AT&T Halts Plans To Expand High-Speed Internet Until Net Neutrality Is Decided

CREDIT: AP Photo/Richard Drew

Customers whiz by an AT&T store in New York's Times Square.

AT&T is halting plans to bring faster internet service to nearly 100 cities until industry regulators make a decision on how to best regulate the Internet and Web traffic.

AT&T’s CEO Randall Stephenson told investors Wednesday the company “can’t go out and invest that kind of money deploying fiber to 100 cities not knowing under what rules those investments will be governed,” according to a Reuters report. “We think it is prudent to just pause and make sure we have line of sight and understanding as to what those rules would look like.”

AT&T planned on expanding fiber optic internet access in dozens of cities nationwide, which would give customers a significant boost in internet speeds. The plan is similar to Google’s growing fiber program that has been praised for fast connections that are better than those offered by competing service providers.

Cable companies that are throwing their weight against net neutrality also tried to block the expansion of Google’s fiber optic program by lobbying for state legislation. The U.S. lags far behind most of the developed world when it comes to internet speeds — Americans pay more than double for less than half the speeds enjoyed by European and Asian users.

AT&T’s decision comes days after President Obama urged the U.S. Federal Communications Commission (FCC) to protect net neutrality and asserted that everyone has the right to equal internet access without fast and slow lanes. The White House’s plan would ban internet service providers (ISPs) from blocking or throttling content. Paid prioritization, or fast and slow lane access, would be forbidden so web services can be accessed without paying an extra fee.

Broadband companies have strongly opposed net neutrality and the government’s attempt to regulate the internet. Both Comcast and AT&T have threatened legal action against the FCC if the agency moves to treat the internet as a utility, subjecting ISPs to much stricter rules. After a judge tossed out the original net neutrality rules, ISPs have been lobbying against any attempt to reinstate them, while also trying to win customers hearts.

AT&T vowed to maintain the net neutrality rules for up to three years when it announced its $49 billion merger deal with DirecTV earlier this year. Verizon cancelled its plans to throttle customers’ connections in October during heavy traffic periods after intense public backlash and scrutiny from the FCC.

The FCC has been under fire for months, and had trouble coming up with a solution that would appease customers and stay true to the original net neutrality rules, but also give ISPs the chance to make deals with Web services like Netflix. The FCC’s most recent proposal was rumored to allow companies such as Verizon to charge websites for faster access — a fee that could be passed on to consumers — and has been heavily criticized as a result.

But a resolution won’t likely come soon. FCC Chairman Tom Wheeler said during a conference Tuesday that coming to a decision that pleases everyone is proving difficult. “What you want is what everyone wants: an open Internet that doesn’t affect your business,” Wheeler said. “What I’ve got to figure out is how to split the baby.”