AT&T halts fiber deployments until net neutrality is resolved

AT&T (NYSE: T) CEO and Chairman Randall Stephenson came out against President Barack Obama's plea to ask the FCC to reclassify broadband providers under Title II, a move that he says is driving it to pause the expansion of its ambitious fiber-to-the-premises (FTTP) project into 100 U.S. cities.

Speaking at the Wells Fargo Technology, Media & Telecom Conference, Stephenson said that this lack of clarity on the rules will create a challenging environment to invest in new fiber deployments in more cities where it would like to provide service.  

The lack of clarity could have an effect on a plan the service provider announced in April to expand its fiber network to up to 100 of what it calls candidate cities and municipalities nationwide, including 21 new major metropolitan areas.

Among the potential cities that could get the service would be Atlanta, Charlotte, Chicago, Cleveland, San Francisco and San Jose.

"We announced we'll deploy fiber to 100 cities and we can't go out and deploy fiber to these 100 cities not knowing what rules those investments will be governed," Stephenson said. "We have to pause and put a stop on those kinds of investments that we're doing today."

Stephenson added that they want to carefully evaluate the proposals that the FCC has on the table and their potential implications.

"We think it's prudent to just pause and make sure we have line of sight and understanding as to what this process looks like, where these rules could land and let's re-evaluate," Stephenson said. "We're in pause moment right now on those kinds of investments."  

Separately, the service provider still plans to continue with its plans to bring FTTP services to 2 million addition homes upon completing its DirecTV (NASDAQ: DTV) acquisition.

"We made some commitments with the With DirecTV announcement that we would build fiber to 2 million homes," Stephenson said. "We'll obviously commit to that initiative once the DirecTV deal is done."  

At the same time, AT&T continues to make progress with expanding its traditional U-verse service and fiber to businesses under Project VIP.

Under that plan, the service provider has set a goal to bring higher speed U-verse services to 57 million homes and expand the video footprint.

"We made a commitment that we would increase the speeds of high-speed Internet to 57 million homes," Stephenson said. "We're at 57 million homes and that number has been achieved well ahead of schedule."

It is also reaching the goal to connect 1 million buildings with fiber under its fiber-to-the-building (FTTB) program, which is part of its Project VIP initiative. At this point, AT&T has invested and brought fiber to 650,000 buildings.

"We've got the fiber to 650,000 business locations and we're now on the doorstep of most of the other buildings as we sell the services and take the fiber to the last step," Stephenson said. "We're on a success-based run rate for that fiber now so that one is by and large complete."

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