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Summary:

AT&T CEO Randall Stephenson spoke Tuesday at the National Association of Regulatory Utility Commissioners summer meeting in Los Angeles, where he called DSL “obsolete.” Since AT&T still provides and profits from DSL, this is a surprising admission.

attmanhole

Updated: AT&T CEO Randall Stephenson (pictured) spoke Tuesday at the National Association of Regulatory Utility Commissioners summer meeting in Los Angeles, where he called his company’s copper-based DSL broadband technology “obsolete.” This is a stunning admission from one of the nation’s largest DSL providers. Sena Fitzgerald Fitzmaurice, a spokeswoman for rival ISP Comcast tweeted from the meeting:

When I asked her for a follow up she said Stephenson made his statement during the question and answer period following his speech and that Comcast EVP David Cohen was following Stephenson in the lineup. She recalled Stephenson saying “We built DSL back in 1997 to chase David’s company and now that’s obsolete,” but said she hadn’t written it down. I emailed AT&T to confirm and haven’t heard back, but a NARUC spokesman who attended the event confirmed Stephenson’s quote.

Update: AT&T got back to me with the following statement about Stephenson’s remark:

Stephenson was answering a question from an audience member about how state regulators should think about new technology cycles when they are considering things like USF. He said that new technology used to be amortized over a 10-15 year period, but that has shrunk to about 5 years now. He said that DSL was introduced in the 1990s, it has been surpassed in speed by U-verse and Comcast’’s DOCSIS 3.0. He also gave the example of deploying 3G in 2006 … and now 5 years later we are rolling out 4G. His point was — new technology is being surpassed by the next generation much quicker than ever before. We have millions of customers using DSL and remain fully committed to the technology — even as we constantly look to bring innovation to the marketplace.

My attention to this quote may seem petty, but as AT&T focuses more and more on wireless and continues pushing its fiber-to-the-node services instead of faster fiber-to-the-home or even cable, it’s leaving millions of Americans in the dust.

For many in rural areas DSL is the only option, and as of the end of AT&T’s first quarter it still has roughly 10.2 million DSL subscribers. AT&T doesn’t report total DSL subscribers so I am looking at the total of 14.5 million consumer broadband subscribers which AT&T says can be DSL, U-verse or satellite customers. From that number I am assuming that roughly 4.3 million are using U-verse based on AT&T’s statements that AT&T’s U-verse deployment now reaches 28 million living units and “companywide penetration of eligible living units is 15.3 percent.” Analyst Tim Farrar of TMF Associates estimates AT&T has “between 10,000-20,000K and quite possibly less” satellite customers.

And it’s not as if AT&T plans to continue upgrading all of its customers over to U-verse. Earlier this year, AT&T executive John Stankey told an investor conference that the company would likely halt its building plans after it brings the technology to about 55 percent to 60 percent of the homes it serves. Stankey also admitted that about 20 percent of the homes in AT&T’s service area are “not a heavy emphasis for investment.” Verizon has come to a similar conclusion and has sold off a huge number of its DSL lines to other telecommunications providers. It is now pitching its wireless broadband in those areas an alternative to DSL.

But if DSL is “obsolete” as Stephenson says, then what about the Americans who are forced to rely on that as their only method of broadband access? I know many argue that because wired broadband is expensive, mobile broadband can deliver the Internet and will be more competitive, but one only has to look at the pricing for a gigabyte of data and the lack of network neutrality rules on wireless networks to see what a sham that is. For millions of U.S. citizens their broadband access is obsolete and the head of one the nation’s ISPs just inadvertently admitted as much, but that doesn’t mean he’s going to do anything about — or stop selling it.

Manhole image courtesy of Flickr user Eddie~S

  1. Vill Robinson Tuesday, July 19, 2011

    Based on the Merriam-Webster definition of the word as meaning “no longer in use” or “no longer useful,” Stephenson made a factually inaccurate statement. Having debunked this misinformation, I look forward to AT&T’s response to your followup question, “How exactly is DSL no longer in use or no longer useful to the people who have no other broadband option?”

