AT&T gives investors and gov’t wildly different takes on need for fiber Internet


An AT&T sign in front of a retail store
Enlarge / A sign in front of an AT&T retail store on May 17, 2021, in San Rafael, California.

AT&T says fiber Internet is a “superior” technology that is built for today and the future because of its ability to deliver symmetrical upload and download speeds of 1Gbps and higher. AT&T also says that “there is no compelling evidence” to support the deployment of fiber across the US and that rural people should be satisfied with nonfiber Internet access that provides only 10Mbps upload speeds.

The difference between those two wildly different statements was the audience. AT&T’s message about fiber’s future-proof nature and its superiority over cable and DSL was delivered to investors while AT&T discussed the incremental fiber expansion in which it is hooking up more homes in metro areas where it already offers fiber. By contrast, AT&T’s message that Americans don’t need fiber access was delivered to the US government while the ISP lobbied against government-subsidized construction of fiber lines that are clearly superior to the DSL and fixed wireless home-Internet products that AT&T sells in areas where it decided that fiber is not cost-effective.

As we reported on March 29, AT&T is fighting proposals to subsidize nationwide fiber, writing that “there would be significant additional cost to deploy fiber to virtually every home and small business in the country, when at present there is no compelling evidence that those expenditures are justified over the service quality of a 50/10 or 100/20Mbps product.” That refers to 50Mbps download speeds with 10Mbps upload speeds or 100Mbps downloads with 20Mbps uploads.

AT&T Executive VP of Federal Regulatory Relations Joan Marsh also said at the time that building new networks in areas that already have basic speeds “would needlessly devalue private investment and waste broadband-directed dollars.” But while AT&T tells the government that such spending is a “waste,” it has a vested interest because blocking fiber construction would protect it from competition in the many areas where it hasn’t upgraded copper to fiber and in places where it has deployed fixed wireless instead of wired Internet.

AT&T: Fiber profitable “because it’s a superior product”

Of course, AT&T wouldn’t bother deploying fiber to any homes if everyone at the company believed 10Mbps uploads are fast enough. So on June 16, AT&T consumer-division CEO Thaddeus Arroyo told investors that “we plan to reach 30 million customer locations passed with fiber by the end of 2025. That’s going to double our existing fiber footprint. And investing in fiber drives solid returns because it’s a superior product. Where we have fiber, we win. We’re improving share in our fiber footprint, and the penetration rates are accelerating and growing, given our increased financial flexibility.” (See transcript.)

Arroyo went on to tout fiber’s “20X faster upload speeds than standard cable, 99 percent reliability, [and] low latency.” He said that AT&T’s fiber investment will “generate internal rates of return in the mid-teens” in part because the pandemic increased consumer demand for high upload speeds.

“This work-from-home shift during the pandemic highlighted fiber’s symmetrical differentiation,” he said. “And we expect, in a post-pandemic hybrid workforce and a home-based learning model, that even as students go back to school, we’ll move into new models of tutoring at home using these video capabilities.” Usage of “the uplink is growing faster than the downlink. This strengthens that potential for fiber-based services.”

In sum, Arroyo said that “fiber is a superior product… met for the moment in time that we’re in and beyond,” adding that fiber’s ability to provide the “same speed up [and] the same speed down… makes it very durable. But more importantly, this foundation of what we’ve built is capable of scaling to multiple gigabits in the near future.”

But if you’re not already close to a metro area where AT&T delivers fiber-to-the-home, you’re probably out of luck in the near future. AT&T has said it plans fiber-to-the-home expansions in 90 metro areas this year, reaching 3 million customers who live close enough to existing fiber lines that building to their homes is profitable enough for AT&T to make the effort. AT&T’s rural customers won’t be getting fiber any time soon unless another ISP or municipality decides to provide it, and many people in urban areas won’t get fiber either due to the “digital redlining” in which ISPs prioritize rich neighborhoods over poor ones.

