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Cable is Eating DSL's Lunch in Un-Upgraded Markets
Telco Investors Get What They Were Willing to Pay For

Both AT&T and Verizon saw continued strong growth in wireless in this week's earnings reports, but took a bit of a beating in terms of DSL subscriber counts in their un-upgraded markets and overall broadband growth. Verizon lost 103,000 DSL lines during the fourth quarter of 2011, while AT&T lost 636,000 DSL lines. In AT&T's case the company wound up posting a net loss of 49,000 broadband customers thanks to the addition of 587,000 U-Verse Internet customers. Neither company is keeping pace with cable industry additions, however.

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Where are the DSL users going? Neither company breaks down market or subscriber specific defection paths. Some are obviously migrating to the faster FiOS or U-Verse options being offered by the telcos. However, many are signing up for faster cable services in markets neither AT&T or Verizon wanted to spend money to upgrade.

Last summer, AT&T CEO Randall Stephenson went so far as to call DSL "obsolete" -- a problem when that's the only broadband product you're selling.

As we noted earlier this week, despite Verizon's $24 billion FTTH FiOS investment, there's still 30% of their footprint that won't be joining the modern broadband age anytime soon. AT&T's initial investment in U-Verse was significantly less aggressive and costly, but the number of customers not upgraded to U-Verse sits around 50% of their footprint. Even when upgraded to U-Verse, AT&T's not matching cable when it comes to speeds. The reasons for the AT&T DSL departures and slow broadband growth are clear: AT&T didn't put enough money back into the last mile network.

Both cable companies and customers stuck on slow DSL can thank telco investors for the stagnation. Investors whined, griped and complained ceaselessly over the last few years about any attempt by AT&T and Verizon to put money back into the network -- even when cash was clearly on hand. Now neither company can seriously compete with cable in the markets investors never wanted upgraded in the first place, which will result in a subscriber hit -- that investors will then complain about.

Annoyed customers stuck on slower DSL may eventually see faster speeds, but right now both U-Verse and FiOS expansion plans are frozen, meaning cable broadband will rule the roost for the foreseeable future. While there are a variety of new DSL technologies that bond lines and quell crosstalk pushing last mile DSL speeds higher, they've not yet been seriously deployed and still face distance constraints. Right now the focus is on wireless, with the telcos pretty clearly not caring what happens in a large number of landline markets where millions of users are still clodding along at 1.5 to 3 Mbps.
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etaadmin
join:2002-01-17
united state

etaadmin

Member

New uverse = old adsl

Still stuck with slow internet speeds like in this post »The best uverse I could get in illinois

It is just ol' adsl by a new name.
smitmor
join:2004-04-10
Springhill, LA

smitmor

Member

Re: New uverse = old adsl

I, too, am in an unupgraded market. We moved offices a couple weeks ago and had AT&T move the phone lines. When they did, they terminated our legacy DSL service. When I inquired about it, they told me that DSL was no longer available and I'd have to upgrade to U-Verse. I went along with it, but neither U-Verse voice nor U-Verse TV are available, only Internet. The "new" service is the same 3 meg service we've always had. Even the modem they sent is a plain old ADSL2+ modem. As far as I'm concerned, it's not U-Verse unless it's VDSL with TV and voice. I guess this is AT&T's way of making the public "think" they are improving things, without actually putting any money into the network.

npln
Us Army
join:2000-07-17
Martinez, CA

npln

Member

Re: New uverse = old adsl

AT&T is calling anything and everything that connect to their U-verse "backbone Uverse! in your case, you got hooked up to an IPDSLAM at the central office. That equipment has no TV capabilities thus its just DSL.
chgo_man99
join:2010-01-01
Sunnyvale, CA

chgo_man99 to etaadmin

Member

to etaadmin
said by etaadmin:

Still stuck with slow internet speeds like in this post »The best uverse I could get in illinois

It is just ol' adsl by a new name.

Actually higher speeds were available to me and I am on VDSL but sales would not sign me up without a tech visit, even though theoretically they support self-install up to 12mb profile (18 and higher with pro). I guess some locations have very old twisted pare and they dont wanna oversell tier only later to receive complaints. Don't remember if they wanted to charge for a visit, but I refused and went with 6 as I had no time to be at Illinois to deal with this.

MacBridger
Late to the party
Premium Member
join:2001-01-11
Morgantown, WV

MacBridger

Premium Member

Re: New uverse = old adsl

Verizon is the same deal. I am in an area that will be one of the last ever upgraded. I supposedly can get 3.0 Mbps DSL. The problem with that is that the copper here is so old it won't even support 56k dial up over pots. In fact, my line has so much attenuation that adding more than 2 ringers to the line causes pots to drop.

