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AT&T to FCC: We Haven't Killed Broadband Rollout

Ray Le Maistre
11/27/2014

AT&T has clarified its broadband rollout plans with the FCC following the net neutrality rumpus caused by President Obama earlier this month. (See AT&T GigaPower Awaits Regulatory Resolution and Obama Backs Net Neutrality, Stuns Industry.)

In a letter to the FCC dated November 25, Robert Quinn Jr., senior VP-Federal Regulatory and Chief Privacy Officer at AT&T Inc. (NYSE: T), noted that the operator is not halting its plans to build out its GigaPower service in the markets identified in April, despite suggestions by CEO Randall Stephenson that this might be the case.

"AT&T still plans to complete the major initiative we announced in April to expand our ultra-fast GigaPower fiber network in 25 major metropolitan areas nationwide, including 21 new major metropolitan areas," writes Quinn. (See AT&T Turns Up Gig Heat in 21 New Metros.)

"In addition, as AT&T has described to the Commission in this proceeding, the synergies created by our DIRECTV transaction will allow us to extend our GigaPower service to at least 2 million additional customer locations, beyond those announced in April, within four years after close," added Quinn in reference to the operator's plans to acquire DirecTV Group Inc. (NYSE: DTV). (See AT&T to Acquire DirecTV for $48.5B and Opposition Mounts to Comcast/Time Warner, AT&T/DirecTV Mergers.)


The rollout of Gigabit broadband access networks is spreading. Find out what's happening where in our dedicated Gigabit Cities content channel here on Light Reading.


Expansion beyond those specific markets and locations, though, is now in limbo: AT&T had stated in April that up to 100 cities and municipalities might get its "U-verse with GigaPower" service.

Quinn added:

    At the same time, 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.

The full letter is available here.

— Ray Le Maistre, Circle me on Google+ Follow me on TwitterVisit my LinkedIn profile, Editor-in-Chief, Light Reading

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Mitch Wagner
Mitch Wagner
12/3/2014 | 8:28:14 PM
Re: Still lots of unknowns
Sounds like somebody slapped AT&T's wrist.
KBode
KBode
12/1/2014 | 12:03:08 PM
Re: Still lots of unknowns
It's the same promise every time (we'll expand broadband but won't be entirely clear on where we actually serve and where we planned to expand) whether it's them buying BellSouth, T-Mobile, or DirecTV. I was kind of impressed that the FCC staffer actually asked, given that's just not particularly common.
brooks7
brooks7
12/1/2014 | 11:44:43 AM
Re: Still lots of unknowns
Kb,

I think after the last merger condition (the 100% Broadband from the BellSouth deal) that people might want to check the math all the time :)

seven

 
KBode
KBode
12/1/2014 | 11:30:31 AM
Re: Still lots of unknowns
The lion's share of AT&T's "GigaPower" deployment involved bumping speeds to high-end developments where fiber was already in the ground (read: cost them little to nothing). I think they've then dressed up these deployments as being larger than their are, mostly for PR benefit and as a regulatory carrot they can then jerk around to get deals approved or -- as we saw last week -- to get government to back off neutrality rules. Apparently AT&T didn't expect somebody to check their math this go round.
Phil_Britt
Phil_Britt
11/30/2014 | 4:56:05 PM
Re: Still lots of unknowns
As buildouts of larger markets get completed, it's only natural that next tier markets would follow. But at a certain point, markets get too small to support this kind of upgrade.
kq4ym
kq4ym
11/28/2014 | 5:05:09 PM
Re: Still lots of unknowns
Sounds to me like AT&T is doing a little backtracking. Or just putting a new spin on what might have been a trial balloon comment on the Giga broadband rollout that they said would be slowed by the neutrality issues. What they really will do in the real world market remains to be seen.
briandnewby
briandnewby
11/28/2014 | 9:41:39 AM
Re: Still lots of unknowns
Being old enough to remember construction heydays, we haven't seen many cranes in cities over the past 10 years.  Some cities have been growing, but most major markets haven't construction growth for 10 years or more.

And, yet, everywhere roads are being torn up, replaced, and torn up again to support local broadband buildouts.  Here in Kansas City, Google Fiber is part of that.

There's a book here--one I don't have time to write, or at least a big article, how community development has gone underground.  It would be interesting to compare the cost of the fiber build-outs to the cost of construction of office parks and the long-term return.
MikeP688
MikeP688
11/27/2014 | 1:31:04 PM
Re: Still lots of unknowns
We have to keep faith-ever so.  Although the words as reported by our distinguished Editor in Chief is wonderful to note, we have to maintain the sense of vigliance that is ever so crucial.   As I read thru the reporting and the commentary, I could not help but wonder what would Judge Sirca say if he was here today.    
MordyK
MordyK
11/27/2014 | 1:27:52 PM
Re: Still lots of unknowns
Amen!
MikeP688
MikeP688
11/27/2014 | 12:45:04 PM
Re: Still lots of unknowns
Hopefully the ruckus caused by #POTUS will awaken the giants within by all for the betterment of the rest of us.   

Happy Thanksgiving!! :-) :-) 
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