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Time Warner Cable’s Incoming CEO Promises to Keep Unlimited Broadband Tier

Phillip Dampier September 12, 2013 Competition, Consumer News, Data Caps 15 Comments

twcGreenTime Warner Cable will not follow Comcast, Charter, Cox and Mediacom by imposing usage caps or move towards a compulsory usage-based billing scheme.

Yesterday, incoming CEO Robert Marcus told investors attending the Bank of America Merrill Lynch 2013 Media, Communications, and Entertainment Conference that he recognizes the majority of Time Warner Cable’s broadband customers want the company’s unlimited use offering and made it clear that option will continue to be available.

Marcus

Marcus

“Most customers today — the vast, vast majority — take our unlimited offering and I think over time most customers will continue to take unlimited,” said Marcus, who currently serves as Time Warner Cable’s chief operating officer. “They value it and will be willing to pay for it. I think that is great and we have no desire to change that.”

However, Marcus also reflected on the revenue opportunities available to the company from its broadband offering, and signaled investors the company would continue to price the service commensurate with its perceived value.

“High Speed Data is a tremendous product for us,” Marcus said. “Our customers continue to use it more and more for all different sorts of applications. I think consumption growth year over year in the second quarter is somewhere north of 40 percent. It has been in that kind of range for a long time and we expect it to continue to grow at a pace like that for as long as we can see. With that increasing usage comes an increasing utility to customers and we believe an increasing willingness to pay for that incremental utility.”

Time Warner Cable increased its broadband average revenue per user (ARPU) by 9% for residential High Speed Data during the second quarter, with total broadband revenue up more than 12%, according to Marcus. Those revenue increases have been made possible by three things:

Less is More: With the FCC claiming the average Internet user consumes 28GB of broadband per month, this may explain why Time Warner Cable customers have little interest in the company's 5GB Internet Essentials offer. (Chart: New America Foundation)

Less Costs More: *-With the FCC claiming the average Internet user consumes 28GB of broadband per month, this may explain why Time Warner Cable customers have little interest in the company’s 5GB Internet Essentials offer. (Chart: New America Foundation)

  • Adding new broadband customers, mostly those abandoning telephone company DSL;
  • Implementing general price increases on broadband service for existing customers and the introduction (and later increase) of modem rental fees starting last fall;
  • Successfully encouraging customers to upgrade to faster speed tiers, which are sold at a higher cost.

Despite Marcus’ commitment to maintain unlimited broadband service for Time Warner Cable customers, the cable company is moving forward with several optional, usage-based tiers sold at a discount.

“There are customers who choose to consume less and we feel strongly that we need an offering for them which allows them to pay less and eliminate the structure where they have to subsidize the heavy users,” Marcus explained.

For more than a year, Time Warner has offered a little noticed, usage-limited plan for customers willing to confine their Internet browsing to a maximum of 5GB per month. The plan has not been popular with customers and very few have signed up. Time Warner announced earlier this summer they would try again.

“We’re now in the process of rolling out yet another usage-based tier of service which I think is a more meaningful one because it comports with what real-life usage is like, which allows customers to use 30GB a month of service again at a discount from the unlimited pricing,” said Marcus. “When you put 30GB in context, our average usage today is about 50GB a month, median usage is actually less than 30GB, so for some customers there is going to be an economically rational reason for them to choose that 30GB tier. I expect the take rate will be certainly higher than for the 5GB service.”

Marcus, like the current CEO Glenn Britt, admits the company is attempting to educate customers that broadband usage carries a cost.

“There is a principle at stake: that value, price and usage are related to one another and that is important over time,” Marcus said.

Verizon Says It Won’t Enter Canada; Incumbent Providers’ See Major Stock Gains

Phillip Dampier September 3, 2013 Bell (Canada), Canada, Competition, Consumer News, Public Policy & Gov't, Rogers, Telus, Verizon, Video, Wireless Broadband Comments Off on Verizon Says It Won’t Enter Canada; Incumbent Providers’ See Major Stock Gains

610px-Verizon-Wireless-Logo_svgExecutives at Canada’s largest telecom companies are sighing relief after Verizon announced it was not interested in competing in Canada.

