Tag Archives: AT&T

The Big Carrier Chess Board

There was big news in the long-haul fiber business recently when Zayo announced it will be acquiring the fiber assets of Crown Castle and adding 90,000 miles of fiber to its network. The acquisition will also Zayo’s access to major buildings to 70,000. Zayo says the acquisition will position it as a major player in providing transport for AI. Zayo has been actively building new fiber routes across the country in the last few years.

Crown Castle is also selling its small cell business to EQT, a major investor in Zayo. The announced cost of the fiber acquisition is reported at $4.25 billion. My back-of-the-envelope math says that is paying $47,000 dollars per route mile for long-haul fiber. That seems like a huge bargain. Here is the map of the Crown Castle network. The map doesn’t show the many local routes within metropolitan areas.

There have been rumors that Crown Castle hasn’t been doing well, with its slowdown based on the decision of cellular carriers to expand via small cell sites. Crown Castle made a major bet that small cell sites was going to be a thriving business. That didn’t sound like a bad bet based on the rhetoric of the big cellular carriers a few years ago – but the expansion to small cell sites ceased abruptly.

This will cause a big shift in the large carrier market. Vertical Systems Group tracks the large carrier market. For 2024 they rank the leasers in that market as 1-Luman, 2-Zayo, 3-Verizon, 4-AT&T, and 5-Crown Castle. Each of these business has at least a 4% market share in selling fiber  wavelengths. We’ll have to see if the acquisition bumps Zayo to number one.

Zayo was ranked seventh in connections to lit buildings, with Crown Castle listed at eighth. One has to thin this might move Zayo ahead of number six Cox, or number five Lumen.

Lumen is also in the news. It’s widely reported in the press that AT&T is going to make a $5.5 billion bid for Lumen’s retail fiber business. This deal is far from over, and AT&T hasn’t even made a formal offer yet. There are already rumors that T-Mobile, Verizon, and BCE (the Canadian company that recently purchased Ziply Fiber) might make counteroffers.

Interestingly, analysts are saying that an AT&T bid for Lumen’s fiber customers is as much about reducing cell phone churn as it is in acquiring fiber customers. However, if AT&T is successful in buying Lumen, they would grow to 55 million fiber passings, compared to 35 million for Verizon and 12 million for T-Mobile.

Verizon will be growing it’s footprint and is expected to close the acquisition of Frontier sometime this year. T-Mobile has also been active in fiber acquisitions and purchased a share of Lumos and Metronet last year and is partnering with two ISPs in Louisiana that are pursuing BEAD grants.

There are lots of other rumors in the industry, with the biggest being that T-Mobile is interested in buying Charter, which has over 30 million broadband customers.

It’s clearly going to be an interesting year watching the big companies move pieced around the chess board.

Rural 5G

The FCC voted last year to launch the 5G Fund for Rural America to expand 5G coverage into the many parts of country with poor cell coverage. It may turn out that market forces might mean that some of that subsidy won’t be needed since the big carriers are expanding into rural areas. A recent blog from Ookla documents the rural expansion of 5G. Ookla concludes that fierce nationwide competitive pressure is driving the carriers to look harder at rural areas to gain every possible customer.

Ookla, which collects a huge volume of speed tests, is one of the few companies that can look at carrier expansion using its own data. When Ookla sees multiple speed tests on 5G, it has definitive proof that coverage is present in an area. Ookla looked at the recent rural expansion from each of the three primary carriers.

T-Mobile. Ookla shows that T-Mobile has the largest rural 5G footprint today. T-Mobile claims it covers 323 million people, or 98% of U.S. households with 5G using its low-band 600 MHz spectrum. This low-band spectrum carriers for a greater distance than the spectrum used by other carriers. The company was required to expand coverage to 97% of the population as part of the agreement with the FCC when it purchased Sprint. I have to wonder about the 98% coverage. If you look closely at the FCC cellular maps, T-Mobile shows coverage of very slow speeds over a lot of rural America, and you have to wonder if this coverage is real enough to even use for voice calls.

