AT&T's Stephenson: Title II Puts Damper On Fiber Builds

Says Investment Will Need To Be In Pause Mode
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AT&T Chairman Randall Stephenson warned at a Wells Fargo Securities analyst conference Wednesday that its plans to deploy fiber to 100 cities are in hold mode as the company figures out how broadband is going to be regulated.

"So, you're doing multi-billion-dollar investments and you really have no clarity in terms of how those investments will be regulated," he said. "That can have no effect other than to cause one to pause."

He said AT&T would deliver on its promise in the DirecTV merger proposal to build out fiber to 2 million additional homes if that deal is approved, but beyond that the picture was cloudier.

Stephenson said that whichever way the rules go, they are going to court, and sees that taking at least a couple of years to resolve. He suggested Wheeler's initial effort to restore rules without reclassifying under Title II might be a swifter resolution of the issue, and could still provide the prophylactic prohibitions on slow lanes and paid prioritization the President was looking for.

Comcast EVP David Cohen blogged Tuesday that Comcast agreed with the president on not throttling and no paid prioritization, but, like Stephenson, says it can be done short of Title II.

Stephenson has already made the point to FCC Chairman Tom Wheeler about the threat to infrastructure investment and the build-out of high speed that is high on the chairman's to-do list.

Last week, Stephenson met with Wheeler about the issue, arguing that the FCC has authority under its Sec. 706 authority to prohibit paid prioritization "which harms consumers or competition," and that regulating the Internet under Title II could do a number on Wheeler's top priority of extending high-speed broadband.

According to an ex parte filing on the conversations, Stephenson told Wheeler Title II "is not only contrary to Commission precedent but would negatively impact broadband infrastructure investment in a manner that would be counterproductive to the Commission’s and Administration’s goal of making high speed broadband universally available in the United States."