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    1. Instead of Higginbotham and others badgering AT&T to keep a dying technology alive, why aren’t you guys asking the REAL question: why doesn’t Comcast go after these customers?

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  2. U-Verse = DSL
    Fibre-to-the-Node = DSL
    Pair-bonding = DSL
    Vectoring = DSL
    “Phantom Mode” = DSL

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  3. That’s great. Comcast will become more of a monopoly in the ever eroding net neutrality island that is non-wireless networking. Remember the Google/Verizon proposal to limit FCC regulation to land lines?

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  4. Wow, this is a bunch of bull. I suppose that all depends on the relativity. How many DSL customers are there compared to Comcast or higher speeds than DSL? Right now, I get up to 3mbps download speed. At least that’s what I’m paying for. If you ask me, paying $40 a month for a service that only lets you use a fraction of that up to 3mbps. It’s a rip off. That means, I’m sharing a 3mbps line with at least 9 other people for a total of 10 people and we’re all paying $40 a month, at least. Rip off. But, until something better comes along at a much more affordable rate, I’ll have to stick with it.

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  5. Stacey, normally if a CEO says a technology is obsolete I would take it to mean the company intends to sell their customers something newer. I’m not certain that’s not the case here.

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  6. DSL is only obsolete from the perspective of a service provider like ATT, because they don’t feel like they can still overcharge customers for it it like they can with wireless service. They are addressing one of the biggest obstacles to raising prices for mobile service by buying T-Mobile, but they would have to buy a cable company to eliminate their competition, or actually several cable companies, as they compete in multiple markets. If they could only get the cable companies to cooperate on faux competition like Verizon does, then they would be able to charge more for wireline service, and wouldn’t have to waste money on FTTH.

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  7. I would hardly call Dallas, Texas rural. If he wants me to cancel my dsl and go to his competitor he had better give me another option before calling the only service he offers obsolete.

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    1. I concur. I’ve been stuck with AT&T’s abysmal and overpriced DSL in my San Jose neighborhood for years and years. Uverse isn’t available here in my area and AT&T can’t seem to offer me any timetables on it. Maybe Mr. Stephenson needs to brush up on his corporate activities a little.

      I’ve got Comcast on the schedule to install next week. It’s my only alternative as I’ve given up on waiting for AT&T to move my neighborhood in to modern times.

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  8. I would kill for the chance to have obsolete DSL in my ‘RURAL’ neighborhood. The closest I can come to broadband is Wild Blue with the huge latency that the satellite brings. Not a satisfactory solution for business use.

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  9. Maybe he finds DSL “obsolete” because it doesn’t randomly drop calls like their bullshit wireless does. AT&T continues to win at being the most hated company on the planet…like we needed one more reason to find them clueless & inane.

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  10. ADSL, which is what would have been deployed with the original DSL rollout, is obsolete. Having said that, VDSL2 (which is what Uverse is from a technology standpoint) costs about $1000 per port, assuming that the fiber back haul is already in place for the device. It can easily support speeds in excess of 25Mbps, up to 5000ft (wire length), which is at least competitive to cable – plus it is dedicated bandwidth, not shared like cable.

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    1. Cable is shared? Really? I have worked in the cable industry for 20 years and I can tell you that you are WRONG! As for 25mbps over 5000 ft….that is WRONG as well. No tests have been done to support your claim…..TWC & COX have done tests that give 200mbps over 2 miles but ATT has not done any tests to the magnitude you are stating. CABLE HAS DEDICATED BANDWIDTH TO THE HOME, SALE and UVerse does NOT! They share with everyone connected to the node in their respective neighborhoods.

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  11. Wow! Then why the F can’t I get anything better than DSL from AT&T while living right in the middle of Silicon-F’ing-Valley?