T-Mobile also is the fastest carrier in much of the country, which came from the deployment of the 2.5 GHz spectrum that the company acquired with the Sprint purchase. The company has used the 150 MHz band of the spectrum to increase speeds in the top 100 markets in the country. We know that T-Mobile has rural plans since the company announced in 2024 that it is hoping to achieve a 20% market share in rural America by the end of 2025. That claim is bolstered by the pending close of the purchase of 30% of the spectrum and all 4.5 million customers of UScellular.

AT&T. A lot of the company’s rural expansion comes from FirstNet. This is a nationally funded program to create a nationwide first responder network. AT&T was awarded $6.5 billion to build the network and also given 20 MHz of 700 MHz spectrum. FirstNet brought AT&T a 25-year contract with the government. There is an expected $2 billion additional investment to upgrade the network to 5G everywhere.

One of the key requirements for FirstNet is that it must be made available to first responders in rural areas. This led AT&T to install FirstNet on all of its own towers and to build over 1,000 rural towers. AT&T announced in October 2024 that it has 6.4 million connections and 29,000 public safety agencies on the network. AT&T has also invested heavily in spectrum auctions and spent $37 billion the FCC’s C-band and 3.45 GHz auctions.

Verizon. Verizon doesn’t own much low-band spectrum that would give it coverage in rural areas. Instead, the company relied on a technology called Dynamic Spectrum Sharing (DSS) that allows one spectrum band to toggle between 4G LTE and 5G  in 1 millisecond increments. While it works, this didn’t give the company the boost it was hoping for.

Verizon’s rural strategy seems to be through acquisition, and the company has bought cell carriers operating in Kentucky, Iowa, New York, Pennsylvania, Missouri, and Montana. Verizon is also buying $1 billion of 850 MHz, AWS and PCS spectrum from UScellular.

Verizon is betting on the C-Band spectrum that it purchased in 2021 for $52 billion. It’s hoping that the 161 MHz band of spectrum will carry it into the future. The company has announced it intends to deploy more rural spectrum,

None of the carriers are likely to expand into sparely populated rural areas where coverage is often nonexistent. But the current expansion plans likely will bring cellular relief to a lot of rural areas, long before any solution might come from the FCC.

Pushing the Speed Limit

Today’s blog is about several new fast broadband deployments. It seems that every year that vendors are developing new technologies that will speed up our networks and broadband connections.

The first was an announcement from AT&T that the company completed a live test of a 1.6 terabit fiber connection on a route between Newark and Philadelphia. The connection was tested over AT&T’s long-haul network that was also running 100 Gbps and 400 Gbps links.

The fast link was created by combining two 800 Gbps links created by white hardware operating with the Broadcom Jericho3 packet processor chip. The two links were combined using Ciena’s WaveLogic 6 Extreme cohere optical transponder. At the two ends of the link, the signal was processed by 800 G DR8 pluggable transceivers from Coherent which created the cross-connectivity to communicate with other packet and optical technologies.

This new link is four times faster than the 400 Gbps lasers that are being installed nationwide as the newest iteration of ling-haul and middle-mile networks – replacing the 100 Gbps lasers that were the standard for the last decade.

Lumen announced that the company successfully created a 1.2 terabyte connection connection on an 1,800 mile long link. The link was accomplished on what Lumen calls its ultra-low-loss (ULL) network. The test used Ciena’s WaveLogic 6 Extreme technology and Ciena’s Waveserver platform along with Juniper 800 Gbps routers.

The AT&T news release of the test quoted Mike Satterlee, VP of Network Infrastructure and Services as saying that these tests are vital for AT&T to keep up with future demand. He was quoted as saying that AT&T expected that overall long-haul network traffic will be doubling by 2028.

The other groundbreaking speed trial was conducted by T-Mobile. The company was able to achieve a 6.3 Gbps connection on a Samsung Galaxy S25 cell phone. The phone was using the Snapdragon X80 5G modem-RF system. The 6.3 Gbps test was achieved in the lab, and the speed achieved on a real-world 5G network was 4.3 Gbps. A second test achieved the same speeds using a non-commercial handset that used Qualcomm’s X85 5G Modem.

