"We don't care. We don't have to. We're the phone company."
Posted on 11/12/2014 8:17:50 AM PST by walford
AT&T CEO Randall Stephenson warned that he will hold off on many of his company's capital investment plans if uncertainty persists over how the US government will regulate the Internet.
"It's prudent to pause," he said at an investor conference Wednesday. "We want to make sure we have line of sight on this process and where these rules could land, and then re-evaluate."
The comments come two days after President Obama threw his support behind the idea that broadband services providers should be regulated under Title II of the Telecommunications Act, which would treat Internet service providers more like utilities and would give the government more say over how much they can charge customers.
Obama's Monday announcement, addressed to the Federal Communications Commission, set off a flurry of responses. Broadband companies such as AT&T, Verizon and Comcast warned that the regulations would be onerous and would curtail investment and innovation. Consumer advocacy groups and Internet companies lauded the move, saying it was the only way to ensure Net neutrality, or the concept that all Web traffic is treated equally.
FCC Chairman Tom Wheeler said later on Monday that all options are on the table. Wheeler is reportedly looking at a middle-ground approach that would merge some Obama's proposals while addressing concerns from the Internet service providers.
While Stephenson said Obama's proposal provides clarity on his expectations for how the Internet should be regulated, he warned that the process of changing the rules to put broadband under Title II could take two to three years at worst, and a year at best. He also said that any such proposal would face legal challenges.
While this happens, capital investments could be curtailed, Stephenson said. AT&T last week said it expects to invest $18 billion in its network next year, but added that the number could drop if the uncertainty persists. Specifically, the company's goal of bringing faster fiber-optic lines into new cities could be put on hold until it gets more clarity on any potential Internet regulations.
AT&T had planned to invest in bringing its GigaPower 1-gigabit broadband service -- a competitor to Google's own super-fast Google Fiber service -- into 100 cities next year.
"We can't go out and invest that kind of network without knowing the rules governing the network," he said.
An area where Stephenson said he is making a bigger bet is in Mexico. The company said Friday that it plans to spend $2.5 billion to acquire Mexican carrier Iusacell.
Mexico has recently changed its telecommunications rules to enable more foreign investment, and Stephenson said he was impressed with how attractive it has become. The country has a growing middle class, a young population, and a vibrant economy, he said, adding that he wants to get in there ahead of the looming mobile Internet revolution.
"It'll be a terrific growth opportunity," he said.
He envisions a consistent network experience across the US and Mexico, which would give it a geographical edge over its rivals. In particular, he noted that AT&T's prepaid wireless business, Cricket, has a proportionately high number of Latino customers, which would work well with its pending Iusacell acquisition.
AT&T's other large deal is the pending $48.5 billion acquisition of DirecTV. Stephenson acknowledged that with 6 million U-Verse TV customers, its television business lacked the scale to make money, with most of the costs sunk on paying for the content itself.
DirecTV brings in 20.3 million customers, giving it the scale to profitably run a television business and negotiate for additional content rights on mobile, which Stephenson said would be a priority once the deal closes, expected some time next year.
Stephenson also talked about the "hypercompetitive" environment on wireless, boasting that it was willing to defend the "premiere smartphone customer base we have built."
AT&T has found itself drawn into a price-and-data war largely spurred on by T-Mobile and Sprint, which have thrown out an increasing number of discounts and additional data packages in an effort to take market share.
Even as AT&T's capital expenditure total drops off -- its 2015 target is $3 billion lower than this year -- Stephenson said the network remains a priority.
"We won't compromise on best-in-class network performance," he said.
And more people will lose jobs.
There has been extensive debate about whether net neutrality should be required by law, particularly in the United States. Debate over the issue of net neutrality predates the coining of the term. Advocates of net neutrality such as Lawrence Lessig have raised concerns about the ability of broadband providers to use their last mile infrastructure to block Internet applications and content (e.g. websites, services, and protocols), and even to block out competitors.
Neutrality proponents claim that telecom companies seek to impose a tiered service model in order to control the pipeline and thereby remove competition, create artificial scarcity, and oblige subscribers to buy their otherwise uncompetitive services. Many believe net neutrality to be primarily important as a preservation of current freedoms. Vinton Cerf, co-inventor of the Internet Protocol and considered a “father of the Internet,” as well as Tim Berners-Lee, creator of the Web, and many others have spoken out in favor of net neutrality.
