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Another Analyst Predicts New U-Verse Expansion Wave
Though it Will Be Small Portion of Un-Upgraded Customers
by Karl Bode 08:34AM Friday Oct 19 2012
Suggesting a leak somewhere in AT&T's supply chain, a second analyst this week is magically predicting that AT&T will be upgrading at least a few additional DSL customers to U-Verse. As we noted this week any significant landline upgrades would run contrary to AT&T's character, and recent FCC filings suggest AT&T's interested in actually shuttering the majority of their 18 million un-upgraded DSL users. George Notter of Jefferies & Company estimates that AT&T's going to announce on November 7 that about 3 million of 18 million un-upgraded users will be upgraded to U-Verse, with the rest being nudged toward AT&T's LTE services:
quote:
Notter points out that the remaining 18 million access lines are "scattered over 80 percent of AT&T's geographic footprint." Alcatel-Lucent (NYSE: ALU) provided the fiber-to-the-node gear for the original U-verse deployment and would be the likely choice for the expansion, Notter writes. About 3 million to 5 million households would get FTTN in a U-verse expansion, Notter estimates. Most of the rest would get access via LTE, and that part of the deal could be split between AlcaLu and Ericsson AB, he writes.
While LTE may be faster than DSL in many of these markets -- it's also going to be dramatically more expensive for users thanks to low caps and $15 per gigabyte overages. Despite claims, there's also going to be portions of AT&T's existing landline footprint where LTE won't adequately reach -- meaning AT&T's move will result in connectivity gaps in an age where we're supposed to be eliminating them.

There's also serious competitive implications to AT&T's move. Most of the eighteen million, as AT&T's recent FCC filing points out, will be literally forced to cable competitors once AT&T has lobbied to strip regulations requiring they provide DSL and POTs services. Once consumer advocates wake up to what's going on you can expect some howling, since AT&T has received countless billions in taxpayer subsidies to get those lines up and running in the first place.

AT&T's November 7 announcement will introduce this as a revolutionary expansion of services with dramatic flair, when in reality AT&T's delivering a boot to the rear end of millions of customers AT&T no longer wants. Combined with Verizon's decision to drive millions of unwanted DSL users to cable, we're witnessing one of the largest power shifts in telecom in the last thirty years, with cable's monopoly powers about to be dramatically increased. Odd then that so few appear to be noticing what's happening.

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decifal

join:2007-03-10
Bon Aqua, TN
kudos:1

usf

They should no longer be eligible for the USF's as its stinking obvious they aren't using it for the networks..

mackey
Premium
join:2007-08-20
kudos:13

Re: usf

said by decifal:

They should no longer be eligible for the USF's as its stinking obvious they aren't using it for the networks..

No no, they're definitely using it for the network. By using USF funds to run the network, they can use all the money collected from subscribers to line the execs' and investors' pockets.

/M
decifal

join:2007-03-10
Bon Aqua, TN
kudos:1

Re: usf

said by mackey:

said by decifal:

They should no longer be eligible for the USF's as its stinking obvious they aren't using it for the networks..

No no, they're definitely using it for the network. By using USF funds to run the network, they can use all the money collected from subscribers to line the execs' and investors' pockets.

/M

This would be accurate Just imagine if ATT god forbid actually seriously reinvested in the networks they gobbled up over the years as the companies they purchased them from was actually in the process of doing.. ATT's too big, they need to sell off parts of their business as they are holding parts of the country back technologically.
elray

join:2000-12-16
Santa Monica, CA
So end the program and return the money to the taxpayers.
elefante72

join:2010-12-03
East Amherst, NY

Fill out

They are simply going to fill out existing metro areas...There is no way this is going to go to rural deployments. The current FTTN would be too expensive unless they switch the last mile and that means running new wires or going to a new wireless fixed topology (whitespace, LTE, etc).

As for the rural areas, they will let them go to DSL or cablecos. 20% of the people for 80% of the work is not cost effective.

If they can build out LTE in those areas, they can get the juicy wireless margin, so call it a day.

As they will have fibre backhaul for LTE, they are good from a capacity perspective. If the governement doles out billions maybe they run a few fibre cables.
canestim

join:2012-01-20

1 edit

Re: Fill out

After Randall Stephenson said last quarter that they were mulling upgrading more DSL lines I had actually already sent a letter to the Office of the President for AT&T asking them to do that. Just a few days later I received a call from a construction supervisor who said that they had been giving the green light to upgrade our area but he wasn't sure all the details yet as it was just decided. He said he wasn't sure when our area would be upgraded but that it would be upgraded within a 12-18 month time frame. So this analysts prediction may be spot on.

