AT&T is firing back against a series of newspaper reports that suggest the telecommunications giant knew that a vast amount of its underground and underwater transmission lines contained dangerous lead shielding.
In a new court filing made public this week, AT&T said around 200,000 miles of its copper-based transmission lines contain the problematic lead coating, which represents less than 10 percent of the 2 million miles of underground and underwater cable used by the company.
The disclosure was made as part of an ongoing court case involving AT&T subsidiary Pacific Bell and the California Sportfishing Protection Alliance (CSPA), which sued the telecom in 2021 over contaminated cables that run under the water of Lake Tahoe. (Pacific Bell was acquired by SBC Communications in 1997, and adopted the AT&T brand after SBC acquired AT&T in 2005.)
AT&T settled the lawsuit that same year, agreeing to spend upwards of $1.5 million to remove the problematic cable at Lake Tahoe, which runs around eight miles long. The settlement was signed off by a federal judge that November.
Earlier this month, the Wall Street Journal published an extensive investigation into AT&T underground and underwater cables, including the transmission line in Lake Tahoe, with its journalists taking the position that the telecom knew its lead-covered lines had the potential to contaminate public areas. Among other things, the Journal contracted scuba divers to take samples from underwater transmission lines at Lake Tahoe and elsewhere.
AT&T said the Journal’s sampling of its transmission lines is flawed, and argues that the newspaper’s use of the same dive team relied upon by the CSPA amounts to a conflict of interest. It restated those claims in a federal court filing on Tuesday, in which it claimed to have notified the CSPA with its position on why the Journal’s reporting is wrong.
“Although AT&T has not been provided with the complete test results [taken by the Journal], the information reported by the Journal differs dramatically from the expert testing commissioned by AT&T,” attorneys for the telecom said in the filing. “Under the circumstances, AT&T submits the responsible course of action is to develop a further record rather than remove the Lake Tahoe cables, and work cooperatively with regulators and other stakeholders on a risk assessment.”
The Journal’s reporting has had a significant impact on the share prices of telecom industry stocks, with AT&T and peers seeing sharp declines over the last few days. Some of the cables initially laid by AT&T decades ago are now owned by Verizon, Lumen Technologies and other companies following the federal government’s break-up of AT&T into regional holding companies in the late-1980s.
Shares in AT&T, Verizon, Lumen and Frontier have lost a combined $18 billion in market capitalization since the Journal’s first story on the issue was published July 9, the newspaper reported, citing research from a pair of analysts with MoffettNathanson.
Officials at AT&T say they want the U.S. Environmental Protection Agency (EPA) to examine the issue of its lead-covered cables. The EPA has the authority to compel a private company like AT&T to address environmental contamination, but has not yet done so. If it does, some financial analysts believe it could cost AT&T a lot of money.
“AT&T is telling us that the total exposure is 200,000 route-miles or less,” Frank Louthan, a financial analyst with Raymond James who specializes in the telecom industry, wrote in a note to clients this week. “If it is determined that it all must be removed, we estimate the risk to $T is something in the neighborhood of $84 million per year.”
