AT&T Working With Regulators on Cause of Feb. 22 Outage
AT&T is collaborating with the FCC and other regulators in the wake of the recent widespread wireless network outage (see 2402220058), AT&T Chief Operating Officer Jeff McElfresh said during a Morgan Stanley financial conference Monday. McElfresh also confirmed that the loss of affordable connectivity program (ACP) funding won’t be a major financial hit for the carrier, while AT&T is poised to gain connections through the broadband, equity, access and deployment (BEAD) program.
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Feb. 22, the date of the outage, was “not a good day,” McElfresh said. AT&T's customers don’t expect the network to fail “and we definitely were not happy letting our customers down,” he said. The majority of customers had service by the start of their work day, he said. “I’m pleased” with the response “we’re getting from the apology that we offered customers and our proactive credits,” McElfresh added (see 2402260031).
The network update that caused the outage was the kind of technical change that AT&T makes nightly, McElfresh said. “It was the incorrect application of a process that created this,” he said. The company has taken steps to prevent a similar problem, he confirmed. It's in discussions with the FCC and other regulators about preventative steps, he said. “We’ll have to let that process take its due course.”
FirstNet recovered quickly because of the design of its network, McElfresh said. The FirstNet Authority is probing the outage (see Ref:2402290055]).
On BEAD, the two states that received the most funding, California and Texas, are within AT&T’s wireline and fiber footprints, McElfresh said. “We’re excited to see how [the program] transpires” this year and it could help the carrier expand its wired offerings in communities that really need connections, he said. BEAD is “a local game,” he said: “We own and operate a massive wireline network, which is one of our advantages, so we like our chances.” The loss of ACP funding won’t influence AT&T’s financial guidance, the COO said, noting that the carrier has other programs that help subscribers stay connected even as ACP goes away.
The wireless market is “certainly healthy” and “more rational” than in the past, McElfresh said. AT&T has grown its subscriber base and average revenue per user, with “industry-leading” low customer churn, he said. He noted that AT&T is now “100% focused on the telecom sector.” The company is performing well “even under a more stressful economic environment” and against strong mobile competition, especially from the cable operators, he said.
“We still have room to grow” in mobility, “make no mistake, we’re number three,” McElfresh said. Verizon and T-Mobile are the U.S. leaders in number of wireless subscribers. “The appetite for bandwidth is not slowing down,” he said.
AT&T is working with Dish Wireless and other providers to offer wholesale wireless services, McElfresh said. “It’s an attractive category and segment,” but one in which the carrier has “historically underperformed,” he added. The company places a priority on spectrum use by premium, postpaid customers, he said. But in markets where it has excess capacity and doesn’t see “any kind of spectrum exhaust," it’s exploring options, he said. “Spectrum costs money and getting the right returns for our investors requires discipline.”
Customer uptick for AT&T’s fixed wireless access hasn’t been “overwhelming[ly] successful” or set new records, McElfresh said. But that was what AT&T expected, he said. FWA customers use a lot of data, he said. The company has been “very deliberate” in the markets it has targeted and in its FWA trials, he said. When AT&T provides fiber to a home, it’s a long-term investment compared with FWA, he said. When a customer sells the home, the new owner will likely keep the fiber connection, he said.
AT&T expects 2024 capital investment in the $21 billion-$22 billion range, the carrier said in a release Monday tied to the presentation. The company “remains on track” to meet financial guidance and “continues to see healthy demand for world-class connectivity through 5G and fiber,” AT&T said. Its mid-band 5G spectrum now covers more than 210 million POPs.