AT&T Halts U-verse Builds

AT&T, in a decision that is parallel to an earlier decision made by Verizon (News - Alert) Communications, has decided to halt further expansion of its fiber to neighborhood program (U-verse) beyond the 30 million homes that can or will soon be able to access the service.

Speaking on an investor’s conference call to discuss 4th quarter earnings results, AT&T (News - Alert) CEO Randall Stephenson announced the expansion of its fiber to the neighborhood service is now effectively over. The move is parallel to the earlier decision by Verizon to suspend its deployment of FiOS (News - Alert) fiber to the home network.

The Verizon decision, as well as the AT&T decision, will be taken as a sign in some quarters that neither firm is committed to faster broadband. At some level, such commitments are debatable. Both firms now get all of their growth from wireless services, not their fixed line networks.

In truth, as revenue becomes scarcer, and as more customers abandon using the fixed line network, fixed costs have to be allocated across a smaller base of customers as well. That makes unrestricted expansion of fiber to home networks unwise, in many cases, executives at both firms likely would tend to say, especially if there are other alternatives.

In a “monopoly” environment, such decisions might not have to be made, as lucrative profits earned elsewhere simply can be used to subsidize uneconomical investments. That gets to be much more difficult, perhaps even impossible, in competitive environments.