U.S. Federal Communications Commission Chairman Tom Wheeler testifies before a House Energy and Commerce Communications and Technology Subcommittee hearing on oversight of the FCC on Capitol Hill in Washington May 20, 2014. REUTERS/Jonathan Ernst  (UNITED
attribution: REUTERS
FCC Chairman Tom Wheeler.
This week, AT&T engaged in a little extortion over net neutrality, when CEO Randall Stephenson said that the company would halt its efforts to extend new high-speed Internet connections in 100 U.S. cities because of the possibility that the Federal Communications Commission might impose net neutrality regulations. This attempt by the company to throw their weight around on the issue apparently did not amuse the FCC, which has called the company's bluff.
The agency emailed AT&T Friday asking for more information about that announcement, including "all documents" related to that decision.
The request may not be great news for AT&T, which still needs the FCC to sign off on its$48 billion deal to acquire DirecTV. Stephenson’s threat to stop the company's fiber build-out may help bolster the case of Internet providers that net neutrality rules advocated by President Obama would hurt investment in networks. But it doesn't help the case with regulators that allow AT&T to buy DirecTV will expand high-speed broadband access to millions of Americans who currently can't get it.
FCC officials also want to know if AT&T's financial model "demonstrates that fiber deployment is now unprofitable" and whether laying fiber to more than two million homes after the DirecTV acquisition "would be unprofitable." AT&T has a week to respond.
AT&T has never actually detailed its plans to extend the fiber network, and most likely has never intended to extend it to all 100 cities, despite what Stephenson said in his threat. It named 100 "potential" spots for the build-out, but has only worked with some local officials on it.
AT&T has separately claimed it will bring fiber-to-the-premises Internet service to "2 million additional locations" if it's allowed to buy DirecTV. But since AT&T never said how many locations it would bring fiber to if the merger is rejected, it's not clear what that 2 million number is in addition to. In short, no one outside of AT&T knows how extensive the company's fiber buildouts are planned to be.
It's hard to know what's in the tea leaves on net neutrality in this demand from the FCC, but damn, it's good to see them pushing back on AT&T's obnoxious threats. It's at least a hint to AT&T and Big Telecom that there are some limits to what they can get away with. Maybe they'll like the feeling so much they'll actually do the right thing, and protect open internet access with the strongest net neutrality rules.