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November 7 will be an important day if you are a rural AT&T landline customer. On that date, AT&T, in concert with Wall Street, plans to announce the future of its rural and “tier two-smaller city” landline business.
The implications for customers are enormous. AT&T could elect to exit and auction off its rural customers to companies like Windstream, Frontier Communications, CenturyLink, and FairPoint Communications. AT&T could also announce it will aggressively petition the Federal Communications Commission to decommission its copper landline facilities in favor of a new wireless IP network based largely on its national 4G LTE expansion, or it could be a combination of both: keeping existing landline facilities but transitioning them to Voice over IP technology with a gradual shift towards wireless.
AT&T CEO Randall Stephenson delivered important clues about the company’s direction in remarks at yesterday’s Goldman Sachs Communacopia Conference, attended primarily by Wall Street investors. Stephenson drew clear distinctions between valued customers in areas upgraded to AT&T’s U-verse platform and more problematic customers in smaller communities where AT&T refuses to invest in landline upgrades.
“Where you look at the footprint where we have deployed U-verse technology we do very well,” Stephenson said. “In fact we are the share leader in virtually all U-verse markets. Those markets grow nicely. Where we have not deployed fiber and U-verse technology, we are losing share and those markets are in decline and that is the whole reason behind this analysis and evaluation that we will be laying out Nov. 7. What do we do with those markets? Because we have demonstrated if you go invest you can grow the market.”
Stephenson
“We said coming into the year that we have to find a broadband solution for these assets that is cost-effective or we need to look at selling them,” Stephenson said. “I would just tell you at the 30,000 foot [line length] level we think we’re finding line of sight to some investment theses here. We can get a good competitive broadband product to a large portion of our footprint and would avoid us having to go through a number of regulatory approval processes to sell [landlines] across a large geography. There will probably be a mix of actions here, but the bottom line is we think we may have line of sight but we will flush that out on Nov. 7 in an analyst conference here in New York.”
Early indications suggest the company is considering deploying DSL extenders to reach a larger share of rural customers without a complete overhaul of its copper wire network. The upgrades could deliver results similar to what Frontier Communications has been doing in territories it acquired from Verizon Communications, which includes extending fiber optics further into neighborhoods and finding ways to reduce copper wire length to improve speeds. Frontier has set its sights on delivering up to 25Mbps over copper landlines, a speed it feels is competitive with cable broadband. AT&T could come close to these speeds without the amount of investment required in a typical U-verse deployment.
But just as likely is a largely wireless broadband solution to replace the company’s aging copper wire-based DSL service. Stephenson says he strongly believes that a wireless solution exists for rural America over the company’s new LTE 4G network.
“I don’t envision in major metropolitan dense population centers that LTE will serve as a broad-based fixed-line replacement or surrogate,” Stephenson said. “I do believe in less dense markets and especially when you begin to think about rural America and tier two towns, that LTE can become a fixed line replacement or even better than what you can get in fixed line out in those markets. This is one of the exciting things about the WCS spectrum [AT&T plans to acquire]. It allows you to truly begin to think about investing in and doing this.”
But AT&T’s solutions will come with strings attached: a lobbying effort to get the FCC to loosen up on regulations, acquire more wireless spectrum, and allow the company to dispose of its landline infrastructure.
“You don’t go out and put in LTE capability in rural America and leave up all your copper infrastructure in the long haul,” said Stephenson. “It just wouldn’t make sense to do both. So this is the big regulatory issue. The FCC would require us to leave that copper and TDM fixed-line infrastructure up by some mandated rules and you can’t do both. You can’t support both infrastructures. We have got to work through the regulatory implications of this, but I think LTE can prove over time to be a fixed line replacement in rural and less dense populations. I think in a five year time horizon that can become significant.”
Thus far, AT&T has been unwilling to consider upgrading smaller communities to its U-verse platform, primarily because of the cost and return on investment. The company is content with its current U-verse footprint and has begun to enjoy increased wireline margins from a growing number of urban customers as programming costs decline.
LTE: AT&T’s wireless rural broadband solution?
“The U-verse margins continue to expand,” Stephenson noted. “U-verse is one of those where you go make a really significant capital investment and then you go in as a new entrant to do programming contracts and you’re paying multiples of what the big scale guys are paying and then as you scale that over time then margins really begin to expand. We’re riding that right now and we’re getting really good margin expansion just out out of scaling U-verse and getting better economics on content terms as well.”
Wall Street has been applying pressure to Stephenson to extract higher margins and cut costs from its traditional landline business. Stephenson sought to placate concerns about the cost profile of AT&T landlines before investors.
“We have done a nice job controlling our labor costs and that has been very helpful to continue to sustain margins in the fixed line business,” Stephenson said. “Those labor costs savings we take and reinvest back in the business in the form of U-verse and looking at some future investments as well.”
Stephenson hopes the FCC will eventually let AT&T abandon traditional landline service everywhere, which could also deliver serious cost savings for AT&T.
“I do believe if we can find a path to an all-IP infrastructure in not just your major metropolitan areas but your tier two markets there are significant cost savings in the five or six year time horizon that could come out of these businesses as well,” he noted.
AT&T CEO Randall Stephenson took questions at Goldman Sachs’ Communacopia Conference about its wireless network and the future of the rural landline business. (September 19, 2012) (41 minutes)
You must remain on this page to hear the clip, or you can download the clip and listen later.
