AT&T today announced it has agreed to lease exclusive rights to its nearly 9,100 cell sites and sell outright an extra 600 towers to Crown Castle International Corp. for $4.85 billion in cash, filling the wireless company’s coffers for possible acquisitions, especially in Europe.

Under the terms of the deal, Crown Castle will lease and run the towers for an average of 28 years, after which the company will be able to buy them outright for around $4.2 billion.

Crown Castle will gain more than 9,000 AT&T cell towers available to lease to other providers.

AT&T is seeking to monetize its extensive portfolio of cell towers while protecting rights of access. The cell phone company is guaranteed subleases on the towers for at least a decade for $1,900 per month per site, with annual rent increases of 2 percent, with a right to renew for up to 50 years total. AT&T will also have access to reserve capacity on the towers for future use.

The money will help AT&T’s balance sheet as it undertakes a $14 billion network upgrade and plans a shareholder-friendly stock buyback that may top $11 billion.

After the deal closes, Crown Castle will become the nation’s largest provider of shared wireless infrastructure, operating more than 40,000 communications towers in the United States alone. This is not the first deal Crown Castle has done with major wireless carriers. In November 2012, Crown acquired exclusive rights to lease and operate 7,100 T-Mobile USA cell towers.

In the past, many wireless carriers refused to share tower space for competitive reasons. Today, the demand for wireless data is forcing carriers to increase the number of cell sites to improve coverage and capacity. Many carriers now share cell sites to cut costs and avoid the regulatory burdens and citizen objections that often come with a proposed new tower. Crown Castle’s acquisition is likely to boost leasing of the AT&T cell sites. At present, AT&T’s towers only have 1.7 tenants per site, including AT&T. Crown Castle towers average 2.8 tenants per site. Potential clients for the AT&T towers include the three other major carriers: Verizon Wireless, Sprint, and T-Mobile.

AT&T U-verse customers hoping for speeds faster than 24Mbps may have significant hurdles to overcome to qualify for a speed boost up to 45Mbps.

AT&T realized they were at a disadvantage in the broadband speed race as their biggest competitors — cable operators — began transitioning to DOCSIS 3 technology and launched speed upgrades to 100Mbps or more for broadband customers seeking a faster online experience. In November 2012, AT&T announced Project VIP — an investment plan to expand and enhance AT&T’s U-verse service to approximately 57 million customer locations by the end of 2015. AT&T claims it has already upgraded 1.8 million U-verse broadband customer locations, including 500,000 U-verse video locations. As part of the upgrade, AT&T promises up to 100Mbps speeds in the future.

But customers are finding just getting 45Mbps more difficult than they first imagined. A report published by Broadband Reports explains why.

The new 45/6Mbps ‘Power Tier’ requires VDSL2 pair bonding, a technology used to increase the available bandwidth to a customer’s premise. Customers who can now purchase the Max Turbo (24Mbps) tier are the most likely to get manually qualified for 45Mbps service. It’s pot luck for almost everyone else.

Among those not qualifying are most customers in apartments, duplexes, townhouses, those served with ADSL2+ or xPON connections, or through network extenders like DSLAMs. AT&T’s website may offer availability information that suggests faster service might be available, until a technician arrives to explain it is not because the line length or copper quality between your home and AT&T disqualifies you.

With AT&T still dependent on its aging copper wire facilities, service variability will remain a fact of life and until fiber replaces more copper. AT&T customers should expect many of the company’s U-verse speed claims to be possible, not probable.

A new research report issued by Time Warner Cable concludes cell phone companies like AT&T and Verizon Wireless cannot meet the future data demands of customers over their 4G LTE wireless networks without punitive usage caps and high fees to deter usage, even with new spectrum becoming available for the wireless industry’s use.

The report, authored by Michael Calabrese of the New America Foundation, finds an answer to this problem in Wi-Fi, which can offload wireless traffic and deliver wireless service customers already prefer:

There is simply not enough exclusively licensed spectrum to meet the rapidly rising demand for wireless data, to sustain a competitive market, and to keep prices at an affordable level.

