AT&T Pouts, Freezes Mostly Bogus 'Fiber To The Press Release' Deployments In Net Neutrality Bluff

from the land-of-broadband-make-believe dept

Wed, Nov 12th 2014 11:06am — Karl Bode

Oh, AT&T. For a good thirty years the telco has used a halt in "network investment" as a bogeyman to scare government away from any and all consumer protection policies. Do something we don't like, AT&T will usually argue, and we won't invest in the technologies of tomorrow, leaving you all stuck in the stone age and regretting the day you tried to challenge us. Usually said network expansion is a phantom; the company will simply manipulate numbers to actually create artificial broadband gaps, then promise to fill those gaps each and every time they want a regulatory favor.

AT&T has been doing it again lately with the DirecTV deal -- promising to shore up broadband gaps that should have filled years ago (thanks to billions in government subsidies) if it's allowed to gobble up a pay TV competitor. Basically, I've watched for ten years as AT&T just shaves off a few million users from their existing or already-planned network build projections, then pretends these users will be new upgrades -- but only if AT&T gets deregulated, faces fewer price controls, gets some new subsidies, or is allowed to buy BellSouth, DirecTV, or T-Mobile.

This week, "the good time, down home AT&T network investment bogeyman stage show" came to town in the form of a pouting response to the President's clear support for Title II reclassification. AT&T CEO Randall Stephenson has breathlessly proclaimed that the telco is going to freeze fiber expansion because they're concerned about Title II network neutrality protections:

"We can't go out and invest that kind of money deploying fiber to 100 cities not knowing under what rules those investments will be governed," CEO Randall Stephenson said..."We think it is prudent to just pause and make sure we have line of sight and understanding as to what those rules would look like," he added."

In other words, do what we want or we'll make sure the United States remains a broadband backwater. The problem? It's a childish, transparent bluff, as AT&T gave up on meaningful fixed-line fiber investment years ago.

Despite a decade of massive, sweeping telecom industry deregulation, AT&T's fixed-line network investment has consistently dropped like a stone as the telco focuses on wireless services, where socking users with overage fees and imposing bizarre new anti-competitive pricing models is far more profitable. In fact, AT&T announced yet another $3 billion fixed-line CAPEX investment cut just last Friday, long before the President announced he wanted to go to war over Title II. As for those "100 cities," AT&T says were getting fiber under the "Gigapower" brand? All AT&T's really doing is cherry picking a few high-end wealthy housing developments where fiber is already in the ground, then dressing up those deployments to make them look much, much larger than they actually are.

It's something I affectionately refer to as fiber to the press release.

When Google Fiber entered the market, pampered, competition-phobic, incumbent ISPs like AT&T, CenturyLink and Frontier began putting on a stage show, proclaiming that they too were joining the 1 Gbps race. Usually these announcements come in the form of a press release with absolutely no meaningful statistics in terms of timeline, coverage areas, or the actual number of users covered. That's again because it's largely bullshit: with a few exceptions, the companies are simply bumping speeds in housing communities where in many cases, fiber was in the ground as part of the building process. You'd be amazed (or perhaps not) just how well this works on the press, helping to craft the image AT&T's keeping pace as a next-generation broadband powerhouse.

But not only is AT&T not significantly upgrading the majority of its users to fiber, they're actively pulling out of vast swaths of the United States under the guise of something they're calling the "IP transition." As I've noted previously, AT&T's going state by state, promising state politicians amazing new levels of network investment -- but only if AT&T is completely deregulated and all consumer protections (like having to continue to offer dial tone to old people so they can call 911) is stripped off the books. In reality, AT&T's looking to sever the connections of tens of millions of DSL users they don't want to upgrade, which will only strengthen the cable monopoly in many markets.

This week, AT&T's once again pretending that if the government doesn't do what the pampered duopolist wants, they'll freeze fiber investments that were already stagnating by choice. It's a bluff that AT&T never stops using because the press, politicians and public seemingly never learn to stop believing it. Of the dozens of technology news outlets covering AT&T's announcement, only a handful could be bothered to mention that AT&T's 100 city promise was incredibly ambiguous and disingenuous to begin with, or the fact that AT&T had cut fixed-line investment projections already just days earlier.

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Filed Under: fiber, fiber to the press release, net neutrality, randall stephenson, threats, title ii
Companies: at&t

26 Comments

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Anonymous Coward, 12 Nov 2014 @ 11:47am

"We can't go out and invest that kind of money deploying fiber to 100 cities not knowing under what rules those investments will be governed".

Is AT&T requesting Title II rules like Verizon? That would make the answer simple.
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mcinsand, 12 Nov 2014 @ 12:03pm

What is the best way to help?
Those of us that care need to write our legislators to have them remove those duopoly-protecting barriers, but how do we get the word out best? We need to lower the restrictions to help companies like Google and Musk's proposed satellite network upstarts.

