With its shares tumbling to their lowest in 13 years, Verizon Communications Inc. is launching an investigation to help clarify the extent of potential lead contamination that may be related to its aging phone cables.
Verizon is testing various sites where lead was reported to be leaching into the ground from wiring dating back to the early 20th century.
The issue was exposed last week in a Wall Street Journal story that pointed to lead found in several areas around the US, including the banks of the Passaic River in New Jersey and a playground in Wappingers Falls, New York.
The old landline networks were built starting in the late 1800s at a time when lead cladding was used to insulate transmission wires. Lead, which has been linked to multiple health issues in adults and children, started to be phased out in the 1950s. Most of the legacy networks are now owned by several national carriers including AT&T Inc., Verizon and Lumen Technologies Inc.
“We are taking these concerns regarding lead-sheathed cables very seriously,” Verizon said in a statement. “Lead-sheathed infrastructure has not been deployed in decades by Verizon or its predecessor companies. Only a small percentage of our existing network today includes lead-sheathed cable.”
AT&T also said it is “conducting additional testing,” including at sites mentioned by the Journal.
The uncertainty around the lead issue and the potential cleanup costs add to an already difficult year for the carriers, which have seen almost no payback from billions of dollars spent on 5G upgrades, a slowdown in subscriber growth and the potentially disruptive entry of Amazon.com Inc. into the mobile service.
AT&T, like its peers, is an amalgam of the old regional Bell phone companies acquired over the years. But analysts have assigned Ma Bell, as it’s informally known, with the most potential cost exposure given the age and size of its local and long distance networks. Shares of AT&T have fallen to a three-decade low as Wall Street worries over the extent of the potential damage.
“Investors are likely to shoot first and ask questions later,” Craig Moffett, an analyst at MoffettNathanson Research, wrote Monday. Wall Street might not be buying phone company stocks until the lead cloud lifts, he said.
USTelecom, an industry group, has created a website featuring several statements about the Journal’s investigation, disputing the charge that phone cables are a leading cause of lead exposure. The group, which represents most US phone companies, says it’s “ready to engage constructively on the issue.”
Verizon said in its statement that lead in the environment may come from “a variety of different industrial uses other than telecom. “As our review of this matter continues, we stand ready to work closely with our industry and others to address any concerns and issues.”