AT&T CEO Randall Stephenson went a little too far pushing back against the FCC, and had to walk back statements that AT&T might have to suspend some network construction if the FCC were to reclassify broadband as a Title II service. But it reiterated its threat to hold hostage capex investment outside of those pledges.
In mid-November, Stephenson said AT&T would hold off on building out until the issue was settled, and then said that if the FCC did elect to redefine broadband under Title II, AT&T (and others) would immediately litigate, meaning the issue wouldn’t be settled for years. His comments were from an address at the Wells Fargo Technology, Media, and Telecom Conference.
Many assumed that this included the company’s pledges to roll out GigaPower in up to 25 cities, and to connect another 2 million homes with fiber to the premises (FTTP) as a condition of being allowed to buy DirecTV. The FCC immediately wrote AT&T asking the company if this were so.
AT&T wrote back, saying it would honor those pledges (in the following quote, those are the “commitments described above”).
The AT&T letter reads: “President Obama’s proposal in early November to regulate the entire Internet under rules from the 1930s injects significant uncertainty into the economics underlying our investment decisions. While we have reiterated that we will stand by the commitments described above, this uncertainty makes it prudent to pause consideration of any further investments – beyond those discussed above – to bring advanced broadband networks to even more customer locations, including additional upgrades of existing DSL and IPDSL lines, that might be feasible in the future under a more stable and predictable regulatory regime. To be clear, 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.”
AT&T is hardly the only company fighting furiously against Title II reclassification. It’s just that it’s one of the few that has made promises of specific build-outs in return for consideration.
Nearly every communications service provider has threatened to stop investing in their networks, including the NCTA, the TIA, and many of the companies they represent.
The TIA even circulated a letter to the FCC, signed by a few dozen communications equipment vendors, making the same complaints. When asked several times who, specifically, wrote the original draft of the letter and circulated it, a TIA spokesperson told me the vendors did.
All of them, apparently. I’ve heard of spontaneous human combustion, but this might have been the world’s first documented instance of spontaneous epistolary creation.
Everyone is saying that reclassification would cost more money, but here’s the problem: they don’t say how. And if AT&T can be believed in its letter above, no one can. According to AT&T above, it could be cheaper to go to Title II — we just don’t know.
Oh, but reclassifying would create uncertainty, which would cause everyone to reevaluate… things. The problem is the uncertainty.
Part of the problem is that “uncertainty” a) is a dog-whistle scare word that doesn’t really mean anything, and it b) the uncertainty doesn’t derive from reclassification, it derives from the industry’s reaction to it: lawsuits.
Show us exactly how reclassification would cost more – not including the litigation costs – or admit it’s all just whining. Put up or shut up.
Filed Under: Industry regulations