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AT&T complains about unfairness of municipal broadband to FCC

updated 04:22 pm EDT, Tue September 2, 2014

Letter to FCC alleges that government owned networks hold undue power

Given the opportunity to petition against the expansion of municipal broadband expansion in Chattanooga, Tennessee and Wilson, North Carolina, AT&T has taken the opportunity to remind the government of its role in the state of Internet connectivity in the US. In its filing with the US Federal Communcations Commission, the telecom giant lays out its case against why local broadband, or "Government-Owned Networks" (GON), shouldn't be allowed.

The FCC requested the letters from interested parties, evaluating whether or not Chattanooga's and Wilson's networks should be allowed to expand to underserved areas very close to the epicenter of the service. Both networks serve large areas, are established and thriving, and both face legal challenges from private industries seeking to thwart expansion.

After visiting Tennessee in June, FCC chairman Tom Wheeler voiced the path that the FCC plans to take regarding municipal broadband. Wheeler stated that he thought it was in the best interest for competition and consumers that the FCC use its regulatory power to prevent state laws from being able to restrict the community-based services. In fact, he stated that the FCC would get involved should the need arise.

In the five-page filing, AT&T says that despite some successes, especially in Chattanooga, "GONs should not be utilized where the private sector already is providing broadband or can be expected to do so in a reasonable timeframe," essentially asserting a right to be a monopoly for a given area. Rural zones outside Chattanooga have been told that AT&T needed tens of thousands of dollars to even provide a quote on how much it would take to get service, to say nothing of actually laying cable to the areas -- exactly the reason that municiple broadband networks were set up in the first place. AT&T believes that these areas are possible to service in the aforementioned "reasonable timeframe," and as such, should be blocked from building out its own network.

Additionally, AT&T claims that municiple Internet providers shouldn't be given tax breaks on income generated, despite being part of the government. The company believes that "indeed, any tax incentives or exemptions should be provided, if at all, to private sector firms to induce them to expand broadband deployment to unserved areas."

AT&T alleges that it may have problems competing in an area served by a community-based network if it is given preferential treatment by the government in any way. It said in the letter that "any commercial entity will be concerned about further investment in an area in which it would be forced to operate at a competitive disadvantage, including with regard to access to and rates for rights of way, and the use of taxpayer funds to subsidize a competing service." Critics claim the term "forced to operate at a competitive disadvantage" is code for "lower rates."

The FCC is facing pressure from outside sources on the matter, including the House of Representatives and the National Conference of State Legislatures (NCSL). The Republican-led House recently passed an amendment to an appropriations bill, championed by Representative Marsha Blackburn (R-Tennessee), which could prevent FCC funding from being used to fight any state law present or future over the issue. The NCSL threatened legal recourse against the FCC should they infringe upon the Constitutional rights of the states.

by MacNN Staff



  1. chimaera

    Dedicated MacNNer

    Joined: 04-08-07

    "GONs", right. I wonder how long AT&T spent coming up with that.

    I feel so sorry for them. They'd have to roll fiber to actually compete, instead of mailing endless flyers for "high speed DSL" plans.

  1. OldMacGeek

    Fresh-Faced Recruit

    Joined: 08-04-10

    I am an example of a customer that was in an area where the local broadband suppliers wouldn't even talk to me. I was "too far outside the normal service area." Translation - I was too expensive to be hooked up. What was their motivation, after all. A local broadband coalition (Utopia) came in, and now I'm wired. Sorry, but all the large telcos want to do is pick the low-hanging fruit and let the rest of us rot. From their perspective, I get it. It's a money thing. However, to pay off legislators to create amendments that will stifle competition (a GOP cornerstone) seems a bit odd.

  1. jdonahoe

    Forum Regular

    Joined: 07-05-06

    I thought competition is good. Sounds like AT&T is blatantly demanding a monopoly.

  1. cvbcvb

    Fresh-Faced Recruit

    Joined: 11-03-03

    A monopoly is exactly the roots of AT&T's existence.

  1. Flying Meat

    Dedicated MacNNer

    Joined: 01-25-07

    Ah! So give them the dough and they'll make good for all the rural areas they've never cared about before. Sure. I see that happening. Tax payer's paid for that GON, and AT&T is crying about not getting the profits? wow.

  1. Makosuke

    Forum Regular

    Joined: 08-06-01

    "We could theoretically provide service to people we have, to date, completely ignored and not provided service to, at some point in the foreseeable future, and therefore those people should be prohibited by law from setting up their own broadband so they can actually get service in the near future."

    Did I read it right, or is that exactly what AT&T is saying?

    You know, when your company literally started business as a government-regulated monopoly telecommunications provider, which was then subsequently broken up by the government and has spent the last 30 years re-buying the component parts to reconstruct as much of that monopoly as possible, your arguments about why a local town trying to provide service you won't is evil and anticompetitive are kinda weak.

  1. Mike Wuerthele

    Managing Editor

    Joined: 07-19-12

    Yeah, you've got it, Makosuke.

    That's why I included the original filing with the FCC. There's no way you would have believed the quotes came from them if I didn't.

  1. gprovida

    Junior Member

    Joined: 02-14-06

    When there is vibrant private sector competition, then ATT argument may make sense, but when there is effextively little to no competition, then ATT arguments are meaningless.

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