Rules Could Sway AT&T Participation in Broadband Stimulus
Senior AT&T executives suggested a light regulatory touch to promote U.S. broadband investment. They asked the agencies responsible for broadband stimulus to keep to a minimum the conditions on grants and loans. The telecom industry owes much of its success to the deregulatory stance of policymakers, said CEO Randall Stephenson in a speech Wednesday to the Economic Club of Washington. Afterward, Senior Vice President Jim Cicconi told reporters that the company’s participation in the government’s broadband stimulus efforts may hinge on the number of strings attached to the $7.2 billion that’s available.
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AT&T hasn’t decided whether or how to take part, Cicconi said. The company is waiting to see how government agencies define terms left open in the legislation, including “unserved” and “underserved,” he said. AT&T wasn’t active in stimulus legislation discussions, because the company isn’t seeking “taxpayer funding to assist us in our investments,” Cicconi said. But AT&T is interested in partnerships with state and local governments that apply for grants and loans, he said.
AT&T’s annual spending on broadband dwarfs the federal stimulus money. Business spent $60 billion last year on deployment, and this year AT&T will direct most of its $17-18 billion in planned spending to broadband, Cicconi said. Government money “can help” if it’s disbursed quickly and not saddled with strict rules, he said. Stimulus money could jump-start state and local government broadband projects that are ready to go, he said.
The NTIA and Rural Utilities Service should make their priority areas without any broadband, Cicconi said. “The notion of ‘underserved’ can easily mutate into companies seeking government support for the second or third players in an area.” It’s “unfair” for government to subsidize the second company in a market when the first company “took all the risks” on its own dime, he said. That policy would discourage companies from going into new markets without government money, he said.
Imposing speed requirements on grant projects could discourage investment, Cicconi warned. “The problem with thresholds is that the infrastructure capabilities are going to vary,” he said. “The overall objective should be to make broadband as widely available as possible and continue to upgrade the speeds.” In defining nondiscrimination, agencies should do no more than adopt the FCC’s Internet principles, which have proven to be enforceable, he said.
“Less regulation results in more investment,” Stephenson said. New technology requires billions of dollars in telecom investment, he said: “If you want to slow down the amount of capital,” impose “burdensome regulatory requirements” on the industry.
Stephenson said he sees the largest growth opportunity for AT&T in wireless, and he plans to devote much of the company’s capital spending this year to mobile broadband. That’s why AT&T spent about $9 billion on buying spectrum last year, he said. Fixed line service is declining because more people are substituting cellphones for wireline voice and broadband is moving to wireless, he said. But wires remain vital for video, he said. “There’s always going to be some kind of value delivered over the wires going into the house.”