So if it's only 3-5 million lines it will be like elefante72 said, major area fill out and then LTE with Verizon Home Fusion like services for the rest. This is very encouraging for me since I live in a metro area that isn't upgraded (and AT&T is our only provider). I wanted to believe the AT&T guy but I always take it with a grain of salt until a guy is digging or running a line in our neighborhood. But this is encouraging, well for about 3-5 million of us unfortunate suckers anyway.

OSUGoose

join:2007-12-27
Columbus, OH

Re: Fill out

I'm curious how you worded the letter, as I live in a pocket where there isn't a nearby x-box to plop a VRAD next to (Fiber backhaul from CO to the RT, then UG copper to our neighborhood, qualify for Elite DSL). Yet were surrounded by u-Verse. Guys have said it will take running the fiber a lil deeper to us, or placing a VRAD next/in the RT to pair bond us. Maybe this will finally plug out hole were in.
Joe12345678

join:2003-07-22
Des Plaines, IL
As long as they don't force you over to U-verse tv from the ATT / directv deals and if they do will ATT pay the ETF? Give you the same rates and channel packs??? I don't want to be forced to buy showtime and starzs to get MLB Network, NBA TV, Fox Movie Channel, Planet Green, Fox Business Network, and others.

also 3 HD max is less then I get now.
canestim

join:2012-01-20

Re: Fill out

said by Joe12345678:

As long as they don't force you over to U-verse tv from the ATT / directv deals and if they do will ATT pay the ETF? Give you the same rates and channel packs??? I don't want to be forced to buy showtime and starzs to get MLB Network, NBA TV, Fox Movie Channel, Planet Green, Fox Business Network, and others.

also 3 HD max is less then I get now.

They will eventually do some kind of transition like when you make changes to your plan you would have to change over (or forcibly eventually) from DSL to U-Verse Internet but they wouldn't force you over for video services if you have a Directv contract, they are just partners. As for the discounts you receive from bundling they could keep the bundle price or make you pay current Internet pricing, who knows what they will do in your area.
MyDogHsFleas
Premium
join:2007-08-15
Austin, TX
kudos:5

Actually a nice analysis by Karl

Clearly the telcos are losing to cable in the wired broadband market. As a result Verizon has basically stopped FIOS expansion and doesn't seem to be doing much with their current base. AT&T has a few more legs because they can expand U-verse to new locations a lot more cheaply than Verizon can, they just have to run FTTN and reuse their existed twisted pair runs, which is not free by any means but a lot cheaper than running new FTTH. As this analyst reports, they may be doing just that to milk a few more dollars out and to deprecate their DSL in a few more areas. But that's kind of it.

DOCSIS 3.0 is way faster than vDSL already vs. AT&T, and competes head to head with FIOS. I just put in 50/5 service myself for $50/month from Mediacom at a new home. And DOCSIS 3.1 is coming which will blow away FIOS unless major improvements are made.

I think the telcos are becoming wireless companies. I had thought that AT&T would continue to improve vDSL but they appear not to be doing that. Same old tech is out there on the FTTN. They do have very nice STBs using video over IP and wireless in-home connections, but for broadband, not so much.
silbaco
Premium
join:2009-08-03
USA

We do not know....

Why don't we just admit we have no idea what At&t is going to do? Just a couple days ago we had a discussion about how U-Verse expansion is done. Clearly, it is not. We don't know what the company is going to do and it sounds more and more like At&t doesn't know what they are going to do either. Why don't we take a step back and wait for their November 8th announcement.

JigglyWiggly

join:2009-07-12
Pleasanton, CA

Re: We do not know....

This sucks. I have DSL and 2 cable lines at my parnets house. I have all my games go through DSL and if I am hosting I make sure the game goes through DSL with pfsense firewall rules.

The routing is so much better, and there is 0 jitter.
I do not want it being upgraded to uverse with its crap pings, and I certainly don't want for it to be "upgraded" to LTE.
TheRogueX

join:2003-03-26
Springfield, MO

Re: We do not know....

Crap pings? I've never seen a U-Verse speed test with a latency higher than 40ms.

David
I start new work on
Premium,VIP
join:2002-05-30
Granite City, IL
kudos:101
it's apparently infinite x infinite to blog and speculate than it is to wait. They say "Patience is a virtue"....now-a-days in the blogger world that's like asking and giving death!

OSUGoose

join:2007-12-27
Columbus, OH

Re: We do not know....

