We just completed our 4G network build, putting LTE in our network, so our capital spend spiked for a period of time. What’s going on now? Fiber to the home. This will take the place of what just came out of our spend. We’re hopeful that the 15% to 16% doesn’t become mechanical and that, by virtue of software-defined networks, we can get to a slightly more efficient investment model. But it’s still a lot of money. You have to be committed to investing in this industry if you want to be a serious competitor.
Q: In his recent book The Third Wave, AOL founder Steve Case argues that regulation of the Internet will greatly diminish innovation. Where do you stand on the current administration’s efforts to treat the Internet as a utility?
A: History will look back and see 2015 and 2016 as a period when the government threw an incredible amount of sand in the gears of telecommunications, Internet and technological innovation. The implications of the regulatory framework that was put in place in 2015 will drag on indefinitely. The chairman of the FCC said he had no intention of regulating pricing with his regulations. Yet the evidence so far suggests that he’s actively and aggressively involved in how pricing is set.
We will look back and see that the pace of innovation, and the investment in innovation, will have been affected by what happened in ’15 and ’16 unless the courts tell the FCC that it has overstepped what the law says it can do. There is a big lawsuit right now pending in the circuit court. If the courts invalidate this, as we’re hopeful they will, then hopefully this is just a bad dream that we’ll all wake up from and realize that the innovation can continue apace.
Q: Having the right people with the right skills is one of your biggest challenges in transforming AT&T. How are you dealing with the need to adapt and retrain a workforce of 280,000?
A: Over the next five to six years, one of our biggest logistical challenges will be how to re-skill our workforce. You can’t just replace them. One thing we are doing is leveraging technology to improve educational outcomes, training and development. We took a big step by engaging with Georgia Tech and Udacity to develop a fully accredited master of computer science program that students can do from home through the Massive Open Online Course (MOOC) environment.
Here’s the beauty of it. Rather than going to Georgia Tech to get a master of computer science degree for $41,000, our program costs about $6,700. The same accreditation, the exact same degree, at a fraction of the cost. That’s big.
So far, a million courses have been completed by tens of thousands of our people. The training qualifies them for new responsibilities and jobs and it’s all being integrated into our HR system. This is key. You can’t just put these tools out there and say, “Go train yourself.” By integrating it in with your HR system, people see what jobs are trending up and which ones are declining. They can tell what online training they need to qualify for specific internal jobs.
I am convinced that by 2020 we’re going to have—not all—but a great deal of our workforce reskilled and retrained for the work that we need.
Q: You see AT&T as an innovation company. What specific innovations during your tenure are you most proud of?
A: We believe we revolutionized how networks are developed, engineered and built to handle the mobile Internet. I feel really good about our leadership with this. Our development of software-defined networking was ahead of the curve, taking that innovation and putting it into the open-source environment so that it could be propagated broadly and developed into what is a radical advance in terms of how telecom networks are built and developed.
This fall we’re going to see a very different experience on TV—the TV Everywhere experience. We will be offering a different user interface for watching live TV in a mobile world or in a fixed-TV-mounted-on-a-wall world.
In addition, our bandwidth-on-demand (network-on-demand), which allows companies to manage bandwidth and data demand within their environment, will prove revolutionary in terms of how companies interact with their telecom providers.
Finally, our use of technology to change the game in reskilling the workforce will revolutionize training and development. We are demonstrating that you can accelerate the pace of learning and dramatically expand the footprint of skills using technology. It’s something that elementary, secondary and higher education should all mimic.