For me, this isn't only about hating AT&T as much as the thought of eating a plate of calve's liver (I have come to accept that I will only get tortuously-horrible customer service from them... like when they took 3 months to hook up a DSL line and then kept charging me for one of the numbers they couldn't make work on top of charging for the one that they did enable). No company should have the government in its back pocket to protect it from competition. If a company can't compete on merit, then we don't need it!
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Anonymous Coward, 12 Nov 2014 @ 12:16pm

Calling in threats if the poor helpless corporation doesnt get it's way? Let's just call this behaviour what it is: extortion.

We saw this same behavior with the various tax cuts/carveouts they've received over the years with the promise of 'job creation' which never materialized. Don't be fooled again people
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Anonymous Coward, 12 Nov 2014 @ 12:20pm

We've already excellent examples of how well AT&T as well as the other telcos upgrading. That's why the US is falling to the bottom of the list for internet connections and speeds globally. That business with Netflix sure wasn't about upgrading networks.

The only thing I've seen work is when Google comes to town, suddenly the other telcos can speed up their networks and lower their prices somewhat. Other than that, it's about obstruction and preventing.

That's not exactly hardware expansion and upgrading.
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Anonymous Coward, 12 Nov 2014 @ 12:27pm

AT&T can pause, meanwhile the companies that are actually rolling out fiber are getting even farther ahead.
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Anonymous Coward, 12 Nov 2014 @ 12:33pm

How healthy is a market if a single business can hold regulators hostage?
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Anonymous Coward, 12 Nov 2014 @ 12:52pm

Came here to submit the story to Techdirt after I read it elsewhere only to find it already reported on.

What I couldn't believe is the political spin put on by Congress and the press about all this. Forget the children, think of the poor telcos.
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DannyB (profile), 12 Nov 2014 @ 12:52pm

AT&T just proved the need for Net Neutrality
AT&T is basically saying that if they can't charge money to unfairly prioritize traffic that is already paid for, then they won't build out their network.

AT&T here is a free clue. You are supposed to build out your network and then charge what it costs to operate, plus a profit. That is also what everyone else is supposed to do. To compete in the market you can:
1. have better service than competitors by having a better network
2. have lower prices than competitors by reducing either or both the 'cost to operate' part or the 'profit' part
3. have better customer service than competitors by not using barely conscious drones to answer customer calls

If you can't out compete your competitors doing exactly this, then you don't deserve to be in business.
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Anonymous G (profile), 12 Nov 2014 @ 12:56pm

Maybe AT&T is just inviting the FCC to regulate them INTO putting heavy investments into providing decent broadband in all their areas?

In a sane world, the FCC should say: Challenge Accepted.

But that's not where we live.
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Michael, 12 Nov 2014 @ 1:00pm

Re: AT&T just proved the need for Net Neutrality
The flaw in your logic is that they don't have any competitors.

So their plan of saying: "we are going to raise prices and provide worse service" isn't actually determined to fail.
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Michael, 12 Nov 2014 @ 1:01pm

What's really funny is that if they did actually invest in any infrastructure, they would actually be requesting it gets tax breaks and funding under...Title II.
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Anonymous Coward, 12 Nov 2014 @ 1:04pm

"We can't go out and invest that kind of money deploying fiber to 100 cities not knowing under what rules those investments will be governed,"

Says the moron in charge of a company which literally more than half is already governed by Title II and they know exactly what it means, they just don't like it.

"We think it is prudent to just pause and make sure we have line of sight and understanding as to what those rules would look like,"

More like wait to see if Wheeler can come though for them once their check to the FCC clears.
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Anonymous Coward, 12 Nov 2014 @ 1:08pm

Next Steps: AT&T, Verizon, Comcast, and Time Warner all move their corporate headquarters overseas and use corporate sovereignty provisions to sue the U.S. govt. after they reclassify broadband under Title II.

Billions from Title II subsidies, billions from corporate sovereignty tribunal rulings, plus no corporate income taxes - it's genius! Sneaky, underhanded, and completely depraved, but genius.
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John Fenderson (profile), 12 Nov 2014 @ 1:21pm

Despite a decade of massive, sweeping telecom industry deregulation [...]

Despite? I believe that you misspelled "Because of".
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tqk (profile), 12 Nov 2014 @ 1:47pm

Re:
"We can't go out and invest that kind of money deploying fiber to 100 cities not knowing under what rules those investments will be governed".

