Sunday, June 11, 2006

AT&T's Project Lightspeed: Bolshoi ain't just a Russian ballet company

The Los Angeles Times takes a closer look at AT&T's much ballyhooed Project Lightspeed -- the project that AT&T and BellSouth are using to justify eliminating local franchise laws in Louisiana.

What a scam!

Let's go to the core issue of the technology:
But industry analysts are skeptical about the network, dubbed Project Lightspeed, and the TV service, called U-verse.

"This is a complicated product launch on a scale that is pretty much unprecedented," said analyst Adi Kishore of the Yankee Group research firm in Boston. "They're going to have problems, especially given the relatively tight time frame to get things done."

Experts question the wisdom of creating a network that's likely to be technologically out of date by the time it's complete. Lightspeed is designed to send data at an average of 25 megabits per second by extending high-capacity fiber optic lines to within 3,000 feet of homes. To cover the remaining distance, AT&T plans to rely on new DSL gear to send data humming over existing copper lines.
OK, so it's obsolete technology that is going to cost AT&T something in the neighborhood of $5 Billion to deploy.

And what might consumers get (at least those customers of AT&T/BellSouth that might actually see Lightspeed deployed)?
AT&T won't reveal its TV package prices yet. But Internet information company Broadband Reports said users of its online forums learned that the basic bundle of 170-channel TV service plus 1.5-megabit-per-second Internet access would cost $85 a month. The top tier of more than 200 channels with 6-megabit-per-second access would cost $114 a month.
That deal loses to Cox right now. It'll won't pose any threat to whatever the package LUS brings to market next year (yes, that's a prediction).

But, might that be a good deal in other parts of the state and, thus, justify ripping out the local franchise laws? Well, it might be, but Lightspeed is probably not coming to Louisiana -- or, if it is, it's only going to faster growing places like Baton Rouge and maybe Shreveport and St. Tammany Parish.

Why?

Well, as John has spent a good bit of effort trying to explain, Lightspeed represents the ultimate cherry-pick by AT&T. That is, the company only figures to bring Lightspeed to about 50 percent of their existing customer base:
AT&T's strategy is to bring Lightspeed to 19 million homes in 41 of its markets by the end of 2008 — a little more than half the homes in its 13-state territory, including California. The rollout is expected to cost $4.6 billion. Other customers can get Homezone, a combination of satellite TV and high-speed Internet access, which will be available in the next few months.
Now, the deal is that Louisiana is not a fast growing market. We've been one of the slow growth markets in BellSouth's nine-state service area. Once the purchase of BellSouth by AT&T closes, we'll be a slow growth market in AT&T's 22-state market.

Bottom line: the DirecTV/DSL combo that BellSouth offers now is going to be the dominant package offered by AT&T in Louisiana after this deal closes -- regardless of what BellSouth's lobbyists are saying in the Legislature.

So, why are legislators ignoring the facts and buying into the BellSouth/AT&T B.S.? A lobbyist for the Police Jury Association of Louisiana quotes one lawmaker as explaining it this way: "False hope is better than no hope at all."

That is, BellSouth may well be lying to legislators, but the prospect of relief from high cable bills is worth the risk. And it is based on that reasoning that the Legislature is preparing to make the Digital Divide the official policy of the State of Louisiana.

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