Uverse broadband television and internet bundle is growing
in popularity around the country. It had 2.3 million
subscribers at the end of March, up 231,000 from a year earlier.
And it is available to 24 million homes. AT&T
hopes to reach 30 million households by the end of 2011. But a
change in Federal Communication Commission's (FCC) classification of
broadband providers could cause AT&T to decrease funding to
Uverse, its executive indicated in
recent remarks according to the Wall
FCC is considering reclassifying cable internet to a Title 2
service. Under the tighter Title 2 classification, the FCC
would gain new powers of regulation. AT&T executive Randall
Stephenson says that could change the economics of the business.The
FCC says it won't exercises its greatest Title 2 power -- regulating
pricing -- but AT&T fears that stance could change at any time.
Stephenson states, "If this Title 2 regulation looks imminent,
we have to re-evaluate whether we put shovels in the ground.
I'm a 3-2 vote away from the next guy coming in and saying I disagree
with that, I take it away"Besides pricing, AT&T did
not elaborate on what other forms of regulation could be damaging to
the economics of its cable television business, thoughStephenson
estimates that AT&T will spend a "couple billion" of
the approximately $19B USD it spends on wireline and
wireless infrastructure this year on the Uverse offering.Even
if the reclassification goes through, it may be shot down in courts.
Courts recently ruled that the FCC did
not have the power to censure Comcast for throttling
peer-to-peer traffic. However, that could change with new Net Neutrality legislation that looks to give the FCC
greater, explicitly-defined regulatory powers.That
legislation and the reclassification of broadband and cable may have
a serious effect on other service providers as well.