I'd say a re-write is in order:
"We can't go out and invest that kind of money deploying fiber to 100 cities. Not knowing under what rules those investments will be governed is irrelevant since we were never going to do that anyway."
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lostalaska (profile), 12 Nov 2014 @ 2:25pm

Bullies...
It's like standing up to a bully and their response is "Well, I was going to play nice finally and do all these great things for you, but you just had to go and stand up to me and tell me how much of a lying jerk I've been all these years, such a shame... I always wanted to be your friend. Now all I want to do is take your lunch and kick you in the balls, now gimmie 'yer wallet!".
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John Fenderson (profile), 12 Nov 2014 @ 2:49pm

AT&T paraphrased
"If we don't get what we want, then we won't give you any barely-existing, dramatically overprices gigabit service that you'd be an idiot to buy in the first place."
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Anonymous Coward, 12 Nov 2014 @ 4:29pm

Broadband; the only technology that keeps getting worse.
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Anonymous Coward, 12 Nov 2014 @ 4:44pm

Re: Re:
" ... is irrelevant since we were never going to do that anyway."

... unless Google starts deploying fiber in that city.
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Anonymous Coward, 12 Nov 2014 @ 6:39pm

AT&T does sound like a bunch of liars.
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TruthHurts, 12 Nov 2014 @ 7:51pm

That would be priceless (to the American Citizens)
I can see the FCC response to a move like that.

FCC responds to their antics by calling on Eminent Domain to seize all of their infrastructure, and opening it up to any American company that wants to use it to deliver service.

AT&T, Verizon, Comcast and Time Warner have all of their patents, copyright seized and converted to public domain, free to use by anyone.

The Attorney General's office and IRS could then seize all of their assets, liquidate them and place those monies into a fund to expand the infrastructure and pay for free gigabit internet for everyone in the U.S.
All of this would be legal, because they would be attempting to blackmail the U.S. with their antics. If they all did it, it's possible it could be a Rico Act violation.

It would be a nice day indeed.
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Jeremy Lyman (profile), 13 Nov 2014 @ 5:21am

Re: AT&T just proved the need for Net Neutrality
Yup, take your ball and go home. I'm sure there will be plenty of companies who would like to deliver bits as a regulated title II utility.
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JD, 13 Nov 2014 @ 5:58am

Groundhog Day
Look what I found:

The threat is that broadband would be reclassified as a Title II telecommunications service, leading to the type of pricing oversight and network access to competitors that have characterized the traditional phone business. This puts the attractiveness of the broadband business under greater scrutiny and could lead to slower investments in next generation broadband technology. This in turn, may slow the rate at which customers adopt the latest broadband services like U-Verse (fiber-optic based internet) offered by AT&T.

and

AT&T has said that it may reduce investment on U-Verse (fiber optic-based TV and broadband service) if the Federal Communications Commission goes forward with its plan to tighten regulation on broadband providers.

Wow, harsh words.

Except they're from 2010:

http://www.forbes.com/sites/greatspeculations/2010/07/14/fcc-broadband-regulation-could-whack-a tt-net-biz/

We all know that reclassification didn't happen, so that means infrastructure investment from NCTA members wouldn't flatline or go down, right?

Wrong:

https://lh3.googleusercontent.com/-wKfsSWDLcIA/U3OYryFQghI/AAAAAAAAFM4/YrZfMRjeBQ8/s800/ ncta_capex.png

Digging back even further we see this series of FCC orders in 2007, where AT&T (and others) make all sorts of noises about the necessity of forbearance from certain regulations and avoiding lots of the aspects of Title II:

https://apps.fcc.gov/edocs_public/attachmatch/FCC-07-180A1.pdf

Fun quotes:

AT&T asserts that tariffing and cost support requirements limit its ability to negotiate service arrangements tailored to specific customer needs and to respond to new service offers from unregulated competitors because it must currently provide advance notice of any tariff price changes.[121] AT&T further submits that the ability to negotiate in an unencumbered fashion is not only essential to enable competition in the broadband market but to encourage investment in, and development of, new broadband services.[122]

and

Promoting broadband deployment is one of the highest priorities of the FCC. To accomplish this goal, the Commission seeks to establish a policy environment that facilitates and encourages broadband investment, allowing market forces to deliver the benefits of broadband to consumers. Today, we take another step in establishing a regulatory environment that encourages such investments and innovation by granting AT&T’s petition for regulatory relief of its broadband infrastructure and fiber capabilities

That was in October of 2007. Two things: (1) go back to that CAPEX graph; what's the trend-line on investment since the FCC "encourage[d] suck investments"? And (2) the FCC was clearly more than willing to forbear certain aspects of Title II regulation after a review process. Explain to me again, AT&T, how Title II with forbearance is going to kill broadband.
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Pragmatic, 13 Nov 2014 @ 7:43am

Re: Re: Re:
Sounds about right.
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Pragmatic, 13 Nov 2014 @ 7:48am

Re: That would be priceless (to the American Citizens)
Bu-bu-but Government! Socialism! AAAAAAHHHHHHH!!! /Sarc

Have you noticed that the people who gripe the most about government are complaining about attempts to protect the public from corporate malfeasance? I'm with you, TruthHurts.
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DMNTD, 13 Nov 2014 @ 12:21pm

Re: That would be priceless (to the American Citizens)
Great bout of fiction, to bad reality is outside our walls.
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