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AT&T's 'Expansion' of 1 Gbps to 100 Cities is a Big, Fat Bluff

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Re: AT&T's 'Expansion' of 1 Gbps to 100 Cities is a Big, Fat Bluff

#31

Post by rayiner »

drewcrawford wrote: post #30
rayiner wrote: post #25

Earlier quoted context omitted.

The $200 billion figure doesn't represent real money that changed hands. It's an estimate based on taking the actual profit margin of the telecom companies since deregulation in 1996, and calling everything over 9-10% to be "excess profits." The premise is that telcos "promised" to lay fiber in return for being deregulated, and that if their profit margins had been limited to rates typical of a regulated utility, the…

> According to this reasoning, every year Google is "ripping off" the public to the tune of $6 billion. This comparison is invalid because Google's business is fundamentally different than a telecom in every relevant dimension. Telecoms sell a commodity product with technology they source entirely from third parties, the only form of product differentiation they have is geographical monopoly, and it is a zero-sum gam…

This data point shows that AT&T spent about $1 billion on R&D in 2010: http://www.bizjournals.com/dallas/print-edition/2010/11/19/f.... Yes, it's a "drop in the bucket" compared to their $20 billion in capital expenditures, as noted in your article ([1]), but it's hardly "basically none." Also, a lot of sophisticated engineering goes into building out infrastructure, even if it's accounted to capital expenditures and not R&D.

Water companies and power companies are generally, true monopolies, in that they're protected from competition and guaranteed a rate of return on their investment. AT&T and the other telecoms are very different. They might have certain geographic advantages, but AT&T is rarely the only wireless or telecom provider in any given market, and its capital expenditures come out of it's own pocket. It can't turn to a rate setting board like a power company or water company to guarantee cash flow to cover investment.

You can't have your cake and eat it too. If you want to develop telecom as a regulated monopoly, which worked just fine in the U.S. for the better part of a century, then you need to give companies monopoly protections. If you want to have a market, then you can't regulate rates of return. When you pretend to have a market, then encumber it with excessive regulation, you can't complain when companies don't invest private money into expanding infrastructure.

Re: AT&T's 'Expansion' of 1 Gbps to 100 Cities is a Big, Fat Bluff

#32

Post by jessaustin »

rayiner wrote: post #25
ryoshu wrote: post #19

Earlier quoted context omitted.

The $200 Billion Rip-off: http://www.pbs.org/cringely/pulpit/2007/pulpit_20070810_0026... The telcos have already promised to lay fiber, received concessions for it, and delivered little to nothing. Google may start ripping off taxpayers like that, but I'll give them the benefit of the doubt until I see it.

The $200 billion figure doesn't represent real money that changed hands. It's an estimate based on taking the actual profit margin of the telecom companies since deregulation in 1996, and calling everything over 9-10% to be "excess profits." The premise is that telcos "promised" to lay fiber in return for being deregulated, and that if their profit margins had been limited to rates typical of a regulated utility, the…

The RBOCs didn't "promise". They actually promised to lay fiber to a particular percentage of homes, then they actually received the benefits of deregulation and rate hikes premised on that promise, and then they actually did not lay that fiber. Prior to the deal, RBOCs were regulated like the utilities they were, so profit margins were absolutely appropriate for regulators to target. After the deal, they reconglomerated into the two-headed unregulatable vertically-integrated Ma Bell redux we suffer today, spinning off huge fees for execs and M&A specialists while UNE-Ping actually-innovative CLECs and ISPs to death. If you don't like the (really conservative) $206B figure, then propose another, but don't pretend it's zero.

Spending money on wireless rather than fiber made more sense because that segment has even less competition and consumer power than broadband. They're making money hand over fist there; spare us the crocodile tears over the capital investments.

Re: AT&T's 'Expansion' of 1 Gbps to 100 Cities is a Big, Fat Bluff

#33

Post by gonzo »

I live in Austin, TX.

I have Grande and AT&T fiber to my home.

AT&T will not sell me their (current 300Mbps, future 1Gbps) service.

Grande will.

When Google Fiber arrives in my neighborhood, I'll probably keep both Grande and Google. (Because it makes for an excellent test of pfSense, and as co-owner of the company behind pfSense, I'm into testing it.)

Re: AT&T's 'Expansion' of 1 Gbps to 100 Cities is a Big, Fat Bluff

#34

Post by Bud »

rayiner wrote: post #25
ryoshu wrote: post #19

Earlier quoted context omitted.

