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AT&T, Comcast say GOP tax bill will mean $1,000 bonuses for employees

(Andrew Harrer/Bloomberg News)

AT&T said Wednesday that it plans to invest an additional $1 billion into its U.S. networks in 2018 and give hundreds of thousands of employees a one-time bonus after the passage of the Republican-led tax bill in Congress.

The additional funding is expected to support AT&T's expanding high-speed Internet networks, as well as the next generation of wireless data, known as 5G, the telecom company said.

“Congress, working closely with the President, took a monumental step to bring taxes paid by U.S. businesses in line with the rest of the industrialized world,” said Randall Stephenson, AT&T's chief executive, in a statement.

America's 20 largest companies on tax reform

As many as 200,000 employees will receive a bonus of $1,000 under the plan, according to AT&T.

AT&T spent about $23 billion building out its infrastructure in 2016, and estimates earlier this summer suggested that the company was on track to spend $22 billion in 2017.

The announcement came as House and Senate Republicans approved a massive tax bill that slashes the corporate tax rate from 35 percent to 21 percent. Among the biggest beneficiaries of the legislation, analysts say, will be the telecom industry. AT&T's effective tax rate is currently 32.7 percent.

President Trump on Dec. 20 said that the GOP tax bill that passed the House and Senate is the “largest tax cut in the history of our country.” (Video: Reuters)

The bonuses are not a part of a union contract agreement announced last week, said a spokeswoman for the Communications Workers of America. But, the group said, they are a result of conversations between CWA President Christopher Shelton and AT&T's Stephenson.

“By pushing employers for this raise, CWA proves that working people have power when we join together to negotiate for a fair return for the work we do,” the union said in a statement. “Unions remain the most effective means for working people to stand together and achieve wage growth and keep good jobs in the U.S.”

The cable industry also joined the wave of corporate announcements linked to the tax bill Wednesday. Comcast chief executive Brian Roberts said the company would be giving out $1,000 bonuses to “eligible frontline and non-executive employees.” Comcast also said it would be investing “well in excess of $50 billion” over the next five years into its infrastructure, media businesses and theme parks, in light of the legislation and of the Federal Communications Commission's recent decision to deregulate the broadband industry.

The network spending of Internet providers has become a hotly contested issue in recent years as broadband companies such as AT&T and Comcast blamed a relative decline in spending on the FCC's net neutrality rules. Those rules were repealed last week by a 3-to-2 vote at the agency, in a move that would allow providers to speed up some websites, slow down others or charge some sites new fees.

A wave of new broadband spending next year could increase the industry's overall investment numbers, giving ammunition to industry and FCC officials who predicted that the deregulation would accelerate upgrades to the nation's Internet infrastructure.

The bonuses also come as a number of Internet providers, including Comcast and DirecTV, the television provider owned by AT&T, announced price hikes for their broadband and cable TV packages that are expected to start next year.