Net Neutrality dispute forces AT&T to put on hold the Gigabit Internet Rollout

AT&T stated this week that it will “pause” its gigabit Internet rollout until it has a better idea of what the government will do regarding net neutrality.

In April, AT&T committed to expanding its ultra-fast fiber network to cover up to 100 cities nationwide, including 21 major metropolitan areas.

But on Monday, President Obama urged the Federal Communications Commission to reclassify broadband as a telecom service rather than an information service in its upcoming net neutrality rules. The move would give the FCC more power to regulate ISPs (like AT&T) and wireless carriers.

Not surprisingly, the industry had a fit. But AT&T is apparently doing more than complaining because it’s pausing the rollout of gigabit Internet.

“We can’t go out and just invest that kind of money, deploying fiber to 100 cities other than these two million, not knowing under what rules that investment will be governed,” AT&T Chief Randall Stephenson said during an appearance at a Wells Fargo conference, according to a transcript provided by AT&T. “And so, we have to pause, and we have to just put a stop on those kind of investments that we’re doing today.”

By reclassifying broadband, a move known in DC-speak as Title II, “it becomes unclear even how those kinds of services would be regulated,” Stephenson said. “And so, we just think it’s prudent to just pause. Let’s pause; let’s make sure that we have line of sight and understanding as to what this process looks like, where these rules can conceivably land, what those rules would look like, and then let’s reevaluate. But we’re in a pause moment right now on those kinds of investments.”

AT&T declined to comment on specifics of the pause. But Stephenson said “I hope we’re not sitting here on pause for an extended period of time until we have line of sight.”

As for what that line of sight should include, Title II is the wrong approach, Stephenson said. For 20 years now, established rules have said that telecom and wireless is an information service, not a telecom service, he argued.

AT&T’s pause, meanwhile, is perhaps Google’s gain. Its Google Fiber rollout continues, and it recently announced plans for a business version of the service in Kansas City.