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.)
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.
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, , Editor-in-Chief, Light Reading