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.