So much easier to go to Comcast.
BosstonesOwn
join:2002-12-15
Wakefield, MA

BosstonesOwn

Member

Re: New uverse = old adsl

Exactly the same which happened here,

I have recently been looking for a dsl provider to help cut costs but there just isn't any here because the copper here is so old and neglected.

I love how we spouted off about this for the past 5 years since fios started and now it's hurting the investors bottom line and they will complain about it, sorry but Im not going capped wireless, at this point i have even dumped some value added services on verizon wireless to get away from verizon. Tired of when a ceo has a vision and has a direction for the future the boards of this country dump them instead of embracing the future. We can not all live only for today we need to start developing for the future.

IVAN WE MISS YOU ALREADY !

dslwanter
20 years on this site
Premium Member
join:2002-12-16
Mineral Ridge, OH
·Armstrong
Ubiquiti UniFi AP-LR
Ubiquiti EdgeRouter X SFP

dslwanter to etaadmin

Premium Member

to etaadmin
AT&T tried to get me to sign up for "U-Verse Elite" at 6mbps for $24.95 a month or upgrade to "Elite DSL" for $43 at my 1 year last month. I threatened to switch to TWC and got a $19.99 "Elite DSL" promo. Why would I care to upgrade to U-Verse? I don't qualify for any package higher than "U-Verse Elite". I did qualify for "Max" at 12mbps at one time, but that option went away. 1 choice for a modem which I would have to pay $100 for.

I don't come close to the 150GB cap and I get to keep my good ol' Speedstream 4100 and Linksys WRT54G.
mlcarson
join:2001-09-20
Santa Maria, CA

mlcarson

Member

Not obsolete

DSL is not obsolete as long as you're close enough. What else does the telco have for consumers? Nobody's using wireless for home with the per byte billing and low caps. I switched from cable since I can get 40/6 on DSL.
davidhoffman
Premium Member
join:2009-11-19
Warner Robins, GA

davidhoffman

Premium Member

Re: Not obsolete

"...Nobody's using wireless for home with the per byte billing and low caps..." I personally know of 4 families who are dependent on cellular broadband. They use the Millenicom resell of Verizon. They all live with a limit of 20GB per month. They all live in areas with no cable or DSL service. They had either dial up or satellite. One family lives in an area filled with well to do horse owners and large horse pastures. In spite of the income those people have, AT&T and the cable company refuse to build high speed internet in those areas. AT&T did install a tower to handle some of the no cellular service problems in the area, so AT&T mobile broadband customers are getting much better service, at least as far as signal strength is concerned. Now if AT&T would reduce the cost per GB, getting broadband through them might be tolerable.

Tobester
join:2000-11-14
San Francisco, CA

Tobester to mlcarson

Member

to mlcarson
said by mlcarson:

DSL is not obsolete as long as you're close enough.

Agreed.

Here in San Francisco we have a local company Sonic.net who I believe is eating AT&T's lunch by those who hear about Sonic's Fusion package of ADSL2+ service package of internet, unlimited calling, custom calling features, and voicemail.

Like your example, I'm only 5,000' from the Central Office so I get great speeds (10.2Mbps); no usage caps, and it's much cheaper than anything Comcast offers.

Sonic's fiber to the home will eventually replace copper, but for now, ADSL2+ can work in densely populated areas if the local Bell company would provide it.
davidhoffman
Premium Member
join:2009-11-19
Warner Robins, GA

davidhoffman

Premium Member

Re: Not obsolete

If I understand Sonic.net correctly, they can bond two telephone lines together to double the data rate. So in your example you would normally get 5.1 Mbps on one line, but due to bonding of two lines you get 10.2Mbps. Or am I not understanding the various technologies Sonic.net uses. Or is the telephone line bonding something else.

Tobester
join:2000-11-14
San Francisco, CA

Tobester

Member

Re: Not obsolete

You are correct about Sonic being able to bond two copper pairs in order to double your speeds.

My speed of 10.2Mbps is with one pair.

Of course, I could upgrade to bonded service (like my neighbors) and double my speed, but my current package is best for saving money.

BTW, the bonded Fusion service is still cheaper than Comcast's similar services.
davidhoffman
Premium Member
join:2009-11-19
Warner Robins, GA

davidhoffman

Premium Member

Re: Not obsolete

I want, I want, I want Sonic.net here in central Georgia. Bonding two lines would get me about 12 Mbps download and 1 Mbps upload. I dread having to someday needing to switch to Cox cable to get higher data rates. And no cap threats. What a treat. We need more companies in the USA like Sonic.net for all kinds of services.

