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AT&T May Sell Off Many DSL Markets
Upgrades Schmupgrades
by Karl Bode 02:39PM Tuesday Mar 06 2012
We recently noted how AT&T's U-Verse expansion is essentially over, and if you haven't seen your market upgraded yet you probably aren't going to. So what happens to a little less than half of their current customers still on older DSL technology? Like Verizon -- who offloaded millions of users in somewhat ugly deals with Frontier and Fairpoint, it appears that AT&T is looking to sell off many DSL markets and keep their focus on wireless.

AT&T's recently on record stating that they can't find an "economically viable" way to upgrade these users, despite a looming increase in faster and less expensive last mile DSL technologies. The company's also recently on record stating that they believe DSL is "obsolete" -- a troubling claim since that's their primary product. According to the latest DSLPrime newsletter from Dave Burstein, all signs point to the fact that AT&T's gunning to sell many DSL markets off, provided they can find a buyer.
quote:
That’s essentially all of AT&T not reached by U-Verse. Stankey is “doing a rapid tech evaluation” of whether they can upgrade their DSL + wireless to “a competitive broadband product.” But Randall “doesn’t see a solution.” If that’s confirmed, “we’re looking for others who might want the properties.” Stankey’s competent. Looking at bonded/vectored DSL he may change the company’s plans. Randall’s mantra, however, is "We are a wireless company." It's unclear if any of the “rural carriers” – Century, Frontier, Windstream – have the financial ability to make an attractive offer. If operators can’t raise the money, T would need to make a financial transaction. A complicated spinoff retaining the growing parts of the company is one possibility. There’s probably an interesting way to lose pension and deferred tax liabilities if they make that choice. All the big private equity firms are looking at bids.
The sale could involve anywhere between 10 and 25 million DSL lines. AT&T would then follow Verizon's lead and focus on selling capped, expensive LTE service to many more rural users, who primarily have the choice of slow, overpriced satellite, or slow, over-priced DSL (both, if they're "lucky"). The complete lack of interest in upgrading DSL lines in more than half of the United States is great news for cable companies, who'll be able to jack up rates for a decade as the only ISPs in many markets capable of anything close to next-gen speeds.


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