Other stories of interest:
- AT&T Discovers It Has Rural Customers Who Need Better DSL; Company Mulls Providing It
- AT&T’s Broadband Answer for Rural America: Sell Rural DSL Operations To Someone Else
- Verizon CEO Ponders Killing Off Rural Phone/Broadband Service & Rake In Wireless Profits
- AT&T U-verse Expansion: It’s Over; AT&T’s Rural Broadband Solution? “We Don’t Have One”
- AT&T CEO: “DSL is Obsolete”
I want readers to pay careful attention to the subtle implication that if AT&T does not get more spectrum, deregulation, and a green light to terminate traditional landline service, its rural broadband solution essentially starts to fall apart. It’s deregulation blackmail. If AT&T and Wall Street don’t like the conditions, they’ll auction off the business they committed to remaining in as a condition of the last round of deregulation in 1996.
We can only hope the FTC gets a backbone for once and tells AT&T to pound sand. Deregulation has been a huge failure for the market, and 4G as a landline broadband replacement is a joke that’s just going to provide abysmal connectivity and at a high cost to customers.
1st of all, its the FCC, not FTC. I have 4G with US Cellular and it’s great and at a low cost. Landlines are 20th century. embrace change and new technology!
And the deregulation was the best thing ever. It stopped Bell Co’s from being a monopoly, opened up competition and forced more competitive prices.
4G still hits copper sooner or later. Copper to Copper will always allow better connectivity, better bandwidth, and lower latency. Embrace reality. New isn’t always better. 4G may be great for quite a few people. Not everyone.
I think the anti-trust ruling against ATT had a lot more do to with breaking the “monopoly” than deregulation, as the a lot of the baby bells were bought back up by ATT after deregulation, and the monopolistic effects are worse again.
ISTM that if AT&T sells off its rural customers to carriers that are actually interested in providing them the services they want and need, that would be a “good thing”.
So I say call AT&T’s bluff, and let someone else take over who actually WANTS to do the job.
The company’s listed to assume the landline business have poor track records for customer service. In fact Verizon has been stopped in selling off some of their land line business by some state DPUC’s because of terrible customer service.
Have you seen difference in pricing between Frontier and CenturyLink broadband and at&t??? it would NOT be a good thing for consumer to pay for 1/2 the speed and 4x the price – been there done that.
“In fact we are the share leader in virtually all U-verse markets. Those markets grow nicely. Where we have not deployed fiber and U-verse technology, we are losing share and those markets are in decline and that is the whole reason behind this analysis and evaluation that we will be laying out Nov. 7. What do we do with those markets? Because we have demonstrated if you go invest you can grow the market.”
CEO Stephenson….
I know 3 markets in Central Illinois where you have AT&T U-Verse deployed, and U-Verse is nowhere near the share leader. They all are dominated by Comcast, Dish, and DirecTV. You are in 4th place in all of those 3 markets……
You don’t get it at AT&T!!! FTTH was the way to go, not FTTN. Just go FTTH ASASP in your suburban/rural markets,and get it over with. Too many of your customers are on 50+ year old copper POTS lines.
In my metro with over 250K people, you’re afraid to offer more than 3Mbps DSL.
And, you wonder why you can’t make $$$ in your suburban/rural markets!?!
WTF!?!
U-verse is not the dominant player in any market I know anywhere. I think they have a 10-15 percent market share in most cities if memory serves. Even Verizon FiOS does not dominate in its markets, despite being vastly superior to cable as far as their technology goes.
AT&T did what it always does — it went cheap. This company does not like to spend money. Verizon Wireless has an LTE 4G network, AT&T is just getting theirs going. They underspent on their wireless network for years.
AT&T U-verse is AT&T’s answer to FiOS. It’s network design is not unprecedented, however. Many phone companies, including Bell in Canada, seem to prefer fiber to the neighborhood to reduce investment expenses. Except Bell seems to see its Fibe service as a fiber to the home solution in some places (especially in Quebec) and a fiber to the neighborhood solution in others (GTA).
We live with much the same thing here in Rochester with Frontier Communications, which hates to spend money. They are just now discovering Time Warner has eaten their broadband lunch and they are finally deploying bonded DSL and VDSL to compete. It’s awfully late.
I think what Stephenson said was important: if you invest in your markets, you can grow them. I just question whether he really believes that.
AT&T has to spend money to make money. Only they want to make a lot of money without spending a lot. U-verse is the result, and I suspect their answer to the rural landline problem will probably be similar to what Frontier is doing — incremental and cheap speed upgrades with ADSL 2+ and other line bonding.
At least until their lobbyists sucker regulators into turning off the legacy network and pushing everyone to their dreadful, overpriced wireless network.
So where does this leave the Union employees tied to the wireline business? Will Stephenson try to kill two birds with one stone?
Jorato do your research. It is good union members providing and working on the uverse. This is the problem nowadays, people speak without thinking. By the way since unions declined wages in this country actually have gone down against inflation since the mid 70′s while the profit margins for corp have skyrocketed. If they are totally gone there goes your marketplace for wages. Unions only make up less then 7% in the private sector.