The network test was conducted using Nokia’s 5G radio access RAN. The sped was achieved by aggregating 2.5 GHz, AWS, and 600 MHz spectrum. The test was not as much about speed as it was the ability to combine multiple frequencies to create a high-bandwidth path.

These trials are proof that carriers are constantly pushing vendors to develop the next-generation of network gear that brings greater capacity. Middle-mile and long haul routes are under strain from unexpected traffic from AI data centers. But long-haul network operators are reporting a big uptick in requests for 100 gigabit data connections across markets and unrelated to AI.

How Low Can They Go?

AT&T and Verizon continue to aggressively eliminate staff. You have to wonder where the bottom will be in staffing levels.

In September 2024, Verizon announced that it would cut 5,000 positions. As of January 1 of this year, the company had 99,600 employees, down 5,000 from the beginning of 2024. As of January 1 of this year, AT&T had 140,990 employees, down 8,910 people during 2024. At the beginning of 2000, the two companies employed over 475,000 people, and since that time have shed a little over half of their employees.

The following graph shows the employees of the two companies since 2000.Verizon has steadily cut full-time employees during this century. The graph doesn’t show any disruption from Verizon’s purchase of AOL in 2015 and Yahoo in 2017. The graph also doesn’t tell the whole story since Verizon has also outsourced positions during this time. I recall a controversy at the end of 2018 when the company outsourced 2,500 IT jobs to India.

AT&T employee counts are a lot more complicated since AT&T acquired a lot of companies this century, including BellSouth in 2006, Leap Wireless in 2013, DirectTV in 2015, and Time Warner in 2018. AT&T subsequently shed both DirecTV and Tim Warner. Even with the turmoil caused by purchasing and ditching subsidiaries, AT&T has steadily been eliminating staff.

Both companies are currently actively striving to eliminate copper networks, with Verizon is much further along with this effort than AT&T. However, Verizon is slated to merge with Frontier sometime this year, which will bring new employees and a return of a lot of copper networks that Verizon had ditched to Frontier in the past.

Both companies also say they are considering how AI might streamline operations, which probably means even further cuts in staffing over the next few years.

This is all a far cry from the time when AT&T was the telephone monopoly and had over 1 million employees, making it the biggest employer outside the U.S. military. It’s anybody’s guess how much more these companies can slash staff and remain viable.

Major Outages in 2024

2024 was like most recent years where there were a few major broadband outages and a lot of smaller regional ones. Most carriers claim to be investing more money in increased redundancy to avoid major outages and one hopes that is cutting down on outages.

AT&T suffered a big outage in February when it lost cellular coverage in markets like Dallas Houston, Los Angeles, and Atlanta. The outage particularly affected first responders served by AT&T’s FirstNet network. The company said the outage was “caused by the application and execution of an incorrect process used as we were expanding our network, not a cyberattack” Basically, the company messed something up during a network update.

The biggest telco outages for the year came from hurricanes. In western North Carolina alone, 80% of cell sites went out of service by the day after the storm hit. Fiber networks were severed as entire roads washed away, and something like a million trees were damaged. I live in Asheville, and we experienced a total communications blackout with no cellular or landline broadband. It took about a week to get a partial cell signal back and over three weeks to get broadband. Some rural areas were out much longer.

Hurricane Milton caused broadband outages as well, more related to power outages than destroyed telecom network. A lot of places didn’t lose cell coverage, and most people were back in service within a few days.

The other big outages in 2024 were not network outages but service provider outages.

