AT&T Blames FCC for Price Hikes
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