November 2012

AT&T to Invest $14 Billion to Significantly Expand Wireless and Wireline Broadband Networks, Support Future IP Data Growth and New Services

AT&T announced plans to invest $14 billion over the next three years to significantly expand and enhance its wireless and wireline IP broadband networks to support growing customer demand for high-speed Internet access and new mobile, app and cloud services. The investment plan – Project Velocity IP (VIP) – expands AT&T's high-potential growth platforms, helping drive continued increases in revenues from existing and new products and services, and earnings per share.

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 has acquired spectrum through more than 40 spectrum deals this year (some pending regulatory review) and has plans to buy additional wireless spectrum to support its 4G LTE network. Much of the additional spectrum came from an innovative solution in which AT&T gained FCC approval to use WCS spectrum for mobile broadband. Between what the company already owns and transactions pending regulatory approval, AT&T expects to have about 118Mhz of spectrum nationwide. The company will continue to advocate with the FCC for release of additional spectrum for the industry's long-term needs.
Densification & Small Cell Technology. As part of Project VIP, AT&T expects to deploy small cell technology, macro cells and additional distributed antenna systems to increase the density of its wireless network, which is expected to further improve network quality and increase spectrum efficiency.

AT&T plans to expand and enhance its wireline IP network to 57 million customer locations (consumer and small business) or 75 percent of all customer locations in its wireline service area by year-end 2015. This network expansion will consist of:

U-verse. AT&T plans to expand U-verse (TV, Internet, Voice over IP) by more than one-third or about 8.5 million additional customer locations, for a total potential U-verse market of 33 million customer locations¹. The expansion is expected to be essentially complete by year-end 2015.
U-verse IPDSLAM. The company plans to offer U-verse IPDSLAM service (high-speed IP Internet access and VoIP) to 24 million customer locations in its wireline service area by year-end 2013.
Speed Upgrades. The Project VIP plan includes an upgrade for U-verse to speeds of up to 75Mbps and for U-verse IPDSLAM to speeds of up to 45Mbps, with a path to deliver even higher speeds in the future.

In the 25 percent of AT&T's wireline customer locations where it's currently not economically feasible to build a competitive IP wireline network, the company said it will utilize its expanding 4G LTE wireless network -- as it becomes available -- to offer voice and high-speed IP Internet services. The company's 4G LTE network will cover 99 percent of all in-region customer locations. AT&T's 4G LTE network offers speeds competitive with, if not higher than, what is available on wired broadband networks today. And in many places, AT&T's 4G LTE service will be the first high speed IP broadband service available to many customers.

Fiber to Multi-Tenant Business Buildings. AT&T plans to proactively expand its fiber network to reach an additional one million business customer locations – 50 percent of the multi-tenant business buildings² in its wireline service area. AT&T expects the proactive fiber deployment to increase business revenue growth, accelerate provisioning and facilitate the installation of distributed antennas systems and small cell technology to help offload wireless network traffic.

AT&T’s LTE investments will go big by using small cells

AT&T’s use small cells to build out density is important because it will allow more subscribers to take advantage of the limited airwaves, and is yet another carrier commitment to the HetNet concept. This idea combines the use of multiple radio technologies –from LTE to Wi-Fi — as well as a variety of different base stations and antennas to maximize the capacity of the airwaves, and is the next generation of cellular infrastructure. AT&T will use more than 40,000 small cells to build out a highly dense network that can reuse spectrum and hopefully move traffic off the airwaves and on to AT&T’s fiber networks. The initial deployments of these dense networks will begin in the first quarter of next year and will work with the 3G UMTS and HSPA+ networks that AT&T has deployed. By 2014 AT&T will support LTE on these small cells as well. Both Verizon and Sprint are already exploring similar plans to make their networks more dense using small cells as well.

Here’s AT&T’s $14 billion plan to kill its copper network and leave rural America behind

[Commentary] AT&T is done with its copper telephone network and copper DSL business, according to its CEO and chairman Randall Stephenson.

The company believes that an all-IP network is the path to more profitable future. Given the millions of subscribers that are dependent on the copper telephone lines and copper DSL products, AT&T has offered a $14 billion fringe benefit for those customers and the regulators who will likely balk at the idea of AT&T stopping its investment in copper. For those worried about losing their access to communications, AT&T said with the new investment, its LTE network will reach 300 million people or 99 percent of the U.S. , while its wireline U-Verse network will expand to cover 75 percent of the current customer locations — or 57 million people.

The premise being that the remaining 25 percent of its customer territory will subscribe to LTE broadband, which comes at a much higher cost and has onerous caps that DSL access and AT&T phone lines do not have. Essentially those living in rural areas are screwed when it comes to broadband, with Stephenson saying that he believes that in an IP age, wireline broadband will still be profitable in markets of “reasonable density.” He further went on to say that “The best service is delivered through an IP-only service with a streamlined product set,” which clearly doesn’t include copper telephone lines and DSL. This news will have huge ramifications for Americans in rural areas as well as those who still rely on their wireline copper-based telephones for burglar alarms, emergencies and fire alarm systems. Competitive local exchange carriers in many regions will be wondering how they will continue to offer their products over AT&T’s copper pipes.

