AT&T backs off threat to halt its fiber rollout

Carrier tells FCC it will pursue its GigaPower network to 100 cities after all

AT&T now says it will continue its already-announced fiber optic network expansion to 100 cities, backtracking on comments by AT&T CEO Randall Stephenson after President Obama voiced support for net neutrality last month.

The move brought a strong retort from critics who say the carrier's fiber optic plans are mostly bogus and were designed as a competitive play against the ongoing Google Fiber rollout. The purported delay in AT&T's investments was quickly seen as an empty threat.

In a letter to the Federal Communications Commission (FCC) sent Nov. 25, AT&T said won't limit future fiber-to-the-premises deployments to 2 million homes as part of its $49 billion deal to acquire DirecTV. That contrasts with what Stephenson said Nov. 12.

"To the contrary, AT&T still plans to complete the major initiative we announced in April to expand our ultrafast GigaPower fiber network in 25 major metropolitan areas nationwide." Robert Quinn, AT&T senior vice president for regulatory matters, said in the letter.

In his Nov. 12 appearance at a Wells Fargo investors conference, Stephenson had said AT&T would stop fiber rollouts beyond the 2 million for the DirecTV deal: adding: "We can't go out and just invest that kind of money deploying fiber to 100 cities other than these 2 million not knowing under what rules that investment will be governed." The 100 cities are included in the 25 metro areas AT&T cited in its letter to the FCC. Stephenson later said to Fox Business Network that it might be two to three years before AT&T starts investing again in fiber optic network rollouts to 100 cities.

Since it won't limit its fiber deployment to 2 million homes, AT&T also told the FCC that it didn't need to provide documents surrounding any decision to delay. AT&T also redacted from public view any details on its fiber rollout in the letter.

Stephenson has been a leading critic of Obama's proposal that Internet providers be regulated like utilities under Title II of the Federal Communications Act. At the same time, AT&T needs the FCC's approval of the DirecTV deal.

On Monday, AT&T spokesman Mark Siegel said the FCC letter "makes clear that we are keeping our DirecTV merger-related investment commitments, which includes our previously announced fiber deployment plans." He also called Obama's proposal a way to "regulate the entire Internet under rules from the 1930s designed for voice services [that] inject significant uncertainty into the economics underlying our investment decisions. As a result, we have paused consideration of any fiber deployment investments that would go beyond what we've already announced."

Several analysts and activist groups reacted negatively to the Nov. 25 letter from AT&T to the FCC.

"The FCC out-finessed AT&T," said Gartner analyst Bill Menezes. "The 100-city GigaPower deployment has always been mostly vapor. The carrier never has provided a detailed timeline or set of criteria to substantiate the purported deployments."

Menezes noted that in its April 21 announcement of its GigaPower service, AT&T said it was "committed to or is exploring 25 metro areas for deployment." Menezes added that Stephenson was saying AT&T would have to "rethink something it never really committed to in the first place."

In addition to the billions it will spend on the DirecTV acquisition, Menezes noted that AT&T is spending billions more to buy new spectrum at an FCC auction. "There's no way it would back out of the auction and let those assets fall to Verizon and Dish Networks simply to register its concern about uncertainty over the potential effect of future net neutrality regulations on its use of that spectrum."

John Bergmayer, senior staff attorney at the civic interest group Public Knowledge, added, "If you claim something at the FCC, it needs to be verifiable, but so far there's no public information for people to be able to track whether AT&T would live up to its fiber commitment."

Bergmayer called the GigaPower announcement by AT&T a competitive response to Google Fiber. "Sure, AT&T has fiber investment plans, but nothing in particular, and there's no way to tell any particular household when you'll get service," he said.

Google, in a blog post on Monday, said it had kicked off signups for the first Google Fiber neighborhoods in Austin, Texas. Google first launched its 1Gbps service in the Kansas City area in 2012.

AT&T's GigaPower is intended to show there's some actual public benefit to the DirecTV acquisition beyond the 2 million more fiber connections already committed, Bergmayer said. "How can the FCC do anything with that? Is it 2.1 million? It's vague and the FCC has been looking to justify the public interest benefit."

Another public interest group, Free Press, reacted much the same way. "AT&T never had actual plans to deploy fiber to 100 additional communities, but only promised in a press release to initiate conversations with these municipalities about possibly deploying fiber in the future," said S. Derek Turner, research director at Free Press.

Copyright © 2014 IDG Communications, Inc.

7 inconvenient truths about the hybrid work trend
Shop Tech Products at Amazon