AT&T's 'IP Transition' Will Make U.S. Broadband Even Less Competitive

from the ill-communication dept

AT&T has spent a massive amount of time the last few years harping on the need to speed up the “IP transition.” On its surface the idea seems reasonable; the nation needs to begin migrating from older copper DSL and phone technology toward new IP solutions, such as wireless and fiber to the home, the former being easier to deploy to rural areas, and the latter having much lower maintenance costs while being able to deliver faster speeds. AT&T is going state-by-state insisting that if lawmakers gut consumer protections governing these older networks, newer, better networks will spring forth from the ashes to help forge a better tomorrow, as this charming video makes clear:

Aren’t those little railroad men saddled with antiquated regulations and ancient technology adorable?

The problem is that AT&T’s version of the network of tomorrow for millions of users is going to mean significantly fewer choices and worse, more expensive service than ever before. While it’s true many people are moving away from copper phone service, unmentioned by AT&T’s video is the fact that millions of customers remain on copper-based DSL because it’s the only choice they have and the only one AT&T offered. While AT&T has selectively upgraded some users to their faster but still not fiber to the home U-Verse VDSL platform (about half of their fixed-line network), tens of millions of AT&T and Verizon’s DSL customers aren’t going to be upgraded anytime soon. Instead, they’re going to be hung up on or sold to smaller telcos with even less interest in upgrading them than AT&T did.

Enjoy the magic of tomorrowland, everyone!

While new DSL deployments and upgrades can be expensive (AT&T has always had the funds, they’ve just long placed investor returns well above offering quality product and support), existing DSL customers are perfectly profitable. They’re simply not profitable enough for impatient investors, whose eyes are squarely fixed on wireless with its low usage caps and per gigabyte overages, even if wireless is not (especially at AT&T prices) an adequate replacement for a fixed line. Refusing to upgrade fixed-line networks could almost be excused if it wasn’t for the fact that, with their other hand, AT&T has long lobbied for protectionist legislation across multiple states banning towns and cities from upgrading themselves – – even in cases where nobody else will.

Once AT&T has gutted any remaining consumer protections and regulations on copper lines (which were over time quite heavily subsidized by taxpayers, but who cares, right?), they’re going to walk away from many areas — leaving users with either the choice of more expensive wireless (many rural users won’t be able to get), or a suddenly emboldened and stronger cable monopoly. AT&T and Verizon are quietly ceding huge swaths of America’s fixed-line broadband market to cable, who’ll be sure to jack up prices in the face of less competition than ever. This before you even factor in the smaller ISPs that might have been using those telco lines to offer competing services (whoops, sorry!).

The use of “all IP” is also quite a lovely bit of conflation and misdirection, given the company’s U-Verse and DSL users are already IP-based. You’ll see the “all IP” rhetoric popping up in an endless series of editorials (like this one by Steve Forbes) AT&T has been running nationwide to convince people they really don’t need that DSL line they’re using. Larry Downes at CNET recently informed readers that AT&T’s simply interested in “connecting more Americans to the broadband ecosystem.” Nothing quite says connecting more Americans like disconnecting Americans.

The FCC recently started paying closer attention to this “IP transition” when Verizon’s version of it involved refusing to repair east coast DSL customers after Hurricane Sandy. Instead, after waiting months for repairs, customers were given something Verizon is calling Voice Link — a wireless service that locals complained was dramatically less functional and reliable than their previous copper DSL and phone lines, failing to offer basic features or data, leaving Comcast (which had no problem financing coaxial repairs) as the only regional fixed-line broadband competitor in many of these areas. Verizon was using the storm as cover to back out of areas they no longer want to service, though they fell under criticism by the New York AG for violating PSC rules.

To tackle the general technical problems with the “IP transition” (will my home security system still work? Can I even get a reliable LTE signal in my basement? Will 911 work?), the FCC has proposed a series of observed technical trials. AT&T has announced that their version of these trials will involve migrating two tiny towns to presumably LTE wireless and U-Verse over the next few years, after which AT&T and the FCC will likely proclaim the trial to be a smashing success. Ignored by AT&T, the FCC, and the press so far has been the fact that as AT&T and Verizon back away from DSL, they’re going to be leaving an even less competitive broadband market than we have now — at a time when everyone pays endless lip service to improving broadband competition.

The next time you read in the press about the “IP transition,” (and you’ll be reading about it a lot) notice how quickly everybody applauds the idea that copper is just so lame, old fashioned and unnecessary. Then notice how, buried under the pageantry, nobody seems to recognize that what’s actually happening here is simply the lopping off of unwanted DSL customers that companies are refusing to upgrade. That in turn will lead to a stronger cable monopoly across half the country, resulting in cable companies — like the freshly-merged Time Warner Cable Comcast — feeling free to impose more draconian usage caps than ever before. Welcome to the “all IP” networks of tomorrow. Watch that first step.

Filed Under: broadband, competition, dsl, ip transition
Companies: at&t, verizon