Opponents of net neutrality claim that broadband service providers have no plans to block content or degrade network performance. Despite this claim, there has been at least one case where an Internet service provider, Comcast, intentionally slowed peer-to-peer (P2P) communications. In 2007, one other company was using deep packet inspection to discriminate against P2P, FTP, and online games, instituting a cell-phone style billing system of overages, free-to-telecom “value added” services, and bundling. Critics of net neutrality also argue that data discrimination of some kinds, particularly to guarantee quality of service, is not problematic, but is actually highly desirable. Bob Kahn, co-inventor of the Internet Protocol, has called the term “net neutrality” a “slogan” and states that he opposes establishing it, but he admits that he is against the fragmentation of the net whenever this becomes excluding to other participants. Opponents of net neutrality regulation also argue that the best solution to discrimination by broadband providers is to encourage greater competition among such providers, which is currently limited in many areas.
On 23 April 2014, the Federal Communications Commission (FCC) is reported to be considering a new rule that will permit Internet service providers to offer content providers a faster track to send content, thus reversing their earlier position on net neutrality. Municipal broadband could provide a net neutral environment, according to Susan P. Crawford, a legal and technology expert and a Visiting Professor at Harvard Law School. On 15 May 2014, the FCC decided to consider two options regarding Internet services: first, permit fast and slow broadband lanes, thereby compromising net neutrality; and second, reclassify broadband as a telecommunication service, thereby preserving net neutrality.
Wait,...huh?
Liers on both sides of the issue.
It will be “The Tragedy of The Commons” on the Internet.
It’s amazing how the meme rolls on with these progressives. First the president comes out with a policy statement, the media begins to run with it, liberal blogs pick it up, then big business leaders that may prosper by taking more freedom from the prols start to push it, and pretty soon it blots out any real news until another Obola scandal comes along to distract us.
This scenario plays out time and time again and alerts me that this is another conspiracy by the left to usurp more of my freedom. BOHICA
RE the article: What investing? AT&T has been running on inertia for years. And, their phone service is overpriced and iffy.
“”Mexico has recently changed its telecommunications rules to enable more foreign investment, and Stephenson said he was impressed with how attractive it has become. The country has a growing middle class, a young population, and a vibrant economy,....””
Is this person from a strange, parallel universe?
If it’s so darned good, why does everyone seem to want to leave it?
Why people are grasping at anything. I don’t trust either side. On the one hand the ISP’s want to charge you extra for content already free, then on the other the government wants everyone equal.
No such thing as "free." Someone ALWAYS pays, and that someone is the consumer. The only question is whether the payment is direct and transparent or indirect and concealed.
The Government does not care about "equal". The Government cares about control for control's sake. "Equal" is just the foot in the door.
Good.
It should be a public utility.
Good.
It should be a public utility.
Care to elaborate?
Yes, I'm old enough to remember Ma Bell.
And although Ma Bell had its shortcomings, it also had many good points--simplicity is one.
And whatever good points modern communications gives to each of us, they also give to our competition, too.
So the benefits are largely a wash, though they are purchased at the expense of greatly complicating our lives for the enrichment of a few.
"We don't care. We don't have to. We're the phone company."
She wasn’t about to enable the outsourcing of American jobs to India, either.
That happy event had to wait for more recent communication technologies.
I believe the telecoms received over 200 billion in tax money to build high speed internet (45mbps).
The biggest problem is allowing the ISP’s to regulate what you look at on the net. AT&T for example may not like you watching youtube...so they charge you extra perhaps through a third party for watching sites like youtube or netflix. You may get charged extra for going on a website that they don’t like or one that may compete with them. I’ve already been slammed by AT&T home phone for third party charges, things I never agreed to. I cut the phone service off. I believe the government has already given the major telecoms over 200 billion in tax payer money to build high speed internet (45mbps).
Exactly, lairs on both sides. Remember Comcast owns MSNBC. They are a democratic bullhorn. They should not decide who gets fast internet.
I could not approve of that. I am utterly opposed to direct corporate welfare, and fairly strongly opposed to government loan guarantees, but at least those are usually paid back. Still, fraud and cronyism are all but unavoidable when the government is handing money out. If indeed the federal government threw $200 billion at this issue, I’d like to know more.
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