AT&T Is Letting the Wired, Public Telecommunications Utilities in 21 States Deteriorate — for 5G and Streaming?
§ Did you know that AT&T controls 21 state-based, public telecommunications utility networks — but never mentions this fact?
§ Did you know that there are still public state telecom utilities left in America?
§ AT&T covers about 76 million locations yet has less than 3.9 million fiber optic lines to the premises in use — that’s only 5%.
§ AT&T claims it will be focusing on 5G wireless and streaming — like Netflix.
§ AT&T claims it is only deploying 350,000–500,000 fiber optic lines to homes a year.
§ Real 5G requires a fiber optic wire to the small cell every block or two.
This means that:
§ At this rate, it will take decades for AT&T to bring fiber to their territories.
§ Almost all of the wireline utility construction budgets have been diverted to fund wireless — instead of upgrading cities.
§ The majority of the wired infrastructure has been left to deteriorate.
§ Over the decades, though it varies by state, customers have been charged thousands of dollars for fiber to the home, and now customers are overcharged for fiber to the wireless cell sites.
§ If 5G requires a fiber optic wire down the block, then why are they not wiring the homes that are being passed along the way?
§ It would appear that the FCC, state commissions and those who are supposed to provide oversight failed to examine basic facts.
§ 5G is not profitable if these subsidies are removed; and
§ This has been and is a massive continuing, financial bait-and-switch.
AT&T’s Plans: 5G — Streaming Entertainment Company.
According to a Barron’s article, AT&T’s current plan is to ‘transform’ the company to focus on 5G and streaming video. The headline says it all. (Requires registration)
“How AT&T Is Transforming Itself for a Future of 5G and Streaming”
John T. Stankey, AT&T President & COO at the Morgan Stanley Technology, Media & Telecom Conference, March 3rd, 2020, said:
“In terms of our marketing muscle and our momentum in the market, it will be about software-driven pay TV packages either over bring your own hardware, which is ATT (sic) [AT&T] — ATT Now (sic) [AT&T TV Now] or ATT TV (sic) [AT&T TV], which is our own hardware-provided package, that will be what the customer sees and has us promoting.” (Emphasis added)
(NOTE: We left in the transcription marks to give what everyone reading this should feel –sic.)
I paraphrase AT&T; We’re not building infrastructure anymore. We are now ‘software-driven’ and we have all of these entertainment properties — like Warner Brothers. So, besides tracking you online — we’re not serious about doing upgrades of the utility infrastructure. Instead, we’re offering a package that competes with Netflix — i.e.; the customer uses someone else’s broadband pipe and the AT&T content which includes HBO.
Or, the customer can use AT&T’s wireless service — which can be versions of 5G that are the same as 4G with some lipstick — or worse, the services just aren’t available.
“AT&T has three 5G network offerings. Speeds on 5GE can be up to two times faster than LTE, according to AT&T. However, research from OpenSignal shows, ‘The 5G E speeds which AT&T users experience are very much typical 4G speeds and not the step-change improvement which 5G promises’.”
Moreover, AT&T et al. control the wires so they also control the price of wireless service; America has some of the most expensive wireless services in the world.
All of this should be ringing large alarms in every AT&T state. AT&T controls 21 state public telecommunications utilities, and these networks have been the primary wireline infrastructure — the essential infrastructure in each state for decades upon decades. And with all the talk of fixing the Digital Divide, maybe it is time to come to grips with how the promised future technologies have been used to manipulate public policies.
Where’s the Fiber?
AT&T’s fiber optic deployments are in need of investigation. After examining AT&T’s overall financials and business statistics, what stands out is that AT&T, after all of the blister and talk of U-Verse (which was supposed to be a fiber optic service) and Gigapower (which was supposed to be a serious deployment of fiber optics in cities) — AT&T still has squat.
AT&T’s 2019 Annual Report shows 3.9 million fiber broadband connections to residential customers, and most of this increase was based on a condition of the AT&T-DirecTV merger to have 12 million households upgraded.
AT&T is claiming that it will upgrade about 350,000–500,000 residential locations annually; that’s about 17,000 to 24,000 per state.
“We’ve continued to build fiber to new homes as they’re built probably in the 350,000 to 500,000 living unit growth per year, as some of our cost efficiency initiatives start to take hold, as I described earlier, and we start to free up cash flows with overperformance on that…”
Here’s the rub. According to previous AT&T announcements, AT&T covers 76 million locations in these 21 states. In fact, almost all of AT&T’s territories have already been wired with a copper wire as part of the state utility over the last 50–80 years. Moreover, over the last 30 years, thousands upon thousands of miles of fiber have been put in place as part of the state telecom utilities, or put in place as part of the previous version of AT&T that offered long distance. And yet there is a paucity of very high speed services offered by AT&T.