“Verizon is not going to Canada,” Lowell McAdam, chief executive officer of New York-based Verizon, said yesterday in a phone interview with Bloomberg News. “It has nothing to do with the Vodafone deal, it has to do with our view of what kind of value we could get for shareholders. If we thought it had great value creation we would do it.”

McAdam added he thought speculation about Verizon’s plans in Canada was “way overblown.”

[flv width=”480″ height=”290″]http://www.phillipdampier.com/video/CBC Big 3 Canada telecom stocks surge as Verizon threat fades 9-3-13.flv[/flv]

The CBC reports three of the largest telecom companies in Canada are seeing their stock prices soar on news Verizon won’t enter Canada. Kevin O’Leary takes a position shared by Bell, Telus and Rogers that no spectrum should be set aside for new competitors. Instead, he seeks a “winner takes all” auction, even if it means dominant incumbent carriers monopolize every available frequency. (3 minutes)

McAdam

McAdam

Verizon’s possible entry into Canada was among the hottest stories of the summer, even reported on the CBC’s national nightly news. The potential new competition provoked Bell, Rogers, and Telus — three of Canada’s largest phone and cable companies — to join forces in a multimillion dollar lobbying effort to slow Verizon down and make the wireless business in Canada less attractive. The Harper government used news of Verizon’s potential entry to promote its policies favoring competition over regulation.

Verizon Chief Financial Officer Fran Shammo said the company was considering a wireless venture in Canada at a June Wall Street investor conference.

“We’re looking at the opportunity,” Shammo said at the time. “This is just us dipping our toe in the water.”

Verizon took its toe out yesterday, despite the potential profits available in a country criticized for its extremely expensive cell phone service.

“I’m surprised that Verizon isn’t interested in Canada,” tweeted Adam Shore. “There are over 33 million suckers up here that will pay ridiculous cell phone rates.”

Bell joined Telus and Rogers to launch a multi-million dollar lobbying effort to make Verizon's entry into Canada difficult.

Bell joined Telus and Rogers in launching a multi-million dollar lobbying effort to make Verizon’s entry into Canada difficult.

The three companies most Canadians now buy wireless service from denied they wanted to keep Verizon out, arguing they simply wanted a “level playing field.”

Industry Minister James Moore suggested a fourth large player could provoke a price war in a way much smaller wireless providers like Wind Mobile or Mobilicity never could. The government was willing to set aside coveted 700MHz wireless spectrum at a forthcoming auction to help a new entrant — any new entrant — get started.

Verizon’s decision to stay out might have delivered a damaging blow to the Conservative government’s “pro-competition” solution to the problem of high cell phone bills. After the announcement, Moore was left promising only that spectrum auctions would carry on regardless of Verizon’s decision.

For now, the best chance of increased competition comes from Quebecor, which is gradually expanding its wireless network. Spectrum set asides almost guarantee the owner of Quebec’s cable giant Vidéotron will be able to bid for and win significant spectrum at the upcoming auction, some at a discount.

“If Verizon doesn’t show up, they’re actually in a very strong position to buy a block of spectrum that will not be very expensive,” Maher Yaghi, an analyst at Desjardins Securities Inc., told Bloomberg News. “Wireless is currently providing them with a nice growth platform.”

Without a surprise late entrant suddenly announcing interest by the auction filing deadline of Sept. 17, many analysts predict the outcome will likely not deliver Canadians any significant changes in cell phone service and pricing. The government may also be disappointed with the auction proceeds. Canada’s big three will likely avoid overbidding and still end up dividing most of the available airwaves between them. Quebecor may end up with most of the rest at comparatively “fire sale” prices. The Montreal-based company must then decide how much it will spend to expand its home coverage areas outside of Quebec, Toronto, and southeastern Ontario.

