AT&T (NYSE: T) has joined the chorus of service providers that have voiced their concern that municipally-owned broadband networks aren't a sustainable model and will discourage privately-owned providers from making new investments.
In a new blog post, Bob Quinn, senior VP of federal regulatory and chief privacy officer for AT&T, said that the FCC's move to overturn state laws in North Carolina and Tennessee is a blow to traditional service providers.
The FCC in February preempted elements of state laws in North Carolina and Tennessee that were designed to restrict municipal providers in these communities from providing broadband service outside of their current serving areas. This move could drive other states to act and could result in court challenges.
"To be clear, we at AT&T have no problem with government-owned networks in areas where there has been a market failure because the economics for the private sector just don't work," Quinn said. "Unfortunately, the FCC's advocacy here, like the agency's preemption decision itself, doesn't appear to be limited to circumstances of market failure. And, bottom line, government owned networks are going to have a negative impact on private investment."
Regardless of the fight AT&T and other telcos and cable MSOs have waged on the municipal broadband movement, it continues to gain steam.
Take the state of Colorado. On Tuesday, residents in 26 cities and towns and 17 counties voted to overturn a law that limited local communities from building a broadband business even in areas where incumbent telcos and cable operators have refused to upgrade facilities.
Colorado's 2005 state law says that a municipality can build their own broadband network if "an election shall be called" and a majority of voters approve it.
What has driven towns in cities in states like Colorado, North Carolina and Tennessee to take their own broadband matters into their own hands it that a number of larger telcos, including AT&T, have been unwilling in some instances to provide higher speed services.
Chattanooga-based municipal utility EPB Fiber has gained notoriety in recent years by delivering 1 Gbps and now 10 Gbps services over its FTTH network, but state laws ban it from extending services into new areas -- even those that have no Internet access.
To be fair, AT&T is making progress with its own broadband expansion efforts, including the rollout of VDSL2-based U-verse and even FTTH.
In order to gain approval for its DirecTV deal, the FCC required AT&T to build 12.5 million new fiber connections, including areas like Jacksonville, Fla. This is on top of the 1 million businesses that will soon be fiber-ready as part of Project VIP.
"This construction is going primarily to residential customer locations where we already face a cable competitor," Quinn said. "The FCC even placed limits on our ability to count enterprise business customer connections as part of the 12.5 million."
- see this blog post
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