Analyst: Something 'Doesn't Add Up' With AT&T's Fiber Promises While AT&T is certainly expanding gigabit fiber into a few key areas, we've noted a few times how AT&T's PR department has made the deployment appear significantly larger than it actually is. With the exception of a few locations such as LA, Austin and select areas of North Carolina, AT&T's effectively been running fiber to a few key housing developments -- then trying to imply the entire surrounding market is "launched." That pretty consistently results in disappointed customers who try to sign up for service in said launched market -- only to find it doesn't exist.

The "fiber to the press release" tactic as we like to call it has proven to be very successful so far, thanks to a media that has never been much into fact checking ma bell. "AT&T is out-building Google Fiber," the Washington Post crows. AT&T is "outpacing every other competitor" when it comes to fiber to the home, an analyst tells Computer World. AT&T's building fiber "much faster" than everybody else, proclaims USAToday. These are only three of hundreds of such stories that hit the news wires each and every time AT&T declares a new fiber market is "launched." The problem, as we've noted a few times, is that AT&T's actually been slashing its fixed-line broadband investment budget as it focuses primarily on wireless. In fact, AT&T's busier than ever trying to back away from millions of DSL customers the company has absolutely no intention to upgrade. And most of the company's full fiber to the home deployment stats have tended to ebb and flow -- depending on what AT&T wants from regulators. It's pretty rare to find an analyst or reporter that actually notices this. Enter CCG consulting, which over at its Pots and Pans blog tried to dig into AT&T's claims of fiber deployment, only to find that something "doesn't add up." And again, what doesn't add up is AT&T's CAPEX. While the company has a $22 billion capital budget for this year, $10 billion of that is aimed at overseas spending including $3 billion to build out from their new acquisition in Mexico. The rest is predominately aimed at some side projects like smart cities and the IOT, while the lion's share is wireless. In fact, just $2 billion of the $22 billion total is budgeted for AT&T's entire wireline network this year, nowhere near enough to meet the kind of utterly massive fiber expansion AT&T has convinced the press and regulators it's currently engaged in. "It’s just hard to see that AT&T is serious about actually meeting the fiber targets it promised to the FCC," notes the firm, speaking of AT&T's promise to wire 14 million locations with fiber by 2019 to get DirecTV merger approval. "To meet their goals will cost something in the range of $14 billion, and yet they have told Wall Street they will only be spending $2 billion per year on wireline capital. Something isn’t adding up." What doesn't add up is that AT&T's deployment promises to the FCC are a bluff. Government and the media never really fact checks AT&T's broadband deployment claims, as such they've shifted, varied, and changed over the years depending on what AT&T wants from government. A pretty standard industry trick is to conflate "homes passed" (anywhere up to several blocks away) with homes actually served, giving an inflated idea of how big a deployment is. Another trick is to count homes, developments and apartments where fiber was already deployed (or required minimal work to finish) as new builds. AT&T has long offered fiber to the home to some development communities, but capped those users at DSL speeds -- until recently. It took little effort to bump more than a million of these customers to gigabit speeds, letting AT&T recently crow how it now serves 1.6 million fiber to the home users -- without really having to do much heavy lifting. Again to be clear, there's some areas like Austin and pockets of North Carolina where AT&T's very busy trying to keep up with Google Fiber -- and with AT&T's scale some of these deployments won't be small potatoes. But AT&T's promise that it's building gigabit fiber out to "56 communities" is exceptionally hollow, something that's going to become more and more apparent as users in these locations actually try to sign up for service that more likely than not -- doesn't actually exist. Again to be clear, there's some areas like Austin and pockets of North Carolina where AT&T's very busy trying to keep up with Google Fiber -- and with AT&T's scale some of these deployments won't be small potatoes. But AT&T's promise that it's building gigabit fiber out to "56 communities" is exceptionally hollow, something that's going to become more and more apparent as users in these locations actually try to sign up for service that more likely than not -- doesn't actually exist.







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Most recommended from 41 comments



TIGERON

join:2008-03-11

Boston, MA Motorola MG7550

17 recommendations TIGERON Member All while AT&T is trying to end wireline in California Talk about a sad joke Karl. Steve Blum of www.tellusventure.com last reported that the AT&T sponsored bill the company tried to get passed under the public's nose that would've given the company permission to effectively shut down the copper fixed line network in the state was met with ferocious opposition by organized labor and angry communities who don't want to be screwed with very expensive, capped inferior wireless that can't even deliver nearly have of the demands of the current applications and services now.



Good.



But this isn't going to stop the company from trying again next year. Hopefully, Randall Stephenson will make a deal to hand over the copper to CenturyLink as a possible buyer.



Thank the gods in three weeks I'm moving out of California. I don't want to be here when the shit hits the fan. Dampier

Phillip M Dampier

join:2003-03-23

Rochester, NY 9 recommendations Dampier Member We Should Be Analysts We knew it was BS at least a year ago when we were saying it was a fractured fiber fairy tale. I actually do get calls from Wall Street firms looking for my views, presumably so they can short some stocks when people realize a press release is not a documentary and they are fibbing to you. betam4x

join:2002-10-12

Nashville, TN 7 recommendations betam4x Member No GigaPower to be found I've yet to see anyone with AT&T GigaPower here in Nashville. There probably are a couple, but based on what I've seen, Google actually has a more active deployment right now.

wavelength

CyberSec Pro

join:2015-05-22

Raleigh, NC ·Google Fiber

Juniper SRX240

Ubiquiti UniFi UAP-AC-PRO

6 recommendations wavelength Member ATT's secret... Look at the contractors. At least in North Carolina, ATT has been using very low cost contractors to do their work.



For example, most of their Uverse fiber is direct buried without conduit. The work crews largely appear to be immigrant workers; forty of them show up, each digs a hole spaced 20-30 feet from the next guy and then they use a pneumatic piston to burrow through the ground, attach the fiber and pull it back.



Funny thing is that they wired up the neighborhood faster than ATT has made service available afterwards. It took them two weeks to wire our entire neighborhood. It has been more than two months since they finished and service still is not available. Kiwi

Premium Member

join:2003-05-26 6 recommendations Kiwi Premium Member AT&T I'm tired of decades of promises and no delivery, AT&T has become a PR nightmare relic of yesteryear and just needs to go away, that will save a few billion in tax dollars.

battleop

join:2005-09-28

00000 4 recommendations battleop Member Lost credibility... This story lost credibility at "Analyst:". Since when did Analysts fact check?

Anon192e5

@comcast.net 2 recommendations Anon192e5 Anon It's just a question but...



»www.wsj.com/articles/SB9 ··· 23462500 Enron was building a fiber network too. Do we need to get Arthur Andurson to do an audit?