That broadband investment will suffer because of net neutrality has been the rallying cry of the broadband industry for much of the last year, despite the fact that hard evidence and public executive statements repeatedly show this claim to be nonsense. You might recall that back when the President issued his surprise support of Title II-based net neutrality rules last November, AT&T responded in typical AT&T fashion: by pouting. The company quickly proclaimed it would be taking its ball and going home, "freezing" the company's plans to deploy fiber to the home to up to 100 cities nationwide:
"We can't go out and invest that kind of money deploying fiber to 100 cities not knowing under what rules those investments will be governed...We think it is prudent to just pause and make sure we have line of sight and understanding as to what those rules would look like," added the CEO."
Of course, as we noted at the time, this 100-city deployment claim was a ridiculous bluff to begin with; AT&T was simply offering gigabit speeds to a limited number of housing developments where fiber already exists, then dressing it up as a massive deployment to save face in the Google Fiber age (aka "fiber to the press release"). In reality, AT&T's been cutting fixed-line investment hand over fist for years, and had announced yet another $3 billion fixed-line CAPEX investment cut just three days before announcing its supposed "investment freeze." In other words, it was all political theater.
And it wasn't even good political theater. When the FCC pressed AT&T to show hard numbers, the company had to notably walk back its claims in a highly-redacted filing. AT&T effectively admitted the entire thing was basically a bluff, and the company's plans to offer gigabit service to a few high-end housing developments was absolutely unchanged by net neutrality.
"We have seen the way the rules came out, ... and as we read those rules we do believe they are subject to modification by the courts" or by Congress, Stephenson said on CNBC's "Squawk Box." "So we've said we're going to invest around $18 billion this year. That will allow us to deploy a wireless broadband solution to 13 million homes around the U.S.," he said. "That compares to about $22 billion last year."
Basically, Stephenson's pretending that the broadband industry's just so damn confident it will be victorious in court, AT&T's going to boldly shake off reservations and sally forth with network investment. Of course Stephenson knows the press won't notice or care he's conflating wireless and wired network investment (when his original freeze claim was clearly regarding wired), overall investment is still dropping, AT&T's actually hanging up on millions of DSL users it no longer wants all over the country, or the fact that AT&T already admitted in filings the entire argument was a fraud in the first place. With a press too lazy to fact check him, Stephenson still conveniently trots out the investment bogeyman when convenient, even after AT&T's admitted such worries are little more than factually-unsupported, politically useful phantoms.
We've noted how AT&T and Verizon investors and executives have been terrified for some time that they would have to (gasp) compete on price as T-Mobile continues to disrupt the market with its consumer-friendly, faux-punk rock behavior. Ever since the AT&T deal was blocked by regulators, T-Mobile has been mercilessly (but entertainingly) mocking both companies, offering a bevy of promotions while eliminating a lot of "pain points" for consumers (like overage fees). It's working: T-Mobile's now signing up more subscribers each quarter than Sprint, AT&T or Verizon -- just by treating consumers well.
So far, outside of a few very time-limited promotions, Verizon's been unwilling to compete on price, insisting the company's high prices are justified by a "premium network experience." Verizon also recently tried to shoot down the appeal of T-Mobile's unlimited data offerings by insisting that nobody really wants unlimited data plans, they're just being driven by "gut feelings." With T-Mobile just having one of its most successful quarters ever, Verizon's increasingly under pressure to compete on price, yet the telco continues to proclaim it doesn't have to:
The company reported on Tuesday that it had lost 138,000 postpaid customers in the last three months. Francis Shammo, Verizon’s chief financial officer, apparently won't be missing customers who, he says, value price over quality. "If the customer who is just price-sensitive and does not care about the quality of the network—or is sufficient with just paying a lower price—that’s probably the customer we’re not going to be able to keep," he said in the company’s quarterly earnings call."