[flv width=”640″ height=”372″]http://www.phillipdampier.com/video/BNN Verizon Wont Enter Canada 9-3-13.flv[/flv]

BNN reports Verizon’s decision not to enter Canada leaves the Conservative government without an effective means to moderate cell phone pricing in the country. Mary Anne de Monte-Whelan, president of The Delan Group, observed the government may be forced to take a more regulatory approach to control expensive cell service, possibly starting with roaming rates.  (7 minutes)

Ask DirecTV for Pricing Information, They Quietly Run a Score-Dinging Credit Check on You

Phillip Dampier August 27, 2013 AT&T, Comcast/Xfinity, Competition, Consumer News, DirecTV, Verizon 2 Comments
MYOB

MYOB

Asking about the cost of DirecTV could turn out more expensive than you think.

The Los Angeles Times found DirecTV a little more nosy than it should be, opening the door to identity theft and some minor credit damage from unwanted credit inquiries from the satellite provider.

As customers in southern California grow weary over Time Warner Cable’s dispute with CBS, some are shopping around for a better deal with another provider.

57-year old Los Angeles resident Michael Bell got more than he bargained for when he called DirecTV looking for some price quotes. Before the representative would answer, Bell found himself grilled for a lot of personal details that seemed irrelevant in response to a question about the price of HBO.

In addition to name, address, and type of residence, DirecTV wanted to know if Bell owned or rented his home.

“That stopped me,” Bell told the LA Times. “Why should he care? I told him I just wanted a price quote. He said we’d get to that. And then he asked for my Social Security number.”

That was T.M.I. for Bell’s tastes and he quickly hung up.

Requesting a Social Security number these days is a red flag, often giving warning the person asking is about to run a credit check on you.

credit dropSure enough, Robert Mercer, a DirecTV spokesman, explained the satellite provider pulls a credit report on every potential customer to determine their financial viability. DirecTV doesn’t want deadbeat customers, not after spending close to $900 to install satellite television in the average home.

If you don’t like it, you can pay DirecTV a $300 deposit and keep the number to yourself. The money is gradually refunded in the form of $5 monthly service credits each month you maintain service.

Cable companies are also notorious for running credit checks on customers, which can appear to other creditors as a request to extend credit. Too many credit inquiries can temporarily cut your credit score or worse, deny you credit.

AT&T and Verizon are also sticklers for good credit so expect them to run credit checks as well.

Time Warner Cable stands out among others for at least taking an interest in protecting customer privacy and preventing possible identity theft.

Dennis Johnson, a company spokesman, told the newspaper it can run a preliminary credit check with only the last four digits of a Social Security number and your date of birth.

Consumer privacy advocates argue that in the age of identity theft, nobody should be providing a Social Security number to anyone without a clear understanding it is being used to establish credit, open an account, or get earned retirement benefits. Consumers asked for a Social Security number for any other purpose should ask if they can avoid providing it or at least carefully scrutinize the request. If uncomfortable, simply end the conversation.

Canadian Wireless Carriers Freak Out Over Rumored Verizon Entry; Panic Buttons Pressed

upsetcableguyThe three companies that control 90 percent of Canada’s cell phone marketplace have set what they argue is ‘cut-throat’ competition aside to team up in a multi-million dollar lobbying campaign to discourage Verizon Wireless from entering the country.

Bell, Rogers, and Telus have maintained what critics charge is a “three-headed oligopoly” in the wireless business for years, leading to findings from the OECD that Canada is among the ten most expensive countries in the world for wireless service in almost every category and has among the highest roaming rates in the world.

Americans also pay high cell phone prices, and customers of both countries will find somewhat comparable pricing when comparing prices north or south of Lake Ontario. A shopper in Niagara Falls, N.Y. can find the Samsung Galaxy S4 from a Verizon reseller for $120 with a two-year contract. A shared data service plan runs as little as $80 a month for 500MB of data and unlimited domestic calling and global texting. Travel across the Rainbow Bridge to Niagara Falls, Ontario, walk into a Rogers store and the same phone runs $199 with a two-year contract (most Canadian carriers used to offer three-year special reportcontracts until the government banned them earlier this year) and a service plan running $80 a month offering the same 500MB of data and unlimited domestic calling and texting. Rogers charges extra if customers want to text a customer outside of Canada, however.

