AT&T's Stephens: Friendlier local laws help drive FTTP expansion

AT&T (NYSE: T) says that its willingness to bring its fiber-to-the-premises (FTTP) to more communities is being driven by both a mix of customer demand and more favorable local government laws that eliminate barriers to building out service. 

Speaking at the Deutsche Bank 2015 Media, Internet & Telecom Conference, John Stephens, senior EVP and CFO for AT&T, told investors that by not being required to build to every part of a market, it can more effectively target network investments in areas where it sees the most customer demand.

"What generated the rollout of FTTP was customer demand and what generated the capability to it is getting relief from some of the regulatory responsibilities at the state level to build everywhere," Stephens said. "We're now able to build where customers are demanding service or where there's demand for it as opposed to build everywhere is probably the biggest sea change."

Today, the U-verse with GigaPower 1 Gbps service is available in four markets, including Austin, Dallas, Kansas City and Raleigh/Winston Salem, N.C.  

While not providing any specific numbers, the service provider said that it is seeing good service uptake in Austin, where it is competing against Google Fiber (NASDAQ: GOOG) and regional cable over-builder Grande Communications, which also offers a 1 Gbps product for $65 a month.

Ultimately, AT&T plans to bring FTTP services up to 100 cities, including 21 new major metropolitan areas.

However, another issue is the FCC's new net neutrality rules that reclassify broadband providers under Title II. AT&T has publicly said that the new rules could create uncertainty and potentially delay new network investments.

Stephens said that the new regulations will not interrupt the investments it committed to in the cities it said it plans to deliver FTTP services.

"While Title II has disrupted the process, we have made commitments to those markets and cities and when you're a company that's made commitments, you keep them," Stephens said. "We're going to continue to go forward with the promises that we made both in the GigaPower view and some of the other areas we have out there."

Like other carriers and members of the telecom industry, Stephens said AT&T has not seen the 300-plus page order, but any uncertainty it may create when it comes out could impact future investments.

"The first point of Title II is our regulatory and legal experts have not seen the order yet so we need to see the order," Stephens said. "Any kind of uncertainty is not good for investment."

For more:
- listen to the webcast (reg. req.)

Related articles:
AT&T battles legacy losses with U-verse gains, but sets focus on profitable customers
AT&T challenges Google Fiber, Consolidated with 1 Gbps in the Kansas City area
AT&T's U-verse gains help to ease legacy losses in Q3
AT&T plans to shut down 'certain' copper network assets
AT&T: FCC's CAF-II should just support broadband services

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