It shows you just what kind of competition Verizon's historically used to if the company honestly believes you have a choice of when you get to compete on price. And while the company is busy telling investors that it's not feeling any heat from T-Mobile, the growing, magenta-hued (TM) threat has Verizon simultaneously testing a number of new price promotions it hopes will help tip the subscriber scales back in its favor. Smelling blood, T-Mobile this week launched a new promotion that specifically takes aim at these "price sensitive" customers Verizon apparently doesn't want any more:
Of course Verizon's not entirely wrong. The company does come in first place pretty consistently in most customer service and network performance studies. Verizon's also well aware it enjoys an 80+% retail market share with AT&T, and an 85% market share of the special access (cell tower backhaul) market. The two companies also enjoy an estimated $171 billion in combined spectrum holdings, which certainly helps keep other competitors from market. Still, this belief that the company doesn't have to compete on price in the face of increased price competition seems like a pipe dream narrative they'll only be able to push for so long, especially if Sprint can manage to get out of its own way, fix its lagging network, and become a viable fourth wireless competitor.
Back when AT&T stopped offering unlimited wireless data, it grandfathered many of the unlimited users it had at the time. Unfortunately for those users, AT&T immediately started waging a quiet war on these customers as part of a concerted effort to drive them like cattle to more expensive plans. That included at one point blocking Facetime from working at all unless users switched to metered plans (but net neutrality is a "solution in search of a problem," am I right?) and throttling these "unlimited" LTE users after they'd consumed as little as three gigabytes of data.
Then, just about a year ago, the FCC (like it has on a number of consumer telecom issues like telco accounting fraud or municipal broadband) miraculously awoke from a deep, fifteen-year slumber and decided to do something about this kind of behavior. FCC boss Tom Wheeler started warning telcos that they can't use congestion as a bogeyman to justify cash grabs, and that network management should be used to actually manage network congestion -- not as a weapon to herd users to more expensive options. The FTC also filed suit against AT&T for false advertising over its "unlimited" claims.
"As a result of the AT&T network management process, customers on a 3G or 4G smartphone with an unlimited data plan who have exceeded 3 gigabytes of data in a billing period may experience reduced speeds when using data services at times and in areas that are experiencing network congestion. Customers on a 4G LTE smartphone will experience reduced speeds once their usage in a billing cycle exceeds 5 gigabytes of data. All such customers can still use unlimited data without incurring overage charges, and their speeds will be restored with the start of the next billing cycle."
As of this week, the policy now looks like this:
"As a result of AT&T’s network management process, customers on a 3G or 4G smartphone or on a 4G LTE smartphone with an unlimited data plan who have exceeded 3 gigabytes (3G/4G) or 5 gigabytes (4G LTE) of data in a billing period may experience reduced speeds when using data services at times and in areas that are experiencing network congestion. All such customers can still use unlimited data without incurring overage charges, and their speeds will be restored with the start of the next billing cycle."
In other words, gone are the references to throttling unlimited LTE users just because they hit a totally arbitrary threshold, and the company is now using network management to manage the damn network, not to make an extra buck. AT&T will of course find other, clever ways to annoy these users until they switch to more expensive plans, but it's at least good to see that the network congestion bogeyman (fear the exaflood!) isn't quite as effective as it used to be when it comes to justifying high rates, misleading consumers or conning regulators.
After a fifteen-year slumber, regulators have apparently decided it might be a good idea to start cracking down on rampant fraud in the telecom market. Not long ago, we noted how AT&T was finally fined for abusing the IP Relay network for the hearing impaired, intentionally turning a blind eye to scammers on the network just to haul in the $1.50 per minute subsidies tied to the network. AT&T strung regulators along for years, implementing "solutions" that it knew wouldn't work but technically met flimsy FCC requirements. As a result, simply stopping AT&T from profiting off of defrauding the deaf (it's estimated that 95% of AT&T's IP Relay traffic at one point was credit card or other scammers) only took regulators the better part of two decades.
Last year, regulators finally cracked down on AT&T for helping scammers of a different sort: crammers. Crammers had been gouging AT&T customers for most of the last decade, charging them $10 a month for garbage "premium" text messaging, horoscopes and other un-asked-for detritus. There again, AT&T intentionally turned a blind eye to the criminal behavior, in large part because the company was netting around 35% of the proceeds from the scams. Worse perhaps, regulators found AT&T was actively making its bills harder to understand so the fraud would be more difficult to detect.