Verizon is no discount carrier. Verizon management has repeatedly stressed it offers premium service and coverage and can charge commensurately higher prices for access to that network. So the idea that Verizon’s interest in entering Canada is to launch a vicious price war is suspect, according to many telecommunications analysts.

Keep Verizon out of Canada at all costs!

They are coming.

They are coming.

In June, the Globe and Mail reported Verizon had shown serious interest in acquiring Canadian cellular upstart Wind Mobile with an early bid of $700 million. Wind Mobile, one of the three significant new “no-contract” entrants vying for a piece of the country’s cell phone market, has limped along since opening for business in 2009, unable to attract much interest from customers concerned about coverage gaps and the poor choice of mobile devices.

More recently, Wind Mobile’s new owner — the Russian mobile giant Vimpelcom — has expressed an interest in selling off the carrier because it cannot gain traction against the biggest three, which also control 85 percent of mobile wireless spectrum.

News that Verizon had taken an interest in the carrier leveled shock waves across the Canadian financial markets. Shares in the three largest telecom giants fell sharply on the news. Earlier this month, Bell CEO George Cope reported that Bell, Telus and Rogers have taken a $15-billion cumulative hit on the capital markets since Verizon hinted interest in Wind Mobile.

[flv width=”480″ height=”290″]http://www.phillipdampier.com/video/CBC Verizon takes aim at telecom Big 3 with possible Wind Mobile bid 8-19-13.flv[/flv]

The CBC reported earlier this summer that Verizon Wireless was interested in acquiring the 600,000 customers of independent wireless provider Wind Mobile, which has an insignificant share of the Canadian wireless market. (2 minutes)

Spending a few million, or even a billion dollars, to keep Verizon south of the Canadian-U.S. border is well worth it to the three big players who have launched an expensive campaign to block the proposed transaction and are willing to pay premium prices to keep struggling carriers from being sold to deep-pocketed American telecom companies.

bribesTelus had already done its part, attempting to scoop up another scrappy upstart carrier that wanted out of the wireless business. But the Canadian government rejected Telus’ proposed acquisition of Mobilicity, claiming it would harm efforts to expand Canadian wireless competition. Not to be deterred, Rogers is now attempting a cleverly structured deal to acquire Wind Mobile out from under Verizon with a proposed buyout worth more than $1 billion.

To avoid the anticipated rejection of the deal by Canadian regulators on competition grounds, Rogers has reportedly joined forces with Toronto-based private equity firm Birch Hill Partners that would make that firm the owners-in-name. Although Rogers wouldn’t get a direct equity stake in Wind, it would finance a good part of the deal and win access and control of Wind’s mobile spectrum for its own network. More importantly, it could keep Verizon out of Canada.

“The government is handing out loopholes to Verizon to beg them into Canada”

Cell phone companies in Canada are particularly angry that the government has set aside certain spectrum and guaranteed access for upstart providers to successfully establish themselves without having to outbid the cash-rich big three for wireless frequencies or have to build a nationwide network from scratch. Bell, Rogers and Telus have consistently opposed spectrum set-asides for small carriers, deeming them “unfair.” They argue Canadians’ voracious needs for more wireless service are unending, and it would be unfair not to sell the spectrum to benefit their larger customer bases. But hearing that Verizon, a company larger than Bell, Rogers, and Telus combined, could get preferential treatment and spectrum to enter the country has them boiling mad.

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/CBC Telecom debate 8-19-13.flv[/flv]

Bell’s CEO George Cope appeared on “The Lang and O’Leary Exchange” to debate the fairness of Verizon’s possible entry into Canada’s wireless market. Cope argues Verizon is getting special favors. (9 minutes)

Cope

Cope

The idea of luring a company to move or begin offering service in a barely competitive marketplace is hardly new. Cities have offered preferential policies to airlines to fly in and out of particular cities, local governments have offered tax abatements to get companies to set up shop, and providing exemptions for zoning and infrastructure have been familiar to telecommunications companies for decades.

In 1880, the National Bell Telephone Company had incorporated, through an Act of Parliament, the Bell Telephone Company of Canada (today also known as BCE), which was given the right to build telephone lines over and along all public property and rights-of-way without compensation to the public or former owners. Through a series of mergers and acquisitions, Bell would later become the dominant monopoly provider of telephone service across much of eastern Canada.