  • Microsoft Teams had a seven hour outage on January 26. The cause of the outage was never disclosed but seems to have been internal to Microsoft.
  • On March 5, Meta had an outage that blocked users from accessing Facebook, Instagram, Messenger, and Threads. The reason for the outage was a glitch in the login process.
  • Google lost service for an hour on May 1. The problem was a failure in the verification process that couldn’t identify users.
  • The biggest outage of the year happened on July 19 and affected 8.5 million Microsoft Windows devices. The outage was worldwide. Flights were canceled, customers couldn’t access banks, surgeries were canceled, and there were widespread 911 outages. The cause of the problem was a section of code at CrowdStrike, the cybersecurity firm that many large Windows customers were using to protect their devices. In retrospect, the outage was blamed on the lack of testing from CrowdStrike before implementing a software update.
  • Microsoft had an outage on November 25 that caused intermittent inability for users to use Outlook or reach the web. Microsoft admitted the source of the problem was a configuration change – another software update problem.
  • On December 11, OpenAI had an outage of it’s video service Sora. This was caused by a cascading error when a telemetry service overwhelmed the platform.

Interestingly, most of the service outages were the result of configuration changes, meaning software upgrades.

These big companies should learn a lesson from smaller telcos. I’ve had many clients who learned the hard way to never introduce new software onto customers without first testing the update. That means NEVER EVER, NEVER EVER, NEVER EVER (did I say that enough?). Many telcos have software test labs where they have a lab setup that mimics the network. They try updates in the test lab before ever subjecting their customers to an untested update. This is software update 101 stuff, but apparently, the smart guys at some of the biggest companies don’t think they need to take this extra precaution.

The Cost of Overbuilding

Some big ISPs have big plans for more fiber expansion. I gleaned the following planned future fiber passings from various quotes from the ISPs in the second half of 2024. These ISPs have plans to build the following fiber passings by the end of 2029 or sooner.

  • AT&T – 21 million
  • T-Mobile/ Metronet – 3.5 million
  • T-Mobile/Lumos – 3.4 million
  • Frontier – 3 million
  • Brightspeed – 1.7 million
  • Verizon – 1.5 million
  • Cox – 1 million

These numbers don’t count the plans of numerous smaller fiber overbuilders that have aggressive expansion plans.

The magnitude of these numbers amaze me because of the history of fiber overbuilding. The two biggest overbuilders have been Verizon FiOS and AT&T. Both companies have always been extremely cost-conscious in deciding where to build fiber.

Verizon was famous for its discipline about where it built FiOS. The company clearly had an internal cost target, and the D.C. suburbs are a patchwork of neighboring subdivisions with and without FiOS that can only be explained by looking at the cost per passing to build the fiber.

AT&T has done the same. I’ve followed AT&T’s expansion in various communities, and the company has built fiber over the last five years where the cost to do so was the lowest. A lot of the AT&T expansion was done by overlashing fiber onto existing copper telephone wires.

A few of the companies on the list above are following that same model. It seems likely that as Frontier and Brightspeed extend fiber in the legacy telephone areas, they will first build the areas with the lowest cost. I will not be surprised to find in a few years that these companies have built only those parts of communities where the construction costs are the lowest. That kind of discipline is the best use of limited capital dollars. Cox and other cable companies have the same option to expand fiber by overlashing on existing cables.

The expansion plan by AT&T perplexes me. Jeff McElfresh, AT&T’s chief operating officer was quoted in Fierce Network in December saying that the company has 29 million fiber passings at the end of 2024 and plans to grow to 50 million by the end of 2029.

It seems likely to me that the 29 million existing fiber passings were mostly done in neighborhoods with the lowest costs in the AT&T footprint. In my own city I’ve driven around and looked at AT&T’s claimed fiber passings, and most are overlashed onto copper wires. I assume AT&T has been using an expansion metric that considers the availability of overlashing plus the density of homes.

Over the years I’ve heard many folks who believe that the big ISPs build strictly based on demographics – and perhaps that is the third part of the AT&T equation on where to build. But I see AT&T fiber in neighborhoods with huge homes as well those with small bungalows. At least in this city, it looks like construction cost is more important than demographics.

Every overbuilder has its own business model and a target construction cost. I know smaller overbuilders who say they can’t make a business case if construction costs are more than $3,000 per passing. For years, AT&T and Verizon touted overbuilding costs below $1,000 per passing.

