Stern words for AT&T's tantrum over broadband regulation

Stern words for AT&T's tantrum over broadband regulation
AT&T CEO Randall Stephenson chafes at the prospect of more oversight. (Andrew Harrer, Bloomberg)

If AT&T can't get its way, it'll just take its toys and go home.

The company's chief executive, Randall Stephenson, told an investment conference last week that AT&T will stop work on expanding super-fast Internet access nationwide because of President Obama's push for more oversight of broadband networks.


"We can't go out and just invest that kind of money," Stephenson said, "not knowing under what rules that investment will be governed."

An AT&T spokeswoman declined to elaborate on Stephenson's comments, not that any clarification was needed.

The telecom giant is basically saying that it doesn't have to eat any broccoli if it doesn't want to.

This is a marked difference from the more mature AT&T we saw in April, when the company announced a "major initiative" to expand super-speed Internet access to 100 cities, including Los Angeles and San Diego.

A spokeswoman said at the time that AT&T was committed to "delivering advanced services that offer consumers and small businesses the ability to do more" and "help communities create a new wave of innovation."

Now Stephenson is saying that "we have to pause, and we have to just put a stop on those kind of investments."

His childish behavior followed AT&T's warning last week that any attempt to treat broadband network providers like public utilities — as Obama is seeking to do — would be tantamount to "government control of the Internet."

As I wrote then, it wouldn't. It simply would be an attempt to redefine 20th century telecom regulations for 21st century technology.

The only thing the president is proposing is a handful of rules to ensure a fair and competitive broadband marketplace, with the Federal Communications Commission serving as referee — as it's done for decades with phone service.

The FCC was so taken aback by AT&T's tantrum that it sent the company a request for more information. Specifically, to how many households does it now plan to offer broadband service?

This was exactly the right question because AT&T has yet to reveal how much it plans to spend, or where it plans to spend it, in expanding its network.

The company only has announced "candidate cities and municipalities" for its faster Internet service, and has said it will "work with local leaders in these markets to discuss ways to bring the service to their communities."

Basically, AT&T is fishing for tax breaks and other taxpayer-funded incentives to save itself some cash as it pursues its normal course of business, which is to increase its reach and market share.

"AT&T has a track record of using its predetermined investment plans as a carrot or a stick for regulators," said S. Derek Turner, research director for the digital rights advocacy group Free Press. "The truth is that AT&T's fiber investments were more of a branding exercise than a substantial investment in deployment."


And even if AT&T does proceed with spreading broadband joy across the country, its so-called GigaPower service won't come cheap for users.

The service, which already is up and running in AT&T's home state of Texas, boasts download speeds of "up to 1 gigabit per second." That's fast enough, the company says, to download 25 songs in a second or a high-definition movie in less than 36 seconds.

However, that assumes your computer and other electronic gear can handle such a fire hose of data. Many wireless routers, for example, won't be able to pass along faster speeds for household Wi-Fi connections. Equipment upgrades may be necessary.

Then there's the price. Full-speed GigaPower is available in Dallas for $120 a month, or $1,440 a year.

Compare that with South Korea, where the same broadband speed is available for about half what AT&T is charging and plans already are being made for Internet access 10 times faster than AT&T's top speed.

Verizon Communications, for its part, seems content to sit back and see how AT&T's GigaPower is received.

Jarryd Gonzales, a company spokesman, said Verizon's FiOS broadband network already has proved itself capable in tests of handling download speeds that top AT&T's 1 gigabit per second.

"Once the customer demand for 1-gig or higher speeds approaches, we will act accordingly," he said.

In other words, if AT&T gets away with charging $120 or more each month for super-fast Internet, Verizon likely will give it a go as well.

The behavior of these telecom heavyweights makes the case for greater oversight more eloquently than the president was able to do.

There's a reason Americans pay more for broadband than most other developed countries but receive slower speeds. It's because our marketplace lacks true competition and innovation.

Instead we have AT&T running to its bedroom and slamming the door behind it, while Verizon sucks its thumb and waits to see if its sibling gets spanked.

It would be funny if it weren't so pathetic.

David Lazarus' column runs Tuesdays and Fridays. He also can be seen daily on KTLA-TV Channel 5 and followed on Twitter @Davidlaz. Send your tips or feedback to