AT&T Delays New Fiber Rollout Until Net Neutrality Rules Sorted Out

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AT&T CEO Randall Stephenson told investors on Wednesday that the telecom will wait to roll out fiber connections to 100 cities until rules around net neutrality are solidified.

According to a report by Reuters, Stephenson told investors that AT&T “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.”

AT&T announced its plans to expand its fiber network up to 100 cities, including 21 new major metropolitan areas, in April. The list of 21 candidate metropolitan areas included Atlanta, Chicago and Miami.

Earlier this week, US President Barack Obama released a statement on net neutrality, urging the FCC to use “common sense” when coming up with the rules, which ideally would include a ban on paid prioritization. Obama also prompted the FCC to reclassify consumer broadband service under Title II of the Telecommunications Act.

AT&T GigaPower currently has speeds of 300 megabits per second and plans for a 1 GBPS speed upgrade in the near future, according to a report by The Motley Fool on Sunday, which compared AT&T fiber to Google Fiber. The report noted that building the infrastructure to support fiber is not cheap.

“Goldman Sachs estimates that if Fiber were to reach just 50 million households, less than half of all US homes, Google would have to spend up to $70 billion, or $140 billion to provide nationwide coverage,” the report said.

“In other words, Google doesn’t have the operating cash or the support from investors to invest in Fiber at a rate to remain competitive with AT&T’s construction. In 2013, Google spent $7.35 billion on capital investments, AT&T spent $21.2 billion, and therefore it’s hard to imagine where Google can find those additional billions of dollars annually to reach 50 million households faster than AT&T.”

It remains to be seen if AT&T’s delay in rolling out fiber due to net neutrality concerns will impact its position in the fiber internet market.

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