The Empire Strikes Back: AT&T threatens to pull Paltry US Fibre Investment

Whether or not you think that AT&T is bluffing on halting or slowing its capital investment, the reason that they are investing in residential services is that it is not regulated and they are finally facing some competition. Implementing Title II regulation will limit their return-on-investment and drive up their costs so naturally they will start investing in areas where they can make more money just as they have done since divestiture. Look at the amount of money that they invest in business and wireless services that are not subject to regulation. 

People are naive to think that introducing regulation will make service better and lower prices. Only competition will do that. Regulation will bring you consistent price increases each year and a lower quality of service with little to no innovation. Look at any of the utilities that your city or county provide. What new and exciting services has your water or trash company offered lately? Have you seen your price go down? The same goes with the electric utility. The only innovations that have creeped into their services are to lower the cost of providing electricity so they can achieve higher profits.

Once again I caution, “Be careful for what you wish. You just may get it.” 

In a sure sign that net neutrality won’t be instituted in the US without one hell of a struggle (see –Obama pushes for Title II, expect years more argument), AT&T CEO, Randall Stephenson, has announced an “investment pause” on AT&T’s broadband roll-out plans. It’s not a strike, you understand, nor a deep cut, certainly not any sort of blackmail (the very thought!). It’s a nice little pause, so everyone can get their  breath back. How kind.

There’s only one problem with this blatant blackmail ploy. AT&T’s fibre investment has never been that fulsome in the first place. It’s been cutting back on fixed broadband investment for some time and very recently announced yet another  “$3 billion fixed-line CAPEX cut last Friday,” according toKarl Bode of DSLReports.

In short, writes Bode, “AT&T’s ‘halting’ a fiber expansion that barely existed in the first place, then pretending it’s a massive deal in the hopes the government chickens out on Title II.”

Still, that won’t stop every shill diligently working to further the ends of ‘big telco’ and ‘big cable’ in the US (and Europe, and there are many) from chasing down the ref to bring to his attention the fact that Randall is writhing in apparent agony in front of the goal mouth.

Stephenson’s announcement, made at an analysts conference yesterday, follows closely on from the US president’s full-throated endorsement of so-called Title II regulation as a way through the seemingly endless Internet (or net) neutrality saga. Title II is the legal basis upon which the FCC regulates ‘common carrier’ telecoms services in the US.

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About Mark Milliman

Mark Milliman is a Principal Consultant at Inphotonics Research driving the adoption and assisting local governments to plan, build, operate, and lease access open-access municipal broadband networks. Additionally, he works with entrepreneurs and venture capitalists to increase the value of their intellectual capital through the creation of strategic product plans and execution of innovative marketing strategies. With more than 22 years of experience in the telecommunications industry that began at AT&T Bell Laboratories, Mark has built fiber, cable, and wireless networks around the world to deliver voice, video, and data services. His thorough knowledge of all aspects of service delivery from content creation to the design, operation, and management of the network is utilized by carriers and equipment manufacturers. Mark conceived and developed one of the industry's first multi-service provisioning platform and is multiple patent holder. He is active in the IEEE as a senior member. Mark received his B.S. in Electrical Engineering from Iowa State University and M.S. in Electrical Engineering from Carnegie Mellon University.
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