The $200 Billion Rip-off: http://www.pbs.org/cringely/pulpit/2007/pulpit_20070810_0026... The telcos have already promised to lay fiber, received concessions for it, and delivered little to nothing. Google may start ripping off taxpayers like that, but I'll give them the benefit of the doubt until I see it.

The $200 billion figure doesn't represent real money that changed hands. It's an estimate based on taking the actual profit margin of the telecom companies since deregulation in 1996, and calling everything over 9-10% to be "excess profits." The premise is that telcos "promised" to lay fiber in return for being deregulated, and that if their profit margins had been limited to rates typical of a regulated utility, the…

How are your bills when you try to use those LTE services to stream TV or to do anything serious whatsoever with cloud data, though?

The net effect I see here is that the telcos keep selling us less and less data, at a progressively lower speed, for more and more money.

I had better and faster DSL service 20 full years ago, in Iowa City, than AT&T offers me now in the middle of Silicon Valley. And that AT&T service costs more, too. That is a major red flag and indicates that something is seriously wrong.

Re: AT&T's 'Expansion' of 1 Gbps to 100 Cities is a Big, Fat Bluff

#35

Post by ilyanep »

earlz wrote: post #15

This article is spot on. I've had countless reps try to sell me on U-Verse "It's fiber to your neighborhood, so it's faster"! My next question is of course "How fast?" "Well, you can get up to 18mbit/s".. I have faster than that with cable. wtf That's not to even mention their HORRIBLE modems that they force you to use after migrating to U-Verse. Search for "nvg510" and you'll see how happy your service will be after…

Yup. I had to specifically buy another router to use with the modem because the U-Verse default routers don't even let you set custom DNS servers and AT&Ts were significantly slowing my connection.

Re: AT&T's 'Expansion' of 1 Gbps to 100 Cities is a Big, Fat Bluff

#36

Post by thenewbtg »

jessaustin wrote: post #22
ryoshu wrote: post #19

Earlier quoted context omitted.

The $200 Billion Rip-off: http://www.pbs.org/cringely/pulpit/2007/pulpit_20070810_0026... The telcos have already promised to lay fiber, received concessions for it, and delivered little to nothing. Google may start ripping off taxpayers like that, but I'll give them the benefit of the doubt until I see it.

I'm sometimes amazed how otherwise competent adults take seriously anything that ATT or VZN say. It takes a tabula that is particularly rasa to just ignore the last three or four decades of behavior from these rascals. It's actually much more likely that they'll orchestrate another "rip-off", except for more money, than that Google will ever do anything even approaching that.

I'm sometimes amazed how otherwise competent adults believe that one investor focused for profit corporation isn't capable of behaving just like another investor focused for profit corporation.

When I look at Google services, I see a lot of monopolies forming. For example, Hangouts now takes over SMS messages, and is automatically installed on all Android devices as a system app that cannot be removed. Or, in order to interact with Youtube, one requires a wholly unrelated public Google+ profile.

For someone to say that Google is incapable of abusing monopolies for strategic reasons including profit, while they are already abusing monopolies for strategic reasons including profit, is amazing to me.

Re: AT&T's 'Expansion' of 1 Gbps to 100 Cities is a Big, Fat Bluff

#37

Post by jessaustin »

thenewbtg wrote: post #36
jessaustin wrote: post #22

Earlier quoted context omitted.

I'm sometimes amazed how otherwise competent adults take seriously anything that ATT or VZN say. It takes a tabula that is particularly rasa to just ignore the last three or four decades of behavior from these rascals. It's actually much more likely that they'll orchestrate another "rip-off", except for more money, than that Google will ever do anything even approaching that.

I'm sometimes amazed how otherwise competent adults believe that one investor focused for profit corporation isn't capable of behaving just like another investor focused for profit corporation. When I look at Google services, I see a lot of monopolies forming. For example, Hangouts now takes over SMS messages, and is automatically installed on all Android devices as a system app that cannot be removed. Or, in order t…

You would benefit from a sense of proportion. Come back with this noise when there's a Google line running through my front yard that I'm not allowed to dig up. If you don't like the Android that Google built for you, then don't use it. Google haven't been purchasing laws and agencies since 1937. Ma Bell has.

Re: AT&T's 'Expansion' of 1 Gbps to 100 Cities is a Big, Fat Bluff

#38

Post by rayiner »

jessaustin wrote: post #32
rayiner wrote: post #25

Earlier quoted context omitted.