AT&T makes it hard to figure out how many U-Verse or wired broadband service connections are still left (some moved to fiber in areas where available; some moved to DirecTV). These numbers show that the AT&T wired connections in 21 states have been and continue to be eliminated with the plan to move customers off of a wired broadband solution. DSL, which was cannibalized by U-Verse, has less than ½ million customers in 2019.
In fact, AT&T’s total broadband connections (which include the fiber lines and U-Verse and DSL, etc. ) — has been totally flat for the last three years and going down since 2014.
NOTE: U-Verse is a copper to the home service, though it has been advertised as “fiber optic” based. In fact, the fiber is within a ½ mile from the home.
There have been rumors that AT&T is going to stop offering U-Verse. Cordcuttersnews has been tracking the story.
“For some time now we have heard that U-Verse TV’s days are numbered. Recently AT&T has confirmed to Cord Cutters News that U-verse TV is no longer offered in markets where the new AT&T TV is now available. Now AT&T has announced that AT&T TV will go live nationwide in February of 2020, raising questions about the future of U-verse TV….Cord Cutters News asked AT&T for comment about the future of U-verse TV after AT&T TV goes nationwide. All AT&T would say was the national rollout of AT&T TV would not affect current customers. AT&T declined to answer our question on if signups for U-verse TV would stop when AT&T TV rolls out.”
Add this from AT&T’s web site. It details that the “fixed wireless” used for more rural areas, (when available) is at least 10Mps down, 1Mbps up.
In the end, where’s the plan for very high speed competitive broadband-internet services, including rural areas from AT&T?
5G is just another in a long line of shiny-tech-baubles that are used to distract the public from what’s really going on — pursuing less obligations to customers and creating more profits with little concern about the harms they cause cities or the states they serve.
How to Screw 21 States: Erase the History and Rewrite it.
America has had multiple waves of hype about the delivery of a fiber optic future. And it is important to remember this (or to learn this now) because a) there is a plan to shut down the remaining wired infrastructure and hand it over to the wireless subsidiaries as private property while b) letting whole areas of these state utilities deteriorate, especially rural areas. These actions also let c) the companies plead poverty so they can get government grants to deploy slow wireless at high prices instead.
Fiber Optic Plan Part 1: The Info-Highway Fiber Optic Future, 1993
This next chart is a sample of the fiber optic upgrades that were supposed to be done in the 1990’s in parts of AT&T’s state utilities. Known as “video dialtone”, the state-based telecom utilities (and their holding companies), filed to replace the existing copper wires to offer video services — over fiber optic wires. And these applications were filed at the FCC, as this was the federal version of the fiber optic broadband plans that were to be implemented by the state utilities. Almost nothing was ever built as advertised. Notice that these were to be ‘permanent’ installations.
In fact, according to the 1993 Pacific Telesis Annual Report, California was to have 5.5 million households wired with fiber optics by 2000 and the company would be spending $16 billion dollars.
AT&T California Pacific Bell, 1993
“In November 1993, Pacific Bell announced a capital investment plan totaling $16 billion over the next seven years to upgrade core network infrastructure and to begin building California’s “Communications superhighway”. Using a combination of fiber optics and coaxial cable, Pacific Bell expects to provide broadband services to more than 1.5 million homes by the end of 1996, 5 million homes by the end of the decade.”
The Ameritech Fact Book, March 1994 (which includes Ohio, Indiana, Illinois, Wisconsin and Michigan):
“We’re building a video network that will extend to six million customers within six years.”
All of this was just the start, as this first wave of upgrades were to be completed around the year 2000. The other now-AT&T states had varying degrees of state-based fiber commitments, but in almost all states, laws were changed to give the companies more money for replacing the existing copper wire with fiber optic wires. Some plans even called for schools, libraries and hospitals to have fiber optic upgrades.
What most people never understood was that the federal video dialtone plans overlapped the state-based commitments — and the FCC never examined the state based- commitments and they were never mentioned or brought up as part of, say, the advanced network broadband reports or even the National Broadband Plan of 2010.
For the gory details of AT&T’s broadband plans see “The Book of Broken Promises: $400 Billion Broadband Scandal & Free the Net”
Part 2 Fiber Optic Plan: FiOS and AT&T’s U-Verse, 2004
AT&T, (formerly SBC) 2004 Annual Report
“Project Lightspeed In June 2004, we announced key advances in developing a network capable of delivering a new generation of integrated IP video, super-high-speed broadband and VoIP services to our residential and small-business customers, referred to as Project Lightspeed… “We anticipate that we will deploy approximately 38,800 miles of fiber, reaching approximately 18 million households by year-end 2007, and expect to spend approximately $4 billion over the next three years in deployment costs and $1 billion in customer-activation capital expenditures spread over 2006 and 2007.” (Emphasis added)
In fact, SBC told the FCC it was rolling out fiber to the home. According to former FCC Chairman Michael Powell’s statement as to why he closed the networks to direct competition, he pointed to AT&T’s commitment for fiber.