When the phone companies were handed wireless spectrum to launch their wireless businesses in the 1980s, they didn’t have anything to complain about either.

None of that history impressed Bell’s current CEO George Cope, who took to the airwaves to complain Verizon was being given preferential treatment:

  • Verizon could bid on two blocks of Canadian spectrum set aside for new entrants to the market in auction later this year. Because the big three Canadian firms are not permitted to bid on these blocks, they are likely to be sold at a lower price.
  • Verizon would not have to build its own networks to remote or rural communities, but would be able to piggyback on existing networks.
  • Verizon can bid to acquire small Canadian companies such as Mobilicity or Wind, but Bell, Telus and Rogers are forbidden from bidding on them.

“A company of this size certainly doesn’t need handouts from Canadians or special regulatory advantages over Canadian companies,” Bell said in a full-page newspaper ad. “But that is exactly what they get in the new federal wireless regulations. We’re ready to compete head to head, but it has to be a level playing field,” Cope said in a TV interview, echoing Rogers CEO who also called for a “level playing field.”

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/CBC Is Verizon really the bogeyman Canada’s telecom giants claim 8-19-13.flv[/flv]

Bell, Telus, and Rogers have launched a lobbying campaign designed to make life difficult for Verizon Wireless if it chooses to enter Canada. The CBC reports Verizon will be able to bid on more spectrum than Canadian carriers and will have the right to roam on Canada’s incumbent wireless networks. (2 minutes)

Industry Minister Moore

Industry Minister Moore

Telus went further, claiming Verizon’s entry into Canada would result in a “bloodbath” for Canadian workers, laid off by the three largest Canadian providers to cut costs to better compete with Verizon.

But Cope said at least one Canadian carrier won’t be able to compete at all, because preferential treatment for wireless spectrum will result in at least one of the big three to lose at a forthcoming spectrum auction, guaranteeing degraded wireless broadband speeds and worse service.

The three companies have found little sympathy in Ottawa, particularly from Industry Minister James Moore, now on a road tour across Canada to promote the government’s wireless competition policies. He called the big three’s loud campaign self-serving and announced a new website sponsored by the Conservative Party of Canada to prove it.

“I think that the public instinctively knows that when they have more choices that prices go down and more competition they’re well served by that,” he told CBC News in Vancouver on Monday. “The noise that we’re hearing is about you know companies trying to protect their company’s interest. Our job as a government is larger than that, our job is to serve the public interest and make sure that the public is served in this so that’s one of the reasons why I’m pushing back a little bit.”

Industry Minister James Moore appeared on CBC Radio this morning to contest the wireless industry’s claims that Verizon is getting special treatment and will bring unfair competition to the Canadian wireless market. (7 minutes)
You must remain on this page to hear the clip, or you can download the clip and listen later.

Oppose Verizon Wireless. Do it for Canada!

But the wireless companies show no signs of backing down and have turned towards appealing to Canadian nationalism and fairness.

fair for canada“The U.S. government is not giving Canadian wireless carriers any special access to the U.S. market,” says a website launched by the big three cell providers to drum up support for a “level playing field.” “Then why is it that our own government is giving American companies preferential treatment over our own companies?”

This week, a Reuters report citing unnamed sources suggests Bell, Telus, and Rogers are about to target Verizon directly with a new campaign warning Canadians the American giant has been implicated in allowing the U.S. government open access to network and customer data, which would represent a profound privacy threat to Canadian customers.

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/Bell Rogers Telus Ad 8-13.flv[/flv]

Bell, Telus, and Rogers paid to produce this ad calling on Canadians to protest unfair competition from an American wireless company.  (1 minute)

So far, Canadians’ hatred of their telecommunications providers has trumped the companies’ public relations and scare tactics. The Conservative government in Ottawa is winning support for its wireless competition war, even from unlikely places.

tweet“Someone mark the date,” Tweeted one Halifax woman not inclined to vote Conservative. “Stephen Harper has done something I mostly support.”

