To Make Its Net Neutrality Point, AT&T Pulls Plug On Fiber?

November 12th, 2014 by · 23 Comments

So AT&T isn't happy about Obama's speech yesterday endorsing regulating broadband like a utility.  Today they CEO Randall Stephenson said the company would suspend investing in its FTTH expansion until the situation is resolved.

It's a little bit like Seinfeld's 'Soup Nazi', but in this case it's 'No fiber for you!' and it's to those of their customers who might have been finally getting some soon - not that it was all that widespread to begin with.  I understand their concern with finding a reliable economic model for last mile bandwidth, but I'm not sure this is going to help with their public relations issues.  At least, I'm guessing the liberal bastion of Austin they were rolling out fiber in is not going to blame Obama for this one.

It's amazing how many years we've been debating net neutrality without resolving anything at all.  I'll bet Google takes the opportunity to expand its FTTY plans somehow, at least in a token way -- just to rub it in.

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Categories: Government Regulations · Internet Traffic

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23 Comments So Far


  • bebbers says:

    This guy Obama must be one sharp cookie , he seems to always be in the know on whats best for all of us. I guess the next move he will tells us to dress in blue shirts and tan slacks. I can not wait till Jan 2015.

  • Also says:

    This is the cheap stunt of a an incredibly powerful company mad about not being able to buy a completely unencumbered regulatory environment. I look forward to canceling my AT&T Wireless contract once my contract ends in January.

    Google, please: call their bluff.

  • JWK says:

    Call it anything you want, what needs to be addressed are legislative restriction to muni fiber builds. ATT, Verizon, Comcast, etc. and their lobbyists along with the politicians they own should not be able to set policy for a “utility” build in a town that has passed a referendum. Let them light it and compete once the infrastructure is in place.

    • Lobbying sucks says:

      Completely agree – open up access to broadband customers like in most other countries in the world, first world or third, and this whole issue becomes moot. As much as these companies want Govt and regulations outside of their business in the case of net neutrality, they will turn around and use the Govt to keep competition out of their access market – yay for our politicians!

      In markets with moderately sufficient competition, like Wireless, AT&T has to invest to both further its technology and reach in order to keep up with the other players, which benefits consumers and OTT companies. Lack of competition in broadband access is why AT&T can play these stupid threat games.

    • mhammett says:

      Nope!

      Work with a local independent ISP if you want it.

  • COST CAUSATION LOVER says:

    If you think about it, there’s quite a humorous irony in ATT’s childish behavior. Only a monopolist (or duopolist) could tell the market (and, yes, regulators), we’re going to stop investing if we don’t get our way. Their action pretty much confirms that without some regulatory intervention incumbent ISPs can impose some ugly roadblocks for the content community.

    Comments like AT&T’s rarely happen in competitive markets.

    We are in desperate need for a Competitive Internet Service Provider (CISP) revolution similar to the 90s CLEC activity.

    Former FCC chairman Powell is partially to blame for today’s duopolist environment but CLECs bare some responsiblity too (which may be a blastphemous statement on this board).

    Virtually all CLECs chased commercial fruit which was sensible. Most paid a lot of lip service to the resi market, making statements to state regulators and legislators to satisfy the concerns they had that consumers wouldn’t benefit from all the CLEC investment. In reality, not many CLECs did much, if anything, to chase resi customers unless they dwelled in multi-tenant buildings directly on a CLEC network’s path. (I expect if anyone reads this, I will get some dissenting opinions here.)

    Those CLECs/DLECs that did go after resi customers started a bit late and Powell pretty much shut the door on them prematurely.

    Barring some serious technological WiMAX breakthroughs, it’s hard to envision meaningful facilities based ISP competition developing any time soon. I imagine it will take Google decades to make any serious market share inroads against incumbent ISPs.

    The best chance for any competitive offering would come from some sort of Fix Line Virtual Network Operator (FLiVNO) service (or bitstream unbundling). FLiVNOs would purchase superhighway’s worth of bandwidth on ATT’s, CMCSA’s or VZ’s network, for example. Maybe for starters the FLiVNO purchases capacity in a specific market.

    The FLiVNO then sells directly to end users their own ISP access and other bundled TV/media services as well.

    AT&T, VZ & CMCSA still compete for customers but also build a wholesale revenue stream through their bitstream offerings. The end user relationship is now owned by the FLiVNO. The FLiVNOs compete directly against AT&T’s, VZ’s & CMCSA’s retail division for end users.

    Of course, there’s not much incentive for a monopolist or duopolist to do this. However, there is some precedent for the idea. When the EU began their unbundling process back in ’99-’00 the idea of “bitstream access” was discussed.

    Bistream access unbundling would permit a handoff to the CISP at the DLSAM, ATM-POP, or at the IP Level.

    I believe the New Zealand regulatory authority may impose some form of Bit-stream unbundling on the incumbent.

    http://www.comcom.govt.nz/regulated-industries/telecommunications/regulated-services/standard-terms-determinations/unbundled-bitstream-access-uba-services/

  • Just sayin.... says:

    If memory serves me, the rboc’s were allowed to collect highly inflated rates, as part of the 96 telecom act, with the promise they were supposed to build hi speed fiber to the home. So they have already been paid for the build out they are refusing to do. Absolute monopoly behavior.

