AT&T will spend $14 billion on its wireless and wired broadband networks in an effort to improve service for its urban and suburban customers, while preparing to argue its case for disbanding parts of the century-old landline network.

In a major 90-minute presentation with most of AT&T’s top executives on stage, the company announced its intention to move away from traditional landline service and towards a combination of an enhanced broadband platform and 4G LTE wireless access, especially in the 22 states where it currently delivers landline service.

The investment plan — Project Velocity — is a pivotal moment for AT&T, which has seen deteriorating revenue from its aging rural landline network and has focused most of its investments in recent years on its increasingly profitable wireless network.

But AT&T also hoped to hang on to the enormous revenue it still earns providing traditional home phone service. Its early answer for landline cord cutting came in 2006 with U-verse, an IP-based network platform on which AT&T can sell video, voice, and broadband service with a minimum of regulatory oversight. U-verse succeeded attracting high-paying customers who either stayed with or returned to AT&T. But now company officials hope U-verse can help the company achieve victory in its next public policy fight: to abandon traditional landline service altogether.

That emerging battle is likely to pit urban and suburban customers enjoying enhanced U-verse service against rural AT&T customers deemed unsuitable for wired broadband. AT&T is seeking to decommission up to 25% of its rural landline network as part of the strategy announced today, shifting affected customers to its 4G LTE wireless voice and broadband service, which comes at a higher cost and includes draconian usage caps.

Critics contend such a move could leave AT&T largely unregulated with monopoly control over its networks, with few service requirements or access concessions for competitors. It would also leave rural customers relegated to a wireless Internet future, perhaps permanently.

Landline/Wired Broadband: Good News for Some, Scary News for Rural America

AT&T plans to expand and enhance its broadband network to 57 million consumers and small businesses across its 22-state operating area, reaching 75 percent of customers by the end of 2015. AT&T will operate three broadband networks going forward, while gradually decommission its existing ADSL network.

• U-verse: AT&T’s triple play package of TV, Internet, and Voice over IP phone will be expanded by more than a third to reach an additional 8.5 million customers by the end of 2015. This will make U-verse available to 33 million customers in AT&T home phone service areas. Most of the expansion will be in urban and suburban areas bypassed during the initial U-verse construction phase. To remain competitive, AT&T will also increase available broadband speeds for existing customers up to 75Mbps;
• U-verse IPDSLAM: An additional 24 million customers will be offered a combo voice-broadband package that could be called “U-verse Lite.” It will offer speeds up to 45Mbps and is primarily intended as a replacement for the company’s DSL service in exurban and semi-rural areas. Arrives by the end of 2013;
• Fiber to Multi-Tenant Business Buildings: AT&T plans to expand its fiber network to reach more commercial buildings, but also lay the foundation to use these facilities for future distributed antenna systems and small cell technology that will create mini-cell sites serving individual neighborhoods, cutting down the demand on existing cell towers.

Customers living in rural, open country in AT&T service areas in states like Texas, northern Mississippi, western Tennessee and Kentucky, central and northern California and Michigan, and the rural areas of the Carolinas may eventually find themselves using AT&T’s wireless network as the company seeks to decommission its landline infrastructure.

A number of AT&T customers living in areas shown in red may see red if and when AT&T begins trying to force rural Americans to its more profitable wireless networks.

But AT&T officials also admitted in a Wall Street Q & A session that the company planned nothing special for rural landline customers transitioned to wireless. Those customers will be sharing service with traditional mobile customers. If AT&T’s service plan resembles that of Verizon, customers will pay around $60 a month and limited to just 10GB of usage per month. If AT&T decommissions its existing landline infrastructure, no other wired provider is likely to take its place.

Most remaining regulations enforcing a level playing field for telecommunications networks remain with legacy copper-wire landline Plain Old Telephone Service. AT&T’s plan would effectively banish that network in its entirety through a series of regulatory and service-transition maneuvers:

• U-verse customers actually no longer have traditional landline service. U-verse offers barely regulated Voice over IP service, free from most state regulations and pricing oversight;
• U-verse IPDSLAM customers will also quietly forfeit their traditional landlines. This product works over an IP network, which means telephone service is Voice over IP;
• Wireless service is already barely regulated and not subject to price oversight or universal service requirements that landline providers must meet to deliver service to all Americans.

AT&T proves you have to spend money on network upgrades to make money from customers purchasing the enhanced services they offer.

4G LTE Mobile Broadband: 99% Coverage Across 22 AT&T Landline States, Up to 300 Million Americans Served by the End of 2014

The majority of AT&T’s planned investment in its network will once again go to its highly profitable wireless division. At least $8 billion will be spent on bolstering AT&T’s 4G LTE wireless coverage area, especially in rural sections across its 22 state landline service area. That investment is necessary if AT&T hopes to win approval to decommission traditional landline service for rural customers.

