FCC Calls AT&T's Net Neutrality Bluff, Asks For Proof That Fiber Investment Has Stopped

from the data-or-it-didn't-happen dept

Earlier this week, we mocked AT&T’s pouty and bogus announcement that it was “halting” fiber deployments because of “uncertainty” over the FCC’s decision on net neutrality. As we pointed out, AT&T’s fiber promises were mostly bogus in the first place — using “fiber to the press release” in which it would announce fiber plans, but never actually deliver them (beyond, perhaps, a few carefully chosen developments). Furthermore, AT&T had announced that it was cutting back investment spending a week earlier, totally unrelated to the net neutrality stuff. Pretty much everyone saw AT&T’s announcement as nothing but a ridiculously obvious ploy in response to President Obama’s plan for real net neutrality.

However, it appears the FCC isn’t going to just let AT&T get away with it. It has now sent the company a letter, calling its bluff, and asking for actual evidence that AT&T is really doing anything different as a result of net neutrality uncertainty. The letter notes that AT&T says it will only deliver fiber to the 2 million homes it committed to in hoping regulators would approve its DirecTV acquisition, and then asks for more detailed information on the plans beyond those homes:

(a) Data regarding the Company?s current plans for fiber deployment, specifically: (1) the current number of households to which fiber is deployed and the breakdown by technology (i.e., FTTP or FTTN) and geographic area of deployment; (2) the total number of households to which the Company planned to deploy fiber prior to the Company?s decision to limit deployment to the 2 million households and the breakdown by technology and geographic area of deployment; and (3) the total number of households to which the Company currently plans to deploy fiber, including the 2 million households, and the breakdown by technology and geographic area of deployment;

(b) A description of (1) whether the AT&T FTTP Investment Model demonstrates that fiber deployment is now unprofitable; and (2) whether the fiber to the 2 million homes following acquisition of DirecTV would be unprofitable; and

(c) All documents relating to the Company?s decision to limit AT&T?s deployment of fiber to 2 million homes following the acquisition of DirecTV.

You can almost hear the gritted teeth from AT&T’s spokesperson claiming that the company is “happy to respond to the questions posed by the FCC.” Yes, I’m sure happy is exactly how people there feel…

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Comments on “FCC Calls AT&T's Net Neutrality Bluff, Asks For Proof That Fiber Investment Has Stopped”

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KSlidz says:

Re: Re:

since we started to voice our opinion and talk to them.

Think about an employee, he will get into mischief and feel as though he can do w/e when he has no goal and no positive or otherwise reinforcement from his boss.(us)

he will be happy to make some money on the side too.

but once his boss starts to invest in him, that employee will respond and in kind.

Be active, be thoughtful, be heard.

Anonymous Coward says:

Long-term investment

As a technology, copper twisted pair had about a century’s run. That century saw the rise of Ma Bell—and its breakup.

Right now, today, looking forward, we expect fiber-optic technology to have a similar long run: about a century, as far as we can see down the road now.

Nothing’s certain, of course, fifteen years from now something better could come along. Or maybe it’ll be sixty-five years before obsolescence. We don’t really know. A century from now? Well, the crystal ball just gets too cloudy. Too cloudy.

But all the indications, as best we can see right now, run towards a fiber-optic century.

Anonymous Coward says:

Re: Re: Long-term investment

“Always in motion the future is.” — Yoda

Well, we can seen ten years down the road fairly clearly. The technologies that’ll have widespread impact in a mere decade are already in the pipeline right this instant. It generally takes a good decade for societal adoption.

So, when I say that looking ten years on, fiber optic will still be the go-to technology for hi-bandwidth applications, that’s awfully good odds.

Anonymous Coward says:

I suspect there is something behind this with the FCC. Surely AT&T had to make agreements along the line when the federal government was passing out money for upgrades and expansion of connections. Seems to me I remember them getting their pound of money for expansion some time ago and then everything froze on the expansion horizon years ago.

When Google came to town was when you actually saw some willingness to drop prices and increase speeds. Other than that nada. I sort of believe there is a lot more here than what it looks like on the surface.

Andrew D. Todd (user link) says:

Businesses Don't Do Long-Term Investment.