Hard to wait when u-Verse is all around you, but your neighborhood don't have it simply BC AT&T is being cheep. They plopped down all around us VRADS at every xbox you can find, but since there is no xbox between me and the RT they haven't figured how to do it. Guys even say I'd qualify for pair bond, based on cable type 22PIC with a small bit of 26PIC. Need to have uverse facilities placed at or near the RT, which at present there isent.

fiber_man
Things Happen For A Reason
Premium
join:2001-01-27
Port Saint Lucie, FL

Re:2 gauge change is problem

As stated you have a 2 gauge change in your loop 22 to 26 and that kills the u-verse signal.
--
GO NOLES!!

OSUGoose

join:2007-12-27
Columbus, OH

Re: Re:2 gauge change is problem

The tech pulled up the specs and that did not matter.

mikedz4

join:2003-04-14
Weirton, WV

what about eastern ohio?

Will eastern Ohio see u-verse tv?
Sammer

join:2005-12-22
Canonsburg, PA

Re: what about eastern ohio?

said by mikedz4:

Will eastern Ohio see u-verse tv?

That probably depends on what the cost per home to bring U-Verse to a neighborhood is? According to the 2010 census 51% of the U.S. population is suburban, 33% is urban, and 16% is rural. Population density shouldn't be much of a factor in the urban and most of the suburban areas but AT&T doesn't want to spend much money on U-Verse so other factors can definitely rule it out. From what I've seen there is still a large amount of rural area in eastern Ohio and those parts probably aren't on AT&T's U-Verse radar.
etaadmin

join:2002-01-17
Dallas, TX
kudos:1

Interesting date

Why is the announcement/decision on November 7? One day after the presidential election?

It's no secret that at&t is backing up Romney but if Obama wins could that change what at&t says? A win for Romney could mean more preferential treatment for at&t.
BiggA

join:2005-11-23
EARTH

They're not going to shut DSL down

They have no reason to shut cash cows down. The big issue is that lack of upgrades, so that users stuck at 1.5 or 3mbps will be stuck there indefinitely, while the rest of the web grows around them.
tmc8080

join:2004-04-24
Brooklyn, NY
Reviews:
·ooma
·Optimum Online
·Verizon FiOS

cut loose, then what?

If AT&T cuts off POTS and DSL access-- essentially pulilng out of markets, that must open the way for another carrier to pick up those access points and-- if ncesssary a muni backed carrier takes it's place...

It was obvious in 2006 that AT&T bit off more they can chew with BellSouth.. and they just wanted the core liquidity & assets to squander for the better part of a decade. As deregulatory luck (or bad luck for the consumer) would have it.. AT&T successfully became one of two duopoly legs for wireless due in no small part to the justice dept's lack of a backbone and public policy & credibility on the brink of collapse in 2008.

cfm117

join:2004-02-13
Woodland Hills, CA

Re: cut loose, then what?

Im thinking what they really mean by dumping POTS/DSL, they mean the C.O based equipment like 5E/DMS100 switches and DSLAMs and maybe anything up to the SAI/BBOX, keeping F1 cables pressurized, etc. All that requires lots of money in overhead to maintain. Keep everything RT and VRAD based, along with the last mile. All that pretty much runs itself, except for routine maintenence cases.
Pair Gain

join:2002-12-23
Washington
No, with the Bell South purchase, they just wanted full control of Cingular.
TheRogueX

join:2003-03-26
Springfield, MO
Reviews:
·Mediacom

U-Verse

I actually work for AT&T, as a U-Verse Prem Tech, and everything I've heard hints that this year was heavy LTE, but that next year was going to see U-Verse expansion again.

Granted I've not read anything that could be considered solid proof. It's all just hearsay, as far as I'm concerned.
Bob61571

join:2008-08-08
Washington, IL
Reviews:
·MTCO Communicati..
·DIRECTV
·Frontier Communi..

So, AT&T! Don't you want to make $ in Peoria, Illinois?

To whom it may concern at AT&T:

There are thousands of Caterpillar workers that NEED high speed broadband, because they work from home part time(or full time). They work with people in nearly every country in the world, on a 24/7/365 basis.

Caterpillar is a Fortune 50 company, and AT&T is one of its strategic partners. There are hundreds of contacts between both companies' employees every day.

Peoria has 2 major hospitals, and a medical school. Peoria is a center of manufacturing, ethanol production, agriculture, and transportation.

The Peoria IL MSA has 380K people, while the city of Peoria has 116K people.

You haven't invested anything in residential broadband in the Peoria IL market for a decade. Your best speed is 3Mbps down, with good old copper.

You have major fiber lines(that eventually go to various Cat facilities) that go past 10's of thousands of potential residential customers.

Why are you scared to make some residential broadband capex in the Peoria, Illinois market? Are you scared of Comcast?