Major mobile carriers are increasingly coming to grips with this reality. The Wireless Broadband Alliance, a global industry group, reports that Wi-Fi offloading has become an industry standard as “18 of the world’s top 20 largest telcos by revenue have now publicly committed to investing in deploying their own Wi-Fi Hotspot networks.” The industry is shifting steadily toward what it calls heterogeneous networks (HetNets)—i.e., a combination of licensed and unlicensed infrastructure—in order to meet their customers’ insatiable demand for data while keeping costs down.

Alcatel-Lucent forecasts an increase of “87 times [the current] daily traffic on wireless networks” over the next five years, with 50 percent of that traffic on cellular networks “while the remaining 50 percent will be offloaded to Wi-Fi.”

Cisco’s own studies back Calabrese’s findings on consumer preference towards Wi-Fi.

“Given a choice, more than 80 percent of tablet, laptop, and eReader owners would either prefer Wi-Fi to mobile access, or have no preference,” Cisco concluded. “And, just over half of smartphone owners would prefer to use Wi-Fi, or are ambivalent about the two access networks.”

The Cisco surveys found users are choosing Wi-Fi over mobile connectivity for reasons of cost, “because it doesn’t impose data-usage caps or reduce their mobile data plan quotas.” But the primary reason for choosing Wi-Fi “is that respondents find it much faster than mobile networks.” And since Wi-Fi traffic travels over increasingly upgraded wireline networks, that speed differential may only increase as more and more homes, businesses and retail outlets upgrade to fiber optic or other high-speed connections of 100Mbps or more.

America’s largest wireless carriers have fallen far behind offering Wi-Fi services to customers compared to their overseas colleagues:

• AT&T: More than 32,000 Wi-Fi hotspots are available at partnered retail businesses, restaurants, and high-traffic areas like stadiums and major tourist destinations;
• Verizon Wireless: Verizon has an insignificant Wi-Fi presence, with a small number of unadvertised hotspots in selected venues like airports and convention centers;
• Japan’s NTT DOCOMO: Up to 150,000 hotspots, up from only 8,400 in 2o12.
• China Mobile: More than 2 million hotspots are up and running carrying 70 percent of the company’s data traffic.
• France’s Free Mobile: More than 4 million residential hotspots are available through Free’s parent – Iliad.

Comcast could soon be the nation’s largest Wi-Fi hotspot provider.

Calabrese argues it is important for the United States to set aside significant spectrum for unlicensed wireless networks like Wi-Fi to meet future wireless demands. Currently, some Republican members of Congress are opposed to significant spectrum set asides they feel could best be monetized for private use through the spectrum auction process.

It is no coincidence that Calabrese’s findings would be released by Time Warner Cable which itself is growing a Wi-Fi presence in certain cities where it provides cable service.

The wireless carriers’ collective lack of interest in an aggressive nationwide Wi-Fi deployment may have provided a strategic opening for cable operators to fill that gap with Wi-Fi networks of their own. Cable operators consider them a useful tool to retain customer loyalty — access is typically free and unlimited for current customers.

This summer, Comcast announced a “neighborhood hotspot initiative” that will turn millions of customer cable Internet connections into shared Wi-Fi hotspots using a dual-use wireless home gateway. The equipment will offer two separate Wi-Fi signals — one intended for the customer and the other open for use by any Comcast customers in the neighborhood. The cable company will provision extra bandwidth for the open Wi-Fi network to ease concerns that guest users could theoretically slow down a customer’s own Wi-Fi channel. In a relatively short period, Comcast could become the nation’s biggest Wi-Fi network offering more than 20 million hotspots hosted by the company’s own broadband customers.

Calabrese points to the future of seamless transitions between wired, wireless 4G and Wi-Fi network access without dropping calls or data connections. Many customers won’t even know the difference.