This month, the FCC has announced that it has struck a settlement with AT&T and former subsidiary SNET, over charges the companies were collecting undeserved subsidies under the agency's "Lifeline" program, a low-income community subsidy effort created by the Reagan administration in 1985 and expanded by Bush in 2005. According to the FCC's findings, AT&T apparently "forgot" to audit its Lifeline subscriber rolls and purge them of non-existent or no-longer-eligible customers, allowing it to continue taking taxpayer money from a fund intended to aid the poor:
"AT&T and SNET’s failure to remove ineligible Lifeline customers from their rolls was discovered in 2013 during an FCC audit of two AT&T Lifeline affiliates. The audit found that a number of Lifeline subscribers who no longer qualified for the program had not been de-enrolled following the annual recertification process for 2012 and 2013, a process in which consumers are required to certify their continued eligibility for Lifeline. These subscribers were given one extra month of Lifeline support, and AT&T improperly claimed reimbursement from the government for this extra month. Additionally, the Enforcement Bureau found other de-enrollment and recordkeeping violations."
The FCC announcement goes well out of its way to avoid calling this fraud, but unless you believe AT&T honestly forgot to purge its rolls (pretty difficult to do in full context of AT&T's historical behavior), it's hard to call it anything but. The FCC doesn't specify how great the discrepancy was, but given the speed at which AT&T has been backing away from unwanted DSL and phone markets, the revised differences likely aren't modest. This latest fine comes as AT&T is busy trying to convince the government that there's an endless parade of amazing benefits to be had by letting AT&T acquire DirecTV, effectively eliminating a competitor from the pay TV space.
Historically, telecom regulators love slam dunk cases against small scammers, but were willfully oblivious or too timid to acknowledge the larger players' culpability. With regulators no longer napping in regards to obvious fraud by bigger telecom players like AT&T, companies have unsurprisingly started grumbling that Travis LeBlanc, Chief of the FCC’s Enforcement Bureau, is being too hard on industry and therefore not actually curbing bad behavior:
"Two telecom-industry advocates complained that LeBlanc has been successful at grabbing headlines, but less effective at actually curbing bad behavior. By not being lenient on companies that self-report violations, he is discouraging future companies from coming forward, they said. "The FCC's new approach will discourage cooperation and self-disclosure, and it's going to force regulatees to beef up on litigation instead of compliance with the rules," one industry lobbyist said. "Ultimately, that's a poor use of resources for taxpayers, and it will lead to a worse result for consumers."
Yes, doing the bare minimum to prevent AT&T from ripping off taxpayers and consumers is just an atrocious affront to taxpayers and consumers.
While overreach is certainly possible, most of the stuff LeBlanc is cracking down on is either outright fraud, or the kind of enforcement that's hard to seriously cry foul about (like fining companies for failing to report 911 outages or airing porn during prime time). By and large, LeBlanc appears to be following the lead of FCC boss Tom Wheeler, breaking FCC tradition and actually standing up to large telecom companies. If there's a place LeBlanc (former aide to California AG Kamala Harris) may overreach, it's as the FCC begins using newfound Title II authority to re-examine broadband privacy rules.
For the moment, however, it's just interesting to see the FCC no longer turning a blind eye to scams and fraud when the country's biggest telecom campaign contributors are involved, even if the fines being levied are likely a small fraction of the total money AT&T has made off of a decade of very shady behavior.
Did you know that U.S. ISPs in uncompetitive markets are really, really shitty at their jobs? While I assumed that was pretty common public knowledge by this point, there's an interesting new groundswell of attention being paid to the fact that most ISPs are absolutely abysmal at communicating 1: what real-world speeds a user can get; and 2: whether users can actually get service at all. Case in point was the recent, Kafka-esque experience of a new Washington homeowner, who spent months being given the runaround by Comcast and CenturyLink regarding service the companies repeatedly (but falsely) promised was available.
This week, another story is making the rounds that highlights how ISPs will often claim to offer one speed, then actually offer users something dramatically more pathetic (if you can get connected at all). This user in Michigan, for example was told by AT&T's website and employees repeatedly that he should be able to get 20 Mbps at his address -- only to discover that the top speed he could get was a not-so-brisk 300 kbps. Such circa 1999 speeds are of course well below the FCC's new 25 Mbps broadband definition, changed to highlight the notable lack of U.S. competition at higher speeds.
