The Federal Communications Commission is legally compelling AT&T to elaborate on plans to put a stay on its investment in fiber optics, which would boost the quality of Internet services for approximately 2 million customers.
After U.S. President Barrack Obama offered specifics on how he believes regulators should draft rules to keep the Internet free and open, AT&T CEO Randall Stephenson announced that the nation's second-largest wireless carrier is considering scraping or scaling back plans to invest in fiber optics service in 100 cities. Obama advocated the cannibalization of the Communications Act of 1934 to treat Internet service providers like utility companies.
Telecommunications' top dogs, like AT&T and Comcast, have asserted that net neutrality is important to them, but they fear legislation that gives regulators too much control and threatens to severely hamper competitiveness in the market.
While some industry watchdogs have suggested that Stephenson and AT&T may have been attempting to throw their weight around to sway legislation, the wireless carrier's threat to scale back development may have drawn the wrong kind of attention.
As part of AT&T's bid to purchase DirecTV, the wireless carrier agreed to provide 2 million consumers in 100 cities with new fiber service. So before the FCC makes a decision on AT&T's bid, the commission is calling for the wireless carriers to submit details on plans to scale back its fiber deployment.
The FCC sent an official request to Robert Quinn, AT&T's chief policy officer, asking that the wireless carrier tender documents revealing the current number of households the company serves with fiber.
The commission wants to know how many households AT&T planned to serve with new fiber before and after it announced plans to scale back its capital investments. AT&T has to prove that the deployment of fiber to 2 million homes would be unprofitable now or after the acquisition of Direct TV.
"We are happy to respond to the questions posed by the FCC in its review of our merger with DirecTV," said an AT&T spokesman. "As we made clear earlier this week, we remain committed to our DirecTV merger-related build-out plans."
Earlier in November, when Stephenson revealed the possible scaling back of fiber, S. Derek Turner, research director for advocacy group Free Press, used the phrase "branding exercise" to describe the AT&T's plans to deploy more fiber in 100 cities.
"AT&T has a track record of using its pre-determined investment plans as a carrot or a stick for regulators," said Turner.
