AT&T CEO Randall Stephenson says the telecommunications giant will not roll out ultra-fast Internet access in some 100 cities due to the debate over Internet regulation.

Several cities in the Triangle as well as the North Carolina Next Generation Network are on AT&T’s fiber-optic deployment list for what AT&T calls “GigaPower.”

An AT&T (NYSE: T) spokesperson in Charlotte declined to comment beyond what Stephenson said when asked if Stephenson’s announcement would impact Triangle commitments and the NCNGN project.

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GigaPower refers to gigabit speed, which is much faster than standard cable Internet access. 

Stephenson disclosed the delay at a conference in New York.

“We can’t go out and invest that kind of money deploying fiber to 100 cities not knowing under what rules those investments will be governed,” Stephenson said.

“We think it is prudent to just pause and make sure we have line of sight and understanding as to what those rules would look like,” he added.

According to a transcript of Stephenson’s remarks provided by website SeekingAlpha, Stephenson further explained his thinking:

“Let[‘s] pause, let[‘s] make sure that we have line of sight and understanding is to what this process looks like. Where these rules can conceivably land? What those rules would look like and then let’s reevaluate? But we are in a pause moment right now on those kinds of investments.”

“Net Neutrality”

The regulatory issue, or “net neutrality,” erupted on Monday when President Obama called for the Internet to be regulated like other utilities.

AT&T and other major Internet providers such as Time Warner Cable objected to Obama’s stance. AT&T went as far as to threaten legal action. 

“It is common sense that the same philosophy should guide any service that is based on the transmission of information – whether a phone call, or a packet of data,” Obama said.

This approach is exactly what industry lobbyists have spent months fighting against. While Internet providers say they support the concept of an open Internet, they want flexibility to think up new ways to package and sell Internet services. And, given the billions of dollars spent to improve network infrastructure, some officials say it’s only fair to make data hogs like Netflix bear some of the costs of handling heavy traffic.

FCC Chair Reportedly “Frustrated”

The Washington Post, meanwhile, reported Tuesday night that FCC Chairman Tom Wheeler, who was appointed by Obama, told business leaders at a meeting that he was “moving in a different direction.”

“What you want is what everyone wants: an open Internet that doesn’t affect your business,” The Post quoted Wheeler as saying. “What I’ve got to figure out is how to split the baby.”

The Post cited four unnamed sources who were at the meeting, which took place at the FCC and included representatives of several technology companies.

Wheeler was described as “visibly frustrated.”

AT&T is already building fiber networks in Austin, Dallas and Fort Worth, Texas.

It is under contract with the North Carolina Next Generation Network consortium to build a gigabit Internet-cable network in Raleigh, Cary, Durham, Chapel Hill, Carrboro, and Winston-Salem. The cities have each signed agreement with AT&T.

Duke, N.C. State and UNC-Chapel Hill also are part of the NCNGN consortium.

AT&T was awarded the contract in April after a request-for-proposal process.

The Debate

New rules could unleash future innovation and create jobs — or stifle innovation and kill jobs. The divisive and often confusing debate has intensified now that Obama has entered the fray.

Obama’s stance is meant to protect “net neutrality,” the concept that everyone with an Internet connection should have equal access to all legal content online. The idea served as one of the Internet’s building blocks, but its fate has been in limbo since January, when a court ruling invalidated FCC guidelines designed to treat all online traffic equally.

The FCC has already been working on a new regulatory framework and is under no legal obligation to heed Obama’s call. Nevertheless, Obama’s opinion turns up the political heat on Wheeler and the four other commissioners who will make the final decision. The FCC isn’t under a deadline to make a decision.

The Reaction

“We are stunned the president would abandon the longstanding, bipartisan policy of lightly regulating the Internet and calling for extreme” regulation, said Michael Powell, president and CEO of the National Cable and Telecommunications Association, the primary lobbying arm of the cable industry, which supplies much of the nation’s Internet access.

This “tectonic shift in national policy, should it be adopted, would create devastating results,” added Powell, who chaired the FCC during the Bush administration until 2005.

(The Associated Press contributed to this report.)