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AT&T halts improvements until FCC decides on net neutrality

AT&T CEO Randall Stephenson says the company will pause further investments into its fiber networks until the government makes a decision on net neutrality.

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Shannon Stapleton/Reuters/File
The signage for an AT&T store is seen in New York on October 29. AT&T will pause investments to bring fiber connections to 100 cities until U.S. regulators iron out rules to regulate how Internet service providers manage their Web traffic, the company's chief executive told investors at a conference on Wednesday.

The continued uncertainty about the future of net neutrality has one company halting investments in its network until a decision about the future of Internet service is made. This announcement and the call by President Obama to make broadband service a public utility are putting pressure on the Federal Communications Commission to make a decision on net neutrality.

AT&T chief executive officer Randall Stephenson says the company will halt all investments in fiber networks until the FCC comes to a decision on what it will do about "net neutrality," the idea that data on the Internet should be treated equally, regardless of who sends it, where it's headed, and what kind of file it is. Mr. Stephenson said the company needed to pause until they had a "clear line of sight on this process," according to CNET.

AT&T is expecting to invest $18 billion in its network during 2015, the majority of which will go to build GigaPower, the company's one gigabit broadband service. GigaPower is AT&T's answer to Google Fiber and other forward-looking, blazing-fast connections. The company is planning to build the network in 100 cities across the country. The service is already available in Dallas, San Antonio, and Fort Worth, Texas.

"We can't go out and invest that kind of money deploying fiber to 100 cities not knowing under what rules those investments will be governed," Stephenson said at a Wells Fargo event Wednesday, according to Reuters. 

The current net neutrality controversy began in April when the FCC announced proposed rules to allow Internet providers to sell faster Internet service to companies, such as Netflix, Skype, or Amazon. This upset many, who said that such a system would give bigger companies, who could afford faster service, an advantage over smaller websites. The FCC has already received 4 million comments since April, according to The Christian Science Monitor.

Stephenson's speech came two days after Mr. Obama called on the FCC to classify broadband Internet as a public utility, which would permit the FCC to take stronger actions against Internet providers looking to block or limit customer access to certain online services. 

"Cable companies can't decide which online stores you should shop at or which streaming services you can use,” Obama said in a video message. "And they can't let any company pay for priority over its competitors."

FCC chairman Tom Wheeler thanked Obama for his input but said more time is needed to examine all the issues surrounding net neutrality. 

"The more deeply we examined the issues around the various legal options, the more it has become plain that there is more work to do," Mr. Wheeler said in a statement. "We found we would need more time to examine these issues to ensure that whatever approach is taken, it can withstand any legal challenges it may face."

Though Wheeler is asking for more time to parse the issue, politicians and companies, both for and against the proposed rules, continue to call on the FCC to make a decision on net neutrality because the continued indecision is hurting their ability to plan for the future. House minority leader Nancy Pelosi (D) of California said in a statement Wednesday, “The FCC must act swiftly to create clear and enforceable net neutrality standards so the Internet can continue to foster freedom and prosperity here in the United States and around the world.”

Verizon Communications chief executive officer Fran Shammo said Wednesday that he believed the FCC can find a way to restrict "paid prioritization" without imposing the strict utility-style regulations Obama has proposed. 

"I think the independent agency of the FCC will make the right decision," Mr. Shammo said, according to Reuters.

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