Given that AT&T likely doesn't see any competition in the user's market, that 300 kbps isn't just slow, it's unreliable, suffers from the more-than-occasional hiccup and for good measure it's capped at 150 GB of usage before overages are incurred. Similarly, no competition means AT&T doesn't have great motivation to upgrade its outdated internal databases, or improve customer service. The lack of competition and regulatory capture in so many of these states makes communicating with AT&T (or getting regulators to care about broken promises) a Sisyphean endeavor:
"I’ve complained to just about everybody, the FCC, the FTC, the Michigan Public Service Commission,” Mortimer said. "I got a call back from the office of the president of AT&T responding to my FCC complaint. All I got was, ‘sorry, Mr. Mortimer, the speeds are the fastest available at this time.’" Since Ars first spoke with Mortimer in January, he suffered several more frustrations with AT&T. In one incident, his Internet service was shut off after an auto-payment error, he said. In another mishap, AT&T raised his bill from $33 to $89.40 after adding a phone line to his Internet service, even though he never asked for phone service."
The good news is that once you're actually connected at the speed your ISP advertises, more often than not you'll be able to reach those speeds consistently. An annual FCC study informed by custom firmware-embedded routers shows that most ISPs (with the exception of most DSL providers) deliver the speeds they advertise. The FCC has been naming and shaming ISPs that don't with fairly good results. Still, these DSL lines nobody wants to upgrade are going to be a notable problem going forward. And with billions of subsidies already thrown at companies like AT&T and Verizon over the last generation to avoid exactly these problems, people are justifiably skeptical that throwing more federal taxpayer dollars at these markets is actually going to help things.
That's of course where municipal broadband and the FCC's push to eliminate protectionist state laws comes in. Poorly-served towns and cities need the right to craft their own, flexible and customized broadband solutions in cases of market failure -- whether that's a publicly-owned fiber ring or a public/private partnership with somebody like Google. Instead, we've watched as the same telcos that don't even want to serve many of these DSL customers -- pass protectionist law preventing these communities from doing anything about it. We're only just starting to see this logjam starting to break, but it's going to take a lot more work to get many of these broadband black holes out of the grip of mega-ISP apathy.
Having written about the FCC for most of my adult life, I've grown cynically accustomed to an agency that pays empty lip service to things like consumer welfare and the painful lack of broadband competition. It doesn't matter which party is in power; the FCC has, by and large, spent the lion's share of an entire generation ignoring last mile competitive problems and the resulting symptoms of that greater disease. When the agency could be bothered to actually address these issues, the policies were so tainted by the fear of upsetting campaign contributors (read: regulatory capture) they were often worse than doing nothing at all (see our $300 million broadband map that hallucinates speeds and ignores prices or 2010's loophole-filled net neutrality rules co-crafted by Verizon and Google).
Whether it was former FCC boss turned cable lobbyist Michael Powell's claims that massively deregulating the sector would magically result in telecom Utopia (tip: that didn't happen) or Julius Genachowski being utterly terrified of taking any meaningful stand whatsoever, the broadband industry has spent decades governed by an agency that, at its best, is too timid to do its job, and, at its worst, is an obvious revolving-door lap dog to an industry it's supposed to regulate.
So in 2013 when it was announced that a former lobbyist for both the wireless and cable industries would be the next FCC boss, the collective, audible sighs of disgust unsurprisingly rattled the Internet. I, like many others, believed we were bearing witness to a twisted culmination of decades of regulatory capture, a giant, living, breathing middle finger to a public hungry for a more consumer and innovator-friendly FCC. John Oliver even put Wheeler's name in lights when he infamously compared hiring the former cable lobbyist to employing a dingo as a babysitter:
Most people (with a few notable industry exceptions) believed Wheeler was the final nail in a grotesque, campaign-cash stuffed telecom coffin long under construction. We were painfully, ridiculously wrong.
In fact, if you read profiles on Wheeler, he's turned out to be a complete 180 from the thinking of a traditional revolving-door regulator, basing his decisions on all available information -- even if that data conflicts with previously-held beliefs (a unique alien indeed in 2015). And while it's true that massive grass roots advocacy helped shift Wheeler's thinking on issues like Title II, his embrace of issues like municipal broadband required little to no shoving, since the lion's share of the public had no idea the issue existed. One of the biggest reasons Wheeler's willing to stand up to the broadband industry? He's 69, and no longer biting his tongue and biding his time for the next cushy lobbyist or think tank gig. Perhaps we should make a rule that all future FCC bosses must be on the brink of retirement to avoid what we'll henceforth call Michael Powell syndrome.