“Eat it Telus/Bell/Rogers,” wrote a Calgary man fed up with the lack of competition in Canadian wireless.

John Lawford, executive director of the Public Interest Advocacy Centre in Ottawa, says opposition from the big three telecom companies is obvious because they don’t want to face a fourth, powerful competitor.

“They should be scared because chances are they’re going to have more competition in the Canadian market if Verizon comes in and they are going to have to lower their prices and compete harder,” Lawford told CBC News. “It’s pretty rich of them to be talking about unfairness” when they already control 90 per cent of Canadian spectrum, he added.

Iain Grant of the SeaBoard Group, a telecommunications consultancy, said government policies to open up more competition are designed to shake things up.

“[The new rules weren’t] meant to be a level playing field,” said Grant. “[They were] meant to give a leg up [to new competitors].”

“To talk of loopholes, as some do, is to not understand that the same companies who complain most loudly about loopholes in 2013 were the recipients of even greater public largesse in 1985 when the government gifted their initial spectrum as an incentive to build a wireless business in Canada,” said Grant.

wireless north america

Few companies have taken on the Canadian big three telecom providers because of their enormous market share, at least inside Canada.

Nine out of ten Canadian wireless users are subscribed to Bell, Telus or Rogers. Trying to convince a banker to extend capital loans to effectively confront a wireless oligopoly in a country with an enormous expanse of land but not people and find enough airwaves among the 15% not controlled by the big three is an uphill battle.

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/CBC Wireless war heats up 8-19-13.flv[/flv]

CBC reports Industry Minister Moore believes increasing competition is the best way to cut Canadian cell phone bills. Regardless of whether Verizon enters Canada, the current government will continue to push for more competition. Even the threat of Verizon coming to Canada has already reduced prices. (2 minutes)

Why does Verizon want to enter Canada?

roamingAnalysts suspect Verizon’s interest in Canada has little to do with wooing Canadians to Big Red. Many suspect Verizon’s true interest is to make life easier for its traveling American customers who head north for business or pleasure.

Chief among the possible benefits is the elimination of roaming charges for Verizon customers.

“Verizon’s customers come into the country every day through all the bridges and ports of entries and they want to roam where they want to roam, whether that’s fishing in Saskatchewan or hunting in northern Ontario or wherever,” said Grant.

There are other apparent impediments that could limit the usefulness of Wind’s mobile network to Verizon. In addition to only operating in the largest Canadian cities, Wind’s infrastructure is built by Chinese firm Huawei and is not compatible with Verizon’s technology.

Huawei has been the subject of significant controversy because of its reported ties to the Chinese military. Fears that data could be intercepted by the Chinese government have kept many North American firms from doing business with the company.

Verizon also lacks bundling options for Canadian customers. The biggest three Canadian providers can offer telephone, television, and wired broadband service to their customers. Verizon can only offer wireless service.

Verizon has second thoughts

Perhaps most remarkable are late reports that Verizon may be having second thoughts about jumping into Canada’s wireless market.

Desjardins analyst Maher Yaghi said Verizon may have delayed its plans until after Ottawa’s auction of 700MHz spectrum planned for January to better understand the potential spectrum costs it will incur entering Canada.

Others speculate incumbent providers may be attempting to end the rationale for Verizon to enter Canada in the first place. One major development includes a much more favorable roaming deal for Verizon that could dramatically cut the costs for Verizon customers to roam on Canadian networks.

Regardless of what Verizon does, Industry Minister Moore says Canada’s goal of getting increased competition will continue.

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/CBC Verizon doubts 8-15-13.flv[/flv]

CBC reports Verizon may be having second thoughts about entering Canada. Verizon may not be interested in entering a political battle to win licenses to provide service and may want to acquire its own spectrum before considering buying either Wind Mobile or another competitor like Mobilicity. (2 minutes)

AT&T’s Next Generation U-verse Broadband Going to Selected Apartments in Atlanta, Austin, Orlando

att connected communitiesAT&T and Camden Property Trust have announced an agreement to offer broadband, television, and phone services over fiber to the premises technology beginning this fall, serving new high-end apartment homes owned by the developer in Atlanta, Austin, and Orlando.