  • Just sayin.... says:

    I think we’re ready for Divestiture 2.0! Back to 7 Rboc’s

  • anonymous says:

    Yes, back to the RBOC’s. Life was simpler then. Now, for example, if I need something from AT&T in the BellSouth area, I find that AT&T has little or no influence over BS. AT&T reps will admit that. Two separate organizations when it comes to local problems.

  • Jack Pestaner says:

    These ILECs just never got used to the idea of not being a monopoly, and in fact AT&T and VZ have now dominated the industry in a vertical manner far in excess of what they ever had in the Bell System days (wireless, special access, internet, video, and of course poles ducts and right of ways). Along with the cable monopolies, which seem to be headed to largely one company, its no wonder they want to control the content going in as well as the delivery going out.

    According to opensecrets.org, in 2013 Comcast, AT&T, VZ, and the National Cable & TV Association spent $68M in lobbying which is why we are even having this debate, since nobody wants “fast lanes” except these companies.

    This will truly be a test of overwhelming finances versus the public good. Even if the public gets some victory to keep the internet open, these monopolists will continue to relentlessly press their agenda with open checkbooks.

    • mhammett says:

      There’s nothing wrong with fast lanes. Call it QoS and everybody loves it. Call it prioritization and everybody is against it. I don’t get it…

      • Anonymous says:

        Agreed. Everyone is thinking of this in terms of consumer traffic but there’s also a thing brewing out there called cloud. Maybe some of you have heard of it. And if you want to get business grade data into and out of this mysterious cloud with some level of predictability and priority greater than cat memes, videos of dudes getting their nuts smashed, and goatse; we might want to think about this before we let the government “fix” more things for us.

        The internet has had an uncanny ability to get around the pushers and content nags for a couple decades now. Still trying to figure out where it is so broken to begin with? I hate my cableco and wireless provider as much as the next guy, but I also fear the people here and on LinkedIn posts who honestly think the internet is a “human right” and should be free to all.

        Socialism – its a helluva drug, too.

      • COST CAUSATION LOVER says:

        MHAMMET, why is this a QOS issue? Either EONOs have network capacity or they don’t. If they need to augment capacity, then charge the cost causers (EONO’s own customers) who are consuming all the network-clogging packets.

        If Neflix, YouTube, ESPN, and others were sending unrequested packets onto the EONOs network, I’d say they should pay. But the EONO’s customers are requesting this data. Charge them.

        I’d also like to know how you resolve the issue of how Comcast charges CNBC to stream its programming vs. how it charges Bloomberg to stream theirs. Or how it charges NBC Sports vs. ESPN. Are you going to impose and police some sort of imputation on CMCSA’s content? Are you going to require separations accounting to ensure that CNBC and NBC Sports are paying their fair share? And, so what if they are, the money stays in the Comcast family. The parent company has an incentive to see their content affiliates lose money if the parent company is making more in QOS charges off of their affiliates competing content providers.

        (Comcast is also benefitting by keeping internet service rates cheap enough to keep new entrants from entering the market.)

        How would you set the rates for QOS? Could CMCSA set them at any level they’d like? Or do regulators have to review those price levels?

        Your QOS model will likely increase by 10-fold the need for regulation, oversight and enforcement to ensure that Comcast isn’t discriminating against competitor content.

        CMCSA has vertically integrated content and content delivery. While content may be competitive, content delivery isn’t. As people drop their cable service and use the internet to stream content, content providers will start offering content directly over the internet. HBO and others have already begun doing so and others will surely follow.

        Under your QOS model, CMCSA could raise QOS rates for these unaffiliated content providers which would force content rate increases on consumers. At the same time, CMCSA could engage in a scorched earth strategy of making it’s own affiliated content cheap for internet users.

        In short I don’t see how dismantling the net neutrality model creates less regulation.

  • Buster Badass says:

    This is a childish reaction by an oversized and under regulated giant. I hope Google Fiber swoops in and offers these customers the speedy broadband they deserve and need. It wont be too hard to frame AT&T as the company that abandoned these customers….because that’s exactly what AT&T just did.

  • Al Gore says:

    Obama was counseled by Al Gore who invented the internet. As a result he jumped into the fray as it pertains to net neutrality. How can he not be in the know?

  • JWK says:

    Let us not confuse companies that provide “access” with the Internet itself. Many companies are able to provide access in the wireless/wifi arena and most people don’t know their names. Some have leased their own infrastructure and do not rely on the incumbents (ILEC or MSO) for any access service. If the incumbents want to provide transport (i.e. access) to Enterprises and offer them cloud based services, that is not Internet either. Let them build their fiber infrastructure and data centers on their own dime if they can make the case. Prioritization of traffic on Internet access services is only a problem if you own a large media company, then it becomes a conflict of interest especially if you have accepted any Government funding to build said access network. Long story short, it is nobody’s business if a municipality wanted to build an open access fiber based network with taxes or revenue bonds and offer competition for better QOS. So maybe Al Gore or Al Franken need to tell Ted Cruz and his ilk what the Internet really is and what it means.

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