Still, watching Wheeler fills me with cognitive dissonance, as if my frequently-disappointed brain isn't quite sure what to do with an FCC Commissioner capable of objective thought free of AT&T, Comcast and Verizon lobbyist detritus. As a sure sign of the looming apocalypse, last week I watched an FCC Commissioner issue a statement about protecting competition -- and actually mean it:
"Comcast and Time Warner Cable’s decision to end Comcast’s proposed acquisition of Time Warner Cable is in the best interests of consumers. The proposed transaction would have created a company with the most broadband and video subscribers in the nation alongside the ownership of significant programming interests. Today, an online video market is emerging that offers new business models and greater consumer choice. The proposed merger would have posed an unacceptable risk to competition and innovation especially given the growing importance of high-speed broadband to online video and innovative new services."
Though his tenure's unfinished, it may not be a stretch to say that a man most of us believed would be the epitome of revolving door dysfunction has proven to be one of the most consumer- and startup-friendly FCC Commissioners in the agency's history. Granted that may not be saying much; caring more about consumers than Martin, Powell and Genachowski is like getting an award for beating a handful of lobotomized ducklings at a hundred yard dash. And none of this is to classify Wheeler as a saint -- the agency's net neutrality rules have some very concerning loopholes and the FCC still refuses to talk much about pricing, whether that's the problems inherent in usage caps, unreliable meters, or sneaky below the line fees.
Still, it's a lesson learned in letting your mind run on cynicism autopilot, and it's a reminder that even our very broken, campaign-cashed soaked government can still occasionally manage to give birth to consumer-friendly policies. So in short, the tl;dr version is this: I apologize to you, Tom Wheeler, for believing you were a mindless cable shill. I was wrong.
With Comcast's attempted acquisition of Time Warner Cable dead and buried, telecom regulators now shift their gaze to AT&T's attempt to acquire DirecTV. Unlike the Comcast deal, AT&T's deal is in some ways worse because it actually eliminates a direct competitor in the pay TV marketplace. Still, somehow the overarching narrative is that the deal isn't nearly as bad because the final company will be only slightly less massive. As such, regulators appear poised to sign off on the deal, with insiders saying they're swayed by AT&T's claims that the deal will somehow help expand broadband services:
"The divergence in fortunes signals that regulators are more worried about providing choice in Internet access and new, online video options than they are about concentration in pay TV...The Federal Communications Commission sees the AT&T deal as helping competition and aiding the spread of broadband into rural areas that lack service, people familiar with the matter said."
Yet in a recent, heavily-redacted filing with regulators, AT&T promises that if it's allowed to buy DirecTV, it will expand fiber to the home service to an extra two million households. After defending its decision to skimp on network investment for a decade, AT&T's filing illustrates how the telco, unlike Verizon, chose to spend a lot less money on slower fiber to the node service, painting itself in a corner in terms of offering broadband speeds on par with cable. The filing claims that being allowed to buy DirecTV will somehow magically fix this by pushing AT&T to invest more heavily in fiber (and they mean it this time):
"Based on the expected content cost savings alone, AT&T concluded that it will have an economically viable business case to justify expanding FTTP GigaPower’s reach to at least two million additional customer locations that would not meet investment thresholds absent the merger, and AT&T has committed to do exactly that within four years of the closing of the merger. Significantly, this “lift” in the economic viability of FTTP GigaPower service from the transaction is in addition to any further expansion justified by changes in the constantly evolving competitive landscape."
There are a few problems with this scenario. One, AT&T has a long history of using phantom broadband expansion as a carrot on a stick for regulators, then failing to follow through. Whether it's the company's acquisition of BellSouth or its failed acquisition of T-Mobile, AT&T's strategy has always been to take broadband deployments it was planning to do anyway, then break them out as a pretended added expansion should its latest deal get approved. Meanwhile, AT&T's Gigapower service is, as previously noted, mostly aimed at high-end housing ("greenfield") developments. Even if real (which if history is any indication it's not), two million isn't much of an expansion when you consider how much fiber to the home service $49 billion would have purchased. Even if AT&T sees cost savings thanks to improved programming leverage, AT&T's historically the type to pocket those proceeds -- not put them back into the network.
