New Street’s Jonathan Chaplin told investors that some details don’t add up in a Bloomberg report saying AT&T is in talks to buy Lumen's consumer fiber business. The $5.5 billion price tag "looks too low," Chaplin said in a late Tuesday note to investors. That could mean Lumen wants to sell assets "from the central office to the home … but not the central office itself and not the fiber into the central office,” he said. Discussion of the deal comes as AT&T seeks to expand its fiber network, while it closes down some of its legacy copper lines (see 2502250066). Rival T-Mobile announced joint ventures last year to buy fiber providers Metronet (see 2407240020) and Lumos (see 2404250047).
The FCC’s Wireline Bureau released a series of orders on delegated authority Thursday with the goal of making it easier for carriers to move away from legacy copper networks, said a news release and a number of filings. Outdated agency rules “have forced providers to pour resources into maintaining aging and expensive copper line networks instead of investing in the modern, high-speed infrastructure that Americans want and deserve," said Chairman Brendan Carr in the release.
The current FCC is likely to support calls by USTelecom and its members for policies that allow carriers to more easily retire copper facilities in their networks (see 2501270047), New Street’s Blair Levin said Wednesday. FCC Chairman Brendan Carr “has always been in favor of assisting [incumbent local exchange carriers] in this transition,” he said in a note to investors.
FCC Chairman Brendan Carr told reporters Thursday that he will look “very closely” at the state of play on legacy copper in carrier networks. “We have a regime in place where we are requiring carriers to invest billions and billions of dollars into aging, legacy copper networks,” sometimes in parallel with building a modern network, Carr said. “We need to find a way to create the incentives so that we can transition people to next-generation services and incentivize investment in new infrastructure.”
AT&T defended its proposal to stop accepting new customers for parts of its legacy copper network (see 2501310046), responding to opposition from the Communications Workers of America and Bandwidth (see 2502240025). AT&T has four applications pending at the FCC involving legacy services in wire centers in 18 states. “As detailed in each application, demand for each of these services is very low in the Affected Service Area, and new orders are almost nonexistent,” said a filing Tuesday in docket 25-45. “Grandfathering these outdated services will benefit the public and serve as an important step toward meeting both AT&T’s and the Commission’s goals of advancing toward next-generation technologies that customers crave.” AT&T said no actual end users filed comments on the applications. Contrary to CWA's allegations, “all existing customers of the Affected Services will be able to keep their current service,” the carrier said. “AT&T spends over $6 billion annually in direct costs to keep its copper services running -- resources that would be much better spent connecting more Americans to newer networks.”
Broadband officials and experts emphasized the need for greater communication and partnerships between industry and government to complete the transition from copper infrastructure to fiber and other technologies during NARUC's Winter Policy Summit on Tuesday. Some stressed the need for greater oversight of the transition and carrier of last resort (COLR) obligations. Others discussed the potential effects of the challenge to the FCC's Title II broadband reclassification and the U.S. Supreme Court's decision for a second time to deny rehearing a challenge to New York's broadband affordability law.
The Communications Workers of America and Bandwidth separately opposed AT&T’s moves to close additional parts of its legacy copper network (see 2501310046). AT&T CEO John Stankey said in January that the carrier plans to file applications at the FCC to stop selling legacy products in about 1,300 wire centers, which is roughly a quarter of the AT&T footprint (see 2501270047). AT&T started the push during the last administration and is taking a more aggressive approach at the current FCC.
Expect another year of declining net additions of broadband subscribers, Wolfe Research analyst Peter Supino said Wednesday in a Fiber Broadband Association webinar. Net adds by fiber, cable and DSL were around 2.5 million in 2023 and 2.2 million last year, and will likely be fewer than 2 million this year, he said. While cable's lost broadband subscribers are often attributed to fiber and fixed wireless access competition, they might actually be due to incumbents feeling most acutely those declining net additions, he said. Cable has clearly lost its residential broadband monopoly, with close to two-thirds of households having fiber operator options alongside cable, Supino said. In five years, 75%-80% of households will have the choice of fiber and cable, he noted. Traditionally, cable saw its broadband subscriber numbers grow as the number of homes its network passed increased. Since broadband subscriber numbers are no longer growing in lockstep with number of homes its network passes, cable becomes more capital intensive, he said.
The FCC Wireline Bureau on Tuesday sought comment by Feb. 19 on parts of AT&T's requests last week as it shutters more of its legacy copper network. The bureau created dockets for comments about moving customers off DS1 and DS3 services (docket 25-45) and retiring remote call forwarding services (25-46) and VoIP calling (25-47). AT&T plans to move aggressively in the new Donald Trump administration to cut costs by closing parts of its legacy network (see 2501310046).
As previewed during a recent financial call, it appears AT&T in recent days has been moving more aggressively to shut additional parts of its legacy copper network (see 2501270047). In December, in what AT&T executives saw as a model for future retirements, the FCC took no action, allowing AT&T to initially halt sales and then discontinue residential local service in nine Oklahoma wire centers (see 2412230066). AT&T CEO John Stankey said on the call that the carrier plans to file applications at the FCC to stop selling legacy products in about 1,300 wire centers, or about a quarter of the AT&T footprint. On Friday alone, the FCC posted retirement proposals for AT&T wire centers in Alliance, Ohio; Murfreesboro, Tennessee; Easley, South Carolina; and Milwaukee.