Big telecom companies such as AT&T have spent the better part of two decades demanding that they get all manner of tax breaks and incentives in order to build out and upgrade their broadband infrastructure. When they get these tax breaks and then drag their heels—which they always do—some areas decide that it’s time to consider coming together to build affordable high speed services themselves. It is at these times that companies like AT&T will sue municipalities to keep broadband speeds down and even argue that municipalities shouldn’t be able to build broadband because AT&T can’t make money when someone else offers a better service than they offer (they really argued that). Many lawmakers are hip to these machinations, as history has shown that companies like AT&T talk a pretty good game while delivering nothing in return. But that doesn’t stop companies like AT&T from continuing to demand financial incentives to do the thing they are already supposed to do. Business Wire has a press release report from AT&T promising all kinds of wondrous things if they get that sweet tax cut money.
“By immediately lowering the corporate tax rate to 20%, this bill will stimulate investment, job creation and economic growth in the United States,” said Randall Stephenson, AT&T Chairman and CEO.
“With a rate of 20% combined with provisions for full expensing of capital expenditures for the next five years, we’re prepared to increase our investment in the United States. If the House bill is signed into law, we’d commit to increase our domestic investment by $1 billion in the first year in which the new rates are in place. And research tells us that every $1 billion in capital invested in telecom creates about 7,000 good jobs for the middle class.”
Will those jobs be like the ones 40,000 workers have been striking and trying to get some satisfaction from the past six months? Maybe they’ll bring that broadband to the lower income areas that they reneged on after getting tax money to do just that? Considering that our current FCC chair, Ajit Pai has already declared that there are no competitive imbalances in our broadband system, I don’t see why AT&T needs anymore “competitive” advantages.
And looking at the wireless industry from a superficial level, many would likely agree. But look under the hood and things aren't quite as rosy as Pai would lead you to believe. For one, even with T-Mobile disrupting AT&T and Verizon, these companies still largely engage in theatrical non-price competition, resulting in Americans paying more money for slower speeds than most developed nations. There's also the fact that AT&T and Verizon have a duopoly stranglehold over the special access and tower backhaul market, allowing them to drive up operational costs for competitors like T-Mobile and Sprint.
As is pointed out in the above article, T-Mobile and Sprint are forever in talks to merge, which would turn our telecom system into a triopoly where no one competes for much more than Superbowl commercials.