Businesses don’t do long-term investment. The usual standard is that an investment has to pay for itself at a rate of twenty percent before taxes, or, in other words, in five years. This allows for a certain reasonable percentage of investments which do not pan out for one reason or another.

There just isn’t any real business case for a telephone company to upgrade its existing plant to fiber-to-the-premises (FTTP). U-verse-type cabinets can achieve 20-30 M-bits for perhaps 1/10th of the cost of FTTP. The likelihood of a typical customer being able to use more than 30 M-bits in the foreseeable future is “distant and doubtful.”

Most people do not have their own home servers, not being tech enthusiasts. Most people, in fact, are not prepared to pay FatCow a hundred and fifty dollars a year for web-hosting on a businesslike basis. Of course, that seems remarkably cheap if you’ve ever had to do with paper print-shops. However, the reality is that nearly everyone takes Google or Facebook up on their “freebie” offers, without looking too closely at the side-conditions.

Similarly, given the general trends towards improved data compression in video, it is hard to see how even the largest televisions would require higher data rates than a U-verse cabinet can deliver. It is equally uncertain that so many as half of the people in a given district will choose to buy a really expensive television within the next five or ten years.

In a very real sense, the ultimate limitation of telecommunications speeds is the human eye, and the human eye is not getting better at a Moore’s Law rate. Audio equipment ran out of steam in its own “bandwidth race” at about 20-40 Khz. They had gotten up to the point where only dogs could tell the difference. I don’t think that any appreciable fraction of the population will start keeping pet owls.


In both cases, this is before we even discuss the danger of getting into a price war with the cable company. The truth is that AT&T has curtailed its roll-out of U-Verse cabinets to avoid antagonizing ComCast. What it works out to is that FTTP is an empty political symbol; and not a practical product calculated to be sold at a profit. Back in the 1950’s the automakers had to promise nuclear-fusion-powered flying cars at regular intervals, but that meant nothing.

For new construction, in new subdivisions, it really doesn’t cost any more to do FTTP than it costs to do copper-to-the-premises, and very probably the real-estate developer will pick up the tab anyway. The real-estate developer has to build in things like streets and sewers, which he will eventually deed to the city or the homeowners association, and he may as well build in cable ducts as well. The marginal cost is minimal because it does not involve digging up the street. Of course, an astute developer may choose to put in ten sets of ducts, run his own cables through two of them, and present the telephone and cable television companies with a fait accompli. This will probably be where AT&T gets its promised two million fiber installations– at no cost to itself.

Anonymous Coward says:

Re: Businesses Don't Do Long-Term Investment.

The likelihood of a typical customer being able to use more than 30 M-bits in the foreseeable future is “distant and doubtful.”

That’s just a complete failure of imagination. Not just imagination—but a failure to recognize current capabilities.

Odlyzko, among others, has pointed out that faster-than-real-time downloads make more sense than streaming for pre-generated content. He disusses this issue in his 2008 paper, “The delusions of net neutrality”.

That One Guy (profile) says:

Re: Businesses Don't Do Long-Term Investment.

The likelihood of a typical customer being able to use more than 30 M-bits in the foreseeable future is “distant and doubtful.”

Replace 30 with a smaller number, 1, 5, 10, whatever, and that same argument could have been made a decade or so ago. It may be ‘distant and doubtful’ now, but not too long ago so would have been the idea of streaming tv, or a site dedicated to uploading and sharing videos.

Andrew D. Todd (user link) says:

Re: Re: Businesses Don't Do Long-Term Investment.

My year of maximum computer expenditure, adjusted for inflation, was 1984. At that date, computers often cost as much as automobiles. Over the years, I have experienced the law of diminishing returns, as applied to computers. New uses of computers were not so compelling that I had to do them that year, and in two or three years, the price had fallen considerably.

Here is an article I turned up, with a chart indicating how close to the screen you have to be, in order to tell the difference between different grades of digital television sets. We are beginning to reach the point of limits derived from human vision.


As against that, video compression will continue to become more efficient, as more and faster processors are employed.