It seems to me that for AT&T to meet its target of 50 million passings it is now willing to spend more per passing than in the past. Perhaps that willingness is based on the success the company has in converting customers to fiber in overbuilt neighborhoods. It also seems likely that the company is banking on the economy of scale savings from increasing the size of the fiber business. AT&T now has a new motivation, which is to cut folks off copper to cut down on maintenance and backoffice costs. Maybe the net savings from shutting down copper networks is the new factor in the AT&T metrics for where to build fiber.

Only AT&T knows the details behind its decision to expand rapidly. I find it interesting that the company is suddenly willing to build fiber in neighborhoods that were not in its plans just a few years ago.

The Battle Over CBRS Spectrum

It’s becoming clear that there is going to a never-ending battle over mid-band spectrum. At the end of last year, AT&T asked the FCC to allow for full-power use of CBRS spectrum. AT&T’s request would make the spectrum usable for cellular service while killing many of the existing uses of the spectrum.

Twenty-five organizations sent a joint letter to FCC Chairman Brendon Carr in opposition to the AT&T request. This is perhaps the most diverse set of respondents to sign a joint request to the FCC I can remember. It includes trade associations, large ISPs, public advocates, vendors, and large corporations. The letter was signed by Amazon, the American Library Association, Barich, Inc., the Benton Institute for Broadband & Society, Cambium Networks, Celona, Charter, Comcast, Cox, Deere & Company, Digital Global Systems, Hewlett Packard, Imagine Wireless, Lockheed Martin, Mediacom, Miami-Dade Aviation, Midcontinent, NCTA – The Internet & Television Association, the Open Technology Institute at New America, Public Knowledge, the Schools, Health & Libraries Broadband (SHLB) Coalition, Shure Incorporated, Spectrum for the Future, Tarana Wireless, and WISPA.

This group cautions that the AT&T request would kill the current uses of the CBRS spectrum for rural broadband, competitive mobile services, manufacturing, industrial and enterprise private networks, transportation and logistics connectivity, and school and library access.

AT&T is asking the FCC to move existing CBRS users to the 3.1-3.3 GHz band and auction off the entire 3.55-3.7 GHz spectrum bands for licensed, full-power use. AT&T’s plan would continue to protect the Department of Defense but would relocate everybody else. AT&T argues this would create 530 MHz of contiguous licensed mid-band spectrum to support 5G.

There are several reasons behind the AT&T request. AT&T says that lack of spectrum will block the deployment of next-generation 5G and 6G services. In practical terms, having one large block of spectrum would let cellular carriers implement faster FWA cellular products with speeds up to a gigabit.

AT&T also hates the spectrum sharing rules currently used in the CBRS band. The CBRS band has a three-tiered system. Spectrum us is guaranteed for the U.S. Navy. Some of the spectrum was auctioned using Priority Access Licenses (PALs), that gives the winner the next use of the spectrum after the Navy. Finally, anybody else can use CBRS spectrum in the General Authorized Access (GAA) portion of the band. In every market there is a SAAS administrator that tracks the use of spectrum sharing. It’s clear that AT&T and the other cellular carriers don’t want to see spectrum sharing applied to other mid-band spectrum.

This will be an interesting fight at the FCC. The last FCC under Chairperson Jessica Rosenworcel was strongly in favor of spectrum sharing. New FCC Chairman Brendon Carr has already expressed big support for expanding the availability of mid-band spectrum through auctions.

It’s obvious that the coalition of signees to the letter takes the AT&T request seriously. It’s also becoming clear that FCC decisions on spectrum allocation are not necessarily permanent. Expect an interesting fight over the next year.

ISPs React to $15 Rates in New York

AT&T announced that it will withdraw its 5G home Internet product in New York rather than comply with the law that requires it to offer broadband rates as low as $15.

The law went into effect recently when the U.S. Supreme Court refused to hear the appeal for the New York law approved by the New York legislature in 2018. The Affordable Broadband Act requires ISPs to offer broadband rates to low-income households of no more than $15 for 15 Mbps (rumored to soon to be 100 Mbps) or $20 for 200 Mbps. Earlier this year, the 2nd U.S. Circuit Court of Appeals in Manhattan ruled that federal telecommunications law does not stop states from regulating broadband rates, and when the Supreme Court refused to review the case, the law went into effect.