AT&T’s suggestion it will build a competing fiber network that would rival Google appears to be, for now, limited to selected, luxury multi-dwelling units participating in a strategic marketing partnership that can guarantee enough customers to make the investment in fiber optics worthwhile.

AT&T’s Connected Communities Initiative is a special program offered to large single-family homebuilders, developers, real estate investment trusts, apartment owners, property management groups and large homeowners’ associations that can deliver AT&T a virtually captive customer base in return for better-than-average service and kickbacks in the form of lucrative commissions.

Camden's Gaines Ranch in Austin, Tex.

Camden’s Gaines Ranch in Austin, Tex.

With AT&T’s latest agreement, the new Camden-managed properties will receive the next generation of U-verse High Speed Internet, U-verse TV and U-verse Voice on an all-fiber network that will deliver a level of enhanced service unavailable to most U-verse customers. Most importantly, the fiber infrastructure will let AT&T to offer faster broadband to residents without limiting their television viewing.

Most AT&T U-verse customers receive service over a hybrid fiber-copper phone wire network using a more advanced form of DSL. Fiber from the nearest AT&T central office extends into each neighborhood, but existing copper phone wiring carries the service the last several blocks into individual customer homes. The presence of copper limits the available bandwidth, which has kept AT&T’s top U-verse speeds at around 24Mbps. The only way to increase speeds is to cut the amount of copper in the network. Eliminating it completely is even better.

AT&T has been reluctant to follow Verizon’s lead deploying an all-fiber network. The cost to wire each home with fiber was too prohibitive for AT&T, but providing fiber connectivity to large apartment buildings, condos, or other multi-dwelling units has met AT&T’s cost concerns, especially when the property owner signs over exclusive rights to the buildings’ existing telecommunications infrastructure.

AT&T’s program encourages the participation of property owners with a variety of paid commissions and other compensation, including:

Exclusive Marketing Agreements: Under an AT&T Exclusive Marketing Agreement, residents may still choose their communications and entertainment services provider, but the builder, developer or property owner agrees to exclusively promote AT&T services. In doing so, AT&T provides financial incentives in the form of commissions for property owners and multiple service options for residents. In most cases, renters may have the mistaken impression they can only get service from AT&T, and are informally discouraged from considering alternative providers.

camdenBulk Contracts: An AT&T Connected Communities bulk agreement offers greater earning potential. With a single, monthly recurring bulk bill for all contracted units, developers and HOAs get below-retail pricing, increased savings on equipment costs, and other rewarding financial incentives. In most cases, building owners include AT&T services either as part of the monthly rent or billed as a mandatory services surcharge. A resident can still sign up for satellite or cable television, but has zero incentive to do so because they would be effectively paying for service twice.

Exclusive Use of Wire:  Property owners grant AT&T exclusive use of the wiring, including coaxial cable, at the property. In addition, owners agree to promote AT&T products to residents. This deters would-be competitors from providing service at a property signed up with AT&T. A cable or satellite competitor would not have access to existing wiring and have to arrange an agreement with the property owner to provision a second cable inside the building. Neither the competing provider or the property owner would have any incentive to do this, regardless of the wishes of renters.

Large properties can also contract with AT&T to provision a site-wide Wi-Fi network for the benefit of residents both around the property and at amenities like clubhouses or poolside.

While such agreements can benefit residents with bulk pricing discounts beyond what they could have obtained from AT&T themselves, it also strongly deters other providers from delivering competitive services.

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/ATT Connected Communities 9-2012.flv[/flv]

Last fall, AT&T promoted its Connected Communities program with property developers, offering them commissions and other special deals if they sign exclusive marketing agreements with the phone company. In 2013, broadband speeds for certain U-verse Internet customers will be increasing, depending on the infrastructure available. (2 minutes)

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/Camden Online Communities 8-13.flv[/flv]

Camden Properties emphasizes the online services available to residents, particularly those that promote social interaction. In some cases, those services will now be powered by AT&T U-verse. (1 minute)

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