I think video compression and decompression hardware will get better and cheaper, faster than physical cable-laying will. Movie images really don’t change very much from one frame to the next, because they are pictures of things which are themselves mostly unchanging at some level. I have a copy of the screenplay of Woody Allen’s Play It Again Sam, illustrated with a thousand production stills, ie. every six seconds. Looking at this book, it is easy to see just how continuous the visual content of a movie is. If you succeed in finding the right level at which to compress moving pictures of these objects, you get the kind of drastic compression which occurs when bitmaps of text are OCR’d. Let us say, for purposes of discussion, that you can keep bits of image in play for six seconds, by transforming them in various ways. In that case, a movie becomes the equivalent of a thousand images, and, say, fifty or a hundred megabytes. I am talking about a level of compression technology which shades over into animation technique. Moore’s law operates in this kind of technology.

The business of laying cables is not going through any kind of comparable transition. Laying a cable is pretty much like it was ten years ago. A telephone lineman running a cable jumps over a fence and comes face to face with a German Shepherd who thinks it’s his turf, and various complications ensue… progress in cable-laying tends to be slow and laborious.

Movie image quality for the sake of image quality is something of a minority taste. Another aspect of diminishing returns is that an image is good enough when it conveys its meaning, when it doesn’t detract from the story. A certain type of technology enthusiast gets himself trapped into the false position of claiming that any hardcover book is better than any paperback, regardless of their respective contents, just because the quality of physical construction of the hardcover book is greater.

There is a certain type of person who is so proud of his new video hardware that he falls into a similar error, thinking that a high resolution copy of current Hollywood product is better, than a low resolution copy of a historically significant film from the 1930’s. Suich films, I might add, were usually made in black-and-white. Color film was a relative latecomer, and a lot of the great directors, like a lot of the great photographers, had become accustomed to the technique of managing tones in black and white, using color filters to emphasis different elements. Color film was superficially lush, but it did not have the same potentialities of dramatic control.

Another point is that, in the largest sense of the word, something like streaming video is not altogether new. There were movie theaters, and television sets in 1984, and, around a university, there were apt to be all kinds of informal showings of films in classrooms or meetings of student groups. These forms of moving pictures were simply not as flexible in use as computer-based video has become. Computers have been assimilating media which already existed.

Coyne Tibbets says:

Riding a sword point

This may be more clever than it appears at first; making AT&T ride the sword point.

If I understood some of the articles correctly from the last few days, AT&T is being subsidized to do exactly the development it just said it isn’t doing. So, if in fact they prove that statement, wouldn’t they also be proving they are fraudulently collecting subsidies?

Be interesting to see how it plays out.

Anonymous Coward says:

Re: Riding a sword point

This is not limited to AT&T. ALL of the major carriers are getting subsidies for fiber they are not laying, never have, and probably never will. We have spent Billions on smoke and mirrors to allow them to monopolize their networks and keep out real innovation. When do they get called out on it and prosecuted for fraud?

Andyroo says:

The one question.....

What percentage of profits do they use in upgrading the systems they already own and what percentage of profits do they use or plan to use to increase the size of their network, very easy for them to obscure the facts with clever wording but if the questions are asked in a way that they have to open up their books to scrutiny they will have to admit that over the past 10 years they have not been interested in spending money to increase access to more as the people they already have access to are providing way more than the 20% profits they seek, probably somewhere in the region of 99% after a 5 year period. If they took 80% of profits and reinvested they would be increasing their coverage, but then they would be taking away customers from other providers and there is obviously a wink here and a wink there to prevent this from happening.

Businesses really work on the principle that they should give as little as they can for the biggest profits but when it comes to their employees they belive they should give as much as they can in the work environment for the lowest income they can get away with.

Maybe it is time that they started giving their employees salaries based on the profits of a company not the average wage most pay.Maybe then when profits are locked in they will start looking at investing in their company infrastructure rather than pay their employees large incomes.And no they could not pay less when they make less in income they pay based on an average over 10 years or more.

Anonymous Coward says:

Re: The one question.....

IF businesses could be trusted, perhaps this might work. They can’t, so it won’t. The first thing that will happen is the application of “Hollywood Accounting” wherein the “profit” of the company will be adjusted to pay the employees just over minimum, if that. This will also result in much higher hidden, offshore, profit which some special preferred stock owners will enjoy.

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