AT&T and Verizon Investors Have More Than Lead Cables to Worry About

Big telecommunications companies are working to reassure investors about two burdens: toxic lead and heavy debt. Questions about the latter are lingering in the background as AT&T and Verizon use their quarterly earnings reports to address more immediate questions about lead-lined cables. Both companies inherited a web of aging telephone lines from their predecessor companies but reap almost all of their profits from more modern fiber optics and cellphone connections. On paper, wireless companies should be thriving: Americans are glued to their smartphones, federal subsidies are plentiful and the stock market is surging. In the market, companies like AT&T and Verizon look less healthy. The two cellphone carriers were among the worst-performing stocks in the S&P 500 index during the first half of 2023—well before a Wall Street Journal investigation on aging telephone networks rattled already-wary investors. Telecom companies enjoyed a flood of pandemic-era subsidies the federal government issued to keep Americans connected during the crisis, yet that boost faded last year as U.S. officials wound down the programs. Federal officials have since replaced emergency wireless payments with the more permanent Affordable Connectivity Program, a federal voucher that foots up to $30 of a qualifying customer’s monthly phone bill. Analysts say that program, while open to a large pool of Americans, hasn’t driven up subscriber numbers as quickly as the emergency subsidies did.