AT&T’s good cop, bad cop routine with the FCC

When AT&T said it was halting a plan to give 100 cities ultra-fast Internet, it apparently didn't really mean that.

The telecom giant was threatening to pull its investments in new fiber optic cables if it didn't get more "certainty" from Washington about how Internet service providers would be regulated under net neutrality, the idea that broadband companies shouldn't be allowed to speed up or slow down certain Web sites over others. AT&T's chief executive, Randall Stephenson, told investors this month that "we can't go out and just invest that kind of money" without knowing what rules the government might apply. But after the warning raised eyebrows at the Federal Communications Commission, AT&T is now saying that it "still plans to complete" the rollout after all, underscoring the delicate balance the company has to strike with federal officials if it wants them to approve its $49 billion merger with DirecTV.

AT&T has argued that its merger with DirecTV, if approved, would help consumers by expanding video choices and promoting competition with the cable industry. Let the deal go through, and everybody benefits, the company says. Separately, however, AT&T is making a more ominous argument: If regulators don't craft industry-friendly net neutrality rules, AT&T (and everyone else who's an ISP) will have no choice but to hurt consumers by slowing down the pace of their network upgrades. If you pass aggressive regulations, the consequences are on you. Stephenson's comments this month seemed to offer a taste of that.