Tobester
join:2000-11-14
San Francisco, CA

Tobester

Member

Re: Not obsolete

Yes, Sonic is a great company.

ADSL2+ speeds drop off considerably depending distance to the central office, but I more than doubled my speed when I left AT&T DSL for Sonic's Fusion.

Getting back to the initial post, there is value to be found in using the old copper lines, if a company had the inclination.

It might be a smaller market for densely populated areas, but the equipment costs would have to be much less than digging up streets for FIOS, etc.

I just don't see myself ever using my Verizon LTE cellphone for internet browsing due to cost and data caps.

redxii
Mod
join:2001-02-26
Michigan

1 recommendation

redxii

Mod

Quite a dilemma..

Why get 1.5Mbps DSL when 107Mbps cable is available. I was in a Verizon area, and they said they didn't want to deploy FIOS anymore.

Poo on the telcos.

r81984
Fair and Balanced
Premium Member
join:2001-11-14
Katy, TX

r81984

Premium Member

Re: Quite a dilemma..

said by redxii:

Why get 1.5Mbps DSL when 107Mbps cable is available. I was in a Verizon area, and they said they didn't want to deploy FIOS anymore.

Poo on the telcos.

Why have 107 Mbps if you are capped?
The best thing att can do is drop the capping bs. They would become the best isp overnight compared to anyone that caps.

Tobester
join:2000-11-14
San Francisco, CA

Tobester to redxii

Member

to redxii
said by redxii:

Why get 1.5Mbps DSL when 107Mbps cable is available.

Here in San Francisco Comcast offers 105Mbps for $105.00, not including modem rental and taxes; after the first 12 months, monthly service charge goes to $129.95 for months 1324.

While that's blazingly fast, most users don't require such high-speed and cost.

Of course, 1.5Mbps ADSL doesn't work for me either

EDIT: typo

battleop
join:2005-09-28
00000

battleop

Member

AT&T is clueless

An AT&T Senior VP told me and a few others that they do not see a threat from Cable. When on of us asked why he said that Cable can't do a quad play. That's their mind set. They honestly think that as long as Cable can't offer wireless they are no threat.
Kearnstd
Space Elf
Premium Member
join:2002-01-22
Mullica Hill, NJ

Kearnstd

Premium Member

Re: AT&T is clueless

This is why companies like AT&T sit on and squat spectrum though. if Comcast where able to buy spectrum they would not need deals with Verizon, they could build out their own cellular network. And in areas they service with Cable just use their own fiber backbone as the back feed for the tower.
pandora
Premium Member
join:2001-06-01
Outland

pandora

Premium Member

Re: AT&T is clueless

Comcast could buy Sprint. Comcast has decent management, a lot of cash, and a track record of updating technology.

KrK
Heavy Artillery For The Little Guy
Premium Member
join:2000-01-17
Tulsa, OK

1 recommendation

KrK to battleop

Premium Member

to battleop
I guess Muni-Fiber is no threat, then.... but why do they oppose it every time it's suggested?

FLATLINE
join:2007-02-27
Buffalo, NY

FLATLINE

Member

Re: AT&T is clueless

It is a threat to them. Dont let them confuse you. They see everything as a threat. Even you!

Karl Bode
News Guy
join:2000-03-02

Karl Bode to battleop

News Guy

to battleop

When on of us asked why he said that Cable can't do a quad play. That's their mind set. They honestly think that as long as Cable can't offer wireless they are no threat.

What do they think of the new quad-play cable industry partnership with Verizon Wireless?

battleop
join:2005-09-28
00000

battleop

Member

Re: AT&T is clueless

Maybe I'll get another chance to ask in June.

djrobx
Premium Member
join:2000-05-31
Reno, NV

1 recommendation

djrobx to battleop

Premium Member

to battleop
At one point I had all four services from AT&T. I didn't bother to integrate my wireless bill, there was no advantage in doing so. Now all I have left is my AT&T wireless account.

AT&T's dumbest move was to add 150gb caps to these un-upgraded markets. If I was a heavy user I might put up with slower speeds if I could use it unlimited.
en103
join:2011-05-02

en103

Member

Re: AT&T is clueless

yup... TWC speeds here in Santa Clarita area pretty good.
Looks like they finally fixed wireless on Seco Canyon for you.
ConstantineM
join:2011-09-02
San Jose, CA

ConstantineM to battleop

Member

to battleop
Wow indeed!

