AT&T Caught in a Brazen 4G Lie
By David Goldman
NEW YORK (CNNMoney) — AT&T on Wednesday announced a plan to cover 96% of the U.S. population with 4G-LTE service by the end of 2014. That’s great news for customers — but it reveals that AT&T told regulators a pretty big whopper last year while fighting for its doomed T-Mobile merger.
One of the deal’s fiercest battle points was 4G access outside major cities. Without T-Mobile, AT&T said it was “very unlikely” that it would expand 4G-LTE service beyond the 80% coverage threshold it already planned to reach by 2013.
“In some of these [less-populous] areas, AT&T simply lacks the spectrum necessary to deploy LTE,” the company told the Federal Communications Commission in a written defense of its proposal.
The FCC called AT&T’s bluff. It released a damning report on the scuttled merger saying it believed AT&T would expand its 4G deployment with or without T-Mobile.
AT&T hit the roof, complaining that the FCC’s analysis directly contradicted AT&T’s “documents and sworn declarations.” It got particularly irate about the FCC’s prediction — “based purely on speculation” — that AT&T would eventually expand its LTE deployment to 97% of the population even if it didn’t get T-Mobile.
Fast-forward 11 months. AT&T says that its $14 billion network investment will allow its 4G service to cover 300 million Americans, the overwhelming majority of the U.S. population.
“They painted the stakes as dire as possible when they were trying to buy T-Mobile, but the fact is AT&T had to match its competitors in 4G market roll-outs,” said Ken Rehben, an analyst at Yankee Group.
Former AT&T executive Josh King is even more blunt.
“That poor-mouth 80% statement was about as credible as AT&T’s claim that the merger would create 96,000 jobs,” said King, who left AT&T Wireless in 2005 and now heads business development at Avvo, a legal and medical directory site.
AT&T insists that it wasn’t being disingenuous with the regulators. Things changed, the company says, pointing to the 40 new spectrum deals it was able to sign over the past year.
“We chartered a new path,” AT&T spokeswoman Roberta Thomson told CNNMoney on Wednesday.
That’s precisely what the FCC — and industry analysts — believed would happen.
“A decision not to say ‘yes’ at a particular moment is not the same as saying ‘no’ forever,” the FCC said in its report last year. “The record does not support AT&T’s claim that … future consideration of an expanded LTE deployment was a ‘slim possibility.'”
Didn’t AT&T know all along that it would have to beef up its network?
“I am choosing my words carefully here,” said Charles Golvin, an industry analyst with Forrester Research. “The simple answer is yes, I believe that AT&T’s strategy has always been to expand LTE coverage to as much of the market as possible.”
The FCC held off on taking a victory lap. It released a statement on Wednesday praising AT&T’s expansion plans, calling them “proof positive that the climate for investment and innovation in the U.S. communications sector is healthy. “