Saturday, March 25, 2006

Our New Overlords: ATT's Fiber To The Rich Nodes

The new AT&T (recently SBC) is set to absorb BellSouth as soon as the regulatory bodies scuttle out of the way. So it seemed useful to do a little checking on what we can expect from our new telecom overlords. It seems that if you and your neighbors don't average a phone bill in excess of $110 dollars a month you will not get a network upgrade from them. (Not even the stangled fiber to the node kind that ATT and BellSouth are currently touting, much less real fiber to the home.) I spend about 19 dollars with BellSouth each month. Not a few of my neigbors get by on cell phones. I guess we up here in north Lafayette aren't on the list. No surprise.

AT&T and BellSouth are hot to abolish Louisiana's local video franchises and wanting to sell only to the wealthy is a big part of the reason. They don't want to sell to poor folks. Cox does, their local franchise agreement requires them to serve everyone. LUS will serve all too--they've pledged to do so and politcs will make it certain that they do. ATT/BellSouth doesn't think they should have to follow suit. Their profit would be a lot bigger if they didn't have to mess around all those little accounts. That explains two bills lined up in our legislature that forbid local governments requiring a new competitor to serve all equally. (That is really what they say. Check it out for yourself: SB 386, HB 699.)

A bit of googling around popped up the following article from USATodays' Leslie Cauley, whose coverage of muni/telecom issues has been stellar. Here's a telling clip from her article when the franchising issue first heated up in late '05 and SBC had yet to finish swallowing up AT&T and adopting its name. In the story SBC/ATT reps have been complaining that the cable companies attempts to make the phone companies play by the same rules the cable companies do is unfair "regulation." Cauley writes:

Yet, SBC itself has been using regulation to strangle its rivals for years, complains Mark Cooper, director of the Consumer Federation of America. So have the other Bells. Cooper notes that SBC and the other Bells are seeking to bar municipalities from building broadband networks that might compete with their own.

In many cases, he says, the Bells are making these arguments in the same states — Texas, for example — where they're seeking to evade cable-franchise rules.

“My heart doesn't bleed for them,” Cooper says of the Bells and their complaints about franchising rules. “They don't have a public-interest bone in their body.”

Cooper says SBC reinforced that idea last fall when it unveiled plans for “Lightspeed,” its broadband project. SBC plans to spend $4 billion over four years to reach 18 million households, and ramp up from there.

During a slide show for analysts, SBC said it planned to focus almost exclusively on affluent neighborhoods. SBC broke out its deployment plans by customer spending levels: It boasted that Lightspeed would be available to 90% of its “high-value” customers — those who spend $160 to $200 a month on telecom and entertainment services — and 70% of its “medium-value” customers, who spend $110 to $160 a month.

SBC noted that less than 5% of Lightspeed's deployment would be in “low-value” neighborhoods — places where people spend less than $110 a month. SBC's message: It would focus on high-income neighborhoods, at least initially, to turn a profit faster.

Some policymakers, though, said they were appalled. “It was one of the worst self-inflicted wounds in the public policy arena that I have ever seen,” says Blair Levin, who served as an adviser to former FCC chairman Reed Hundt.

At a recent congressional hearing, Rep. Edward Markey, D-Mass., accused SBC of offering Lightspeed “for the well-off and ‘Snailspeed' for everybody else.” Cable operators also piled on. Brian Roberts, Comcast's CEO, dubbed SBC's FTTH (Fiber to the Home) project “FTTR” — Fiber to the Rich.

This will come as no surprise to anyone who watched BellSouth evade the digital divide issue during the refendum here in Lafayette. Even under duress they wouldn't say they'd serve everyone. 80 percent was all they were willing to promise.

If you figure out the "promise" SBC/ATT is making it works out to about 52. 5 percent of the total population. A little over half of the people in the communities they serve. The wealthiest half.

It doesn't look like our New Overlords will be any improvement over the old BellSouth ones.

Statewide video franchising. It's a simple way to exclude half of our citizens.

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