Who cares about quad-play? Nowadays, it's cheaper to get all the services unbundled anyways. Noone uses quad play, it's stupid and there are not even any incentives at all whatsoever.

I've been with U-verse for 1.5 years, never received anything about AT&T Wireless that wasn't already available to regular non-U-verse customers in the first place.

cousintim
join:2004-10-10
Dallas, TX

cousintim

Member

Re: AT&T is clueless

said by ConstantineM:

Wow indeed!

Who cares about quad-play? Nowadays, it's cheaper to get all the services unbundled anyways. Noone uses quad play, it's stupid and there are not even any incentives at all whatsoever.

Sometimes bundling makes sense. I pay $55 for 10/1 and unlimited phone.

brand0n
@bellsouth.net

brand0n

Anon

att dsl

DSL is only 14.99 for a year so i signed up because I live in an apartment complex that doesn't offer cable unless you sign up with one of these no name re-sellers. So I use a tv antenna for local broadcasting, the roku + my computer for all the rest. If DSL goes down then I still have my rooted android to fall back on during any outages.

jchambers28
Premium Member
join:2007-05-12
Peculiar, MO

jchambers28

Premium Member

Nothing from AT&T

My brother can't get nothing from them at all. Stuck with TW.

trparky
Premium Member
join:2000-05-24
Cleveland, OH

trparky

Premium Member

Re: Nothing from AT&T

I wouldn't say that about TWC. I have them and I wouldn't give them up for nothing. I have TWC Wideband service.

jchambers28
Premium Member
join:2007-05-12
Peculiar, MO

jchambers28

Premium Member

Re: Nothing from AT&T

They are OK. just still mad at them trying to push per GB billing as an industry standard.
45612019 (banned)
join:2004-02-05
New York, NY

45612019 (banned)

Member

Re: Nothing from AT&T

That would be Comcap and AT&Trash, although Time Warner tried and failed at hopping on board their bandwagon.

Right now Time Warner and Verizon are the last major providers with no bandwidth caps at this time. Comcap has had that 250 GB cap for almost 4 years now.
kaila
join:2000-10-11
Lincolnshire, IL

kaila

Member

We're still labeled a 'future market' by AT&T

We have no DSL here in the middle of Chicago suburbia. My sleepy village of Lincolnshire has been promised DSL since SBC's 'project pronto' days, some 12 years ago. Then 'project lightspeed' 8 years ago. Then U-Verse. Actually, U-Verse VRAD's were installed in late 2007, and they've been sitting unused ever since and are currently rusting away.

Dealing with AT&T has been an exercise in frustration, with a trail of broken promises strewn over more than a decade. Meanwhile, with that kind of head start, Comcast has built a staggering 90% broadband penetration rate.

mod_wastrel
anonome
join:2008-03-28

1 recommendation

mod_wastrel

Member

It's all about the money.

There are scores of people who'd be fine with 3000/768 speeds--they just don't need 50/20 or even 15/2 speeds. But can they get it for the price it's worth? Nope! And these days it's worth about $15/mo. [if that]. If the telcos won't invest, then they need to go for the "value" market and drop their prices. If they aren't going to compete on product, then they need to compete on price.

••••••••••••••••

Frank
Premium Member
join:2000-11-03
somewhere

Frank

Premium Member

Most people dont even know the phone company exists anymore.

I was looking at several different apartments in an area of another state that only has dsl recently and it seems nobody (including neighbors or rental office people) seems to know what the incumbent phone company even is. When asked they would all mention the name of the cable company.

In the state I live in now, everybody knows of verizon due to fios (most apartment buildings usually advertise the fact that they have fios and cable).

legendNYC
Soon
Premium Member
join:2003-06-04
Jamaica, NY

legendNYC

Premium Member

Stick a fork in DSL

We've been with Verizon for ten years. It's been seven years with no upgrade in service. Waiting and waiting for Fios, but it seems like that bus is not coming anytime soon.

As much as I do not want to give TWC more money, we want fast Internet. 3M/768 is old news.

•••
biochemistry
Premium Member
join:2003-05-09
92361

biochemistry

Premium Member

No Internet?

No broadband internet where you live? Contact your local councilman, state senator, state congressman, US congressman and US Senator. They get annoyed when you ask them the same thing over and over and eventually they wield their influential power just to get you to shut up.
PastTense
join:2011-07-06
united state

PastTense

Member

Re: No Internet?

You are naive. If you want politicians to pay attention to you, then you need to pay them more cash than the phone and cable companies.
biochemistry
Premium Member
join:2003-05-09
92361

biochemistry

Premium Member

Re: No Internet?

