Everytime AT&T Wants Federal Approval Of Merger Or Policy, It Promises It's Necessary To Deliver 100% Broadband... Then Doesn't Deliver

from the because-fulfilling-promises-is-hard dept

We've covered in the past how Verizon has a long history of making promises to regulators to get special deals, and then never delivering. Usually these promises involve providing high speed fiber to the home connections, for which they get massive tax breaks and subsidies... and then never delivering. And, if people finally point out that it didn't deliver, it lobbies to drop the requirements that it had agreed to abide by (but never actually did). Of course, there's a very similar story with AT&T, and telecom analyst Bruce Kushnick, who's been the leading voice on these broken promises for years, has the details. In fact, what he notes is that AT&T has made some rather specific promises about providing broadband to get approval of mergers, but has never delivered. And now it's doing the same for its attempted merger with DirecTV.

He notes that, first, AT&T (then called SBC) promised a massive fiber broadband in 2004, as part of convincing the FCC to kill off open access requirements for fiber optic networks. So did BellSouth (eventually bought up by AT&T). And yet, the numbers they promised were never met. Because, of course they weren't. Then, when the AT&T was buying BellSouth a few years later, it promised to offer 100% broadband penetration. If you can't see that, all you really need to know is that it says "By December 31, 2007, AT&T/BellSouth will offer broadband Internet access service... to 100 percent of residential living units in the AT&T/BellSouth in-region territory." Okay. Now, remember that, and fast forward to today. As you know, AT&T is trying to buy DirecTV, and one of the reasons it's citing for the merger is... that it will help bring broadband to 15 million customers that don't currently have broadband. Here's the press release.

AT&T will use the merger synergies to expand its plans to build and enhance high-speed broadband service to 15 million customer locations, mostly in rural areas where AT&T does not provide high-speed broadband service today, utilizing a combination of technologies including fiber to the premises and fixed wireless local loop capabilities."

Huh. As Kushnick points out: "If AT&T is already supposed to have 100% completed, how can 15 million locations -- at least 20% of all AT&T areas, not already have high speed broadband?" This certainly suggests that AT&T just flat out lied to help get the earlier merger completed.

Meanwhile, Karl Bode is pointing out that it's not just on the wireline side that this happens. Jump over to the wireless side, and its attempted (but failed) acquisition of T-Mobile, and you'll find a similar story:

AT&T does the same thing with wireless. Back when AT&T was trying to get approval to acquire T-Mobile, the company shot itself in the foot by accidentally posting a confidential document showing it would cost AT&T just $3.8 billion more to go from 80% nationwide LTE coverage to 97% coverage, something AT&T had been claiming was only possible if they were allowed to pay $39 billion to eliminate T-Mobile.

Of course, what we've now learned is that the telcos appear to know that they can pretty much say whatever they want, as long as it sounds good, because no politician or regulator is likely to ever look back and call them out on their previous unmet promises.

Filed Under: broadband, competition, fcc, ip transition, mergers, net neutrality, promises
Companies: at&t, directv

AT&T's 'IP Transition' Will Make U.S. Broadband Even Less Competitive

from the ill-communication dept

AT&T has spent a massive amount of time the last few years harping on the need to speed up the "IP transition." On its surface the idea seems reasonable; the nation needs to begin migrating from older copper DSL and phone technology toward new IP solutions, such as wireless and fiber to the home, the former being easier to deploy to rural areas, and the latter having much lower maintenance costs while being able to deliver faster speeds. AT&T is going state-by-state insisting that if lawmakers gut consumer protections governing these older networks, newer, better networks will spring forth from the ashes to help forge a better tomorrow, as this charming video makes clear:

Aren't those little railroad men saddled with antiquated regulations and ancient technology adorable?

