AT&T Promises More Broadband Investment...If It Gets a Tax Cut

AT&T CEO Randall Stephenson this week claimed that the company would dramatically ramp up its broadband deployment -- if it gets a juicy new tax cut from the Trump administration and Congress. Speaking at the Goldman Sachs Communacopia Conference this week, Stephenson repeatedly insisted that were the US corporate tax rate dropped to around 20-25% -- the company would significantly increase its corporate spending. Granted, that's coming from a company with a long history of cutting corners on fixed-line network investment, and playing fast and loose when it comes to network deployment facts and data.

"We would invest more," Stephenson said. "We are already the largest investor in America, and have been so for the last five years. If we got tax reform, you would see AT&T step its investment up."

While it's true that the United States technically has among the higher corporate tax rates among developed nations, corporations traditionally don't wind up paying anything close to that rate. Large telecom providers in particular have an ocean of tricks they use to defer or avoid taxes, and AT&T has consistently found itself under fire for paying a pittance in federal taxes more often than not.

Verizon has been particularly gifted on this front, using complicated financial tricks like Reverse Morris Trusts to offload massive swaths of its unwanted networks while avoiding nearly all tax penalties.

While it's entirely possible any tax benefits would simply be pocketed by company executives, AT&T's CEO insisted that if AT&T's taxes were lowered, it would immediately result in greater sector investment.

“What will get that low investment turned in a short period of time is tax reform,” Stephenson said. “When you’re taxing profits at the highest level in the OECD, it’s logical you’re getting lower investment than in the OECD as a percentage of the economy.”

Stephenson has been meeting with the Trump administration consistently on "tax reform," and has been making similar investment promises for months.