AT&T Raising Wholesale Loop Prices

AT&T RAISING WHOLESALE LOOP PRICES
[SOURCE: BroadbandReports.com]
[Commentary] AT&T is raising the wholesale loop charges 44-46% for ISPs who do business with them. It looks like the changes should officially start on May 16, 2008, but you may start seeing your independent ISP raising DSL prices before then if they work with AT&T. Small ISPs, for whom it's already hard enough to do business, aren't pleased. "The problem for many ISPs is that they've given customers 12 months assurances of price, and they won't be able to pass this price hike along until those contracts are up," says a high-level ISP executive. "For ISPs that offer customers some sort of re-rate contract it could mean nearly 12 months of down side." "For an ISP with 5,000 customers, they'd be out $16,500/mo, for an "average" of nine months (presuming an average 3/4 of a year contract worth of liability per customer). That's potentially a $150,000 hit to the small example ISP." All of this of course eventually gets passed on to you, the consumer. And as you are seeing rate hikes, this is a service that's getting less and less costly for AT&T to deploy. "Bandwidth is getting cheaper, DSLAM ports are cheaper, modems are cheaper and fiber infrastructure (from RTs to COs, and between COs to POPs where Internet bandwidth is purchase) now has virtually limitless capacity thanks to DWDM," says one source. Of course he reminds us that hikes aren't based on cost, but what the market will bear. In other words, AT&T is simply raising rates because they can. And they can because they aren't seeing healthy competition in the U.S. market. It's good to be the king.
http://www.dslreports.com/shownews/ATT-Raising-Wholesale-Loop-Prices-92229