Oct 13, 2016 - Real Estate

Fiber internet service comes at a cost: Hundreds of thousands of dollars in damages

As Google and AT&T have connected Charlotte with lightning fast internet speeds, they’ve also connected time and again with underground lines — causing hundreds of thousands of dollars worth of damage in the process.

Both corporate giants have spent the past year laying cable in neighborhoods and apartment communities throughout the city to roll out their fiber internet options. It’s a significant investment that has been praised as the future of connectivity and a potential economic driver for Charlotte.

But in the short-term, their work has had a significant economic cost. When Google Fiber or AT&T come into an area, they send large teams to dig scores of holes in the ground to lay their wire. In the process, they’ve repeatedly cut water, power and gas lines and even some competitors’ cables.

Homeowners have complained of being without electricity or internet for hours, or coming home to a small squadron of fire trucks on their streets. And both city departments and private companies are now trying to recoup some of the costs of the damage done to their lines.

In two of the highest-profile incidents, fiber layers have accidentally drilled into water mains, sparking large emergency responses.

  • In mid-May, a Google Fiber contractor hit a 4.5-foot water main in west Charlotte, knocking it out of service for weeks and forcing the city council to authorize a $150,000 repair bill.
  • Three months later, a Google Fiber contractor drilled through a two-foot-wide water main line in southeast Charlotte, causing a deluge of water that forced the evacuation of several nearby houses and sapping the water pressure in the Cotswold and Oakhurst neighborhoods. School buses were forced to reroute, causing major backups on Monroe Road.

But the primary effect has been on residential streets.

“When they do these fiber installations, they look like they’re digging up the whole neighborhood,” said John Halpin, president of the Weston Glen neighborhood association in Ballantyne.

While digging there, fiber contractors knocked out the cable service to about 90 of the 205 total houses in the neighborhood, Halpin said. When he asked the repairmen about it, they told him this has been happening all over town, he said.

The city of Charlotte warns that construction — and disruption — will be a fact of life here for several years and will eventually touch every part of the city.

Counting up the costs

The companies haven’t disclosed how much money has been spent on repairs. But data from the city of Charlotte and interviews with local utility companies give a glimpse of how much the damage has cost.

A company is supposed to mark utility lines before digging is done. When a line is hit, an investigator determines who is at fault. If the fiber contractor is determined to be in the wrong, the owner of the line that was damaged can bill Google or AT&T for the cost.

City of Charlotte

Since last July, the city of Charlotte has billed the two companies more than half a million dollars for water lines damaged in incidents the city has determined that the utility contractor was at fault. The claims cover the city’s cost of labor, materials and equipment.

Google has been billed $457,376.91 between last July and mid-June of this year, according to data obtained by the Agenda in a public records request.

A total of $75,469.73 has been billed to AT&T for damaged water lines between July 2015 and early June of this year.

Both figures have certainly risen since then as more neighborhoods have been built out.


Charlotte Fire Department

The Charlotte Fire Department has also spent numerous resources responding to gas and water line breaks around the city. Capt. Rob Cannon said the department doesn’t track which ones are fiber-related and which are not. But he said there’s been a significant increase in traffic to natural gas line calls in this fiscal year, as fiber development has accelerated.

This past year, the department responded to 2,831 natural gas calls — up 50 percent from the year prior. In the past month, the Charlotte Fire Department has responded to 11 gas line ruptures at the same time, and 22 in a single 12-hour period, Capt. Cannon said.

Piedmont Natural Gas

When contractors hit a gas line, the excavator gives Piedmont Natural Gas a call nearly immediately. Most of the time, it’s a smaller service line that’s been hit instead of a larger main line, spokesman David Trusty said.

And it’s been a lot of hits. Through July, Piedmont crews had responded to 800 strikes, double that of the previous year. A total of 2,350 customers have had service impacted out of about 250,000 in Charlotte. The company has been billing about $350,000 per year to utilities contractors seeking to recoup costs.

Not all of the increase is fiber-related, Trusty said. As with the fire department, general construction is also to blame. But the nature of how fiber companies have been installing makes it more noticeable.

“If you are doing the work over the period of a year, it might not seem like a lot of hits or strikes,” Trusty said. “The nature of how they’re doing their work, in putting a number of resources on the job, it sometimes can feel like, ‘Gosh, they just hit that line yesterday.'”

