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AT&T Blames FCC for Price Hikes

Sarah Thomas
1/26/2012

1:30 PM -- Jefferies & Company Inc. analysts suggested Wednesday that increased Wi-Fi usage leading to revenue loss is what drove AT&T Inc. (NYSE: T) to raise prices. But, that's not the reason AT&T CEO Randall Stephenson gave on its fourth-quarter earnings call today. (See Wi-Fi Usage Drives AT&T to Raise Prices and AT&T Banks on Broadband, Cries for Spectrum.)

With more than a hint of bitterness, he blamed the Federal Communications Commission (FCC) .

AT&T's spectrum crunch, the result of its inability to acquire T-Mobile US Inc. , forced it to raise prices and "manage connection speeds" on its biggest users, Stephenson said on the call.

Sure, that could explain the throttling, but the price hike, not so much. AT&T raised the overall price of its data plans by $5, but more megabytes were included in each. So, AT&T is actually encouraging consumers to use more, but charging more for it. It was clearly for the revenue, not the network.

I definitely understand why AT&T is mad at the FCC. I would be too if I lost billions on what I'd thought was a sure thing. But, playing the victim isn't a good approach here -- especially when its customers are victimized in the process.

— Sarah Reedy, Senior Reporter, Light Reading Mobile

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sarahthomas1011
sarahthomas1011
12/5/2012 | 5:44:25 PM
re: AT&T Blames FCC for Price Hikes


That's a good point. AT&T can't fire the FCC, but it'll probably fire someone.


In the meantime, like I've had to tell some of my friends, it's time to stop talking about the breakup and move on.

Pete Baldwin
Pete Baldwin
12/5/2012 | 5:44:25 PM
re: AT&T Blames FCC for Price Hikes


"Bitterness" is a good way to put it. Some of Stephenson's complains might have had some credence, but it was hard for him not to sound like a sore loser.


Still haven't heard of anyone losing their job over the T-Mobile deal. You'd think someone had to have taken the fall for that.

fgoldstein
fgoldstein
12/5/2012 | 5:44:24 PM
re: AT&T Blames FCC for Price Hikes


Let me get th is stragiht.  On the one hand, ATT is whining that they are desperate for more spectrum, which is why they wanted T-Mobile.  On the ohter hand, ATT is whining that so much customer traffic has been offloaded onto WiFi that they are not making enough money to cover their investment, so they have to raise prices.


The contradiction is breathtaking.  If it were not ATT, one would begin to wonder, but ATT routinely does things like this to test the fealty of their puppet analysts, regulators and legislators.

DCITDave
DCITDave
12/5/2012 | 5:44:22 PM
re: AT&T Blames FCC for Price Hikes


I can see why Stephenson is upset. AT&T spends millions on lobbying (research/PR) organizations and what have they getting for their money? You can't outright bribe a Senator but you can make sure they understand your needs and point of view. So, AT&T has a right to be upset. It made an investment in influence and got a result that doesn't help it pay for its investment.

joset01
joset01
12/5/2012 | 5:44:13 PM
re: AT&T Blames FCC for Price Hikes


Maybe they should have focused on the urban network density story as the initial reason to buy T-Mobile then. Using the spectrum for rural access was going to take a lot more time and investment from AT&T.

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