I don’t thnk Jorato was trying to say anything against the union, just worried that AT&T wanting to kill landlines could hurt the union in the process. You might want to do some more research yourself… AT&T UVerse Premises Technicians (prem techs) are non-union in some areas, and where they are union they are generally treated like unwanted stepchildren compared to the traditional wireline union members.
http://www.line-man.com/forums/index.php/topic/20454-for-those-thinking-of-becoming-an-att-prem-tech/
http://www.line-man.com/forums/index.php/topic/21031-premises-techatt/
http://www.topix.com/forum/dallas/TR37JEH86FO62J943
The outsourcing issue is going to continue to be a major problem here. Cable companies already do it (with disastrous results when the registered sex offender cable repair guy shows up or the shady third-party tech robs you blind) and AT&T and Verizon both see savings in their eyes.
I think if these companies could see a way clear to develop two divisions — one for legacy landlines and one for U-verse/broadband, they could starve out the unions just as they neglect their legacy networks.
In all of these investor conferences, it is clear everyone there considers union workers a scourge to be handled and eventually abolished. The relentless drive to cut employee expenses (kill benefits and keep pay increases down) and increase productivity (slave-like overtime) is not going to stop.
Except customers don’t enjoy any benefits from all of this. They end up with untrained (often incompetent) techs from some third party company, higher prices, and worse service.
Who benefits? Executives who get higher pay based on ruthlessly hitting cost cutting objectives, investors who get a higher stock price or dividend payout, and any future buyer who will look at these kinds of “tight ships” as well-managed takeover targets.
From a customer perspective, unions are not the problem here. Management is.
I am a just a long time customer. I believe AT&T is a great company, but if they want to cut cost, I believe there are several ways to do it.
i also don’t understand if they want to dump the copper lines , landlines because of the loss of profit, why would the other companies what the landlines, wouldn’t they loss money also?
I know the Techs have bucket trucks F350 and F450 and I know they get their jobs from Chicago dispatch, but with the price of gas, why would you have your tech drive miles to one location and after they are done, the go to another town that could be hours away, and many times go back to where they were again. Wouldn’t they save money if they had a truck in one town and took care of the surrounding customers and not travel so much. Another tech could go to another small town.
I see as a customer so many ways AT&T spends money they don’t need to spend.
Yes the Union was good to their employees and I believe you get what you pay for. If they go non Union they might not get the trained techs.
What happens to the Union Pensions if this happens? Can someone answer that?
At&T has already given all people in rural areas the shaft…High prices, no quality. No DSL, and no date or desire to provide any service due to costs, they say. “What about those who live in rural areas who really need DSL with health issuess, etc? You really think AT&T cares, no, all they care about is money and that is called coperate greed, not service. Since deregulation in 1983, service is a joke for all of many living in rural areas and customer service ended at that time. Employees are not even trained correctly because the company doesn’t give a care about little or small groups, just the big companies and big money…No way do I agree with their new concept to sell out, make them do the right thing take customer service back to the level it was before 1983 and provide equal service to everyone…They have already been the fat cats too long and doing less for customers daily. Shame on your CEO, fire them all, put that money to work on service equal for all..Shame on AT&T and all your CEO’s and Board members…FCC, take control again, show your backbone and step up for all equality for everyone….
Ms. House you are correct!!
The CEO of AT&T should stop receiving the Million Dollar bonus, each year, and the supervisors that receive the bonus.
When you talk about At&t and this decision you must remember this company GAVE away billions of dollars of revenue after divestiture (business with less than 6 lines) because of trouble to keep them up. And only wanted large PBx systems.Then gave CEO a large raises for coming up with the plan to sever the toe that ended up costing a leg. Then years later they give away billions more to small companies so they can get in the tv business, and we see how well that is working, first dish then unversed. Do you think they could make money if they were not so large of a company. At the rate they are going one day someone will turn and say AT&T one of those little communication companys. Instead of saying that’s are blue chip company that knows it’s business and that you can depend on to take care of it ‘s customers and employees. So much for this fairy tail I don’t see a happy ending because it is hard to stay in business with a good customer base that is loyal. But what can they expect they have not been loyal to anyone but ceo’s for so many years they have forgotten how to be a powerhouse company. Say goodnite Gracie.
As ATT has said….U-Verse is profitable where deployed. Why not deploy it to all rual areas? ATT needs to remember that ALL PAYING CUSTOMERS in these rual areas are part of who HELPED build ATT. BE LOYAL TO YOUR CUSTOMERS AND THEY WILL BE LOYAL TO ATT. “CUSTOMER RULES!!!!!”
cost of laying new fiber if prohibitive in most rural areas, thus lack of Central Office based U-Verse or IPDSAM (basically a uverse terminal out in the field fiber fed to the central office). at&t does not give a $hit about rural customers nor the landline employees – business as usual.
It’s funny to see people debating how AT&T should do this or that, with no working knowledge of the business or the financials that drive it. As much as AT&T or any telecommunications company wants to serve everyone, you simply cannot do it. You wouldn’t spend your money on a business venture you know is not going to return anything or would be a losing proposition. Why should larger companies do it just so you can have service in BFE when YOU choose to live in a rural area knowing that there would be limitations to the services you would have available. Wireless is the best bet for getting decent service in large areas with reasonable cost, so Stephenson is correct when he says LTE can be a good solution.
