AT&T’s Additional $14B High Speed Broadband Investment Deserves Our Support

by David Honig on November 14, 2012

What are two good reasons why consumers need regulatory protection?  The answer:  to prevent market failure, and to protect civil rights.  But if there’s one place where intense regulation does not belong, it’s at the buildout stage of a new disruptive technology, when the key should be to gain the confidence and willingness of investors to support advances in technology for the benefit of consumers.

That principle ought to be kept in mind when we consider AT&T’s announced plans to make an additional $14 billion investment to expand its wireline and wireless high-speed broadband networks to reach 300 million consumers by the end of 2014.

How significant is this pledge? AT&T is actually proposing to beat, by a year, President Obama’s 2010 goal of fast broadband service being available to nearly 98% of the public by 2015.  And AT&T would achieve this entirely with private sector dollars.  It’s not seeking stimulus money or other taxpayer support.

What’s driving AT&T’s business plan is the recognition that the nation is rapidly moving away antiquated legacy telephone “voice only” networks and services.  Thus, the company is staking its future on the next generation, affordable, fast broadband IP network that will replace the 130-year old “POTS” (plain old telephone service) network.

MMTC agrees with FCC Chairman Julius Genachowski that this new investment by AT&T in America’s broadband infrastructure is “proof positive that the climate for investment and innovation in the U.S. Communications sector is healthy.”

For minorities, enhanced access to state-of-the-art high-speed IP broadband services is an especially promising development.  As early adopters of this technology, minorities use it to access healthcare and education programs, seek job training and employment, and engage in civic affairs as parents, community thought leaders, and voters.

Further, minority entrepreneurs will have an opportunity to help build AT&T’s new network facilities.  Among all Fortune 500 companies, DiversityInc. ranks AT&T #4.  And contrary to our prediction in 2006, not only has AT&T built out UVerse without redlining, minority communities actually over-index in access to the UVerse footprint.  That gives me great confidence that AT&T’s investment in high speed broadband will help close the digital divide and deliver underserved Americans the opportunities that come with full first class digital citizenship.

Thus far, we’ve heard one partly dissonant voice.  In a classic case of “no good deed goes unpunished,” the Broadband Coalition has continued its call for access to newly built ILEC facilities as “necessary to achieve widespread deployment and competitive options.”  In this instance, the Broadband Coalition simply hasn’t made the case that intense regulatory intervention at the buildout stage is needed to protect consumers, as opposed to protecting Coalition members’ access to lucrative business customers. Given the huge sunk costs of buildout, the threat of intense regulation down the road for any technology suppresses investment and delays the delivery of network services and connectivity to consumers.  And the consumers who need fast broadband the most – and who need it yesterday – are low income and rural consumers.

So what would serve the nation’s interests?  Rapid, private-sector financed buildout of high-speed broadband nationwide – with regulation applied only to the extent necessary to protect consumers.

  • David Honig is co-founder and president of the Minority Media and Telecommunications Council (MMTC). Since its founding in 1986, MMTC has represented over 70 minority, civil rights and religious national organizations in selected proceedings before the FCC, and it operates the nation’s only full service, minority owned media and telecom brokerage.

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