What would you rather do? Take $1000 to vote one way and put up with people pestering you all the live long day or get peace and leave the $1000 on the table. I'd do the latter.
tmc8080
join:2004-04-24
Brooklyn, NY

tmc8080

Member

consumers in the midwest

this is a historical reality etched in consumer apathy and over time apathy will push consumers over time to the better broadband deal which is cable. will telcos do anything about losing subscribers to cable? doubt it-- until there are none left.

Maybe the DOJ will perk up and see the collusion between cable companies and telcos is bringing about a mix mosh of monopoly and duoplies which have the goal of jacking up the price of broadband no matter which service provider your with. This already happened with DIGITAL VOICE AND CABLE-TV... what's next for 2012? jacking up broadband prices as well! First, with wireless and then with wireline services.

tigerpaw509
join:2011-01-19

tigerpaw509

Member

1st mile

And guess whats Att calls the last mile ??
They call it the first mile.....go figure
elray
join:2000-12-16
Santa Monica, CA

elray

Member

Pure Speculation

Karl continues to beat the drum that DSL customers are bailing to Cable "in un-upgraded markets", without ever offering any data to back up his charge.

•••••

Eagles1221
join:2009-04-29
Vincentown, NJ

Eagles1221

Member

U-verse IS DSL

Stop calling U-verse anything other than DLS. It is vDSL - the VRAD has fiber feeding it...just like a cable node does.

hehatemeidot
@rogers.com

hehatemeidot

Anon

Who Cares?

LTE will be and already is good enough.
zod5000
join:2003-10-21
Victoria, BC

zod5000

Member

Its the same here in Canada.

I was happily using my dsl in the previous city I lived in. It was running at 25mbps, they weren't enforcing caps, all good.

Then I move to a different city and they haven't rolled out the hardware in the area I live in, so its still 15mbps.

Meanwhile the cableco here offers speeds up to 100mbps (with plans to go to 250). I found the 50mbps package to be the sweet spot for me in terms of price and bandwidth.

How does the DSL provider here expect me to stay with them when the Internet from the cableco is some much faster? I'd consider staying on vdsl if it still offered 25mbps, but 15mbps.. meh.

Chucks Truck
@teksavvy.com

Chucks Truck

Anon

Re: Its the same here in Canada.

If Rogers cable internet actually worked dsl would be extinct in Canada. Out in Ontario it's either Teksavvy cable internet or move to another country for internet service.
Sukunai
Premium Member
join:2008-05-07

Sukunai

Premium Member

If you don't build it, they won't come

Lots of people around here are also jumping the DSL ship in favour of cable and the claimed better speeds.

But if you look, you can see that even with companies like Teksavvy that a great many like, you can find all sorts of bitching directed at service. Cable service.

I am on DSL and have absolutely no interest in going to cable regardless of the claims of better speed etc etc etc.

Party because it appears Cogeco only looks better than Bell only because I have never given them a means to screw me with lousy service long enough I suppose.

But until the cable situation is actually 'fixed' I am in no rush to join those paying for a good reason to be on a forum complaining.

DSL, it might not sound as good, but at least it works.
dragger
Premium Member
join:2002-06-19
united state

dragger

Premium Member

My situation, described perfectly

Bode could have been writing about my experiences. Just last month I moved my access to cable after at least a couple of decades with ATT.

I used them for long distance just due to their reputation. Then, they came out with the One Rate cell plan and no one was even close. After Southwestern Bell did their merger, all of my eggs were in one basket with ATT.

I was the guy all my friends would ask for tech advice, and I strongly supported DSL over cable. Back then, there was a real advantage but ATT simply threw it away.

Not too long after they started the Uverse push, my DSL began getting worse and worse. Terrible pings, amazingly high latency with the request dying between hops, a mail server that a couple times of week wouldn't accept my credentials -- it got really bad.

A couple of months ago, I had Charter come in (yes, I know, but absolutely no problems yet) and connect me. I ran a consistent 30/4 against the inconsistent 6/.7 from DSL.

So as of this month, I no longer have any business with ATT. Wish they would have paid attention to the business they had.
tmc8080
join:2004-04-24
Brooklyn, NY

tmc8080

Member

want to raise prices? collude or invest

telco is not colluding with cablecos to tame upgrades of acutal offered speed tiers.. no doubt the country COULD have had 100/100 megabits in 50% of the country by now offered by TWO carriers.. but AT&T dropped the ball on FTTP.

they could always change their minds.. but they'll keep swinging on that rope until it hangs them with a DOJ & Congressional drumbeats for the CEO's head on a platter that looked much like MCI worldcom's!!
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