27 November, 2014

AT&T Threaten's FCC To Halt Fibre Rollout For New Project

AT&T isn't backing down from its threat to halt its fiber rollout, which was a not-so-subtle jab at President Obama's pro-net neutrality / Title II comments earlier this month.
Following the FCC inquiry about an announcement, AT&T said in a letter today that it's still going to move forward with existing fiber commitments -- and adding that it is just not going to make any new plan.

How ever AT&T is in a bit of a tricky spot because of the agreement made to bring fibre to 2 million homes as part of its massive $48.5 billion Direct TV acquisition (which is still under regulatory review). According to the information "AT&T simply cannot evaluate additional investment beyond its existing commitments until the regulatory treatment of broadband service is clarified," Robert Quinn, the company's senior vice president of federal regulatory, wrote in the letter.
See Letter Below:
Re: Applications of AT&T Inc. and DIRECTV for Consent to Assign or TransferControl of Licenses and Authorizations, MB Docket No. 14-90

Dear Ms. Dortch: AT&T Inc. ("AT&T") hereby responds to the Commission letter dated November 14,2014.

When AT&T announced its acquisition of DIRECTV in May 2014, we also announced our commitment to enhance and expand high-speed broadband service to at least 15 million customer locations, mostly in rural areas, utilizing a combination of technologies such as fiber to the premises ("FTTP") and fixed wireless local loop capabilities. "This new commitment, to be completed within four years after close, is on top of the fiber and Project VIP broadband expansion plans" that we had announced prior to the DIRECTV transaction.

The premise of the Commission's November 14 Letter is incorrect. AT&T is not limiting our FTTP deployment to 2 million homes. To the contrary, AT&T still plans to complete the major initiative we announced in April to expand our ultra-fast GigaPower fiber network in 25 major metropolitan areas nationwide, including 21 new major metropolitan areas. In addition, as AT&T has described to the synergies created by our DIRECTV transaction will allow us to extend our GigaPower service to at least 2 million additional customer locations, beyond those announced in April, within four years after close.

At the same time, President Obama's proposal in early November to regulate the entire Internet under rules from the 1930s injects significant uncertainty into the economics underlying our investment decisions. While we have reiterated that we will stand by the commitments described above, this uncertainty makes it prudent to pause consideration of any further investments – beyond those discussed above – to bring advanced broadband networks to even more customer locations, including additional upgrades of existing DSL and IPDSL lines, that might be feasible in the future under a more stable and predictable regulatory regime. To be clear, AT&T has not stated that the President's proposal would render all of these locations unprofitable. Rather, AT&T simply cannot evaluate additional investment beyond its existing commitments until the regulatory treatment of broadband service is clarified.

Accordingly, AT&T responds to Requests (a)-(c) of the Commission's November 14 Letter as follows:

With respect to Requests (a) and (b), we refer the Commission to our response to FCC Information Request Nos. 61 and 56.n.5 These responses describe the total number of customer locations to which AT&T currently plans to deploy FTTP based on pre-transaction economics, as well as the additional customer locations to which AT&T has determined it will be economically viable to reach as a result of the merger-specific cost savings and synergies described in these proceedings.
In further response to Request (a), the attached chart provides, by DMA within AT&T's 21-state wireline footprint, the number of customer locations to which AT&T has deployed FTTP and Fiber-to-the-Node ("FTTN") technologies as of October 2014 and the number of additional customer locations to which AT&T currently plans to deploy FTTN.
Because Request (c) incorrectly assumes that AT&T is limiting its deployment of fiber to 2 million homes, there are no documents responsive to Request (c)
Pursuant to the Second Amended Modified Joint Protective Order8 and the instructions set forth in the November 14 Letter and the FCC's Information and Data Requests dated September 9, 2014 in this proceeding, AT&T is filing herewith, via ECFS, this redacted public version. An unredacted Stamped Highly Confidential copy of this submission is being delivered to your office. Additional copies of the unredacted submission are being delivered to the Commission staff under separate cover.

Please contact me at (202) 457-3851 if you have any questions. Thank you for your assistance.

Respectfully submitted,
Robert W. Quinn, Jr.
Sr. VP-Federal Regulatory and Chief Privacy Officer

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