AT&T says fiber spending pause affects only new commitments

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AT&T Inc sought to clarify to U.S. regulators its plans to pause investments in high-speed Internet connections until "net neutrality" rules are settled, saying in a letter on Wednesday that the plans related to new and not existing commitments.

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The Federal Communications Commission earlier this month pressed the company to explain its plans to stop investing in high-speed Internet connections in 100 cities until the agency sorts out new "net neutrality" rules for how Internet service providers manage web traffic on their networks.

AT&T's announcement of a planned pause in fiber investments came in response to President Barack Obama's call for stricter rules through regulations that would treat Internet providers more like public utilities. [ID:nL2N0T2380]

The FCC pressed AT&T to specify how its response would play into the company's planned $48.5 billion merger with satellite operator DirecTV, which regulators are reviewing. As part of the merger proposal, AT&T agreed to provide high-speed fiber Internet to 2 million homes.

In the letter dated Nov. 25 and released on Wednesday, AT&T said it did not plan to limit those investments or other existing commitments but would pause on further expansions because of the uncertainty about new rules.

"To be clear, AT&T has not stated that the president’s proposal would render all of these locations unprofitable. Rather, AT&T simply cannot evaluate additional investment beyond its existing commitments until the regulatory treatment of broadband service is clarified," Robert Quinn, AT&T's senior federal regulatory vice president, wrote in the letter.

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An AT&T spokesman said the company would pause all investments outside of the commitments made in connection with the DirecTV merger, including potential new customer locations beyond the company's initial expansion plan for 25 metropolitan areas as well as other markets. He said the pause affected millions of potential customer locations.

To read AT&T's letter, see http://bit.ly/1vNPj6k

(Reporting by Alina Selyukh; Editing by Paul Simao)