AT&T plans to delay its ambitious fiber optic cable investments in 100 cities until U.S. regulators define the rules for net neutrality.
"We can't go out and invest that kind of money deploying fiber to 100 cities not knowing under what rules those investments will be governed," AT&T CEO Randall Stephenson told investors at a conference Wednesday morning, according to Reuters.
"We think it is prudent to just pause and make sure we have line of sight and understanding as to what those rules will look like," Stephenson added.
His comments came just two days after President Obama urged federal regulators to invoke rules banning Internet Service Providers such as AT&T from requiring payments from content providers like Netflix to get higher network priority.
AT&T has promoted its U-verse GigaPower service in recent months to bring 1Gbps service to cities and has heard from 100 different cities who are candidates for the rollouts. In an online promotional video, AT&T notes that it already has 16.5 million broadband connections and has laid more than 1 million miles of fiber optic cable.
Google, meanwhile, has connected several U.S. cities with its Google Fiber 1 Gbps connections and has plans to serve dozens more cities.
The delay in AT&T's fiber optic investment could be vast, given AT&T's estimate in 2013 that it would spend $14 billion over three years for wired and wireless broadband infrastructure in what it called Project Velocity.
AT&T didn't respond when asked how long the delay in its fiber rollouts could be. But the Federal Communications Commission (FCC) on Monday said it won't create new rules in its open Internet deliberations until 2015.
The FCC's delay came shortly after President Obama on Monday called for far-reaching rules to affect cable and phone companies, including AT&T and other wireless carriers, that operate as ISPs. Obama made it clear he opposes any attempt by ISPs to prioritize Internet traffic in exchange for a higher payment by a content provider.
AT&T is part of a large group of carriers, including the CTIA industry group, opposed to Obama's approach. Members have argued that regulating ISPs like traditional phone companies under Title II of the Telecommunications Act, as Obama prefers, won't hold up in court.
Groups that favor expanding Internet service to underserved populations in inner cities and rural U.S. areas have largely welcomed fiber optic expansion by both Google and AT&T. The impact of AT&T's delay on their efforts isn't clear.
Early attempts to improve the digital divide in Kansas City, Mo., one of Google Fiber's early deployments, have proven difficult, Google admitted in an October blog post.
Google said its Google Fiber expansion plans remain unchanged.
One pundit at the TechDirt Web site called Stephenson's delay on GigaPower rollouts bogus and an attempt to scare government officials away from consumer protections.