• 4G LTE Expansion: AT&T plans to expand its 4G LTE network to cover 300 million people in the United States by year-end 2014, up from its current plans to deploy 4G LTE to about 250 million people by year-end 2013. In AT&T’s 22-state wireline service area, the company expects its 4G LTE network will cover 99 percent of all customer locations;
• Spectrum: AT&T continues its acquisition binge with more than 40 spectrum deals so far this year. AT&T’s biggest win of the year was approval for new WCS spectrum it will occupy alongside satellite radio. AT&T will have accumulated 118MHz of spectrum nationwide.
• Small Cell Networks: AT&T has already aggressively deployed a large number of Wi-Fi hotspots to encourage customers to shift traffic off its traditional wireless network. The next priority will be deployment of small cell technology, macro cells, and distributed antenna systems that can offer neighborhood-sized cell sites to serve urban and suburban customers and high density traffic areas like shopping malls and entertainment venues.

AT&T’s wireless 4G LTE upgrades will cover 99% of the service areas where the company provides landline service. It has to offer blanket coverage if it hopes to win approval for decommissioning its current legacy landline network in rural America.

Using New Infrastructure to Drive New Business and Even Higher Revenue

AT&T would have had a hard time selling its planned investments to Wall Street without the promise of new revenue opportunities. AT&T’s new network enhancements will support a range of new services the company hopes to introduce to win greater revenue in the future:

• AT&T Digital Life: A nationwide all IP-based home security and automation service set to launch in 2013 that will let consumers manage their home from virtually any device — smartphone, tablet or PC.
• Mobile Premise Solutions: This new nationwide service, available today, is an alternative for wireline voice service and in the future will include high-speed IP Internet data services.
• Mobile Wallet: AT&T is participating in the ISIS mobile wallet joint venture. Market trials are underway in Austin, Tex. and Salt Lake City today.
• Connected Car: More than half of new vehicles are expected to be wirelessly connected by 2016. AT&T is positioned to expand from vehicle diagnostics and real time traffic updates to consumer applications that tie into retail wireless subscriber data plans. AT&T already has deals with leading manufacturers such as Ford, Nissan and BMW.

AT&T’s 2012 Investor Conference introduced major transformative changes for AT&T’s wired and wireless broadband networks.  (2 hours, 9 minutes)

Will be available to 8.5 million additional customers by the end of 2015

AT&T will spend $6 billion over the next three years to upgrade broadband speeds across its 22 state operating service area and further expand its U-verse broadband platform to reach suburban and exurban customers stuck in the DSL broadband slow lane.

AT&T today announced existing U-verse customers will be able to buy upgraded speeds as high as 75Mbps by the end of 2013, with speeds increasing to around 100Mbps further out. AT&T’s current U-verse platform is currently constrained with maximum speeds of around 24Mbps.

Customers currently bypassed by AT&T U-verse may still have a chance to get the service in their community. AT&T announced plans to expand the fiber to the neighborhood service by more than one-third, with an additional 8.5 million customers able to sign up by the end of 2015.

AT&T also announced an eventual replacement for its existing ADSL platform, which currently offers speeds ranging from 768kbps to around 12-15Mbps in certain areas. The company’s lighter version of U-verse, dubbed U-verse IPDSLAM, will be introduced to 24 million AT&T customers in smaller communities by the end of 2013. Customers will be offered phone and Internet service over the network — but not television — with broadband speeds up to 45Mbps.

About 25% of AT&T’s rural customers will not see any upgrade to their current landline service. Instead, AT&T announced it will seek to gradually decommission rural landline networks and transfer those customers to its 4G LTE wireless service for both broadband and voice service, pending regulator approval.

Short on specifics, AT&T did not say whether rural customers will face the same broadband usage caps that are familiar to other AT&T wireless customers.

AT&T plans to upgrade its broadband speeds using a combination of technologies:

• Pair bonding existing copper wiring to get additional bandwidth;
• 17MHz: Devoting six frequency bands to broadband, up from the current four;
• Vectoring: Using technology to reduce or eliminate speed-robbing crosstalk noise on existing lines;
• Additional Copper Wire Reductions: Bringing fiber further into neighborhoods to reduce the distance of copper wiring between your home and AT&T’s network;
• Using “rate-adaptive” technology to let equipment select the fastest possible speeds with a tolerable error rate.

AT&T has announced it has launched its new stolen phone database that offers customers a chance to report and block stolen wireless equipment, with the hope it will deter would-be thieves.