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  12. So, Dallas TX and San Jose, CA only have AT&T DSL? What hope do we in Peoria, IL have to get anything better?

    Oh, AT&T is investing in wireless….
    Ooooops, scratch that, given AT&T’s problems with wireless, they’re not investing there either….

    So, where are they investing their $$ ?
    Buying T-Mobile, a competitor….
    For no good reason, since AT&T can’t manage their own spectrum that well…

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  13. So, Dallas, TX and San Jose, CA only have DSL, what hope does Peoria, IL have to improve on “obsolete DSL” then?
    We know that they don’t want to expand U-Verse very much, per this story above.

    So..AT&T must be investing in wireless, then, right?
    Well, not really…We all know the problems that AT&T has had with wireless the last few years. Verizon can thank AT&T for much of their growth the last 2 years.

    But, AT&T is trying to buy T-Mobile, that should help right?
    Not really, since AT&T can’t manage what spectrum that they have now.

    But, AT&T sez that T-Mobile will help them serve rural America, right?
    Well…not really…If you leave in rural America, you know that T-Mobile doesn’t really even try to serve much of the rural US.

    So, AT&T is not real good at investing their capex for growth?
    Ahhh…I think you may have figured it out.

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    1. Actually AT&T is currently upgrading their cell towers. They’re removing all the old T1 line bundles and replacing them with Cat5. So AT&T’s towers will be able to service more connections with great through put. Now if only they would do at least Cat5 from the Node on U-verse.

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  14. AT&T is getting their heads handed to them by the likes of Comcast and Verizon in both broadband and wireless. They shouldn’t be allowed to acquire T-Mo because of their sheer incompetence.

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  15. Meanwhile, Asia is rising … just ask Apple and the guys in Hong Kong who bring fiber to the high rise condos!

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  16. it’s people like you who try to prevent ceo’s from stating the incredibly obvious. dsl is obsolete and if you don’t agree then you should be writing about women’s fashion instead.

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  17. All Wired Services are at risk.
    The technology that will have the greatest impact on all Copper and many new FTTH services will be the emergence of these new (robust) Wireless Broadband Services (LTE) by VZW and AT&T. Very little reason to be tied down to a Wired link when I can get a Wireless (8-12Mbps) data link in my home/office and be fully mobile. The only near term issue for Wireless services is the lack of sufficient Spectrum to manage the explosion in demand for Video and Gaming Services.

    Jim

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  18. he’s speaking from a financial perspective. when an asset is written off, it is “obsolete,” economically speaking.

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  19. Apparently everyone has forgotten then AT&T COO Randall Stephenson’s famous quote in 8/19/2005 USATODAY:

    “If I bet wrong, I didn’t break the future of this business. For a company of this size, $4 billion is very little money. If I bet wrong, it’s not much money for us to burn.”

    So what’s the backup plan if IPTV doesn’t work out?

    “We’ll just switch gears and go fiber-to-the-prem,”

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  20. We just got U-Verse Aug.2,2011. And so far only 4 Service calls to come out and fix freezing 25+times an hour! We had DHL-U-Verse is mush slower even though thay say it is so much faster!! But I know the differance SO MUCH SLOWER!!!!! And I have even noticed a big differance in home phone quility! Waiting for someone to come back again and fix the freezing TV. Oh ya thay tryed at first to charge us $150.00 to change out big on TV with problem. Which still hasn’t happened!!!!! I think that it is the box on that TV eventhough it show that alls well on there equipment? I started tracking freezes while wrighting this comment it has taken 25 min in that time it has only frozen 15 TIMES GREAT SERVICE ATT!!!!!!!!!!! Drop good for bad GOOD GOING What next???????????????

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  21. Well AT&T no longer offers DSL in my area. They only offer the two crappiest services of U-Verse internet (no tv or phone)… But just a few miles south of me they offer full U-verse, go figure.

    I call and ask about DSL, “Sorry but we don’t offer DSL in your area”, even after i just had it 2-3 months ago..

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