The author recommends the FCC think about reserving space for new unlicensed “citizens band” frequencies dedicated for public and private Wi-Fi networks:

• The FCC should reorganize the UHF TV band to ensure the availability of at least 30 to 40MHz of unlicensed spectrum in every media market, perhaps including Channel 37 (now reserved for radio astronomy) and eliminating two dedicated channels reserved for wireless microphones;
• Open the grossly underutilized 3.5–3.7GHz federal band for unlicensed small cell antennas delivering a ‘Citizens Broadband Service.’ This band is now mostly used for offshore naval radar, allowing both services to co-exist without mutual interference;
• Expand unlicensed access to the 5GHz band by allocating the 5.35–5.47 and 5.85–5.925GHz bands providing contiguous, very wide channels useful for the 802.11ac Wi-Fi standard that can support very high-speed wireless services.

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/XFINITY Wireless Gateway Powers Connected Home Summer 2013.flv[/flv]

Comcast talks about their new X3 Wireless Gateway which is capable of providing two separate Wi-Fi networks, one for the customer and another for the neighborhood. (2 minutes)

The “breakthrough” unlimited data deal with AT&T didn’t last long.

When Apple first introduced its AT&T 3G-equipped original iPad, both companies marketed it with an unlimited 3G wireless Internet plan that soon became unavailable for new buyers and left grandfathered customers enduring a speed throttle when AT&T decided you used their network too much.

Burned customers banded together and sued both Apple and AT&T for bait and switch unlimited broadband. The two companies have now decided to settle, and as well as a whopper payout for the attorneys who filed the class action case, original iPad owners are going to share the proceeds:

• Customers purchasing a 3G-ready iPad before June 7, 2010 will receive a $40 check from Apple, even if you still have a grandfathered unlimited data account.
• Customers purchasing a 3G-ready iPad before June 7, 2010 who never activated an AT&T unlimited tablet mobile data plan will get a $20 discount off AT&T’s current $50 a month data add-on for up to one year.

Customers complained the steep price premium they paid for a 3G-equipped iPad wasn’t worth Apple’s asking price once AT&T removed the unlimited data option that Steve Jobs called part of a breakthrough deal.

Customers will not receive any awards until after February of next year, when the settlement is expected to be approved.

If you thought waiting three days for a service call was too long, you haven’t talked with Tod Robberson, editorial writer for the Dallas Morning News. AT&T has scheduled his U-verse installation 23 years from now.

Robberson has been buried in AT&T promotional mailings pushing its U-verse fiber to the neighborhood service he was ready to sign up for two years ago, but wasn’t yet available in his neighborhood. Dozens of mailings arriving this summer indicated that finally changed and he was ready to see the back of Time Warner Cable:

I phoned one day after receiving my first notice. I signed up immediately for service. The friendly sales person told me because of high demand, she couldn’t set an installation date for sooner than two weeks. Whatever. Fine. We agreed on August 19, somewhere between 9 and 11 a.m. I couldn’t wait.

Then, on August 16, they called with bad news. They needed to delay the installation for another week. Big disappointment, but I could live with it, I thought.

A week later, they called again and said there was another delay. The lines in my area needed “conditioning.” Each week since then, I’ve received a call from an AT&T person telling me about the conditioning problem. I finally offered to get out my own bottle of conditioner and do it myself. They didn’t get the joke.

Finally, today, I escalated. I talked to Gilbert in Complaints. Gilbert the Problem Solver. He heard me out. I told Gilbert that AT&T had me at hello. I was just dying to get U-verse and was very frustrated that no one at AT&T would listen. I could swear he even giggled a little when I made the “bottle of conditioner” joke. Then he did some checking around and told me that, well, truth be told, I could be waiting another year before they got around to installing my service. That’s right, one year.

Turns out that Gilbert was optimistic. I went online today with AT&T just to make sure I didn’t misread the notice I got from AT&T. Did they really tell me that service was now available? Well, I couldn’t have signed up if it wasn’t. AT&T’s system is set up to block you if your neighborhood isn’t ready.

But now, the “due date” on my installation has changed. It reads: 12/31/2036.

Dallas is home to the headquarters of AT&T and was an early adopter of U-verse. But AT&T has won the right under state law to decide when and where it chooses to deploy the service, leaving a large number of Dallas residents waiting since its introduction in 2010.

For the foreseeable future, Robberson’s tree-infested, satellite-unfriendly neighborhood is stuck with one choice for pay television and broadband: Time Warner Cable.