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AT&T's Fiber Optic Construction Last Six Years–$140 Billion or One Slice of Pizza & "FiberHype"?



AT&T has simply introduced but some other spherical of latest plans to set up fiber optic products and services in a slew of extra towns, what I now seek advice from as “FiberHype”, one phrase. And I’m going to get to the slice of pizza (no toppings) in a second.

A yr in the past I wrote a piece of writing laying out AT&T’s Most sensible thirteen Damaged Guarantees, and you’ll be able to in finding all the gory main points in “The Guide of Damaged Guarantees”. The subject has been the similar for over a decade — simply make stuff up; nobody will realize or test or grasp the corporate responsible.

And on this ‘say anything else’ global, as I take a seat right here studying a Washington Submit article, AT&T now claims it has spent $one hundred forty billion in fiber optics during the last six years.

“A part of what is going on is that AT&T is leaning on many years of experience in construction networks. It has spent $one hundred forty billion laying down new fiber optic cables during the last six years, and it is more likely to spend much more because it expands to markets like Asheville, N.C., Louisville, Ky., and St. Louis, Mo.”

Sadly, I needless to say I tested those numbers lately — and this $one hundred forty billion is simply make consider, simply FiberHype. So, as an alternative of speaking approximately deployments, allow’s simply move in the course of the cash AT&T supposedly spent on fiber optic broadband development, via the numbers.


Supply: AT&T’s 2014 Annual Record. The chart makes use of an excerpt from Show off thirteen.

1) As said, AT&T claims it spent $one hundred forty billion on fiber optic development in six years.
2) Then again, as advised through the AT&T’s personal 2014 Annual Record, ‘development and capital expenses’ (capX) for the final 5 years have been most effective $103 billion – approximately $20.6 billion every year.

We did a complete for 2015 the use of 3rdQ, 2015; it comes to just $18 billion in capX. And AT&T stated as so much in 2014:

“We think our 2015 capital expenses for our present companies to be within the $18,000 vary. As a result of our of completion of Undertaking VIP, we look forward to decrease capital spending in our Wi-fi and Wireline segments in 2015.”

FINDING 1: AT&T’s personal SEC filed monetary stories display that capX for the final six years used to be a complete of $121 billion, at easiest.

Subsequent, Sales vs Development

three) AT&T introduced in a whopping $640 billion in sales for those 5 years, 2010-2014.
four) Those sales constitute each wireline and wi-fi products and services.
five) AT&T most effective spent sixteen% on development as a proportion of the sales ($103 billion in development for 5 years is sixteen% of $640 billion (rounded for 5 years).

Extrapolating for 2015, (the use of 2014 sales overall for 2015) AT&T’s sales can be $772 billion for 6 years.

Word: Rigorous investments in community infrastructure have traditionally been 18%-20% of sales, now not sixteen%.

FINDING 2: The six yr overall can be $121 billion in CapX and $772 billion in Income, 2010-2015.

However Then We Have A few Problems.

6) Part of the CapX Is for Wi-fi, Now not Wireline.

We all know this as a result of AT&T’s 2014 Annual Record says fifty three% used to be for wi-fi.

“Our Wi-fi phase represented fifty three% of our overall spending and greater 2% in 2014. The Wireline phase, which incorporates U-verse products and services, represented forty seven% of the full capital expenses and used to be flat in 2014, essentially reflecting our implementation of Challenge VIP, which we started in 2013 and significantly finished in 2014.”

7) Earlier Years Display that Wi-fi CapX Used to be at Least 50%.

Checking earlier years, the AT&T 2012 Annual Record, Show off thirteen, presentations that the corporate has been making an investment within the wi-fi industry all through this six yr duration.

“Capital spending in our Wi-fi phase, except for capitalized pastime all the way through development, represented fifty five% of our overall spending and greater 10% in 2012; the Wireline phase, which incorporates U-verse products and services, represented forty five% of the entire capital charges, except hobby all through development, and reduced 15% in 2012. Wi-fi expenses have been essentially used for community capability enlargement, integration and improvements to our HSPA community and the deployment of LTE apparatus.”

eight) AT&T’s Broadband U-Verse Carrier Is a Copper-to-the-House Carrier.

U-Verse isn’t according to fiber optics; the one fiber being put in does not move to consumers’ houses or workplaces however to a field inside the community.

nine) Wireline Capital Charges had Little to do with ‘Fiber Optics’, Particularly to the House.

And allow me be very transparent– historical past presentations no AT&T best fiber optic ‘pleasure’ or charges via identify. This AT&T 2012 excerpt on capital charges has little to do with ‘fiber optics’, particularly to the house.

