WASHINGTON--AT&T is making the largest ever commitment by an American company to purchase alternative-fuel vehicles, CEO Randall Stephenson told the Economic Club of Washington on Wednesday.
"My No. 1 job is long-term growth," he said. "I only know of one way to do that and that's by investing in areas that drive sustainable growth."
Companies like AT&T, Stephenson said, have an obligation to make investments that will drive the nation's economic growth and productivity, as well as to invest in America's workforce.
AT&T CEO Randall Stephenson says that his company will embrace alternative-fuel vehicles.
(Credit: Stephanie Condon/CNET)Stephenson commended President Obama's emphasis on expanding communications infrastructure, as well has his commitment to health care. He and other AT&T executives, however, cautioned against regulations on broadband funding that could stifle private investment, as well as further union reforms in the Employee Free Choice Act.
"Less regulation results in more investment," he said.
The company plans to make two investments amounting to $565 million to increase the number of alternative-fuel vehicles it uses from 100 to 15,000 by 2020.
Over the next five years, AT&T will spend $350 million to purchase 8,000 vehicles that run on compressed natural gas. The new vehicles AT&T will buy will be built by the U.S. auto industry and should produce 25 percent less greenhouse gas emissions than traditional vehicles, Stephenson said.
AT&T will also spend $215 million to replace nearly all of its 7,100 passenger vehicles over the next 10 years with alternative-fuel vehicles, starting with electric hybrids.
With these two investments, AT&T expects to reduce its gasoline consumption over the next 10 years by 49 million gallons.
The company continues to make large investments--which should amount to around $17 billion to $18 billion this year--expecting to weather the current economic downturn relatively well, Stephenson said.
AT&T's traffic has increased 50 percent year over year, largely in video and data. As an additional sign of its economic health, Stephenson pointed out the company has increased its dividends in all 25 years of its history, including during the 2001-2002 downturn.
"This environment is tough, but it really isn't much more difficult in our industry than what we experienced in the '01-'02 time frame," he said.
Stephenson said the company's growth lies in promoting mobility.
"Wireless is going to be a big opportunity inside and outside the United States," he said. "Everything you do on your desktop, over time your expectation is that it will be mobile."
Federal commitments to broadband infrastructure will help accelerate economic growth, Stephenson said, as long as conditions are not imposed that would deter private investment or influence companies to invest in the wrong technologies.
"The obsolescence curves we are riding are significant," he said. "We have got to make sure we get the policy right on this stuff."
AT&T is not actively seeking stimulus funds, said Tim Harden, AT&T's president of fleet operations, though it will take a look at what is available.
He said federal agencies will have to take inventory of available broadband before making any policy decisions and carefully consider definitions for undefined terms like "unserved" and "underserved." They will also have to be careful shaping the open-access conditions mandated for some stimulus funds.
"I would hope they would not seek to go farther than the FCC has already gone," Harden said.
Stephenson also said that, although more than half of AT&T's workforce is unionized already, the company opposes some aspects of the Employee Free Choice Act, a bill introduced Tuesday in Congress to make it easier for workers to join unions.
"Secret ballots we think are inherently important," he said. "How first contract arbitration manifests itself is very important."
While AT&T's overall workforce is declining because of the dismal economy, the company expects to add 3,000 new high-tech jobs this year that will be union-represented in its growth areas of wireless, broadband, and video. The added jobs will fulfill AT&T's commitment to bring 5,000 offshore jobs back to the United States.
WASHINGTON--The massive "stimulus" bill that's careening through the U.S. Congress spends billions of dollars in areas including green technology, energy research, and rural broadband.
Congressional leaders have made sure it comes with some strings attached. A "Buy American" requirement remains after the Senate failed to remove it by a 31-65 vote. Net neutrality rules for broadband spending is another condition that's been imposed.
But strikingly absent is one provision that unions would seem to naturally prefer: requirements that spending be directed at unionized firms, or at least focused on jobs with minimum hourly wages.
A report (PDF) released Thursday by labor groups called for any stimulus subsidies to include "wage requirements" and a "prevailing wage policy" as well as an end to the practice of giving contracts to the lowest bidder.
The report, commissioned by the the Sierra Club, Change to Win, the Laborers International Union of North America, and the International Brotherhood of Teamsters, said that new jobs created through spending on "green" technology wouldn't meet their standards. It argues that wages at some renewable energy facilities don't compare to those at other durable goods manufacturing facilities.
A representative of the United Steelworkers of America told CNET News: "The stimulus need not necessarily have any 'mandatory' labor requirements, per se. That said, we believe the Buy American provisions are the absolute cornerstone of revitalizing American manufacturing."
Technology industry representatives expressed skepticism on Wednesday that union-backed demands like the "Buy American" requirements were wise. In addition, AT&T, IBM, Intel, Microsoft, and others sent a letter to the Senate saying--in no uncertain terms--that the idea "will harm American workers."
Jared Bernstein, Vice President Joe Biden's economic policy adviser, said at a conference called Good Jobs Green Jobs that the economic package includes funding for the Green Jobs Act, which passed in 2007 without any appropriations, to provide "green" job training and apprenticeship programs. He said that such measures would "create a regime shift in the demand for jobs...potentially good jobs, union jobs, living wage employment."
