Moffett: AT&T FTTH Commitment is Bad News for Cable Companies

Pending approval of its DirecTV acquisition, AT&T’s commitment to a major expansion of its fiber-to-the-premises network could create some major challenges for cable companies, notes Craig Moffett, senior analyst for financial research firm Moffett Nathanson in a research note. An AT&T Federal Communications Commission filing revealed that the company had agreed to extend its FTTP network to reach a total of 11.7 million locations if the DirecTV acquisition is approved -- and according to news reports that approval is expected during the week of July 6. The carrier also agreed to make gigabit service available to an undisclosed percentage of new locations passed.

“[N]obody to whom we’ve spoken had expected a number as high as this,” commented Moffett. “The number disclosed last week is fully nine million higher than their previously published commitments.” And that doesn’t bode well for cable companies, according to Moffett and his research team, who reminded readers that telecommunication company fiber builds of the mid-2000s “weighed on” cable stocks for five years.