Even M&A loving Wall Street analysts don't quite understand the point of the DirecTV deal, even though history (T-Mobile) has made it perfectly clear the telco is willing to spend tens of billions simply to reduce sector competition. Some argue that buying a satellite TV operator at a time when cord cutting is just starting to nibble at satellite's subscriber base -- and the traditional pay TV ecosystem is undergoing a seismic shift related to unsustainable pay TV rates -- just doesn't make sense. As such, the FCC may be thinking the deal may not need to be blocked, given it may just be dumb enough to be irrelevant over the long haul. It may even be able to extract some consumer-friendly conditions in the process.
Still, in the short term, AT&T's inevitable competitive-hamstringing of the traditionally more price disruptive DirecTV is troubling. It's here I'll remind folks that AT&T's attempt to nab T-Mobile was blocked, and the result was undeniably a more competitive wireless marketplace than before. Meanwhile, Comcast's deal was refused in no small part thanks to the extreme, negative public sentiment surrounding cable service and the Comcast brand. Though AT&T is every bit obnoxious and aggressively anti-competitive as Comcast, AT&T's merger has managed to fly under the public-perception radar. Should AT&T's deal (and bundled nonsensical broadband expansion plans) be approved, AT&T's certainly going to owe the folks at Comcast a very lovely "thanks for the distraction" gift basket.
On Monday, the FCC's net neutrality rules officially went into the Federal Register, which was also known as the starters' gun for rushing to the courthouse to sue the FCC over those rules. Trade group USTelecom got there first with its filing, while a bunch of other trade groups, representing big cable companies (NCTAA), small cable companies (ACA) and big wireless companies (CTIA -- ignoring the claims of its members Sprint and T-Mobile) were right behind them. Not to be left out, AT&T has also formally sued the FCC using the same basic complaint ("arbitrary and capricious, yo!")
There had been some idle speculation that the big broadband companies might sit this one out directly, and rather let their lobbying trade groups handle the fun, but AT&T apparently couldn't take the risk of letting those other groups fight this fight, just in case they chickened out. Of course, there is some irony in the fact that AT&T was apparently among those who were most pissed off at Verizon for suing over the previous rules, since that's what led to these new rules. Either way, expect the various lawsuits to get consolidated before too long. And then expect years of fighting before we get a final ruling and lots of whining and complaining in between.
And, just think, instead of spending all that money on lawyers and press releases about future plans to deliver faster broadband, AT&T could actually be investing in building a better network for its subscribers. But what fun is that? According to Wall Street's view... it's no fun at all. They'd much rather AT&T fight against rules that say they have to treat consumers right, rather than actually working hard to treat consumers right.
Back in 2010, AT&T eliminated the company's unlimited data plans and began offering users only plans with usage caps and overage fees. While AT&T did "grandfather" existing unlimited wireless users at the time, it has been waging a not-so-subtle war on those users ever since in the attempt to get them to switch to more expensive plans. That has included at one point blocking video services from working unless users switched to metered plans (one of several examples worth remembering the next time someone tells you net neutrality is a "solution in search of a problem").
AT&T also switched some unlimited users to its metered plans without user consent, something the carrier received a whopping $700,000 FCC fine for in 2012. But the telco's primary weapon against these users has been to throttle these users to speeds of 128 to 528 kilobits per second should they use more than a few gigabytes of data in the hopes they'd switch to metered but unthrottled plans. AT&T was sued for the practice by the FTC in October of last year, the agency claiming AT&T violated the FTC Act by changing the terms of customers’ unlimited data plans while those customers were still under contract, and by "failing to adequately disclose the nature of the throttling program to consumers who renewed their unlimited data plans."
As we noted previously, AT&T tried a rather amusing defense to try and tap dance away from the lawsuit. It claimed that because the FCC was now classifying ISPs as common carriers under Title II, the FTC no longer had the authority to police AT&T actions under the FTC Act. In other words, AT&T hates Title II -- except when it allows them to skirt lawsuits for bad behavior. In a twenty-three page ruling (pdf), Judge Edward Chen says the law is "unambiguously clear" that only AT&T wireless voice, not wireless data, was classified as common carrier when the lawsuit was filed last fall:
"Contrary to what AT&T argues, the common carrier exception applies only where the entity has the status of common carrier and is actually engaging in common carrier activity."