AT&T agreed themselves, in concessions, to the universal service responsibility they have today, in return for regulatory changes that helped spur their Money Party of profits in wireless. AT&T needs to hold to their end of the deal instead of treating rural customers as castoffs for even fatter profits. Remember, we’re talking about the wholesale discarding of rural basic phone service here, not universal broadband.
If AT&T thought rural landlines were a money loser, why promise to continue service in return for regulatory relief. Obviously the thinking was we’ll agree to this now and renege on it later. If they want to change their minds, then the benefits they won in regulatory policy should be canceled as well.
AT&T’s wireless service has a completely different set of ARPU expectations and don’t think for a moment AT&T will deliver an equivalent level of wireless service at the same prices it charges for landline service. Instead of a $30-40 landline bill, rural customers evicted to wireless face $70-80 wireless bills and the likelihood of questionable reception.
Why should a landline consumer have to move because the phone company does not want to spend some of the billions in profits they earn every year to continue their responsibility as the carrier of last resort — something AT&T itself agreed to be?
LTE should not replace rural landline service unless if, and only if, it can guarantee an equivalent level of service at an equivalent price. Anything less should be an absolute no.
Phillip: the 1996 Telecommunications Act was approved by Congress on January 3, 1996 and signed into law by President Clinton on February 8, 1996.
I don’t know how often the word “Internet” was used in the law but my guess is very rarely, if at all. There was no broadband as we know it. The best dial-up modems could do at the time was 28.8kbps. 56kbps modems wouldn’t be available until after the ’96 Act was signed. IP telephony was in its infancy, and consisted of a software package you ran on your desktop and limited its use to others using the same software.
My point being, no one foresaw in 1995 (when the Act was being written) how important the Internet would become. No one anticipated wireless substitution. At some point, wireline POTS penetration will eventually drop to 15-20%. And that number will get smaller every year. Think about that for a moment: a carrier of last resort (COLR), like AT&T, has to maintain 100% of its POTS plant in order to serve on demand 15 to 20 customers (or fewer) for every 100 loops in the ground.
That’s insane, regardless of the “deal” that was struck. The ’96 Act does not mandate that AT&T continue to lose money providing such service — it can sell its plant to any buyer it wants to, subject of course to regulatory and anti-trust review.
But rather than deregulate them, I say call their bluff and tell AT&T to sell its plant. My guess is they won’t do it, regardless of the COLR obligation. By giving up their COLR obligation, they also give up access to valuable rights-of-way, which they want to keep.
In other words, like everybody else, they want their cake and they want to eat it too.
@txpatriot: What are you smoking??? The copper network will never disappear. After AT&T, forces all their POTS customer off of the copper network. They’ll turn around and sell that same copper back to the businesses as back-up. Ask any business that weathered the spring storms in the northeast last fall. Without electricity the wireless network is useless. At current levels, AT&T can only support up to 8 hrs, assuming the batteries are still viable. BTW, as a cost savings measure most of the battery maintenance programs have been canned.
Once they toss all the pots users off of the copper, which by the way is being currently utilized by all of its Uverse subscribers, will be sold off to big data users as back up. This company is interested in only profits. Not customers, not workers, but profits. Hang on to your dollars boys and girls, this cow will be milked and milked and milked until it dies. Then maybe they’ll buy another cow.
Telco Engineer writes: “Without electricity the wireless network is useless”.
Guess what? Without electricity, the copper network is also useless. True, you may have a several days of diesel generator availability at Big COs, but most SLC remotes don’t even have eight hours, let alone eight days, of battery back-up. And the battery back-up program supporting cell sites was the same one supporting remote switches, remote SLC cabinets, and remote DSLAMs.
So the idea that the copper network is more bullet-proof than the fiber-IP network is largely a myth.
Last fall, while on storm patrol, I had customers run out to my car and thank me and AT&T because the only thing that worked in their house was the copper POTS line. No TV, No electricity, No cell phones, no dish network, just Copper Potes telephones. We had CO’s in areas that electricity was out for nearly two week, but the phones still rang. Myth??? I think not!! Central Office service is regulated differently the RT and Wireless towers. Thanks to regulations and the FCC. If AT&T is allowed to decommission it copper network, you’d better get out your twine and tins cans when the next hurricane season arrives.
telco engineer: you’re not telling the whole story.
I agree a POTS line will work during an electrical outage if it is copper all the way to the CO, but if the POTS line is fed by a SLC remote or a remote DSLAM, I stand by my earlier comment: those customers will be lucky to have eight hours of battery back-up. I notice you didn’t mention that little detail in your response.
I don’t know how many customers are fed over SLCs & DSLAMs compared to dedicated copper but my guess is many (if not most) of them.
In the Northeast, where I hang my cables, the WC’s and DA’s are relatively small. The local loops out feed the Slc’s and DSLAM’s by at least 3:1 In the past 5 to 7 years, there has been minimal growth in SLC’S and DSLAM’s . All the money has been in the Uverse/Vrad bucket. We’ve been neglecting and butchering the aerial plant to support the FTTN build. Chopping up plant to remove bridge-tap and then now piecing it all back together to try to squeeze the extra distance for Uverse pair bonding.
Our Uverse technicians are expected to install, test and trouble shoot our high-tech products at grocery store pay rates. Just to squeeze out every last bit of profit. We can’t afford to be second best in customer service if we expect to take the lead in the market.
