When President Obama took to the YouTube airwaves to express his support for the principles of net neutrality, he had to expect some degree of backlash. However, he probably wasn’t prepared for the country’s largest telco to object so strongly that it would cease all investment in its planned fibre network.
Yet that’s exactly what happened. AT&T CEO Randall Stephenson immediately announced an “investment pause” on the telco’s 100-city fibre roll-out plan. Only, AT&T’s investment plans were a little sketchy to begin with. So much so, that the US regulator, the FCC, decided to call its bluff and demanded full details.
Cue panic amongst AT&T’s lawyers, as it no doubt debated whether or not to take on the FCC and get behind its CEO. Perhaps not surprisingly, it decided to take the other route, and started furiously back-peddling. In a letter to the FCC this week, AT&T’s SVP for Federal Regulatory matters, Robert Quinn, said: “the premise of the Commission’s November 14 letter is incorrect”.
“AT&T is not limiting our FTTP deployment to two million homes,” explained Quinn. “To the contrary, AT&T still plans to complete the major initiative we announced in April to expand our ultra-fast GigaPower fibre network in 25 major metropolitan areas nationwide.”
So what did Stephenson mean when he told an analyst conference that “We can't go out and invest that kind of money deploying fibre to 100 cities not knowing under what rules those investments will be governed”? In fact a day later, he was filmed saying the following: “We’re going to stop that, we’re going to pause that. We cannot be good stewards of our shareholders capital and make these investments and not really understand how these are going to be regulated in three years.” Check the link for yourself; the quote starts around 3:30.
Well, according to Quinn in his letter, “AT&T has not stated that the President’s proposal would render all of these locations unprofitable. Rather, AT&T simply cannot evaluate additional investment beyond its existing commitments until the regulatory treatment of broadband service is clarified.”
So that’s clear then. Far from stopping investment in those 100 cities, AT&T will go ahead and finish the job, but it won’t look at new investments beyond that. And as requested, AT&T provided the FCC with details of its fibre-to-the-node investment plans, but it perhaps sensibly decided to redact the commercial information in copies of its letter.
Quinn also couldn’t resist the opportunity to mention how its proposed merger with DirecTV would be beneficial, allowing it to expand its high-speed broadband service to an additional two million homes. However, that deal is certainly far from being sealed.