But it’s clear that AT&T is running from copper like I’d run from a PR person waving a social media pitch, so now it’s up to the Federal Communications Commission to take a hard look at what the loss of copper means for consumers and for the marketplace. As AT&T moves forward we need to look at who is left behind.

AT&T caught in a brazen 4G lie

AT&T announced a plan to cover 96% of the U.S. population with 4G-LTE service by the end of 2014. That's great news for customers -- but it reveals that AT&T told regulators a pretty big whopper last year while fighting for its doomed T-Mobile merger.

One of the deal's fiercest battle points was 4G access outside major cities. Without T-Mobile, AT&T said it was "very unlikely" that it would expand 4G-LTE service beyond the 80% coverage threshold it already planned to reach by 2013. The Federal Communications Commission called AT&T's bluff. It released a damning report on the scuttled merger saying it believed AT&T would expand its 4G deployment with or without T-Mobile. AT&T hit the roof, complaining that the FCC's analysis directly contradicted AT&T's "documents and sworn declarations." It got particularly irate about the FCC's prediction -- "based purely on speculation" -- that AT&T would eventually expand its LTE deployment to 97% of the population even if it didn't get T-Mobile. Fast-forward 11 months. AT&T says that its $14 billion network investment will allow its 4G service to cover 300 million Americans, the overwhelming majority of the U.S. population. The FCC held off on taking a victory lap. It released a statement on praising AT&T's expansion plans, calling them "proof positive that the climate for investment and innovation in the U.S. communications sector is healthy. "

Hey, DSL, it is time for good bye

[Commentary] AT&T is going all-in on IP – the Internet Protocol, and cutting the cord with its past. Instead, it will push newer, faster broadband via a hybrid of fiber-and-copper technologies. And what that means is end of the line for classic DSL. Nothing wrong with it.

Report: China is biggest cyber threat to US, says congressional panel

China's increasingly advanced capabilities to cripple military and civilian computer networks has emerged as the biggest threat facing the United States in the cyber realm, according to a new report from the U.S.- China Economic and Security Review Commission.

Cyber warriors with Chinese military and intelligence agencies have made great strides in their ability to attack "specialized targets" such as American military surveillance and reconnaissance systems, the report says. These cyber operatives are Chinese civilians working for the military, according to the report, with many of the hackers holding day jobs in China as computer and information technology specialists.

The ‘Smart Device’ Future

The smartphone is now a developed market. The tablet is newer, but is clearly catching on with consumers as more companies create products to compete with the iPad. So at this stage, how are tech analysts looking at the market?

Gartner predicts that 1.2 billion “smart devices” will be sold next year, up 50 percent from this year. (To savor that number, here is this fact from Gartner: 821 million smart devices — smartphones and tablets — have been sold in 2012. That’s about 70 percent of all devices sold to consumers in 2012.) Horace Dediu, who writes some of the smartest analysis of the mobile market on his Asymco blog, is starting to think about the late adopters of smartphones. He notes that comScore has declared that half the cellphones in use in the United States are smartphones. He thinks the fast conversion of late adopters to smartphones will continue. Mary Meeker, the technology analyst who is now a Kleiner Perkins partner, made a presentation that predicted that by the middle of next year the number of smart devices in use would surpass PCs.

Do Not Track finally arrives with version 23 of Chrome

Lagging behind competitors by as much as 17 months, Google has finally added the industry standard known as Do Not Track to a stable release of its Chrome browser.

The functionality, which was added to Chrome 23 released on Nov 6, gives users a way to communicate their desire not to be tracked as they navigate from website to website. When turned on, Do Not Track works in the background by adding an HTTP header that's constantly broadcast to all connecting webservers. Mozilla's Firefox browser implemented the feature in June 2011, five months before it was formalized as an official W3C specification. Almost all other browsers have adopted it since then, leaving Google—a company that makes most of its revenue from advertising—the lone holdout.

Which devices use Wi-Fi hotspots the most? Not laptops…

Smartphones have overtaken laptops as the biggest users of Wi-Fi networks as society moves from part-time to full-time connectedness.

According to a recent survey from Informa Telecoms and Media and noted by The Register, 40 percent of all hotspot connections are made by smartphones; nudging just past the 39 percent of laptop connections. Although the tablet market is young, it already accounts for 17 percent of Wi-Fi connections, says the Informa study. Surely some of these results are powered by the fact that smartphone sales have surpassed those of computers and tablet sales are starting to catch up as well. More smartphones than laptops in use, for example, certainly add to more potential hotspot connections for handsets. What else is driving such behavior? The cellular industry moving away from unlimited data plans has to be a big factor here.

News Corp.'s Carey Says Sports Rights Will Pay Off

News Corp. COO Chase Carey said the company’s new long-term rights deals with Major League Baseball and NASCAR offer “key, must-have content” that will justify their expense.

“I want to emphasize that we only make commitments like this when we’re confident we can create real incremental value,” Carey said on an earnings call. He went on to say, however, that a World Series lasting just four games (which was the lowest-rated ever) this fall was one reason the company was disappointed with the performance at the Fox network in the July-September quarter. Another was ratings for new-season shows, which he said were “below our expectations.”

Benton

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