“Venture VIP. In November 2012, we introduced plans to seriously amplify and give a boost to our wi-fi and wireline broadband networks to enhance long run IP knowledge expansion and new products and services. As a part of Venture Speed IP (VIP), we plan to amplify our deployment of LTE wi-fi generation and set up further generation to additional support wi-fi spectrum efficiencies. To that finish, we think to hide no less than 250 million folks in the USA through yr-finish 2013 and roughly three hundred million other folks in the USA through the top of 2014. As well as, we plan to amplify our wireline IP broadband community to further residential and small-industry consumer places to hide roughly seventy five % of all such consumer places in our 22-state wireline carrier space via yr-finish 2015. This venture is meant to beef up new income possibilities in 4 key spaces: wi-fi, strategic community products and services, community controlled (“cloud”) products and services and safety in addition to endured expansion in present wi-fi, U-verse and IP-similar industry products and services. We think capital charges within the $21,000 vary for 2013, and 2014 and 2015 to each and every be roughly $22,000, after which lower to pre-Undertaking VIP ranges.”

10) The Overall Finances Is for All Charges, Now not Simply Fiber Optics–and the Pass-Subsidies May well be Value an Research.

In our just lately launched stories we element Verizon’s capital costs and observe that almost all of it’s being dumped into native carrier bills, the copper-primarily based carrier. AT&T’s whole U-verse is based on the use of the prevailing, legacy, copper application wires, and if wi-fi is the use of this finances, that is of pastime as AT&T has been claiming that the corporate must ‘close off’ consumers in spaces which are ‘unprofitable’. Additionally, we all know in so much AT&T states, the commissions and AT&T makes use of the FCC’s Large Freeze formulation (we mentioned within the studies), to allocate bills. This present AT&T observation of $one hundred forty billion of fiber optic expenses, then, might point out large move-subsidies.

eleven) While We Upload All of this Up, One thing Is Amiss.

  • $one hundred forty Billion in Six Years –Claimed.
  • $121 Billion–In Six Years Overall Development, Annual Record.
  • 50%– Is Going to Wi-fi–60 Billion Much less.
  • U-Verse Is Copper to the House.

While you upload it up, now not most effective did AT&T ‘leave out-talk’ concerning the $one hundred forty billion overall–allow’s name it a fifteen% FiberHype tax, (because the six years yielded most effective $121 billion in development), but if we reduce that during part, (as 50% has not anything to do with wiring the towns) — i.e., that is $60 billion, (over six years)…

One Slice of Pizza?

Then we need to minimize that into slices, like a pizza pie, as a result of U-Verse is a copper-to-the-house carrier, and the full bills for capX are for all bills, copper and fiber.

On account that it’s obtrusive that AT&T can simply make up numbers, we consider that AT&T’s fiber optic charges are most certainly 1 slice of a ten slice pie –with out toppings. That is approximately as correct as any regulator has been, so…

In different phrases, with out audits, there is not any means we will be able to as it should be know the way so much AT&T’s wireline corporate spent on fiber optics however it’s most probably approximately $10-$20 billion, now not $one hundred forty billion.

To place it into viewpoint, Verizon claimed it used to be spending approximately $23 billion in 7 years on FiOS, which no less than is in accordance with a fiber optic cord. (We observe consumers have been charged for the development and with out audits it’s unimaginable to understand the level of the particular spending.)

U-Verse used to be a bait-and-transfer and is determined by the prevailing, ageing copper wires. Good judgment, then, may think that AT&T spent so much not up to it will have had they in reality rolled out fiber optic products and services.

So, one slice of AT&T’s $one hundred forty billion pizza pie, (with 10 slices) can be approximately $14 billion — that may be extra love it — or ninety% much less used to be most certainly spent on fiber optics in towns.

However the end result of this statistical slippery slope is traumatic in that those knowledge issues are implemented to a tale approximately the way forward for wiring towns. This can imply, at the floor, that the deployments also are as slippery – a greasy slice of pizza.

I do word that others have spotted that this new declaration is simply any other fiber-to-the-press-unencumber. Karl Bode’s Techdirt article begins with:

“AT&T Has Fooled the Press and Public into Believing It is Construction a Large Fiber Community That Slightly Exists”


AT&T’s Code of Industry Behavior seems to be in direct contradiction to Techdirt’s end.


It will appear, in line with this record, that any one who feels AT&T does now not stay its commitments can hang AT&T’s control, together with, Randall Stephenson, Chairman and CEO, who signed this report, in my opinion accountable.

— This feed and its contents are the valuables of The Huffington Publish, and use is topic to our phrases. It can be used for private intake, however is probably not dispensed on a website online.


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