“Powell claimed his reason for closing the networks (“removing unbundling obligations”) was based on ‘commitments’ for 100 Mbps, fiber-optic based services by SBC (now AT&T) in October 2004.
“In my separate statement to the Triennial Review Order and in countless other statements during my seven years at the Commission, I have emphasized that ‘broadband deployment is the most central communications policy objective of our day’. Today, we take another important step forward to realize this objective…. By removing unbundling obligations for fiber-based technologies, today’s decision holds great promise for consumers, the telecommunications sector and the American economy. The networks we are considering in this item offer speeds of up to 100 Mbps and exist largely where no provider has undertaken the expense and risk of pulling fiber all the way to a home.
“SBC has committed to serve 300,000 households with a FTTH (Fiber to the Home) network while BellSouth has deployed a deep fiber network to approximately 1 million homes. Other carriers are taking similar actions.”‘ (Emphasis added)
NOTE: SBC bought AT&T after the FCC closed AT&T’s ability to use the networks to offer competitive services — and then took the AT&T name. It then merged with BellSouth in 2006.
Part 3: The AT&T-BellSouth Merger was to have 100% with Broadband by 2007
In 2006, AT&T merged with BellSouth and the new merged company claimed it would have 100% of their 21-state territory capable of broadband, albeit slow at 200 kbps in one direction, but it was the ‘standard’ set by the FCC.
We cut out the actual text from the AT&T-BellSouth merger agreement as someone might suggest that we were making this up.
Part 4: Just Hype Em’: AT&T’s Project VIP, 2013
In 2013, AT&T’s VIP announcement claimed that by the end of 2015 they would have 57 million locations covered, which is 75% of the total.
“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.”
The U-Verse broadband service was supposed to covered 33 million locations.
“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 locations. The expansion is expected to be essentially complete by year-end 2015.”
IMPORTANT: This would indicate that AT&T has 76 million locations. (If 57 million represents 75%, then the total would be 76 million locations.)
Part 5: The Hype Continued: AT&T Gigapower: Fiber to the Press Release.
DSL Reports’ coverage in 2014 nailed it:
AT&T’s ‘Expansion’ of 1 Gbps to 100 Cities is a Big, Fat Bluff
“AT&T today announced that the company is “eyeing” 100 potential target cities as locations they may deploy faster 1 Gbps “Gigapower” service. According to the company’s press release, this “major initiative” will target 100 “candidate cities and municipalities” across 21 metropolitan areas nationwide. Those users could then get AT&T’s $70-$100 per month 1 Gbps service, currently only available in a very small portion of Austin, Texas.”
“Before you get too excited, you need to understand that this is a bluff of immense proportion. It’s what I affectionately refer to as ‘fiber to the press release’.”
But what about the cable companies?
I rest my case.
As a group, over the years the cable subscription TV, ISPs and telecom providers have been rated at the bottom of every customer satisfaction survey, according to the ACSI surveys.
Simply put, with only 3.9 million fiber to the home services in 21 states, AT&T never brought any high-speed broadband competition, so the cable companies have been able to deliver services as they see fit. From poor customer service or continuously raising rates and adding new taxes, fees and surcharges, the cable companies can print money when they need more, which is the punchline of this discussion.
Instead of bringing serious competition for high speed broadband, AT&T has decided– (I repeat and paraphrase) We will use software to allow customers to view AT&T programming on other networks. And we’ll keep the price of wireless inflated because, well, we own the wires that were part of the state utility and we don’t even have to upgrade the state utilities.
In short, the cable and telephone companies have a defacto agreement to split-up the markets where cable keeps the wired broadband services and AT&T will keep the wireless networks.
But What About Direct TV? According to National Interest:
“Since purchasing DirecTV for $49 billion in 2015, the satellite TV provider has been hemorrhaging subscribers — now already down 4 million from the initial headcount of 20 million, as all of its past marketing efforts failed to stanch the bleeding from cord-cutting. All told, about 6 million abandoned satellite and cable in 2019, according to Wall Street analyst firm MoffettNathanson.”
Time to rethink the state telecommunications public utilities?
We’ve taken the FCC to court. IRREGULATORS v FCC focuses on how Verizon, AT&T et al., with the help of the FCC, have been able to manipulate the FCC cost accounting formulas that made the utility networks appear unprofitable, when underneath, there has been a massive financial cross-subsidy scheme to have the state utilities fund the wireless and the other lines of business instead of delivering on the promise of a wired, fiber optic future.
Way to complicated to discuss here, this case is at the core of how AT&T et al. have been able to let the telecommunications utility infrastructure in 21 states deteriorate, and it is also the solution to fix this obvious problem, as will be discussed in future articles.