However, while the House version of the "stimulus" bill included $500 million for the Green Jobs Act, the Senate version currently only includes $250 million.
"And it's probably under attack," said Chris Chafe, executive director of Change to Win, a coalition of various unions.
"To cut back on that means you're going to put taxpayer dollars into projects that will not create the best jobs for workers," he said. "It's great for the people in it for a couple years, but at the end of the day, if we don't have a career path attached to these jobs, we lose."
Chafe argued that training programs would not only give workers more stability but also make it easier for private firms to take over the "green" industry.
Some union leaders and venture capitalists said they'd like to find ways to work together. One benefit, according to two VCs on a panel, is that a well-trained, well-treated workforce creates a more authentically "green" company--and, subsequently, a better investment.
In labor-intensive infrastructure projects--which the VC firms said most of the green economy will consist of--"the cost of talent, the availability of talent is one of the unknowns," said Jeffrey King, the director of new product development for Pacific Crest Securities. "Investors, what they want more than anything else is information and predictability. Clearly, labor is one of the best sources of information."
"There's also a growing understanding of the power labor brings to the conversation," King said. "There are investors out there who do understand being at the table with labor in the policy conversation is going to be a lot more proactive than just complaining."
Innovation-based industries have not worked well with unions in the past. Of the brightest stars in the high-tech firmament--Google, Apple, Microsoft, Yahoo--not one is unionized.
CNET's Declan McCullagh contributed to this report.
House Democrats on Thursday revealed details of a massive legislative effort they said would inject new life into a flagging U.S. economy, thanks to a combination of $825 billion in tax cuts and new government spending.
The sprawling, 258-page draft bill includes $32 billion in electric power upgrades, sometimes known as "smart grid" technology, $6 billion for expanded broadband Internet access, and $20 billion for health care information technology.
"The economy is in a crisis not seen since the Great Depression," said letter published Thursday by Rep. David Obey, a Wisconsin Democrat who heads the House Appropriations Committee. "Credit is frozen, consumer purchasing power is in decline, in the last four months the country has lost 2 million jobs and we are expected to lose another 3 (million) to 5 million in the next year."
The House leadership has said it would like to hold a floor vote on the package by January 28 and send it to President-elect Barack Obama by mid-February. One potential obstacle is negotiations with the Senate, which is likely to have its own priorities.
The energy-related sections of what is tentatively called the American Recovery and Reinvestment Act of 2009 include $11 billion for research and development related to the "Smart Grid Investment Program;" $8 billion in loans guarantees for renewable energy generation; $2 billion for loan guarantees to high-capacity battery makers; and $200 million for a grant program for electric vehicles.
Some other portions, excerpted from the summary prepared by Rep. Obey's office:
* Energy Efficiency and Renewable Energy Research: $2 billion for energy efficiency and renewable energy research, development, demonstration, and deployment activities to foster energy independence, reduce carbon emissions, and cut utility bills. Funds are awarded on a competitive basis to universities, companies, and national laboratories.
* Home Weatherization: $6.2 billion to help low-income families reduce their energy costs by weatherizing their homes and make our country more energy efficient.
* Cleaning Fossil Energy: $2.4 billion for carbon capture and sequestration technology demonstration projects. This funding will provide valuable information necessary to reduce the amount of carbon dioxide emitted into the atmosphere from industrial facilities and fossil fuel power plants.
* Alternative Buses and Trucks: $400 million to help state and local governments purchase efficient alternative fuel vehicles to reduce fuel costs and carbon emissions.
In terms of wireless and broadband, the legislation would require the National Telecommunications and Information Administration (part of the Commerce Department) to create a grant program for "nonrecurring" costs of broadband deployment in rural, suburban, and urban areas--meaning, basically, anywhere in the country. NTIA is supposed to prioritize "unserved" and "underserved" areas, two terms that have no actual meaning until the Federal Communications Commission eventually comes up with one.
State governments may apply for grants by submitting reports listing which of their areas have unserved wireless voice, underserved "advanced wireless broadband," unserved basic broadband, and underserved "advanced broadband service." NTIA will dole out separate funds for wireless deployment and broadband deployment.
"Advanced broadband service" is defined as at least 45 megabits per second downstream and 15 megabits per second upstream; "advanced wireless broadband" is 3 mb/sec downstream and 1 mb/sec upstream.
Whether this so-called stimulus will have any positive effect on the economy is uncertain, though, because the U.S. Treasury will pay for it by running up the national debt significantly and future generations of taxpayers will be expected to pay it back.
The bailout's cost so far has ballooned to $8.5 trillion, not counting the $5.2 trillion in Fannie and Freddie guarantees, although the Treasury should eventually recover some or even much of this amount. If deficit spending were a sure way to stimulate the economy, the Treasury could simply borrow, say, $100 trillion -- and the economic malaise of the last few months would evaporate.
A recent article by Greg Mankiw, a professor of economics at Harvard and former adviser to President Bush, surveys recent research and concludes that each dollar of government spending increases economic activity by only 1.4 dollars, while (according to Obama's top economics adviser) a dollar of tax cuts raises the GDP by about $3. And Tyler Cowen of George Mason University suggests that "we are being asked to spend (untold) hundreds of billion dollars" even though the evidence it will have a positive impact "is inconclusive."
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