Fiber easily beats cable upload speeds

Some of Arroyo’s comments were included Friday in a Light Reading article titled, “Is AT&T’s fiber investment a good idea?” The article also quoted New Street Research analysts as saying “cable will face new fiber competition in more of its markets over the next few years; however, there is little to no prospect of fiber delivering a service in those markets that cable can’t easily match or beat.”

The claim that cable can “easily match or beat” fiber is objectively false. The cable industry has been issuing press releases about future symmetrical upload speeds for years now, but no cable company has delivered those speeds to customers or even said when it will do so. In the meantime, Comcast’s cable upload speeds range only from 5Mbps to 35Mbps, and that’s the general standard across all major cable ISPs.

Altice decided to lower its upload speeds by up to 86 percent in order to, a company spokesperson told Ars, bring the speeds “in line with other ISPs and aligned with the industry.” Comcast and other cable companies have even built fiber-to-the-home in parts of their footprints because it’s the only way they can offer symmetrical speeds. Version 4.0 of DOCSIS, the Data Over Cable Service Interface Specification, is supposed to bring multi-gigabit upload speeds over cable. But theoretical speeds are different from actual speeds—a version of DOCSIS released in 2013 theoretically allowed 1Gbps upload speeds, but cable companies never came close to delivering that.

AT&T: Fiber creates JOBS

Light Reading also pointed to a post last week in which AT&T senior VP of network infrastructure Mo Katibeh wrote, “We are building MORE Fiber to MORE homes and businesses… And you know what comes with all that investment in America? JOBS.”

We haven’t heard that kind of effusive praise for fiber from AT&T when it discusses the rural areas where it has tens of millions of copper lines that provide phone service and/or DSL. Many of those copper lines have deteriorated because AT&T neglected to do maintenance that would prevent lengthy outages and other troubles, an investigation by California state regulators found.

AT&T lobbies against municipal fiber

AT&T’s comments about rural people not needing fiber were delivered as President Joe Biden and Congress debate how to spend tens of billions of dollars on subsidizing broadband for areas with no service or slow service. Biden initially proposed $100 billion to build “future-proof” networks across the US, with priority access to funding “for broadband networks owned, operated by, or affiliated with local governments, non-profits, and co-operatives—providers with less pressure to turn profits and with a commitment to serving entire communities.”

AT&T, which has already taken billions from the government to deliver 10Mbps download and 1Mbps upload service in rural areas, doesn’t want public networks getting any money in the big round of funding currently being negotiated. AT&T CEO John Stankey said this month that it “would be a shame” to use “taxpayer money [to] ask local governments to go into a business that they don’t run today.” He added that he is confident Congress will steer legislation in the more “pragmatic” direction that AT&T favors.

Biden has since settled on $65 billion in a deal with Republicans that may not favor municipal networks as he originally proposed. There are still details to be worked out in the House and Senate, with a key question being whether the US will prioritize building the fiber networks that AT&T has told investors are “superior” to all other broadband technologies or the non-fiber networks that AT&T claims are sufficient when it lobbies politicians.

Ex-FCC chair: Don’t spend billions on slow service

Former Federal Communications Commission Chairman Tom Wheeler wrote last week about “an intense lobbying campaign… especially by wireless and satellite network providers, to define digital down so that they may be able to sup at the federal funding trough. These companies want federal funds for their for-profit services, even if the services are slower in speed than what the market has demonstrated is necessary for broadband.”

Wheeler warned that spending tens of billions on outdated technology would risk replacing the current divide between broadband haves and have-nots with another divide that’s nearly as bad.

“At a time when commercial broadband companies are investing private money in upgrading their networks to mega-high-speed broadband deployment, it is foolhardy for the government to spend public money for second-class service,” Wheeler wrote. “At a time when the nation is finally moving beyond talking about the digital divide to actually doing something about the problem, it is illogical to spend the taxpayers’ dollars for something that will only open the possibility of a ‘not good enough divide’ as demand continues to rise.”



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