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AT&T Blames Labor Costs for High Cost of Fiber Expansion

Phillip Dampier April 5, 2017 AT&T, Consumer News No Comments

AT&T wants to pass 12.9 million homes with its fiber to the home upgrade, but is upset about the price of those doing the work.

In an effort to cut costs, Fierce Telecom reports AT&T is discontinuing the practice of having two technicians prepare a home or business for fiber — one working outdoors on the fiber drop to the home and the other installing inside equipment like wiring, set-top boxes and gateways. Now one AT&T technician or subcontractor is expected to do it all.

“Originally we had a technician who placed the fiber drop and ONT [optical network terminal] on the side of the home and then they turned it over a technician inside the house that get the customer going with their services,” said Kent McCammon, lead member of technical staff at AT&T Labs. “The desire was to have what was formerly called the inside technicians perform the fiber drop, but in order to do that we had to train technicians who were not using to dealing with fiber.”

An AT&T Fiber cable placed on a pole in Dunwoody, Ga. (Image: Heneghan’s Dunwoody Blog)

To simplify training and cut costs, AT&T has been using field installed mechanical connections and pre-connectorized fiber drops, which means the installer no longer has to manually splice fiber cable connections, saving time. But as a result the technicians can no longer test the actual performance of the fiber connection to the home.

“When the technicians did a mechanical connection, you don’t have the visibility like you do with a fusion splicer where you can actually see it’s a good connection,” McCammon said. “[Once] the ONT’s green light turned on […] they left whether it was well done or not.”

That has been a risk AT&T is willing to take to speed expansion of fiber service to more of its customers, but it has also increased the number of service calls when customers are left with substandard service.

“In our recent analysis we did a few weeks ago, we’re seeing lines with variable optical power,” McCammon said, a sure sign there is a technical fault. “It’s 5% of the areas where we have installed fiber so 95% of the cases have a good connection.”

In most cases, McCammon said problems are usually the result of a bad connector and when it is replaced, power levels return to normal. It’s up to customers to notice a problem and call it in for now, but AT&T is studying whether optical time-domain reflectometer (OTDR) capability could be deployed to detect problems like air gaps or high reflection points inside the fiber.

AT&T is also reviewing how future fiber technologies can co-exist with AT&T’s current GPON fiber network. The technologies that can currently overlap AT&T’s GPON network are XGS-PON and NG-PON2. AT&T is currently reviewing XGS-PON to see if it would be suitable to deploy symmetrical 10Gbps service in the future.

“We’re getting started XGS-PON,” McCammon said. “We have it in the lab and we’re starting the IT work on that system right now, and unless something changes, that’s where we’re headed after GPON for consumer and potentially for business.”

AT&T Wants to Walk Away from Universal Landline Service in Illinois

AT&T is seeking permission to walk away from its decades-long commitment to provide universal access to landline service in Illinois, which could mean the eventual end of landline phone and wired broadband service in parts of the state.

An Illinois Senate committee approved a bill in March effectively ghostwritten by AT&T that will end the phone company’s legal obligation to provide wired services. AT&T claims 90% of consumers have already dropped landlines in Illinois, switching to cell phone or Voice over IP services. But the company would not say how many consumers still get wired broadband service from AT&T.

AT&T is laying the groundwork to eventually mothball its copper wire networks. Customers in urban areas would likely be serviced by AT&T’s fiber-copper U-verse network while rural areas would be served entirely by AT&T’s wireless cellular network. The company has already received approval to drop landline service in 19 of the 21 states where it provides landline service. AT&T Illinois president Paul La Schiazza said the company won’t approach the FCC about switching the network off for good until it gets approval in all 21 states.

If AT&T wins the right to pull the plug, it need only provide customers with 60 days notice. The bill also currently qualifies only one company in Illinois to discontinue service almost immediately — AT&T. Despite that, the bill has won support from independent phone companies in the state including Frontier Communications.

La Schiazza complains the government has treated AT&T unfairly by requiring it to provide service while other companies can cherry-pick service areas.

“What we’re left with in Illinois is we’re not guaranteed any customers, we’re not guaranteed any return … yet we still are required to provide an old-style, voice-only telephone line to every customer in our service territory,” he told the Chicago Tribune. “No competitor is required to do that. They can pick and choose whatever customers they want to serve and they can use whatever available technology that they want to.”

But AT&T’s competitors never enjoyed a legacy as a government-sanctioned monopoly, and do not benefit from rights-of-access, government tax credits, and mature network infrastructure over which it can offer service almost anywhere. AT&T also wins an end to the universal service mandate that has been a part of telecom public policy for decades, which means some rural state residents will not be able to get any telephone or internet service from AT&T or any other provider.

AT&T claims it will invest the money it currently puts into wireline network maintenance into ‘services consumers actually want,’ which has traditionally been its wireless network. AT&T’s preferred solution for rural service is to bolster its wireless network and convert existing wired customers into wireless ones. But that gives some state legislators pause, and efforts to decommission landline service by Verizon in rural New York and Superstorm Sandy-ravaged communities along the New York and New Jersey shoreline met with howls of protest from customers about inferior service.

