Texas: El Paso and Lubbock

Wisconsin: Milwaukee

Mike Higdon is the city life reporter at the RGJ and can be found on Instagram @MillennialMike and on Facebook at Mike Higdon, Reno Life.