Re: The Ailments of Ma Cable- HFC vs xDSL/xMDS
Thread- Here's a good wrap-up on the trials and tribulations of AT&T going after the Last Mile via the coaxial pipe. Surprisingly I find it pretty accurate and an interesting summary of what has taken place and what lies in the future.
IMO there are two misleading statements out of T's competitors for the last mile, US West and Sprint.
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"A couple of years ago, AT&T didn't own any last-mile option. The only people with real last-mile access were companies like us or the cable companies. Since it would've been against the law for them to buy us, they had to buy a cable company. But now, to make cable work, they've had to spend billions of dollars. No way have we even spent a billion dollars on DSL. Not even if you took all the money all the regional Bell operating companies have spent together."
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The US West spokesperson has a disconnect with reality. RBOCs are going to spend just as much to upgrade to DSL as T is going to have to spend to upgrade to HFC. IMO, it was a smart move by Armstrong. And it seems like the RBOCs customers are under attack by data-CLECs. No one seems to be attacking T's customers in the same way. At least not from the cable plant angle.
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"Sprint and WorldCom only had to invest $2 billion to get more of the country than AT&T did for $100 billion. They have a head start, but in three to five years, we'll be just as far along as they are and will have spent a fraction of the money. Sprint has only 4,000 customers right now, but it says that it already has service available in 90 markets, covering 30 million homes and 4 million businesses."
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Well this is not as ignorant as US West's comment, but I'm not sure if it's painting an accurate picture. I think if it was as cheap as they say to roll out MMDS, then it would have been a done deal already. And if they already have service to 34 million customers, why have they only signed up .004 million? And if I'm not mistaken, MMDS doesn't do cable TV. I'm guessing it's a gross underestimate to say it's only going to cost a fraction of what T will spend to upgrade to fixed broadband wireless and an over estimate on service areas already covered. But I do have to say, I think Sprint made a good move when they went around purchasing bankrupt and near bankrupt spectrum from failed providers. . -MikeM(From Florida)
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The Ailments of Ma Cable
By Jason Krause
TheStandard.com--Being the biggest cable company in the nation doesn't immediately make things easier - AT&T is struggling mightily to turn its massive cable investment into a winner.
AT&T, which closed its $58 billion merger with cable company MediaOne on Monday, is a company trying to pull itself out of a deep funk. With its stock languishing in the mid-30s, the company is not performing the way CEO Mike Armstrong must have hoped it would when he set out to buy himself a $110 billion cable empire. But since buying MediaOne and TCI, AT&T is learning that cable - an old, low-margin, slow-growth industry - is perhaps the hardest route toward becoming an Internet powerhouse.
The first move by America's leading cable company is AT&T's announcement on Wednesday that it will launch its first open-access trial, offering consumers a choice of ISPs they can get on their cable service. AT&T is tied into an exclusive contract with ExciteAtHome until the mid-2002 but is allowed to test its system to see whether open access is viable over a cable infrastructure. The trial, which will be in Boulder, Colo., and launched in November, will be available to 500 customers.
The open-access plan was expected, but it illustrates AT&T's often-conflicted business plans for Internet cable services. AT&T has been bitterly opposed to legal attempts that would force it to accept competitors onto its cable infrastructure, and the company even bought a controlling position in its exclusive high-speed cable provider, ExciteAtHome. But the company has said that it will let companies other than ExciteAtHome onto its cable plant once its exclusive contract expires.
"AT&T is admitting that no one wants a monopoly on the Internet," says Charles Ardai, CEO of Juno, one of the ISPs approached to join the venture. "They'll have to put up with rampant competition because that's how the Web works."
On top of the trial, AT&T has been taking some extreme measures to prop up the new cable business. It even went so far as to put a sexually explicit cable channel on its digital cable service, a move that Time Warner and others have rejected to protect their wholesome brand names.
AT&T has had to make these moves in order to prove that it can turn its cable play into a winner. The cost to AT&T of putting together its cable empire has been enormous, with an estimated $9 billion in upgrades to fix the aging cable plant that it inherited from TCI - costing as much as $200 million in key markets like Denver alone. But the company is still confident the big cable bet will pay off. Internet access, video, local telephone service and other services will be piped into homes on cable lines, while competitors try to do the same thing with their DSL and wireless offerings.
But since AT&T first purchased TCI Cable in 1999, the competition has started to get its act together. Along with Internet startups, AT&T has to compete with the regional phone companies, satellite companies and other long-distance carriers in the battle to control the last mile, or the wires that run directly into the home.
"A couple of years ago, AT&T didn't own any last-mile option," says Teresa Taylor, VP of integrated solutions with US West. "The only people with real last-mile access were companies like us or the cable companies.
"Since it would've been against the law for them to buy us, they had to buy a cable company," she says. "But now, to make cable work, they've had to spend billions of dollars. No way have we even spent a billion dollars on DSL. Not even if you took all the money all the [regional Bell operating companies] have spent together."
DSL isn't the only competing technology that will try to undermine Armstrong's plans. AT&T has made tepid bids to offer wireless broadband services, but other long-distance phone companies such as Sprint and WorldCom have been buying enough of the wireless spectrum to be able to sell broadband in 60 percent of the U.S.
"Sprint and WorldCom only had to invest $2 billion to get more of the country than AT&T did for $100 billion," says Michael Levin, senior director of marketing for Sprint. "They have a head start, but in three to five years, we'll be just as far along as they are and will have spent a fraction of the money." Sprint has only 4,000 customers right now, but it says that it already has service available in 90 markets, covering 30 million homes and 4 million businesses.
AT&T professes to be nonplussed by the competition, insisting that cable is a much more rounded offering. "We think broadband is network with sufficient bandwidth for high-speed Internet access, phone service, video and [that it] could do video-on-demand and interactive TV," says Steve Lang, spokesman for AT&T Broadband. "The competition are the phone companies, satellite companies and competitive cable services, but none of them can do all the things we can do."
AT&T is confident that its investment in cable will pay off, that DSL and other technologies don't stack up to the full range of services AT&T cable will be able to offer. "It's apples and oranges," says Lang, when asked to compare cable and DSL. "The upgrades will pay for themselves."
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