Remember the news we shared at the end of July about AT&T joining the high speed internet access arms race? Earlier in the year, the company had announced it was “deploying its high-speed fiber network in 100 cities, including Chicago, Los Angeles and Miami.”
In July, as we reported, ten cities in Texas, North Carolina and Tennessee had been selected as the first cities AT&T to which it would be rolling out the service. (We remember it well, as SmallBusiness.com comes to you from one of those cities listed.)
Well, hit the pause button.
Last week, AT&T’s CEO Randall Stephenson announced the company is going to hold off on their plans because of President Obama’s unexpected call on the Federal Communications Commission on Monday to regulate major internet access companies (like AT&T) more like public utilities as part of his support for net neutrality.
“We can’t go out and invest that kind of money deploying fiber to 100 cities not knowing under what rules those investments will be governed,” Stephenson said at an analyst conference.
Even though the President can make his point of view known to the FCC, the commission is an independent regulatory body. Its five members are appointed by the President and confirmed by Congress and no more than three members can belong to the same political party.
The White House detailed Obama’s plan in a blog post on Monday, saying that if implemented, it “shouldn’t create any new burden for Internet providers.”
AT&T’s Robertson obviously disagrees.
The policy fight between AT&T and the White House is related to the issue of “net neutrality,” the belief that all data distributed over the internet should have equal access to it. Backers of the concept of net neutrality believe distributing data on the internet should be sold like a gallon of gasoline: no matter how much you buy, it’s going to cost everyone the same price per gallon.
Telecommunications companies like AT&T believe they should have the ability to charge more (per gallon) to large data providers and, in turn, provide them premium services not available to smaller businesses.
While the issue of net neutrality is not directly tied to high speed fiber networks, the popularity of gigabit speed gives AT&T leverage to lobby Congress and the FCC. In the long run, the competitive pressure of other high speed options–be they local citizen-owned utility provided fiber or Google Fiber–will determine AT&T’s decision to defend its cable, phone and internet access competitive position in the markets it serves, not net neutrality.
Unfortunately, as long as AT&T uses fiber as a weapon in its fight against net neutrality, American cities will continue to have the slowest internet access speeds found in the world’s leading economies.
Illstration: SmallBusiness.com via Photo by Jeffery via Flickr. (CC BY 2.0)