The $200 billion figure doesn't represent real money that changed hands. It's an estimate based on taking the actual profit margin of the telecom companies since deregulation in 1996, and calling everything over 9-10% to be "excess profits." The premise is that telcos "promised" to lay fiber in return for being deregulated, and that if their profit margins had been limited to rates typical of a regulated utility, the…

The RBOCs didn't "promise". They actually promised to lay fiber to a particular percentage of homes, then they actually received the benefits of deregulation and rate hikes premised on that promise, and then they actually did not lay that fiber. Prior to the deal, RBOCs were regulated like the utilities they were, so profit margins were absolutely appropriate for regulators to target. After the deal, they reconglomer…

Your premise is that telecom companies are utilities and should be regulated as such. I think that premise is deeply flawed. Utility models are appropriate for things where demand and technology changes slowly, like power and water. But telecoms is totally different in that regard. Public utilities are almost universally underfunded. Unless public money is invested, utilities have very little incentive to do more than keep the existing infrastructure from decaying too badly. See: your water and power.

Also, on what planet is wireless less competitive than broadband? Most subscribers have 3-4 credible wireless choices. The reason companies are spending money on wireless is that: 1) its less of a regulatory morass than wireline; and 2) there is insanely high consumer demand.

Re: AT&T's 'Expansion' of 1 Gbps to 100 Cities is a Big, Fat Bluff

#39

Post by drewcrawford »

rayiner wrote: post #31
drewcrawford wrote: post #30

Earlier quoted context omitted.

> According to this reasoning, every year Google is "ripping off" the public to the tune of $6 billion. This comparison is invalid because Google's business is fundamentally different than a telecom in every relevant dimension. Telecoms sell a commodity product with technology they source entirely from third parties, the only form of product differentiation they have is geographical monopoly, and it is a zero-sum gam…

This data point shows that AT&T spent about $1 billion on R&D in 2010: http://www.bizjournals.com/dallas/print-edition/2010/11/19/f... . Yes, it's a "drop in the bucket" compared to their $20 billion in capital expenditures, as noted in your article ([1]), but it's hardly "basically none." Also, a lot of sophisticated engineering goes into building out infrastructure, even if it's accounted to capital expenditures an…

Your source states that AT&T spent "0.8 cents" "of each dollar of revenue" on R&D. Secondly, if you dig into the source [1] of your source, you find that R&D spending for North American telecom companies in 2013 are dead last against every other industry as a percentage of revenue. I renew my claim that "basically none" R&D spending is a fair and accurate description.

> AT&T is rarely the only wireless or telecom provider in any given market

That is technically true, but I would paint the same facts as "approximately 96% of the population has at most two wireline providers". [2] This is an optimistic estimate: "the data used here do not provide adequate information on price and performance to determine if multiple providers in a given area compete head-to-head".

> If you want to have a market, then you can't regulate rates of return.

I don't disagree with you there. I think where we disagree is that you think a competitive market for wireline broadband in the US in 2014 is a possible scenario. In my mind, the regulated monopoly (or public utility) is the only viable model.

[1] http://www.strategyand.pwc.com/global/home/what-we-think/glo...

[2] http://books.google.com/books?id=l8oI5rA_NpQC&pg=PA37&lpg=PA...

Re: AT&T's 'Expansion' of 1 Gbps to 100 Cities is a Big, Fat Bluff

#40

Post by bradknowles »

iOsyss wrote: post #26

AT&T has made it their goal to trick the average consumer by having their reps go around telling everyone in Austin they now have fiber in their area! The reps won't even give the speed of the line until asked and the majority of responses when asked are Download Speeds of 15-30Mbps. Time Warner has cable options doubling this and the price is better. AT&T is basically trying to confuse their customers before google…

I live in Austin, and I have had U-Verse for months. I've got ~40Mbps down, and that's pretty reliable and with low latency.

I had AT&T sales reps come by the house a few weeks ago to try and sell me U-Verse, and I was able to tell them more about my service that I already had than they were told to offer to anyone else in my neighborhood.

The only thing they had to hook me on was TV, and I told them we were getting rid of all TV service.

And no, I didn't really feel sorry for them at all. Three nice young people out for a neighborhood walk where they will probably make a years worth of sales commissions in just a few hours. They don't deserve any pity or sympathy from me.

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