AT&T CEO John Stankey has called on Congress to empower the Federal Communications Commission (FCC) to mandate contributions from Big Tech companies to the Universal Service Fund (USF), a crucial fund subsidizing telecom and broadband services.
Speaking at a telecom industry forum in Utah, John Stankey highlighted the reliance of tech companies on the internet infrastructure provided by telecom operators like AT&T.
“The seven largest and most profitable companies in the world built their franchises on the internet and the infrastructure we provide,” John Stankey remarked. “Why shouldn’t they participate in ensuring affordable and equitable access to the services of today that are just as indispensable as the phone lines of yesteryear?”
Currently, the USF, which spends approximately $8 billion annually, is financed primarily through surcharges on cell phone and landline service subscribers. John Stankey’s proposal seeks to shift some of this financial burden to tech giants, arguing for their responsibility in maintaining the infrastructure that supports their services.
Several telecom operators in the European Union are also asking Big Tech companies to share a part of telecom Capex. They believe that Big Tech companies are making huge money riding on the network of telecom operators.
Meta Platforms, one of the Big Tech companies, has generated revenue of $18.585 billion from the United States and Canada during the fourth-quarter of 2023. Other Big Tech companies include Google, Apple, Amazon, Microsoft, NetFlix, ByteDance, among others.
Big Tech companies are relying on telecom infrastructure of wireless operators such as AT&T, Verizon, T-Mobile, etc.
AT&T’s financial commitment to infrastructure is significant in order to enhance customer experience. The company reported a capital expenditure of $4.601 billion in Q4 2023. AT&T has 13.729 million wired broadband connections and a broadband Average Revenue Per User (ARPU) of $65.62.
AT&T has expanded its fiber network, reaching 26 million locations at the end of 2023, and aiming for over 30 million by the end of 2025. Fiber ARPU stands at $68.50, reflecting the company’s focus on high-speed internet services. Over the past three years, AT&T’s fiber subscribers have surged by nearly 70% to more than 8.3 million, doubling fiber revenues to over $6.2 billion in 2023.
The urgency of John Stankey’s appeal is underscored by the recent shutdown of a government broadband internet subsidy program that served 23 million households. The program, which ran out of funds in May, had previously received $17 billion from Congress to support low-income families and those affected by COVID-19. Efforts by the White House to secure an additional $6 billion were unsuccessful, Reuters news report said.
The USF plays a vital role in providing access to telephone and broadband services for low-income consumers, schools, libraries, and rural healthcare providers. With several proposals in Congress aimed at expanding funding sources for the USF to include tech companies and broadband providers, John Stankey’s call to action adds momentum to this legislative push.
Baburajan Kizhakedath
