The recent FCC decision was "a win for states, consumers and competition," said David W. Dorman, Chairman & CEO, AT&T, speaking at the Merrill Lynch Global Communications Investor Conference. Dorman believes the landmark ruling to be a clear endorsement of the local service competition that is already having a positive effect on the economy, driving down prices and offering more choices. Regarding the legal basis for the decision, he said the ruling complies with the letter and the spirit of the Telecom Act as well as the D.C. Circuit Court's decision in the USTA vs. FCC decision. As for the rulings effect on broadband, Dorman said he believes the Bells got significant deregulation for new networks, so now they must to act on their promises. However, Dorman questioned whether the Bell companies are serious about really large-scale broadband rollouts because, in his view, the economics of scaling their networks to support home video services probably would not justify the investment. Some other highlights of his presentation:
- Dorman provided evidence that AT&T continues to outperform its peers and gain share in key growth areas, including data services, managed services, and IP transport. Some of the growth is from distressed carriers.
- In 2002, AT&T recorded $38 billion revenues and had 14% operating margins
- Now that its network rollout is significantly complete, two thirds of CAPEX spending in 2003 will be demand driven. CAPEX is expected to be in the $3.3 billion to $3.5 billion range, down from $3.9 billion in 2002 and $5.6 billion in 2001. AT&T will continue to outspend its peers in areas that improve services, such as customer-facing operations, billing, OSS, etc.
- Traffic volumes continue to rise. AT&T plans to "sweat" its network by driving greater utilization of its existing capacity. Over one petabyte of traffic daily now flows across the AT&T IP network.
The presentation and archived webcast are online.
http://www.att.com/ir
