Broadband bluff or capex cut-off? That’s the question today as AT&T officials work the press to threaten reduced spending on its U-verse broadband and video service offering if the FCC and Congress impose Net neutrality rules or drastically tighten the regulation of broadband carriers.
AT&T used The Wall Street Journal to float its threat:
“If this Title 2 regulation looks imminent, we have to re-evaluate whether we put shovels in the ground,” AT&T Chief Executive Randall Stephenson said in an interview.
AT&T isn’t threatening to roll back capital spending on its wireless network, the core of its business. U-Verse, AT&T’s answer to the cable industry’s TV, Internet and phone packages, had 2.3 million subscribers at the end of March, up 231,000 from a year earlier.
The carrier doesn’t break out how much capital it spends on U-Verse in particular, but Mr. Stephenson says it is a “couple billion” dollars a year. AT&T has said that it plans roughly $19 billion in capital expenditure this year on its wireless and wireline networks combined.
Connected Planet’s take,
Joan Engebretson:
Until a few months ago, when the Supreme Court reversed a previous decision, carriers were already operating under the belief that the FCC would be allowed to impose Net neutrality requirements — and that possibility didn’t seem to stop AT&T from deploying U-verse at that time. Carriers oppose Net neutrality because they want to be able to charge different prices for differentiated classes of service, but they aren’t actually doing that yet — ergo, AT&T’s U-verse business case doesn’t appear to depend on differentiated pricing.
Essentially, I believe AT&T is bluffing. But everything is a matter of degree — and there is undoubtedly an element of truth to the claims the company has made about Net neutrality discouraging investment. If AT&T could offer differentiated service classes, average revenue per user would likely increase, thereby justifying greater investment than the carrier can today.
That’s our take on this. Let us know what you think in the comments section below:
AT&T has already let their cellular network fall down. Not spending any money to upgrade it so there is no shock that they would look for a way to stop spending money on broadband upgrades.
Was one of the best providers around, but slowly fading. Lack of money or vision is now the question?
Thank you for the article.
Terry
Randall Stephenson is stripping a company that could give a quality service. Their customer service is non existent, their cell coverage is spotty at best. Typical of a previous CFO, to only watch the (fake) numbers given to me by lower levels of management that only care about bonuses not the future operations of a company. Ameritech managed itself into trouble in 2000 and Randall is continuing that proud tradition of thievery!
CONSUMERS COULD CARE LESS SINCE ATT IS LOSING BUSINESS LIKE WIND THROUGH A SCREEN DOOR.
APPROXIMATELY 50 PEOPLE A WEEK ARE GOING TO STRAIGHT TALK PHONES WHEN THEIR CONTRACTS ARE UP, JUST IN MY WALMART STORE ALONE.
LANDLINES ARE DISAPPEARING AS THE NUMBERS ARE PORTED TO THE CELLS.