It’s pretty extraordinary when a huge company like AT&T walks away from a state over reduced profits. The company has $122 billion in revenues for the year ending September 2024, and it’s impossible to believe that the company can’t afford to give a discount to a few of its customers.

What is most extraordinary about AT&T’s decision is that the company has been touting its FWA wireless technology as the replacement for customers who lose copper lines. The company announced recently that it intends to retire all copper nationwide by the end of 2029. This new announcement means AT&T is willing to tear down rural copper in New York and provide customers with no alternative. To some degree, they were going to do that anyway since many rural areas don’t have adequate cellular coverage to support the AT&T wireless product.

It’s hard to think that New York regulators won’t quickly react to AT&T walking away from existing FWA customers. This decision might ultimately cost the company more in fines than what it would lose from customer discounts.

It’s hard to see AT&T’s decision as anything other than a political decision and not a monetary one. The FWA products likely has high margins since there are no wires involved. AT&T could have reacted differently. For example, they could have required FWA customers to buy the wireless receiver, which would have eliminated the biggest cost of offering the service. This feels more like a warning to other states about implementing similar laws.

In a related story, Starlink wants an exemption from the new law. The company says it has less than 20,000 customers in the state – which would qualify for an exemption. Other ISPs, like Windstream, are asking for the same exemption. It’s a little hard to accept Starlink’s story of having less than 20,000 customers in the state since the company claims 1.4 million customers in the U.S., but if the company is under that threshold, it should be exempt.

What does that mean for Starlink’s future in the state? Will it permanently cap customers at 20,000 to stay out of the discount program? This seems like it would preclude Starlink from taking any New York BEAD funding to add more customers in rural areas.

One interesting feature of both FWA wireless and Starlink to consider is that these products don’t offer different speed tiers. The networks of both ISPs are not equipped to selectively choke customers to slower speeds, so a $15 customer would get the same bandwidth as everybody else. Both products deliver all-you-can-eat broadband, with no caps on speeds or the amount of broadband used during a month.

It will be interesting to see if other states consider putting the burden for customer discounts on ISPs. There is no guarantee that if this issue spreads to other states that the Supreme Court won’t decide to hear the issue.

Perhaps the biggest problem with the law is that it could bankrupt small ISPs that build expensive networks. 20,000 might seem like a lot of customers, but it’s not. The New York legislators seemingly picked the $15 rate of out the air with no consideration of what that might mean for ISPs. This feels like regulating with a sledge hammer rather than doing the research to develop a long-term solution that can work for both ISPs and customers.

AT&T to Retire Copper

AT&T has made it official that it plans to shut down copper networks everywhere except California by the end of 2029. This is not exactly news since the company has been quietly shutting down copper all over the country.

California is a special situation because the California Public Service Commission has never deregulated AT&T as a local telephone company and the state is going to make AT&T prove to it that customers will not be stranded when the copper comes down. Even California regulations have not stopped AT&T from quietly killing copper in California, as described in this blog I wrote early in 2024.

AT&T says it will offer an alternate technology to customers – either fiber or wireless. AT&T announced in early December that it plans to build fiber to 45 million additional passings by the end of 2029. That will certainly cover a lot of remaining DSL neighborhoods in cities and towns. But I have to wonder if AT&T is really planning on building fiber everywhere in cities. The concept of building ubiquitous fiber is counter to its historical construction plans of only building fiber in neighborhoods with the lowest cost per passing.

Consider my City of Asheville, NC. AT&T currently claims to have built fiber to pass 17,500 of 32,600 passings in the city. Is AT&T really going to build fiber to everybody else in order to replace DSL? If AT&T has already built fiber in the lowest-cost neighborhoods, it will cost a lot more per passing to cover the rest. 45 million passings is a huge number, and while it’s possible the company could build to this entire city, it would be a lot easier to build to neighborhoods with the best demographics and quietly disconnect copper DSL in the rest.