Abe Scarr, director of the Illinois Public Interest Research Group, warned AT&T’s proposal was good for AT&T but potentially bad news for rural, older, and poor residents. Scarr submitted testimony to the Illinois Senate’s Telecommunications and Information Technology Committee that argued the current bill SB1381 was favorable to AT&T’s corporate agenda but failed to preserve time-honored traditions of universal service, consumer protection, competition, and public safety.

Scarr pointed out several recent wireless failures including several 911 outages that disrupted access to emergency services nationwide and AT&T’s inability to offer reliable wireless service during mass events. He also questioned whether AT&T would actually invest adequately in improving coverage in Illinois.

“I don’t think we can take away the old policy without replacing (it with a) new one and just pray to the gods of the markets to provide everything,” Scarr said. “I’m quite confident that’s not going to work out for all Illinoisans, especially since we don’t have real competition in broadband.”

Texas Homeowner Appalled Over “Sissy Ass Fight” Between Two AT&T Workers in Her Backyard

Phillip Dampier March 28, 2017 AT&T, HissyFitWatch, Video 1 Comment

A San Antonio homeowner was upset when she discovered two AT&T subcontractors installing a fiber line in her backyard were instead engaged in what seemed to be a fight/wrestling match/comedy routine.

“Caught this sissy ass fight on my security camera today in my backyard,” the unidentified homeowner wrote on her Facebook page. “These idiots are supposed to be installing AT&T fiber wire not getting into a lovers’ quarrel. It’s a full on chick fight, about the sissiest fight I’ve ever seen in my life. I could have done a better job at kickin’ those boys tails.”

Only in Texas.

“‘Honestly, I couldn’t tell if they were playing around and wrestling or what,” she complained. “Then I saw some sissy hair pulling and thought, ‘Oh no way! This is for real!’ Two grown men rolling around pulling hair like a bunch of sissy pants.”

An embarrassed AT&T sent the Houston Chronicle a statement about the unfortunate incident.

This involved employees of a company that was hired by one of our contractors, and obviously didn’t meet our requirements of how they conduct themselves… The contractor has assured us they will no longer use this company when working for us.

In response to the story, a local company offered the duo free fight lessons.

“If either of these guys want to learn to fight, shoot us a message,” wrote Genesis Jiu Jitsu SA. “We offer a free month of lessons on the house.”

AT&T Subcontractor Fight Club: A San Antonio homeowner’s video security system picked up this encounter between two workers that were there to install a fiber cable. She posted the fracas on her Facebook page. (1:30)

Sprint a Pawn in Masayoshi Son’s U.S. Investment Scheme

President Trump met with Softbank’s Masayoshi Son in December, 2016.

Japan’s Softbank has a deal tailor-made for President Donald Trump’s desire to inspire companies to invest more in the United States and hire more workers, and all the president has to do is get Washington regulators concerned with mergers, acquisitions, and competition out of Softbank’s way.

Softbank’s Masayoshi Son has delivered a lot of speeches and made a lot of promises since acquiring Sprint in 2013 for $21.6 billion, originally promising to rebuild the struggling wireless company into a potential competitive juggernaut, capable of beating Verizon and AT&T and even take on cable operators. Now he’s offering to invest another $50 billion in the U.S., and create 50,000 new jobs, assuming the business climate is right.

Before accepting such a deal, one should take a closer look at how Sprint is doing three years under Softbank’s ownership. Few would argue with the fact Sprint has languished and fallen to last place among the four national carriers, now behind T-Mobile. Despite Son’s commitment to Donald Trump to invest and hire, Sprint has severely cut investment by more than 60% between 2014 and 2016 and has laid off more than 4,000 employees, most in the United States. Customers continue to complain about the perpetual ‘massive upgrade’ undertaking the company embarked on years ago that never seems to be finished and hasn’t helped service quality as much as customers expected.

In January 2016, BusinessWeek reported SoftBank has “plowed more than $22 billion into Sprint, and yet all of Sprint is now valued at $11.8 billion. The company’s $2.2 billion in cash is about the same as its 2016 debt obligations.”

Ten years earlier, Sprint was worth $69 billion and was prepared to dominate the U.S. wireless industry, but drove customers off with very poor customer service and inadequate investment in its network, allowing competitors like AT&T and Verizon Wireless to leap ahead. Sprint also embarked on an executive-inspired fantasy: a disastrous merger with Nextel that preoccupied the company for years. Softbank taking the lead has done little to change customer perceptions, nor those of some Wall Street analysts who fear Sprint is a bottomless money pit that always promises better times and profits are coming, but never seems to get there.

“You’ve watched a once-great institution deteriorate to the point that it is now a badly, badly compromised asset,” said Craig Moffett, an analyst at MoffettNathanson. “They’ve been living from hand-to-mouth for years, constantly making short-term decisions in order to live to fight another day.”

It calls into question Softbank’s vision to use technology “to reduce loneliness and ease the sadness of people as much as possible.” There are a lot of sad Sprint customers, churning away into the arms of competitors like T-Mobile faster than Sprint can sign new customers up.

