There was no dispute about Google’s right to use the telephone poles. It was about an ordinance the city passed that allowed Google’s contractors to relocate AT&T’s equipment, instead of giving AT&T a chance to do the relocation itself. (The same contractors responsible for tearing up Louisville streets: http://wdrb.images.worldnow.com/images/17611056_G.jpeg) Also, the lawsuit was resolved just four months after Google selected Louisville as a Fiber City, two months before Google started nano-trenching, and 18 months before Google gave up after having covered just a few neighborhoods.
Among other reasons, the city is in the heart of karst country [0], which is to say that most of the deep rock under it is water-soluble Limestone. Everything dug below the city needs to be carefully managed to avoid cave-ins, sinkholes, water problems, etc.
(This geographical topology is also why for instance Mammoth Cave National Park is nearby, and has one of the largest known and explored cave systems in North America.)
The city has a very robust utility pole grid and almost all of its infrastructure has always been on utility poles.
ETA: Which is also to say that utility poles were not just the only other option, they were the only sustainable option period in this city, with this climate, and this geography. Google knew that going in to the project and still decided to try something different that history should have convinced them was doomed to fail.
