AT&T Wireless 2013 Annual Report Download - page 39

AT&T Inc. | 37
Equipment failures, natural disasters, computer hacking
and terrorist acts may materially adversely affect our
operations.
Major equipment failures or natural disasters, including
severe weather, computer hacking, terrorist acts or other
breaches of network or IT security that affect our wireline
and wireless networks, including telephone switching
offices, microwave links, third-party-owned local and
long-distance networks on which we rely, our cell sites
or other equipment, or our customer account support and
information systems, could have a material adverse effect
on our operations. While we have been subject to security
breaches or cyber attacks, these did not result in a material
adverse effect on our operations. Our inability to operate
our wireline, wireless or customer-related support systems
as a result of such events, even for a limited time period,
could result in significant expenses, potential legal liability
or a loss of customers or impair our ability to attract
new customers, any of which could have a material
adverse effect on our business, results of operations
and financial condition.
The continued success of Project VIP will depend on
the development of our U-verse services and wireless
initiatives; attractive and profitable broadband and
video service offerings; the extent to which regulatory,
franchise fees and build-out requirements apply to this
initiative; the availability of content on reasonable terms
and conditions, including price, and the availability and
reliability of the various technologies required to provide
such offerings.
Telecommunications technology has shifted from the
traditional circuit- and wire-based technology to IP-based
technology. IP-based technology can transport voice and
data, as well as video, from both wired and wireless
networks. IP-based networks also potentially cost less
to operate than traditional networks. Our competitors, many
of which are newer companies, are deploying this IP-based
technology. In order to continue to offer attractive and
competitively priced services, we have deployed a new
broadband network to offer IP-based voice, data and
video services. Should regulatory requirements change,
our deployment could be limited to only those geographical
areas where regulation is not burdensome. In addition,
should the delivery of services expected to be deployed on
our network be delayed due to technological or regulatory
constraints, performance of suppliers, or other reasons,
or the cost of providing such services, including the
availability and cost of content for our video offerings,
becomes higher than expected, customers may decide
to purchase services from our competitors, which would
adversely affect our revenues and margins, and such
effects could be material.
Unfavorable litigation or governmental investigation
results could require us to pay significant amounts
or lead to onerous operating procedures.
We are subject to a number of lawsuits both in the
United States and in foreign countries, including, at any
particular time, claims relating to antitrust; patent
infringement; wage and hour; personal injury; customer
privacy violations; and our advertising, sales and billing
and collection practices. We also spend substantial
resources complying with various government standards,
which may entail related investigations. As we deploy
newer technologies, especially in the wireless area,
we also face current and potential litigation relating to
alleged adverse health effects on customers or employees
who use such technologies including, for example, wireless
handsets. We may incur significant expenses defending
such suits or government charges and may be required
to pay amounts or otherwise change our operations in
ways that could materially adversely affect our operations
or financial results.