Duke Energy

Duke said they couldn’t provide numbers on the impact of fiber construction on electric lines, but said they go after contractors to recoup costs when possible.

“It’s safe to say we do see more damages anytime construction and other infrastructure improvements increase in the community,” spokeswoman Paige Layne said.

‘A real business’

The digging is the first step in the massive up-front investment that both Google and AT&T are hoping will be meaningful revenue sources as homeowners connect. The two companies have invested millions of dollars in their fiber internet networks.

Since 2012, Google Fiber has entered eight cities across the country, with plans to expand to more than a dozen more. The process takes years and a massive effort to negotiate with city governments, design out a physical network and lay the miles of cable.

It’s unclear how much Google has spent or earned on its Fiber business. In public documents, it combines Fiber under the catch-all “other bets” along with its Nest home system and Google Capital. In 2015, the “other bets” division brought in $448 million, about one half of one percent of its nearly $75 billion revenue. The division lost $3.6 billion.


In an interview with Re/code, a Google exec said Fiber is transitioning from an “experiment” to a “real business.” The company has opened a brick-and-mortar location in Uptown’s First Ward as a community space and sales and education center for Google Fiber.

Their entry is having an impact on more established telecom competitor AT&T, which is simultaneously rolling out gigabit internet service of its own.

AT&T started slightly later but is on a faster track, with plans to be in 45 cities by the end of this year and 67 total by 2019. The company began its fiber internet push three years ago and plans to have 12.5 million customers for its fiber service in the next few years.

Both companies have gone hard at the apartment market in Charlotte, signing deals with property managers for exclusive access to their tenants. Today, Google Fiber service is available in the Highland Creek area at both apartments and houses.

Both companies are now working in residential neighborhoods. AT&T has done more in south Charlotte, while Google Fiber is starting primarily in north Charlotte.

The companies respond

Both companies have asked Charlotteans to be patient while the physical work is done. The promise is that a significantly better internet connection will soon be offered.

Google said in a statement that the company closely monitors the infrastructure it works near and pays companies back when its contractors are at fault.

“Providing superfast Internet to customers throughout metro Charlotte requires Google Fiber to lay thousands of miles of fiber-optic cable — an incredible amount of infrastructure,” Google said in a statement. “While completing this process, Google Fiber adheres to strict protocols to assure the safety and well-being of residents, visitors, contractors and employees. Google Fiber also works very closely with all providers on each issue, reimbursing for utility damage where the company is found to be at fault.”

The Google Fiber page for Charlotte lists a phone number to call if a homeowner believes their power or water is out because of a fiber installation.

AT&T says it has also closely monitored customer complaints. Before doing work in each neighborhood, the company leaves door hangers with information on who to contact if necessary.

“As we work to expand our network in the Charlotte area, we place the highest priority on the safety of our customers, employees, contractors and area residents,” AT&T said in a statement. “We expect contractors performing work to expand our network to work with local utility providers and third-party utility line location services as projects get underway and rely on the accuracy of these services to dig safely. We work hard before, during and after construction to minimize cuts and disruptions for residents, and work quickly with all concerned to resolve any issues regarding our work.”

The problems don’t always end there.

Though both companies say they have been responsive to reimbursing costs, the trouble for homeowners doesn’t always end there.

One common complaint has been about the damage to front lawns as holes have been dug. Contractors have put new grass seed down, but it’s sometimes a different kind of grass than the lawn.

Sometimes the trouble lasts longer.

Photo courtesy of Megan Vespa

In late August, fiber contractors digging in Megan Vespa’s Quail Hollow-area yard struck a Duke Energy line at about 5 p.m., sparking an electrical fire behind the house. Luckily, they were home and able to extinguish the blaze before the four fire trucks were able to arrive, Vespa said.

Electric service was off at the house until midnight. But the heartburn lasted for much longer.

Photo courtesy of Megan Vespa

The companies involved are still figuring out who precisely is to blame, and who should be responsible for the costs.

Vespa said she is still spending about a half hour on the phone per week trying to be reimbursed the $250 the family spent to repair the damaged siding. She says she’s been caught in the bureaucracies of the various companies involved — the contractor doing the digging and the company that was supposed to accurately mark the location of the lines.

“It could have been much worse,” she said. “It’s still frustrating though to have to deal with all of this and spend money on repairs for something that we never asked for.”


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