In other words, no, AT&T can't have its cake (claim to loathe Title II with every shred of its being) and eat it too (run to Title II and common carrier protections when it suits it).
As we've covered repeatedly, AT&T's busy backing away from countless DSL markets it doesn't want to upgrade, promising states that if they gut all consumer protections, those states will magically be awash in numerous broadband options. Of course what AT&T's actually doing is gutting DSL and traditional phone service, then shoving those users toward significantly more expensive wireless service -- which may or may not actually be available, and usually isn't a full substitute. At the same time, it's going state to state pushing protectionist laws that prevent towns and cities from improving their own networks, whether that's through building their own broadband networks, or partnering with a private company to do so.
It's a situation where AT&T truly gets to have its cake and eat it too. AT&T won't provide quality service, but it wants state protection ensuring that nobody can either -- just in case any of these efforts brush up against the company's business interests sometime down the road.
As we've discussed, the FCC has finally started taking aim at these protectionist broadband laws in Tennessee and North Carolina. Tennessee has already filed suit against the FCC for trampling "states rights," though the fact AT&T is literally writing stating law that tramples these same rights isn't seen as much of a problem. While the FCC works to try and gut these protectionist laws, there are a few bills circulating in the Tennessee legislature (like HB 152) that would allow these municipal broadband operations to extend outside of their current footprints without the FCC having to get involved.
AT&T unsurprisingly opposes the proposal, and has played a role in killing similar proposals in three straight legislative sessions. With this latest fight, AT&T has been e-mailing its employees, telling them to oppose the proposals if they know what's good for them:
"Government should not compete against the private sector, which has a proven history of funding, building, operating and upgrading broadband networks," she said in the emailed statement. "Rather than delivering more broadband, we believe that this policy will discourage the private sector investment that has delivered the world-class broadband infrastructure American consumers deserve and enjoy today."
Of course, the only thing AT&T has "proven" is that it will go to any lengths to project its uncompetitive fiefdom from outside competition. AT&T has spent years in Tennessee (and many other states) refusing to seriously upgrade broadband infrastructure, but doing its very best to ensure nobody else can either. Just ask the numerous Tennessee residents who filed their complaint with the FCC in support of the agency's push to dismantle protectionist law:
"For the past 15 years, Joyce and other people in her community have requested better service from AT&T. They were told repeatedly it would be 3 months, 6 months, 9 months until they would get upgrades but it never happened. They finally decided to look for connectivity elsewhere. Joyce and her neighbors approached their electric provider, Volunteer Energy Cooperative, in the hopes that they could work with (Chattanooga's municipal utility broadband company) EPB to bring services to the area. Volunteer and EPB had already discussed the possibility, but when the state law was passed that prevented EPB from expanding, the efforts to collaborate cooled."
AT&T's quick to claim it isn't blocking municipal broadband, because the bills it's pushing (usually based on draft legislation by ALEC in turn written by AT&T lawyers) do allow these operations to expand -- but only if they target markets that aren't "served" by existing providers. Of course, the bills then include an absurdly generous definition of what constitutes a community being "served," whether that's just one DSL line in an entire zip code, or the inclusion of pricey and capped wireless or satellite broadband services. AT&T President Joelle Phillips hides behind this logic when she tells people AT&T isn't against municipal broadband:
"Phillips said AT&T is not opposed to municipal networks, but government-owned providers should be limited to areas where broadband service from the private sector is unavailable or is not likely to be available in "a reasonable time frame." The proposed bill "allows for unfettered deployment of these publicly funded networks," she said."
A better idea would be for AT&T to either offer broadband services that don't suck, or get the hell out of the way. Millions of AT&T customers in Tennessee (and elsewhere) pay an arm and a leg for slow DSL lines with 150 GB usage caps, thanks to the now all-too-familiar lack of broadband competition seen across vast swaths of the country. Allowing towns and cities to improve things would ruin AT&T's ambitious plan to bathe those users in price hikes or apathy, or shovel these neglected customers toward hugely expensive and capped LTE service plans.