The problem is that AT&T's version of the network of tomorrow for millions of users is going to mean significantly fewer choices and worse, more expensive service than ever before. While it's true many people are moving away from copper phone service, unmentioned by AT&T's video is the fact that millions of customers remain on copper-based DSL because it's the only choice they have and the only one AT&T offered. While AT&T has selectively upgraded some users to their faster but still not fiber to the home U-Verse VDSL platform (about half of their fixed-line network), tens of millions of AT&T and Verizon's DSL customers aren't going to be upgraded anytime soon. Instead, they're going to be hung up on or sold to smaller telcos with even less interest in upgrading them than AT&T did.

Enjoy the magic of tomorrowland, everyone!

While new DSL deployments and upgrades can be expensive (AT&T has always had the funds, they've just long placed investor returns well above offering quality product and support), existing DSL customers are perfectly profitable. They're simply not profitable enough for impatient investors, whose eyes are squarely fixed on wireless with its low usage caps and per gigabyte overages, even if wireless is not (especially at AT&T prices) an adequate replacement for a fixed line. Refusing to upgrade fixed-line networks could almost be excused if it wasn't for the fact that, with their other hand, AT&T has long lobbied for protectionist legislation across multiple states banning towns and cities from upgrading themselves - - even in cases where nobody else will.

Once AT&T has gutted any remaining consumer protections and regulations on copper lines (which were over time quite heavily subsidized by taxpayers, but who cares, right?), they're going to walk away from many areas -- leaving users with either the choice of more expensive wireless (many rural users won't be able to get), or a suddenly emboldened and stronger cable monopoly. AT&T and Verizon are quietly ceding huge swaths of America's fixed-line broadband market to cable, who'll be sure to jack up prices in the face of less competition than ever. This before you even factor in the smaller ISPs that might have been using those telco lines to offer competing services (whoops, sorry!).

The use of "all IP" is also quite a lovely bit of conflation and misdirection, given the company's U-Verse and DSL users are already IP-based. You'll see the "all IP" rhetoric popping up in an endless series of editorials (like this one by Steve Forbes) AT&T has been running nationwide to convince people they really don't need that DSL line they're using. Larry Downes at CNET recently informed readers that AT&T's simply interested in "connecting more Americans to the broadband ecosystem." Nothing quite says connecting more Americans like disconnecting Americans.

The FCC recently started paying closer attention to this "IP transition" when Verizon's version of it involved refusing to repair east coast DSL customers after Hurricane Sandy. Instead, after waiting months for repairs, customers were given something Verizon is calling Voice Link -- a wireless service that locals complained was dramatically less functional and reliable than their previous copper DSL and phone lines, failing to offer basic features or data, leaving Comcast (which had no problem financing coaxial repairs) as the only regional fixed-line broadband competitor in many of these areas. Verizon was using the storm as cover to back out of areas they no longer want to service, though they fell under criticism by the New York AG for violating PSC rules.

To tackle the general technical problems with the "IP transition" (will my home security system still work? Can I even get a reliable LTE signal in my basement? Will 911 work?), the FCC has proposed a series of observed technical trials. AT&T has announced that their version of these trials will involve migrating two tiny towns to presumably LTE wireless and U-Verse over the next few years, after which AT&T and the FCC will likely proclaim the trial to be a smashing success. Ignored by AT&T, the FCC, and the press so far has been the fact that as AT&T and Verizon back away from DSL, they're going to be leaving an even less competitive broadband market than we have now -- at a time when everyone pays endless lip service to improving broadband competition.

The next time you read in the press about the "IP transition," (and you'll be reading about it a lot) notice how quickly everybody applauds the idea that copper is just so lame, old fashioned and unnecessary. Then notice how, buried under the pageantry, nobody seems to recognize that what's actually happening here is simply the lopping off of unwanted DSL customers that companies are refusing to upgrade. That in turn will lead to a stronger cable monopoly across half the country, resulting in cable companies -- like the freshly-merged Time Warner Cable Comcast -- feeling free to impose more draconian usage caps than ever before. Welcome to the "all IP" networks of tomorrow. Watch that first step.

Filed Under: broadband, competition, dsl, ip transition
Companies: at&t, verizon