Son’s dream depended on his business plan that reduced the number of U.S. competitors to three by merging Sprint and T-Mobile together, something federal regulators under the Obama Administration failed to accept despite Son’s argument the combined resources of the two companies would theoretically make a super-sized Sprint more competitive with AT&T and Verizon.

In contrast to Son’s plan to consolidate the wireless industry to improve Sprint’s financial health, T-Mobile instead decided to boost investments in network upgrades and improved coverage to attract new customers. Ironically, some of the money to pay for those upgrades came from AT&T after it paid a reverse breakup fee of $3 billion in cash and $1–3 billion in wireless spectrum after its merger proposal with T-Mobile collapsed.

While Son promises he will invest billions in the United States, he is already spending much less on Sprint. In 2017, Verizon planned to spend $9.12 per subscriber (adjusted spending per monthly phone-equivalent subscriber), AT&T will spend $9.67 and T-Mobile will spend $9.04. Sprint will lag behind with $6.78 per subscriber in network investments. Moffett predicted of the $22 billion Verizon has committed for capital spending this year, about $11.3 billion will go toward wireless. By contrast, Sprint will spend $2.97 billion, excluding costs of leased phones. T-Mobile is spending just over $5 billion.

In the last two years, customers have delivered a new paradigm to wireless companies: bigger isn’t necessarily better. The only bright spot among all four national carriers in 2016 was the scrappy T-Mobile, once destined for a fire sale by owner Deutsche Telekom. But under the “Uncarrier” leadership of CEO John Legere, T-Mobile USA is worth pure gold in Deutsche Telekom’s global wireless portfolio. The turnaround came not from trying to consolidate the industry but rather giving customers what they have asked for — more data, unlimited data, better deals, and better service. T-Mobile’s network investments paid off, giving the company very competitive 4G LTE speeds and comparable urban and suburban coverage to its larger competitors. Legere has been so successful, the German owners of T-Mobile no longer seem to be interested in selling T-Mobile USA.

Softbank’s record of achievement with Sprint in the last two years has been much less of a success story.

Customer Gains and Losses by Carrier – 2016-Q4 Phone Activators

Investments by Sprint in its wireless network have plummeted 62.7% under the leadership of Softbank from 2014-2016. (Chart: Hal Singer)

In 2015, Sprint’s capex was $3.958 billion. Last year, it was $1.421 billion — less than half the previous year. Mr. Son seems reticent about maintaining the kind of investment necessary to grow Sprint’s network over the long term to keep up with customer demand, instead willing to compete short term on price and promotions. Sprint’s past reputation for poor customer service, a slow data network, dropped calls, and coverage dead zones makes attracting former customers back to Sprint a hard sell, especially considering T-Mobile exists as a credible alternative to Sprint for those seeking cheaper service plans.

Son’s argument to the new administration depends on President Trump and FCC Chairman Ajit Pai being more friendly to the idea of less competition than the Obama Administration. Son may have an uphill battle, considering the former Obama Administration’s opposition to earlier mergers, including T-Mobile and AT&T and T-Mobile and Sprint seems to have paid off for consumers in the form of today’s fiercer competition and a price war.

Convincing President Trump to loosen merger standards to allow Softbank a stronger position in the U.S. market in return for vague and illusory investment and job creation promises is ridiculous considering Mr. Son’s performance with Sprint has not been as rosy as his rhetoric. No president should agree to a de facto bailout deal for Softbank that reduces competition and guarantees higher prices. Mr. Son should instead direct some of the $50 billion he apparently has stashed in waiting to improve Sprint’s network to more effectively compete. If he cannot or will not, the entire country should not pay for his investment mistake by watching more wireless competition get eliminated in yet another merger.

AT&T Follows Verizon Back to Optional Unlimited Data Plans for All Starting Tomorrow: $100/Mo

Unlimited data is back.

AT&T has followed Verizon Wireless back the era of unlimited data plans, starting tomorrow.

The AT&T Unlimited plan will be available to all customers, not just those signed up with DirecTV, and will be expensive. A single line unlimited voice, text, and data plan will reportedly cost $100 a month. Customers switching four lines to unlimited data will pay $180 after a $40 bill credit kicks in 60 days after signing up. This means for the first two months, customers will pay $220 for the privilege of unlimited data.

The new plan is open to residential and business/corporate accounts and business customers will also get the benefit of any corporate discounts.

AT&T’s definition of “unlimited” actually means 22GB. If you exceed that amount, AT&T reserves the right to slow your data connection “during periods of network congestion.”

The plan includes:

  • unlimited calls from the U.S. to Canada and Mexico
  • unlimited texts to over 120 countries
  • talk, text and use data in Canada and Mexico with no roaming charges when adding the free Roam North America feature
  • the ability to switch off AT&T’s “Stream Saver” which limits online video playback to 480p

“We’re always listening to our customers and will continue to evolve to provide more choice, more convenience, and more value,” claims AT&T in a press release. But observers believe AT&T listens to the competitive realities of the marketplace more than its customers who never wanted to lose the option of unlimited data in the first place.

 

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