For decades now, AT&T has promised that an incredible boon in broadband investment is waiting just around the corner -- but only if AT&T gets what it wants from the government. Whether it's gunning for tax cuts and subsidies, or looking for approval of its latest megamerger, AT&T's an absolute master of the regulatory carrot and a stick game. Even if the carrot is entirely hallucinated, as we saw when AT&T threatened to curtail already minimal fiber optic deployment unless net neutrality was killed.
Of course because AT&T doesn't face meaningful competition in most markets, and few members of either party of government are truly interested in doing much of anything about this problem, this investment explosion never really materializes one way or the other. That's why millions upon millions of AT&T customers still pay an arm and a leg for last-generation DSL speeds, AT&T's consistently under fire for failing to upgrade many cities, and most of the company's network can't offer speeds remotely close to the gigabit-speeds now being offered by cable.
Yet somehow, each and every time AT&T comes stumbling toward government with its hand outstretched, we oddly and mysteriously ignore this history lesson and provide AT&T with absolutely every benefit of the doubt. Case in point: with AT&T looking for Trump administration approval of its $85 billion Time Warner deal, the company last week trotted out its latest promise: a massive wave of broadband investment if the company sees some major tax cuts and has its latest merger approved; a narrative the press was happy to reiterate without qualification:
Ahead of the tech meeting, Stephenson told "Squawk Box" the company will increase its capital investments if Trump delivers on tax reform by the end of the year.
"I don't think we're unique. I think you would see this happen across all industries, and with every player in our industry," he said.
You'll recall that Trump originally threatened to block AT&T's planned acquisition of Time Warner on the campaign trail, claiming it was "too much concentration of power in the hands of too few." But Trump has since given every indication that he intends to approve the deal, and his recently hired antitrust boss at the DOJ is on record saying he thinks the deal should be approved.
Consumer advocates worry an even larger AT&T will use its expanded broadcaster power to hamstring licensing access to streaming competitors. They're also concerned AT&T will use usage caps, overage fees and "zero rating" to give its own content an unfair advantage. But because there's about 100 AT&T lobbyists at any one moment lobbying DC lawmakers to approve the deal, most analysts now think it should sail through with modest, if any, conditions.
It will be just the latest victory for a company that has recently convinced government to kill consumer broadband privacy protections, dismantle net neutrality, end an effort to bring competition to the cable box, and is now pushing government to further hamstring regulatory oversight of one of the least competitive markets in America. Last week, AT&T CEO Randall Stephenson and Trump spent much of a full day lavishing praise upon one another, including this bit of heady telecom sector analysis from Donald:
"With Stephenson seated to his right, Trump said AT&T was "like two companies" — "you started, then it was made different by government and now here you are again." The president added that such a reinvention over the years was "not easy to do."
Of course AT&T didn't "re-invent" itself as-so-much as it got blown up by government for being a predatory monopoly, after which it slowly but surely re-assembled itself via a wave of brand acquisitions (SBC, Ameritech, Bellsouth and ultimately the AT&T brand itself). It then lobbied state and federal governments to not only ignore the lack of competition in the broadband market, but to pass laws protecting it from competition. So yes, while that's impressive in and of itself, the end result has been a company with an indisputably vicious history of anti-consumer policies, anti-competitive behavior and outright fraud.
And while AT&T has been caught repeatedly lying about the job and broadband investment benefits of blind deregulation and M&As, that never gets factored in to assessing the credibility of whatever AT&T's pushing today. And it's clearly not going to be a problem for a Trump administration that has already been taking credit for telecom sector jobs it had absolutely nothing to do with. AT&T's merger pitches are always rife with bullshit and bravado on the job creation and broadband expansion front, but with Trump's help, you can expect AT&T to take things to an entirely new level once the deal is formally approved later this year.