We need to focus our efforts on providing the highest trained and qualified technicians, NOT the highest profits. When we as a company get back to the basics of providing the best service and the best products the market shares will follow.
Telco engineer: good point about U-Verse and VRADs.
But of course my point applies equally to those boxes. Any customer served by one of those boxes will not have more than eight hours of battery backup, if that. My point being, unless you have a dedicated copper loop all the way to the CO, you won’t benefit from the CO’s diesel stand-by capacity.
And if you DO have a dedicated copper loop, then you DON’T have DSL, U-Verse, etc. So you can either have straight POTS with CO back-up power, or you can have advanced services with no more than eight hours of battery back-up.
Pick your poison.
a responce to your remote sites running out of battery backup, thats why we imploy the use of generators to run the sites, the battery backup is just there to buy time to get generators out not run the network.
@serv tech: I understand portable generators are used to supplement battery back-up. But no telco on earth has enough portable generators to back-up up every SLC, every remote DSLAM, every remote fiber terminal, every cell site, etc. If your does, please enlighten us.
Amen brother: well written.
I am assuming this means you are servicing Connecticut, AT&T’s only major wireline presence in the northeastern U.S.
I guess Connecticut customers are caught in the middle. No FiOS, but at least they are not stuck with FairPoint either.
AT&T cannot take the lead in a market with an outdated fiber to the neighborhood solution. Cablevision is well-positioned to fiercely compete, having been exposed to Verizon FiOS across much of their footprint.
AT&T needs to learn from what Bell Canada is doing. In markets where they face enormous competition and can string overhead cables (Quebec), Bell’s Fibe is fiber to the home. In Greater Toronto, where they are stuck with underground facilities, it’s still fiber to the neighborhood.
Just like in wireless, AT&T always fails to learn the lesson they have to invest money to make money. Doing everything on the cheap just hastens customers heading for the door. The techs are stuck making due the best they can with what they are given. AT&T’s final fatal mistake would be to outsource those jobs away from the well-trained, top notch engineering workforce they have now to el-cheapo subcontractors.
I just don’t see AT&T’s short-sighted thinking as caring about rural landline plant, rights-of-way or otherwise. Having listened to hour after hour of execs lecturing on this point (Verizon too), it’s all the same. Wireless for rural equals reduced costs, increased revenue. Win-win for them, lose-lose for customers.
If Verizon and AT&T could operate just like cable companies — only serving customers profitable to serve — they would like a shot. The only thing keeping them from moving this way is regulation. I predict AT&T will find a cheap way to expand rural broadband deployment over wireline and try and force wireless as a compromise for the ultra hard to reach.
I am not against technology evolution, but strong oversight is essential to make sure that these moves equally benefit customers and shareholders.
Phillip: it’s a common misconception that telcos have an “obligation to serve” but cable companies do not. That is not correct.
Within its franchised area, a cable company must provide service upon request. Here is an example of a cable franchise agreement:
http://www.springsgov.com/Files/Comcast%20agreement.pdf
Go to PDF page 14 (franchise agreement page 10) and see paragraphs B and C. The cable obligation is in fact very similar to a telco’s “carrier of last resort” obligation.
Cable companies cannot simply pick and choose which customers they will serve to the exclusion of others. That is called “red-lining” and is illegal anyway.
The fact that cable TV is a “non-essential” service whereas telephone has traditionally been considered an “essential” service may explain some of the misunderstanding about the requirement each has to provide service.
Regardless of how “essential” each service is, both kinds of providers have exactly the same obligation to provide service to any customer who demands it within their franchised service territory. The difference is in scope and scale.
A telco generally has a statewide “franchise” (called a “certification” in most states) whereas a cable company generally has a local franchise, covering a single ccity or a few cities in a county..
Yes, but cable companies also have a test in most franchise agreements that give them a pass if the number of customers are below a certain number per square mile. Some also have concessions that require a customer to pay for drops over a certain length.
Phone companies don’t have this free pass for rural and difficult to reach customers.
Phiilip: phone companies can also charge extra if the customer is a long way from existing facilities. This is usually called a “line extension charge”.
Do you have a reference to the waiver for density? Not saying you’re wrong — I’d just like to read an actual example.
Just Google “cable franchise agreement density” and you’ll get a whole mess of franchise agreements specifying density per mile requirements for a cable operator to provide you with service.
Thanx Phillip. Here is the first hit when I google those words:
http://www.comcast.com/MediaLibrary/1/2/CM/VanityURL/documents/mainefranchises/brunswick_me.pdf
The franchise agreement doesn’t exactly let the cable company off the hook for low-density areas (see section 3.2,, PDF page 11, document page 9). The cable company must contribute $1500 to the line extension cost but otherwise must provide service to requesting customers in low density areas of its franchise area if the customer is willing to pay the balance of the extension costs. This is no different that the carrier of last resort obligation for a telco providing service under its line extension tariff.
If you have a link to a different franchise agreement that lets the cable company off the hook in low-density areas, please provide it.
As far as I can tell, that is not correct.
Cox Cable agreements such as this: http://www.haileycityhall.org/Codes_Plans/franchises/CableFranchise.pdf
have provisions similar to the Comcast agreement, with the “free pass” language:
“Notwithstanding the foregoing, the Franchisee shall have the right, but not the obligation, to extend the cable system into any area that does not otherwise qualify for extension of services.”
