AT&T CEO John Stankey yesterday called President Biden’s plan to fund municipal broadband networks “misguided” and said the US shouldn’t pay for any broadband deployment in areas that already have networks. But as AT&T and other ISPs lobby against public networks and government-funded competition, Stankey said he is confident that Congress will steer legislation in the more “pragmatic” direction that AT&T favors.
In an interview with The Economic Club of Washington, DC, (video), Stankey was asked, “Do you support the president’s proposal to have municipalities own broadband facilities?” Stankey responded, “I think actually the president’s proposal is probably a bit misguided in that regard.”
“It would be a shame that we take taxpayer money or ask local governments to go into a business that they don’t run today,” Stankey said. “You know, their job is to deliver water, patch streets, things like that, not be in a capital-intensive technology business that requires constant refresh and constant management.”
AT&T and other private ISPs have taken billions from the government to deploy incremental upgrades in rural areas over the years, and they don’t want public networks getting any of the cash they’re accustomed to receiving. Stankey claimed there isn’t much of a broadband problem to be solved, as networks “functioned incredibly well for the vast majority of citizens in the United States” during the pandemic. “Why would we want to go overbuild in areas where there’s already great infrastructure?” Stankey said, saying that would be a “waste” of subsidy dollars.
AT&T thinks 10Mbps uploads are enough
Of course, Stankey’s definition of “great infrastructure” would disappoint many Internet users. AT&T has fought proposals to subsidize fiber-to-the-home deployment across the US, arguing that rural people don’t need fiber and should be satisfied with Internet service that provides only 10Mbps upload speeds. Meanwhile, tens of millions of Americans lack modern broadband access, and a new study pushes back against industry claims that networks performed smoothly during the pandemic.
“Despite reports that the Internet handled the surge in traffic well, we find that complaints about Internet speed nearly tripled, and performance was degraded,” the study by Carnegie Mellon University researchers said. “Downstream data rates changed little, but median upstream data rates at midday dropped by about a third.”
Stankey yesterday said that government money for broadband should be used only for “getting somebody on the Internet who doesn’t have facilities and access” and for subsidies that pay the monthly bills of people who can’t afford service. Such an approach would help AT&T avoid competition and get more money by selling its existing services to customers who qualify for subsidies like the ongoing Emergency Broadband Benefit, which AT&T doesn’t even accept on all of its service plans. Although AT&T is expanding fiber access in metro areas this year, the company is not extending fiber to homes in most of its 21-state copper territory, and it intends to replace many of those copper lines with wireless service instead of fiber.
AT&T lobbyists always exert influence over telecom policymaking, and Stankey did not seem worried about Congress approving the portions of Biden’s plan that AT&T dislikes. “I don’t believe that policy is really practical and I actually believe that most policymakers that are in the sausage-making right now are seeing that and are probably steering this in a more pragmatic direction, in my view,” he said.
“Less pressure to turn profits” for public networks
In March, Biden proposed spending $100 billion over eight years to bring high-speed broadband to all Americans who lack access, with the plan “prioritiz[ing] support for broadband networks owned, operated by, or affiliated with local governments, non-profits, and co-operatives—providers with less pressure to turn profits and with a commitment to serving entire communities.”
That “commitment to serving entire communities” is important because private providers focus on building in the most profitable areas while municipal providers strive for universal service. City and town governments that build their own networks often take that action because private providers failed to give everyone affordable high-speed service.
The USTelecom lobby group claimed last month that “government broadband networks aren’t built for the long haul,” but provided only two of what it called “cautionary examples” in the US. By contrast, the Institute for Local Self-Reliance provides information on municipal broadband successes and a map of existing municipal networks across the US that “includes more than 900 communities, of which more than 560 are served by some form of municipal network and more than 300 are served by a cooperative.” The municipal fiber provider in Chattanooga, Tennessee, led PCMag to name the city the “number-one remote-working town in the US.”
Laws in nearly 20 states prevent the growth of these municipal services, however. While Congressional Republicans recently proposed a nationwide ban on municipal broadband, Democrats have proposed overturning the state laws that inhibit public networks.
Biden already cut $35 billion from broadband plan
Biden’s plan for municipal networks and his pledge to lower broadband prices set off a flurry of lobbying from cable and telco lobbies that prefer the status quo. Biden’s call for “future-proof” networks also set off alarm bells within the industry, as incumbent ISPs want to avoid competition from fiber-to-the-home technology in areas where their download and/or upload speeds lag behind fiber.
Biden already reduced his broadband ambitions. Even though Democrats control both chambers of Congress, Biden last month cut his spending plan from $100 billion to $65 billion to match a Republican proposal. The cut could ensure that no money goes toward funding networks in areas where there’s already broadband at basic speeds. Stankey yesterday said, “I will compliment the [Biden] administration on the bipartisan approach they’re using to try to define how we go forward from here.”
The amount of funding isn’t the only thing to be determined by Congress, as Stankey also pointed out in his criticism of municipal broadband. If Democrats try to devote funding to municipal networks, broadband-industry lobby groups and Republicans will do their best to redirect the money to private companies instead.