AT&T has been criticized in the past for allowing stolen phones back onto its network, but now customers can add their stolen or missing equipment to a national database that will prevent the phones from being reactivated with other GSM carriers (primarily T-Mobile).

AT&T said customers can report stolen phones and suspend service via att.com/stolenphone, at an AT&T store, or by contacting customer service. AT&T will block the device within 24 hours, the carrier said.

Verizon Wireless, Sprint, and T-Mobile activated their databases earlier.

AT&T’s mobile charging van

AT&T’s effort to aid powerless areas of Brooklyn with mobile charging stations to help customers recharge dead cell phones fell flat when the company sent the trucks without the equipment needed to charge phones.

Timothy Stenovec reported from the Red Hook neighborhood:

In Coffey Park, just steps from where the National Guard was helping distribute food and water to residents, a large AT&T truck sat, two orange generators resting silently on the sidewalk next to it.

Despite the company’s intention for the vehicle to serve as a mobile power station, the truck was waiting on equipment necessary to charge phones, and had been turning people away all day.

Marie Reveron, who is 57 and has been without power since the storm, said she waited at the truck for more than two hours on Friday morning, expecting the equipment to arrive so she could charge her phone.

“Phone service is the most important thing, and now my phone is on its last, dying bar,” she told The Huffington Post. “Sometimes you have all the bars, and the phone won’t even work.”

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/ATT Charging Stations.flv[/flv]

AT&T is allowing the general public into area AT&T stores and portable charging centers to recharge their wireless equipment, at least when the equipment needed to do that shows up. (2 minutes)

As of Monday, Nov. 5, charging stations are available at the following locations. The stations are open to the general public.

Brooklyn:

• Red Hook East and West – Coffey Park at Richards Street
• Corner of Brighton Beach Avenue and Coney Island Avenue
• Surf Avenue Playground – West 25th Street and Surf Avenue

Manhattan:

• Fulton Street Houses – 419 West 17th Street between 9th and 10th Avenues
• Hamilton Fish – Pitt Street and East Houston Street

Queens:

• Hammel Playground – Beach 84th Street and Rockaway Beach Boulevard
• Conch Playground – Beach 44th Street and Rockaway Beach Boulevard
• Mott Avenue at Beach Channel Drive
• St. Francis de Sales Parish – 126-16 Rockaway Beach Boulevard at Beach 129th Boulevard

Staten Island:

• Midland Beach – Hunter Avenue and Father Capadanno Boulevard
• Parking Lot – Mill Road and New Dorp Lane

Other New York Locations:

• Floral Park (store) – 181 Jericho Turnpike

New Jersey Locations:

• Edgewater Square (store) – 75 River Road
• Watchung (store) – 1592 Route 22 East
• Point Pleasant Beach (The Wireless Experience – Authorized Retailer) – 3122 Route 88 and Highland Drive

The Star-Ledger reports things in New Jersey may be worse.

AT&T brought in hundreds of generators to power cell towers, according to company spokeswoman Ellen Webner, but she said keeping them topped off with fuel has been a challenge. Webner told the newspaper the company will talk to customers who want their bill adjusted for outage time.

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/ATT Generators.flv[/flv]

AT&T carefully tracks its generators now being deployed to cell sites still without power. But some critics wonder why generators are not on site before disaster strikes. (2 minutes)

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/ATT Portable Microwave Cell Tower.flv[/flv]

AT&T cannot easily bring back cell sites that lack backhaul connections to Verizon’s central offices, some still non-operational due to severe flood damage. AT&T shows off emergency equipment that can establish a temporary microwave backhaul link and restore cell service. (2 minutes)

T-Mobile and AT&T customers in the impact zone of Hurricane Sandy will share cellular networks through a mutual aid pact announced today by both companies.

The temporary roaming agreement will allow customers of AT&T and T-Mobile to use cell sites providing the strongest reception and the highest call completion rate in areas of New York and New Jersey where cell service has degraded.

T-Mobile said the temporary arrangement will provide a seamless roaming experience because both companies share GSM technology. There will be no additional charges for this service. We have no information as to whether this agreement will also cover texting and data services.

Earlier today, T-Mobile provided this update to customers about restoration progress:

T-Mobile network engineers are working as quickly as possible to restore service to areas affected by Hurricane Sandy. In Washington, D.C. the network is more than 90% operational. In New York City, the network is more than 80% operational. Restoration work continues in the harder hit areas of lower Manhattan, Staten Island, Long Island, coastal and Northern New Jersey, Connecticut and portions of Pennsylvania, including Philadelphia.

T-Mobile rapid response engineering teams have staged equipment throughout the areas most severely impacted and continue to make assessments regarding how quickly we may be able to begin restoration, and where it is needed most.