This is one of the loopholes that lets a cable system opt out of the extension cost provisions, which BTW routinely exceed $10,000-15,000 in many instances, sometimes far more.
I assure you the average homeowner living in a rural residence almost always has access to affordable landline service and almost never has cable TV.
Other language that lets cable systems off the hook include difficult terrain provisions, “suitable” utility service, and “technically feasible” conditions — all of which are open to interpretation. You asked me for contracts showing density requirements which I provided and then you suggested that there is some practical equivalence between telco carrier of last resort language and cable universal service.
There simply is not because of the often outrageous installation charges which can run the gamut and are honestly designed to discourage those cable companies really do not want to bother with.
One southern tier New York customer in a rural area near Ithaca has been fighting with Time Warner Cable for years to extend service in his area. His quoted cost to extend service? All over the place:
[begin quote]
“$18,260 plus $5294 is the amount Time Warner Cable estimates we would pay to build out from their last connection .6 miles to the west of our home, if the neighbors wanted to join in, it would be $18,260 divided by the number interested;
[...] $53,927.00: the estimate Time Warner quoted us last spring, 2011, to expand service .6 miles to our home with the potential to serve over 11 households, they make clear this is an estimate only
[...] $48,927: the estimate Time Warner quoted our tenants at the same address, their letter was dated three days earlier.
$20,000:quote in 2009 from TWC to connect us
$7500: quote in 2005 from TWC to connect us
The conclusions of this data are that the estimated costs of connecting my home to Time Warner Cable vary significantly. When I have placed calls to TWC about what the real cost would be, I have been inundated with bits of data (the cost of pole rental and NYSEG and Verizon charges, for example), but never the real cost that my neighbors and I would need to pay for Time Warner Cable to build out to us.
—
http://itsaboutthestory.wordpress.com/2012/01/25/rural-broadband-and-time-warner-cable-a-summary-to-date/
@Phillip: thanx for the links. The Hailey franchise agreement you quote from also has this language:
“If a potential Customer resides in an area that does not meet the density requirements of Section 4.8(A) above, the Franchisee shall only be required to extend the Cable System if the Customers in that area are willing to share the capital costs of extending the Cable System by making a capital contribution in aid of construction, including cost of material, labor, and easements.”
Cox is “required” to extend service to customers in non-dense areas IF the customers agree to pay a portion of the line extension cost. This is exactly the same commitment a telco has. The franchise agreement uses the same “contribution in aid of construction” phrase that was used in the news article you referred to earlier.
Anyway, I agree we’ve beat this issue to death — you may have the last word. Thanx again.
My point is phone companies cannot refuse to offer you a phone line. Cable companies can refuse to offer you cable service.
The charge for the “line extension” when and if a cable company is willing to do it is also interesting. Time Warner wanted around $7.74 a foot for a Ballston Spa, NY home looking for cable, making the home owner pay the full wiring price. (http://www.timesunion.com/local/article/Rural-life-carries-2-647-cost-for-cable-2227166.php)
The phone company already provides service surcharge-free. But if it had to, it would charge around $2.50 a foot to get the service to the customer, based on the discounting of the normal length the telco will cover before an extension charge applies.
One sends a clear message: go away. Guess which one.
And my point is, cable companies CANNOT refuse your request for service IF you are willing to pay the line extension charge. I’d still like to see a franchise agreement that supports your claim, but just saying so doesn’t make it true.
And I’m not sure how the article you linked to is relevant: the cable company gave the guy several options, he refused to pay, so they don’t have to serve him. Seems pretty simple to me.
So help me understand how that article proves a cable company can “refuse” to serve someone?
The relevance is in the amount charged for basic line installation. One is designed to actually deliver phone service at a rational price, the other is the cable company quoting the typical “go away” price even they don’t believe people will pay for service.
I think we’ve exhausted this topic.
My remark was for the the Telco Engineer in the Northeast!
wanted to add clarity:
1) They (Randall) are talking about “flow share” not “market share”. The incumbent “cable” provider has the highest market share everywhere for TV. U-verse is growing (flow share) faster than others in almost all of the U-verse markets
2) The labor costs are why VZ got out of the rural business. Most of them (the union workers) left as the VZ rural areas transitioned to others like Frontier who have a lower pay/operating cost model. Call up any of those technicians and ask them how they made out.
Do you think union labor want’s AT&T to sell rural/small markets? I can tell you the answer. NOPE. because it means dramatic pay/benefit cuts or no job at all.
Sometimes you have the play the hand you are dealt
The “flow share” is sort of useless considering U-verse is new and faces no other new players. The rest of the market is very stable — the incumbent cable operator and two satellite TV providers who have a built-in rejection rate of nearly 40% of customers who either cannot get the service or will never consider a satellite dish on their property.
If I opened a supermarket in a town with one other supermarket, my flow share would probably be high too as customers sampled the competition. The real test is how many stick with me over the long run.
The union workers are all still in place in the Frontier service areas. Frontier negotiated new contracts with ex-Verizon workers pretty quickly and with considerably less tension than Verizon has had with their own unionized work force. Cost cutting for Frontier has seemed to mostly be in their call centers and their hope a revitalized new website will let customers self-service their accounts more often.
Verizon Wireless is mostly non-unionized and it shows when you compare the average wages and benefits customers make. While top management can’t find enough room to stash all the cash, the average workers are seeing constant pressure on wages and, perhaps more importantly, benefits as they are eroded away.
