America’s Hidden Hazard: Toxic Lead-Covered Cables Haunt Telecom Giants – The Average Joe
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    America’s Hidden Hazard: Toxic Lead-Covered Cables Haunt Telecom Giants


    July 18, 2023

    Your IQ may be a couple of points lower, thanks to that lead you might’ve been unintentionally consuming. Two weeks ago, a WSJ investigation found that telecom giants like AT&T and Verizon have left behind a network of toxic lead-covered cables across the US.

    That’s troubling since lead exposure can damage the brain and impact early development. And former employees interviewed by WSJ said that telecom companies knew about the exposure and risks but took little action.

    • WSJ tested over four dozen sites with lead levels that exceeded US EPA safety recommendations.
    • In Lake Tahoe, lead samples were 2,533x that of the EPA’s drinking water limit.

    When did it start? The cables were spread across the US between the late 1800s and 1960s during the rollout of the US telephone service. In the 1950s, telecom companies began transitioning towards plastic and fiber optic cables — but often retained old lead cables.

    In a 2010 presentation, AT&T mentioned that “some older metropolitan areas may still have over 50% lead cable.” Verizon said it has been modernizing its network with only a small portion of lead cables left.

    The price of negligence

    Since the report’s release, AT&T’s stock (NYSE:T) has fallen over 11% to a 30-year low. Several telecom stocks have also been downgraded, but there’s still too much uncertainty on the clean-up cost, potential lawsuits, and time it would take to handle the situation.

    • New Street Research is expecting it to cost $60B to extract the lead — with AT&T, who covers ~40% of US homes — eating up $34B of that amount.
    • Telecom companies are already dealing with heavy debt loads — which have become even more expensive to pay off with rising interest rates.

    There’s a long and expensive fight ahead — which could take years to play out and jeopardize the dividends telecom stocks have been popular for.

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