AT&T Gigapower tease is just a Gigaweasel

5 June 2014 by Steve Blum
, , , ,

AT&T is promising more fiber (and, by the way, higher rural wireless broadband speeds) if it’s allowed to buy DirecTv. That’s one way of reading a disclosure statement it just submitted to the SEC, but it’s not the way to bet.

What the filing actually says is…

The economics of this transaction will allow the combined company to upgrade 2 million additional locations to high speed broadband with Gigapower FTTP (fiber to the premise) and expand our high speed broadband footprint to an additional 13 million locations where AT&T will be able to offer a pay TV and high speed broadband bundle.

At best, it’s an assessment of how the DirecTv acquisition will improve the business case for upgrading an additional 2 million homes. Not to a gigabit and not to fiber to the home. To Gigapower – which is only available now as a 300 Mbps copper-based service to select homes in Austin – via fiber to the premise. Usually, the word premise is used instead of home as a way of including businesses in the conversation. But premise is a squishy enough word that it could apply to what fair observers would call fiber to the node in many cases.

That’s quibbling, though. The real weasel lies with the choice of venue – the justice department and the FCC are the real gatekeepers for regulatory blessing in this case, not the SEC. There’s no quid pro quo offered, just an observation about what could happen. As the fine print in this, or most any, SEC filing says…

These estimates and statements are subject to risks and uncertainties, and actual results might differ materially. Such estimates and statements include, but are not limited to, statements about the benefits of the merger, including future financial and operating results, the combined company’s plans, objectives, expectations and intentions, and other statements that are not historical facts.

There’s truth in what AT&T is saying – DirecTv will bring lower programming costs which will change the business case for what are now marginal upgrade propositions – but that core of fact is wrapped in a yarn of expectations and intentions.