When AT&T and other telcos deal from the bottom of the deck, in reality the American people (and rural landline customers in particular) should not and must not simply play the hand they want you to.
AT&T, like any company in a free market society, wants to remain profitable and grow while adding value to the country.
This is tragic. Randall has already proven that his decision making for ATT is a clear disaster. 4 billion dollar loss on a failed takeover of TMobile. The cable facilities all over ATT are falling apart due to the extreme policies ATT has implemented through MSOC. Randall is deliberately sabotaging the network, and failing to provide adequate service to it’s customers nation wide. And now, this will result in massive reductions in jobs. I implore the FCC to not allow this to happen
Notice that Randall only had “his allowance” cut for the TMO merger disaster. The real fall guy was Forrest Miller, AT&T’s head of corporate strategy and mergers and acquisitions who took “early retirement” after the merger deal fell apart.
Gotta love a company that actually has a top shelf executive with a title like “corporate strategy and M&A.”
I think there is just a teensy-weensy bit of fat in the executive corps that could be cut without anyone noticing.
Randall Stephenson is the downfall of AT&T. For not getting T-mobile and shelling out how many billions? He should of been fired. Yet he is rewarded with another golden parachute. Here in the Chicago metro area where the suburbs want U-verse. It is not found. They only put it in areas with the least expense. If the fiber has to be run far from their duct run that area got by passed.So much for those so called valued customers. Remember when AT&T started to throttle back their high usage wireless customers? We will never see an overbuilt wireless network that will supply the demand. Also ask any employee of AT&T how poorly they are treated. The top pay people are being marked as surplus. Their uverse tech are treated so poorly they have a a very high turn around.
Judge Green must be turning in his grave after breaking up that monopoly back in ’84. Just to see how SBC started buying all those pieces back together to create one big screwed up company.
Judge Greene didn’t break up AT&T. That decision was made in a settlement between the DOJ and AT&T management. All Greene did was approve it. He was not the bad guy in the Divestiture. If anyone is “turning in their grave” it should be the DOJ, not the courts.
I live in a community in suburban Atlanta that was built in the eary 1980′s. At that time, Bellsouth decided that IFTL (Integrated Fiber In The Loop) was the way to go and that it provided the greatest possibility for future innovation. Nothing could have been further from the truth.
This is a large community but AT&T cannot provide DSL at any speed above 1.5mbps (Ultra). So a lot of my neighbors have Comcast.
AT&T cannot provide U-verse. So again many of my neighbors have Comcast or satellite service.
I have tried to talk with AT&T personnel to determine what plans, if any, AT&T has to provide the necessary upgrades or enhancements that would afford me and my neighbors the opportunity for more choices for internet or TV. I have yet to find anyone that has any idea of what the future may hold. I suspect that AT&T will do absolutely nothing. That’s what I have come to expect from AT&T.
As an afterthought, DSL on IFTL does not require a modem. When we have problems with the DSL (and I have had quite a few) and attempt to get technical support it is a real hurdle each and every time convincing the “support” personnel that there is no modem to power down and restart to correct the problem. I even had two different dispatches to my home so that a technician could point out the modem to me. Of course the tecnician said that the “support” people worked from a script and did not understand IFTL at all. AT&T should be embarassed at that level of service (non-service??).
WI-Bell sold its “rural” C.O.s in the ’80s, so here it’s a moot issue for ATT. One with more curiosity than I can check the on-line CLLI records (mine stopped being updated when I retired). However, we are keeping our residential land lines, which are verified C.O. battery driven. Yes, the SLC batteries are iffy, as we verified during the Y2K preparation, but then we begged borrowed and stole enough portable generators. Both of our twisted-pair lines went down weeks apart during the last month because U VERSE techs messed-up in a neighbor’s pedestal.
Me, I was a Bell Labs AUTOVON programmer then Toll Trunk Engineer back home in WI, Network Area Manager (2-1), Usage Data Collection and Application guru, Switch Engineering, National Security and Emergency Preparedness, and a bunch of other stuff which required a Top Secret Clearance, Emergency HF Radio guru (almost SBC-wide, but I escaped), and, oh-goody, Human Resources Assessment Center slave for 6-months. Constant travel to Bell Labs locations all over the country means, today, I don’t set foot in an airport.
As a former employee and current contractor for AT&T involved in the copper side with an emphasis on U-Verse products delivered by fibre to the node and from a C.O. based IPDSLAM, I can honestly say AT&T does not provide enough maintenance time to their technicians to maintain these services at a reasonable level. I see personally multiple string-by’s in U-V areas. These are non-bonded I.W. runs outside the sheaths of the so-called conditioned cables. The technicians are now being told to ‘cut around’ bad pairs if they can’t be fixed within 90 minutes. Often an all day job could repair an entire neighbourhood but AT&T no longer wants neighbourhoods repaired just the one pair you are currently working on. I see splices that are entered over and again almost every day in some areas by multiple technicians. When I suggest we repair the splice totally the supervisor’s response is ‘we will return when we are not so busy’.
This is the response I heard for year after year as a technician myself. The supervisors are beaten down by MSOC and endless conference calls and now by hired guns who are employed by upper management to seek out and remove those who do not have enough employees on some program or other. If AT&T was serious about providing a reliable top notch product, they would invest their maintenance dollars properly, and allow for local control again. If you doubt this just wait for the first rains in California.
