AT&T’s Regulatory Wish List

CEO of AT&T Communications Jeff McElfresh recently outlined four major regulatory priorities for the company going into next year. This list couldn’t be more different than the list I made recently from the perspective of small ISPs – and I wouldn’t expect it to be. One thing you have to admire about AT&T – the company has never been bashful about asking for regulatory policies that benefit it over others in the industry. Following are the four items on AT&T’s wish list. This is the shortest such list I think they’ve ever had, since the current FCC largely gave the company everything it wanted over the last four years.

Retain a Light Regulatory Touch. It’s no surprise that this is at the top of the list since a change of administration means an FCC that is likely going to try to re-regulate the broadband industry. This topic is always tied to the reintroduction of net neutrality, but AT&T and the other large ISPs don’t care much about net neutrality. You have to search hard to find examples where the big ISPs are violating the net neutrality principles.

What AT&T really wants is to keep the no touch regulatory regime where broadband has largely been fully deregulated. This AT&T goal is always accompanied by a subtle threat that the company will stop investing in broadband if the FCC tries to regulate them. That’s complete bosh, and AT&T hasn’t considered regulation in any investment strategies in years – anybody at AT&T who suggested this internally would be laughed out of the boardroom.

Congress Should Fund the Universal Service Fund.  McElfresh acknowledges that the funding mechanism is broken for the Universal Service Fund. It currently layers a fee that’s about to hit 30% on top of interstate calling services. AT&T suggest the way to fix this is to let Congress decide the funding for the USF each year in budgetary process.

This is a dreadful idea, because it would them give AT&T and the big ISPs a place to lobby to kill any funding that would be used to compete with them. This would remove USF funding from the open deliberative process at the FCC and move it behind closed doors where lobbyists can influence Congressional votes.

McElfresh acknowledges that the USF these days is mostly used to solve broadband problems, and the more obvious solution would be to keep the USF at the FCC and fund it with a fee on broadband customers instead of voice customers. The whole purpose of the USF is universal service, and the concept behind this funding years ago was that a small fee levied on urban telecom users could be leveraged to bring telephone service to everybody, since we all benefit if the whole US is connected. That goal has been updated from telephone service to broadband and it’s as true today as ever.

The Government Should Be Technology Neutral. This is perhaps the funniest thing I’ve ever seen on AT&T’s wish list because it’s classic doublespeak and AT&T wants the opposite of technology neutrality. The company is benefiting tremendously by a federal government that thinks that 5G should be a priority over every other technology.

The company also means that federal broadband grants shouldn’t consider broadband speeds as a criteria for picking winners for funding. AT&T would love to be handed billions of federal subsidies to roll out a fixed wireless product from rural cell towers – and doesn’t want to see the FCC hand out money to fiber builders that would interfere in areas that AT&T would love to keep as monopolies. The funny thing is that AT&T is already on most cell towers in the country and nothing is stopping them from marketing fixed wireless to millions of rural customers that would gladly buy faster broadband. But the company would rather be handed billion-dollar subsidies than do the hard work of selling.

Fix the Broadband Maps. The only crossover between AT&T’s list and mine is to fix the damned broadband maps. The FCC has been talking about this for years and has been hiding behind the fiction that they need a bunch of funding to make this work. The FCC could require ISPs to begin reporting more honestly starting tomorrow if it was serious about this.

AT&T points out the stupid rule where an entire Census block is deemed to have good broadband if one customer in the Census block has broadband. While that is indeed stupid, that’s probably only 10% of the problem with the current FCC maps. The real issue is that ISPs, including AT&T report marketing speeds instead of real broadband speeds. A new mapping program is barely going to put a dent in the problem unless the FCC decides to start fining ISPs that lie about broadband speeds.

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