Lightspeed ahead

Now TV viewers have a choice of cable providers in a few markets, thanks to the roll-out of the AT&T Lightspeed project, sold as “U-verse:

AT&T’s advanced broadband services – voice, high-speed data and video – are sold under the “U-verse” brand name. The service is currently available in 13 markets in five states. Lightspeed was announced at a splashy press conference in late 2004. At the time, AT&T said it expected to spend $4 billion to $6 billion to make a menu of broadband services available to 18 million homes by the end of 2007.

AT&T started making some revisions to its targets in 2005. One called for Lightspeed to reach 18 million homes by 2008, giving itself a one-year extension on that total. In a recent 10-K filing, AT&T again revised its plan, raising the 2008 goal to 19 million households. In that filing, AT&T says nothing about the original 2007 targets.

The San Antonio-based communications giant has also updated its cost estimate. AT&T now says its spending on Lightspeed from 2006 through 2008 will add up to $4.6 billion. The total expenditure from 2004 through 2008: $5.1 billion.

This offering is the reason AT&T sought nationwide video franchising from Congress last year, only to lose after net neutrality activists twisted the product into a bizarre caricature. But that didn’t slow the phone company down, as states have proved willing to enact statewide video franchising measures that allow deployment as fast as AT&T can deliver it anyway.

So what is it about a second supplier of Triple-Play that’s so threatening to populist Democrats and consumer rights lobbyists? Nothing really, but they’ve been tripped-up by their own rhetoric. This service uses IPTV to deliver TV programming, and the consumer people have made the unfortunate mistake of believing that all network traffic framed in IP is “the Internet”. IPTV is a service that’s confined to a private network, and it never touches the public Internet. That’s annoying to Internet-based companies like Google and Netflix who want to compete with cable TV through these private networks as well, but not so understandable that the U-verse network should be opened up to them for free.

And that was the point that AT&T CEO Ed Whitacre was making when he said Google wouldn’t be using his pipes for free: Internet service, fine; IPTV service, not so fine.

Is that so hard to understand?

One thought on “Lightspeed ahead”

  1. Is that so hard to understand?

    Most neutralists rail about the alleged lack of competition among broadband providers and demand the government do something to encourage competition. However, the proposed net neutrality laws make it less profitable to become a broadband provider. In other words, it quite likely that the proposed net neutrality laws will reduce competition among broadband providers.

    This is just one of the many contradictions in the net neutrality movement.

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