John Stankey

AT&T sees opportunities to apply for funding in the $42.5 billion BEAD rural broadband program in Texas and some other states, but likely will not apply for funding in some other states, said the company’s CEO John Stankey on the company’s fourth quarter earnings call this morning.

Noting that each state will set up its own rules for the program, Stankey said, “I point to a state like Texas. Policy-wise, they had a pretty sound approach to things. . . We’ll probably have a good opportunity there.”

As Stankey noted, Texas will be getting the most BEAD funding of any state. NTIA awarded the state $3.3 billion to go toward the cost of deploying high-speed broadband in unserved and underserved areas.

Stankey added, though, that “There are a few other states where we’re not sure if the policies are going to line up effectively.”

He noted that the economics for AT&T are better for the locations that the company already has targeted for organic growth. The company sees 10-15 million organic opportunities.

In those areas, he said, “we know the average cost” and can deploy service in a “very controlled way.”

In some BEAD-eligible areas, the matching cost that AT&T would have to contribute to a BEAD build is higher on a per-location basis than in areas targeted for organic growth without subsidies, Stankey said.

That’s saying something, considering that NTIA requires providers to contribute 25% of the cost of a build in matching funds for BEAD builds, leaving the remaining cost to be paid through the BEAD award.

“I can get more scale and more households faster,” in areas targeted for organic growth, Stankey said.

The upshot, Stankey said, is that states that understand providers’ financial constraints “are coming up with smart policies . . . and states that don’t understand that are going to have voluminous . . . requirements that will cause investment capital to shy away from matching in some of those areas.”

Stankey’s comments about AT&T BEAD opportunities echo what we have heard from some other major providers, including Charter.

A replay of AT&T’s fourth quarter earnings call is available at this link.

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2 thoughts on “AT&T CEO on BEAD: Thumbs Up on Texas; Thumbs Down on Some Other States

  1. Underserved areas are usually in areas that are more remote that typical providers don’t reach. The BEAD program was to reach those areas, but CEO’s are still focused on populous areas to execute the program because they are more focused on the incremental revenue rather than serving those in actual need. Another instance of corporate greed.

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