I see AT&T trying to get out of copper any way it can. What I wonder however is if this may be the best thing for the rural customers. A lot of local mom and pop telcos have used federal dollars to upgrade to fibre networks with really good results. It could be in some areas it may be beneficial to the end user for AT&T to sell out to a local CO-OP. I fear however AT&T may just opt to ‘spin-off’ the wireless and turn it’s IP based services into CLEC’S and let the core copper company wither away.
I think it is critically important to hear these stories from more of you guys, if only for customers who currently only hear AT&T’s press releases and lobbying astroturf campaigns.
Remember your audience includes a lot of consumers, so always try and explain some of these acronyms so we know what you are referring to.
We’ve reported regularly on what happens to AT&T phone service during heavy rains in California. It can take a week to get service back. We know this is not due to the technicians — it is all about the money (of lack of it) AT&T spends to secure and maintain its network to handle … the weather … without falling apart. AT&T is not alone. Verizon and the independent phone companies are treating their landline networks almost the same.
That’s the end of my job with AT$T,,,, along with thousands of others in wireline business.
I don’t know who wrote this, but I’m sure many readers will enjoy it!
Tip of the day: When shooting cable trouble in rural/farm town areas of California… Step 1) Cross middle finger over index finger and hope your day will go well by finding a half way decent spare pair in your cable count. Meter with your sidekick. Note: The condition of these spare pairs will almost certainly change as weather conditions change. Step 2) Meter field side and c.o. side all the while hoping you don’t have trouble on both your F1 and F2. If trouble is both ways……it is not going to be your day. Continue to curse loudly and openly, even cry at this point as these are the customary reactions/emotions in this instance. Note: Due to you being in the middle of nowhere California, with no signs of human life for miles do not feel obligated to refrain from these acts. The cows now staring at you thru the fence will not mind. They understand your plight and will often break out in synchronized moo-ing as a show of support for you. Step 3) Attempt to find pairs to fault locate on, flip to or deadlug your customer to. After miles of driving back and forth between the prem, B-Box and C.O., you’ll notice you have received numerous calls from dispatch and possibly your manager wondering why you are over running on your ticket and hoping they can put a 2 day old hi-cap 30 miles away from your current location behind you. REMAIN CALM! DO NOT LOSE YOUR COOL! Simply advise them that you are stuck and the 5th level escalation hi-cap is no concern of yours. Continue your mission because surely most of your day is over and the fog and darkness will soon be upon you. By this time you will have realized that you have multiple bad spot on your 25K foot long F2 and you will determine this to be a two man job. Begin the long arduous task of notifying management of your situation and need for help. This may take awhile. Due to “Force”, your nearest fellow tech will be dispatched from 20 miles away. While waiting for your manager to make the “helper” ticket for your comrade, continue to isolate by unnecessarily climbing poles and opening pedestals looking busy in doing so. Note: Do not be alarmed by the field mice/black widows and snakes in the pedestals or the bats/squirrels/wasps and birds in the pole splices. They mean you no harm. Once your help has arrived you will realize that your shift is almost over and you will now need to call your supervisor again, this time for OT authorization. Most likely you will be denied the extra OT and told to return to the job site tomorrow with no help thus further wasting more company time, resources and ruining your MSOC/efficiency results. Once again REMAIN CALM. Return the next day and repeat step 3. After clearing cable trouble test line. You will now realize that this is not your day either because the service tech did not clear the short going toward the customer. DO NOT CURSE openly at this point!!! Just remember, our customers expect the best service and our company will live up to these expectations.
This was my life in att since sbc bought them. i worked in the back country of san diego calif. so i just retired 2 yrs early to get away from the POS Called att. they do not care about customers or employes . take note they have made a contract with the union in over 1 yr.
My god help you all
Hi,
Somewhat related comment, I live in the ATT covered area of Kentucky, 502 area code. I have dial-up service as DSL is not available nor cable in my area. My modem been failing for several months.
I changed internet service providers due to failed service. My landline went out about 6 weeks ago on a weekend. Now this weekend it went out again. I have voltage at times but not a dial tone. ATT says they have a wide area outage. They won’t say where. They say it will be taken care of tommorow but the date of tommorow has been two days away. My data on dial-up fails. I am not
writing to complain, but just to inform. If I had an alarm system tied to this line I would be more at risk. I thought they may be changing some switching elements. I suppose they can’t advertise due to criminal elements taking advantage and liability.
I have not read much of the comments above, but I will.
Good Day and Happy New Year
Eugene,
1. Complain to your Public Service/Utilities Comission Telephone Division and get everyone else suffering from bad service to do the same.
2. Do the same at the FCC.
DSL sounds very unlikely to ever be available at your location from what you described (voltage at times but no dial tone indicates one or more repeaters in your line; wide range outage indicates long distribution plant and DSL is optimum only under 5000 feet from the Central Office or special DSL repeater; a DSL line must be clean (no bridge taps, or line connections to serve someone else in the future when you quit.
‘Sounds like you should investigate Satellite ISP service, but be warned, they say you must have a clear view of the southern sky, which is not the case when heavy clouds go over or during heavy fog (both of which absorb microwaves).
Good luck,
ZZ