Tuesday, December 17, 2013

First indication of AT&T withdrawal from residential wireline market

Sensing AT&T's lukewarm commitment to its residential wireline business segment, in 2008 I predicted that AT&T would abandon the segment in the first half of 2010. The telco is still in the residential wireline business as 2013 draws to a close. But a slow withdrawal could now be underway, one state at a time starting with Connecticut.

Bloomberg reports today that AT&T will spin off its Connecticut residential landline unit, including Internet and TV services to Frontier Communications for $2 billion.

AT&T relies on copper cable plant to deliver premises Internet service, scotching plans dating back to the late 1980s developed by regional bell operating companies AT&T absorbed in the 1990s to replace the last mile copper network with fiber optic cable. That reliance has technologically limited the reach of AT&T's Internet-based service offerings since copper was designed to carry analog voice service and not digital Internet signals that can be reliably delivered over only short distances using copper.

AT&T's relationship with Connecticut hasn't been a copacetic one. In 2007, then-Attorney General Richard Blumenthal pressured the telco to make its U-Verse product offering available to all residences in the state. Blumenthal, now a U.S. senator, said this week the deal should be reviewed to ensure it is in the interest of consumers.

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