DSL Prime: AT&T Dissing the President

The phone company thinks it can offer as "concessions" the things it's already doing, but observers are not surprised, because cable is already getting away with the same hoax.

by Dave Burstein of DSL Prime and Future of TV [October 19, 2006]

"Broadband technology must be affordable. In order to make sure it gets spread to all corners of the country, it must be affordable."
—George Bush, April 26, 2004

Ed Whitacre should saddle up his corporate jet, ride to Washington, and quickly make a deal for the AT&T/BellSouth merger. His lawyers overdid it this time, trying to bamboozle the FCC with meaningless "concessions" and now the merger is delayed. Bravo to C & A for calling AT&T's bluff, hoping public comment would produce something more substantive. There's no reason the company needs to disrespect George Bush. The cost of making broadband "affordable" to AT&T's half of the nation is less than 1/10 of 1 percent of the BellSouth purchase price. Just do it.

Leonid Reiman has made hundreds of millions as Russian Communications Minister, and he didn't even have to wait before leaving office. The WSJ found a deal where Reiman's "friend" cleared $30 million after getting a mobile license, and followed up previous stories of a billion dollar enterprise controlled by front men. Russia, one of the most scientifically advanced countries on earth has only 720,000 DSL lines for 146 million people. Russia's broadband penetration is a tenth that of Estonia and far behind Bulgaria or Rumania (Point Topic figures).

With luck, the round fellow with a beard will make it to Los Angeles for Digital Hollywood next week. Say hello.

Breaking news:

• Free.fr is ready to turn on WiFi mesh networking across 300,000 customers (via Om)
• BellSouth went down across 9 states, and still is having problems.
• DT is about to make a big IPTV announcement
• AT&T strongly denied they were upgrading their FTTN/DSL plans to Phil Harvey at Light Reading
• PopSugar, the celebrity website from ex-2Wire exec Brian Sugar and his family, just received $3 million funding from Mike Moritz of Sequoia.(via Om)

Correction: Cioffi's estimate of 250 megabits maximum speed for standard copper wire was for 500 feet, not 500 meters. My mistake.

BellSouth emergency response has peers
Not a correction, but worth acknowledging
An telco veteran was unhappy my compliments to the BellSouth team didn't acknowledge the quality of his own group. Clearly, other telco reconstruction teams also deserve respect. Sanford Nowlin of the San Antonio Express remembers the work that just earned the company the 2006 Page Principles Award. "I helped the paper cover the story as Gulf Coast evacuees flooded into San Antonio, and I saw first hand what AT&T's services meant to people displaced by the disaster. Congrats to AT&T on a reward that's well deserved." A senior engineer recalls "the RBOCs were all spun off from AT&T, which had some of the most robust disaster recovery methods and procedures for physical plant in case of natural disasters. Most of those M&Ps still exist, in some form or fashion, to this day. While most of the post-Katrina work done was by BLS employees, there were SBC, VZ, and Q employees helping out as well. SBC also had its own hurricane work to contend with after Rita, which was not as widespread, but pretty devastating just the same. … Folks from the outside don't realize that there's still a lot of the pre-divestiture Bell System service ethos that permeates through many RBOC employees, especially in times of crisis."

The key point is that the AT&T/BellSouth merger will not reduce the number of natural disasters, and they will need substantially the same resources to meet them or more lives will be destroyed.

AT&T Considering $10+ 768 Kbps for New Customers
Converting the last dialup tier
The one surprise in the AT&T filing was a dramatic offer $10 + fees and taxes for folks who still haven't left dialup. Unlike previous promotions, the wording of AT&T letter suggested this price wouldn't expire after a limited period, but would continue up to 30 months after the merger. A modem is included for the price of shipping and handling on a 12 month contract, although no word on turn up or order charges. The marginal cost of serving a DSL customer is about $6 to $8 per month, so this is a very aggressive promotion. The U.S. dialup base is still over 15 million customers, an attractive target that should keep net DSL additions up with prices like this.

Copyright 2006 Dave Burstein.
The DSL Prime Newsletter is reprinted with permission.

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