AT&T Promises Better Broadband...If it Gets Another Tax Cut

AT&T continues to promise that it will deploy broadband more broadly -- if it gets another giant tax cut. In a press release intended to show support for Trump's "tax reform" plans, the telecom giant promised to invest an additional $1 billion in US telecom infrastructure in 2018 if the corporate tax rate is further reduced. 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 to currey favor from politicians and regulators.

"By immediately lowering the corporate tax rate to 20%, this bill will stimulate investment, job creation and economic growth in the United States," AT&T CEO Randall Stephenson said in a statement.

“With a rate of 20% combined with provisions for full expensing of capital expenditures for the next five years, we’re prepared to increase our investment in the United States. If the House bill is signed into law, we’d commit to increase our domestic investment by $1 billion in the first year in which the new rates are in place. And research tells us that every $1 billion in capital invested in telecom creates about 7,000 good jobs for the middle class."

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 thanks to an ocean of accounting loopholes. 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. And both AT&T and Verizon have spent the better part of a generation getting billions in tax cuts and subsidies for service upgrades only partially or never completed. And despite these billions in funds, both companies have let DSL lines in poorer areas rot on the vine.

More plainly, history says any additional tax cuts gleaned by companies like AT&T and Verizon will largely wind up in executive pockets, not the actual network.