Replacing copper in rural areas is a much bigger challenge. AT&T says it will replace rural copper with FWA wireless technology – but that implies having rural towers in place that will reach everybody. FWA technology only covers roughly a two-mile circle around a tower, and in most counties, AT&T towers covers maybe a quarter of the geographic footprint. The company has no financial incentive to add new cell towers in sparely populated rural areas.

AT&T can’t tell the truth and say it will offer an alternative for only a portion of rural customers, but that’s the reality. AT&T can’t bring cellular broadband to places where cellphones barely work. The company is not about to say that it will offer an alternative for only some portion of copper customers, but that is what will ultimately happen.

I can’t imagine AT&T building in high-cost urban neighborhoods or sparely populated areas where construction makes no financial sense. Wall Street would crucify AT&T if it tried to bring a DSL replacement to everybody in the historical monopoly footprint. Even worse, doing so might entice regulators to treat AT&T like a monopoly again and make them really be the carrier of last resort.

One interesting part of the announcement is that the company says it has a new technology that will allow people to keep their old analog devices that worked on copper networks – things like medical monitors and burglar alarms. Telcos that upgrade copper technology face public grief over people who want to keep their old devices running. The technology AT&T is offering is not new and has been around for decades. The device is a emulation device that can create a TDM  bridge from an ethernet connection. Telcos have been offering this technology for decades to businesses that wanted to maintain old PBX and keysystem telephones. What’s new is that AT&T has condensed the technology to a small box that can be set next to a home router.

The Ability of the FCC to Issue Fines

We are definitely entering into a new era in regulation. Verizon, AT&T, and T-Mobile are disputing the FCC’s ability to levy fines on them. The fines in question all stem from an FCC action to penalize the carriers for selling customer location data to aggregators. This data allows marketers to become intimately knowledgeable about where people spend their time every day. In the majority of cases, the carriers did not get permission from customers to share their data.

The carriers have all appealed the FCC action, and as is becoming a normal practice, each carrier filed an appeal in a different court. Verizon was fined $46.9 million and filed a brief in the appeal suit in the U.S. Second Court of Appeals. AT&T was fined $57.3 million and filed a brief in the Fifth Circuit. T-Mobile (including a fine against Sprint) was fined $80.1 million and is appealing in the DC Circuit Court of Appeals.

The FCC started the process of assessing the fines under Chairman Ajit Pai, who proposed the fines and said the carriers’ actions are a violation of customer privacy. The FCC under Chairperson Jessica Rosenworcel finalized the fines. Sharing customer data came to light when a sheriff in Missouri was openly using a location-finding service to track the people’s location. The sheriff obtained the data from Securus, a telecom provider that specializes in telecom services for jails and prisons. The FCC said that even after the carriers were made aware of the violation of customer privacy, they continued to sell the location information. The facts in the cases are a bit messy due to Securus’s role in the transactions and statute of limitations.

The three carriers are making roughly the same basic arguments. Verizon claims that the FCC overstepped its authority to enforce issues related to consumer data privacy. Of more interest is that AT&T and Verizon are both arguing that the Supreme Court’s ruling in Securities and Exchange Commission v. Jarkesy means that the FCC has no ability to levy fines and that the companies are entitled to a jury trial. It’s going to take lawsuits like this to define the limit on administrative agencies like the FCC to impose fines on anybody.

There is also a chance that the FCC could stop fighting for the fines. Proposed FCC Chairman Brendon Carr originally dissented against issuing the fines. It’s possible that the FCC could drop its opposition to the suits, which could stop the legal process.

The carriers must be hoping the suits get dropped. This does not seem an issue that the carriers would ever want to take to a jury. It’s not hard to picture a jury – on which every member likely has a cellphone – imposing much larger penalties on the carriers. I suspect most people are uncomfortable with the idea of their cellular carrier selling details of their daily movements to companies they never heard of. It’s not hard to imagine numerous ways that companies could misuse location data to harm people.

If these cases don’t make it to fruition, the courts are going to have to further test the idea in other suits that administrative agencies can’t impose fines. For now, the ability for the FCC to impose fines is in hanging in limbo.