Analysis & commentary on America's troubled transition from analog telephone service to digital advanced telecommunications and associated infrastructure deficits.
Tuesday, January 15, 2008
AT&T's failed broadband deployment strategy
Near the start of the current decade, AT&T (then SBC Communications) announced Project Pronto. The goal was to speed up the deployment of high speed Internet services — Digital Subscriber Line (DSL) over copper cable and twisted pair — to 80 percent of the phone company’s service area by 2002 and throughout its entire service area by 2006. Both deadlines were missed, with more than one in five residential customers unable to obtain any broadband services from the telco by the end of that year.
Now AT&T has decided to abandon that incomplete project in favor of another -- Project Lightspeed. It eschews the legacy DSL of the failed Project Pronto in favor of faster DSL -- VDSL -- running over a hybrid of fiber to the node (FTTN) and copper to the premises. The purpose of Project Lightspeed is to provide the necessary infrastructure to deliver AT&T's bundled Internet Protocol-based voice, data and video services known as U-Verse.
Like Project Pronto before it, Project Lightspeed/U-Verse appears to be faltering amid various technological and market challenges with the number of subscribers falling far below AT&T's goals and setting the stage for yet another incomplete initiative.
Complicating the picture is AT&T's decision to halt new deployments of its older legacy DSL technology in favor of the new VDSL Project Lightspeed platform, leaving large segments of customers who have been waiting for years for DSL hookups left in the lurch.
AT&T badly needs a management shakeup. It's time for an end to the fits and starts of ill-fated "projects" in favor of a new, long term comprehensive broadband strategy. It should commit itself to a deployment plan that covers all -- and not just selected portions -- of its 22-state service area and see it through to timely completion.
AT&T's customers deserve better. So do its shareholders, whom I believe would have the patience and perseverance AT&T's management has been lacking and would back a comprehensive broadband strategy if management clearly laid out the long term benefits.
The future of AT&T is at stake. It must decide if it wants to enter the digital, Internet telecommunications age or remain a mere "telephone company," content to rest on its laurels and passively depreciate its aging analog copper cable infrastructure while burdening itself with large dividend payments (recently five percent or $1.60 a share) that divert funds from needed investment in technology research and updated delivery infrastructure. If it chooses the latter course, then it shouldn't be surprised if bears and short sellers start stalking the company in the near future.
Saturday, January 12, 2008
Connect Kentucky draws fire from debunker
Art Brodsky of Public Knowledge has penned a lengthy examination of the nonprofit Connect Kentucky in which he debunks its claim that more than 90 percent of the state has access broadband Internet access:
“They haven’t impressed anybody in the state” with the data collection, the source said. Another Kentucky source said that the information on deployment wasn’t at all useful to non-Connect members. Connect’s claim that more than 90 percent of the state has access to broadband has been met with a great deal of skepticism. “It’s a joke,” one knowledgeable source said, echoing what others also believe.
Sources with knowledge of the program said there were a myriad of problems. Connect Kentucky’s results were overstated by a methodology that determined everyone within a 2.5-mile radius from a telephone company facility capable of supplying Digital Subscriber Line (DSL) service was indeed capable of getting the service. However, that assumption was not always true, the source said.
Federal Communications Commission data on DSL availability in Kentucky appear to back up Brodsky. In November, the FCC reported that 85 percent of telco customers were able to get high speed services as of Dec. 31, 2006. (See table 14)
And your California-based blogger who is located within 2.5 miles of an unactivated DSL remote terminal can certainly confirm that it doesn't necessarily mean service is available.
Thursday, January 10, 2008
Vermont deal with Fairpoint condemns state to "a dead-end future," union official says
The Charlotte Observer reports the International Brotherhood of Electrical Workers Local 2326, which represents about 500 Verizon employees, is unhappy with the deal. The local's business manager, Mike Spillane, says it condemns Vermonters to "a dead-end future that impacts the economy and jobs."
"We're going to be stuck with a DSL copper-based product that's the horse and buggy of broadband," Spillane told the newspaper.
Wednesday, January 09, 2008
FCC chairman hopes 700mhz auction will increase broadband access
Accordingly, Martin told the International Consumer Electronics Show in Las Vegas this week that the FCC will require companies that gain part of the spectrum in the FCC auction set for Jan. 24 to use and not just hold onto it. "We want to make sure that that's being put to use as quickly as possible. ... That's really going to be the ultimate test of [the auction's] success," the Seattle Times quoted Martin as saying.
New Web site to track broadband availability info
Tuesday, January 08, 2008
AT&T's tepid investment in residential market comes home to roost
The Associated Press quotes Stephenson as blaming softness in the residential wireline segment on disconnections by consumers struggling to pay household bills.
However, what's likely the real reason is AT&T's own flawed residential strategy. AT&T has stubbornly resisted investing in upgrades to its aging and increasingly obsolete last mile copper-based distribution system. Consequently, the telco is unable to offer high speed Internet services and bundles of voice and broadband within large portions of its 22-state service area to the residential and growing home office-based market segment.
Moreover, AT&T's Project U-Verse rollout offering "triple play" bundles including television service based on a hybrid of fiber optic and copper cable has run into a variety of technological and market-based obstacles, causing the company to consistently miss projections for new U-Verse customers.