Beware AT&T's dismal record of unkept broadband promises

When AT&T gobbles up a competitor, it promises better service and lower prices -- but doesn't deliver. Nothing's changed with the DirecTV buyout

"At 50, everyone has the face he deserves," George Orwell once wrote. If that were true, AT&T CEO Randall Stephenson (pictured right), now 54, would have a nose bigger than Pinocchio's. Stephenson and his predecessors have consistently misled regulators, legislators -- and most important -- the public about its plans whenever it seeks approval for an acquisition.

Sometimes it takes years for the truth to come out. But on Tuesday, it only took a few minutes as Stephenson sought to sell the proposed acquisition of DirecTV to members of Congress. He said, "The merger will put downward pricing pressure on cable products -- cable bundles, cable video, and cable broadband." But when asked by Sen. Richard Blumenthal (D-Conn.) whether AT&T would pass along to consumers all the savings the company expects to realize from the acquisition, Stephenson said, "No, sir, I cannot commit to that."

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Compared to previous whoppers, that was a mere fib. Repeatedly, the company has claimed it would expand broadband and fiber service throughout its service areas. But it hasn't come close to keeping its promises, according to excellent analyses by Karl Bode in DSL Reports and by analyst Bruce Kushnick in the Huffington Post.(AT&T has not responded to my request for comment.)

Along with the untruths, AT&T (along with other telecom and cable providers) has poured millions of dollars into lobbying efforts and campaign contributions to win friends in Congress as it seeks approval for acquisitions and tries to kill what's left of Net neutrality.

Do you want fiber to the home? Don't believe it when AT&T says that's what it offers through U-verse. That service is a hybrid of fiber and copper, and it's much slower than the true fiber-to-the-home (FTTH) service offered by Google and other providers.

AT&T is finally beginning to install true FTTH service in some areas, but had the company's promises over the years been kept, subscribers all over the country would be enjoying FTTH's ultrafast connections. They aren't.

The FCC -- which regulates the carriers -- should know this from personal experience. Ten years ago, the FCC sheltered AT&T's and Verizon's fiber optic-based networks from direct competition through ubundling, in which other providers could use the AT&T or Verizon backbones to deliver their own service. The reason: AT&T said it would soon deploy 100Mbps, fiber-to-the-home or fiber-to-the-curb if permitted to buy SBC, writes Kushnick, creating the result the unbundlers were promising. But after it got the OK to buy SBC, AT&T essentially halted the promised 100Mbps fiber deployments.

Three years later, AT&T pulled the same trick when it sought approval to buy BellSouth. Again, it got the permission but didn't build the network.

In 2011, an internal AT&T document showed it could have upgraded its nationwide LTE coverage from 80 percent to 97 percent for $3.8 billion, according to DSLreports. AT&T decided that was too expensive, though it was willing to pay 10 times that amount -- $39 billion -- to buy T-Mobile, a move that regulators fortunately scotched over concerns AT&T would have too much power and raise prices even more while not improving service.

Now, AT&T claims that its proposed acquisition of DirecTV will allow it "to use the merger synergies to expand its plans to build and enhance high-speed broadband service to 15 million customer locations, mostly in rural areas where AT&T does not provide high-speed broadband service today."

I don't know how anyone can believe AT&T's promise. This time, such claims from AT&T puzzle even the usually compliant regulators. "I don't see the connection," says Chris Ungson, a program manager at the California Public Utilities Commission. After all, DirecTV is a provider of entertainment via satellite. "Whenever there's a merger or acquisition, they promise certain things to make the merger attractive," he tells me.

Pinocchio's nose only grows.

I welcome your comments, tips, and suggestions. Post them here (Add a comment) so that all our readers can share them, or reach me at bill@billsnyder.biz. Follow me on Twitter at BSnyderSF.

This article, "Beware AT&T's dismal record of unkept broadband promises," was originally published by InfoWorld.com. Read more of Bill Snyder's Tech's Bottom Line blog and follow the latest technology business developments at InfoWorld.com. For the latest business technology news, follow InfoWorld.com on Twitter.

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