Legacy of Old Lead Cables Is Big New Headache for AT&T

One of the big business stories percolating over the last week involves plunging share prices at telecom companies in general and AT&T in particular. On Monday, for example, AT&T's stock fell another 7% to reach a 30-year low, reports Reuters. The culprit: A damning investigation by the Wall Street Journal that came out on July 9 about the dangers—and potentially huge liability costs—posed by abandoned lead cables across the US.

• Investigation: The Journal revealed what it calls a "hidden" source of lead contamination and one that has not been previously reported: more than 2,000 old lead cables, some buried, some underwater, some overhead, that are degrading and leaching into soil and groundwater. The Journal spot-checked various sites, reporting that "lead levels in sediment and soil at more than four dozen locations ... exceeded safety recommendations" set by the EPA. And these cables are everywhere, with the story citing examples near schools and popular fishing and swimming spots. One analyst estimated the cost of cleanup at $59 billion, per a separate Journal piece. Read the investigation here.

• Fallout: Telecom stocks have been sinking ever since the investigation came out, particularly after analysts at JPMorgan, Citigroup, and elsewhere downgraded AT&T's stock, per Quartz. A typical sentiment, expressed by Edward Jones analyst David Heger: "We are uncertain if remediation measures could be required by environmental regulators and whether health concerns could cause sizable litigation liabilities." It's not just AT&T, though that company faces the biggest exposure. Companies including Verizon, Frontier Communications, and Lumen Technologies also were getting hammered.
• Fallout, II: The matter already has stirred the interest of lawmakers. For example, Sen. Ed Markey of Massachusetts wrote a letter to the lobby group US Telecom demanding more information about the scope of the problem, reports Ars Technica. "Why have the companies that knew about the cables—and the potential exposure risks they pose—failed to monitor them or act?" Markey wrote. He wants answers by July 25.
• Denial: AT&T disputes the Journal story, asserting that the newspaper's testing methods were "flawed" in a statement. "The scientific literature and reliable studies in the US and abroad give no reason to believe that these cables pose a public health issue or a risk to workers when appropriate safety measures are in place." US Telecom similarly says there's no evidence to suggest the cables pose a risk to public health.

(More AT&T stories.)