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AT&T’s hard sell on DirecTV: A new type of broadband network

If you want to sell a telecom merger to the American public, the hip to do is promise more broadband access. Sprint(s s) chairman and SoftBank CEO Masayoshi Son is making such claims to justify his forthcoming bid for T-Mobile(s tmus), and now AT&T(s t) is on its own broadband kick to push its proposed acquisition of DirecTV(s dtv).

In a regulatory filing with the Federal Communications Commission this week, AT&T promised to deliver broadband to 15 million more homes and businesses, but Ma Bell isn’t just talking about wireline technologies like DSL and U-Verse. It plans to build the bulk of this network using wireless airwaves.

AT&T said it would target 13 million primarily rural locations outside of its broadband footprint with a technology called wireless local loop (WLL). Local loop is the telco term for the circuit a copper line completes going from a telephone company’s switching office to the customer’s home. But in this case of WLL, the circuit is made via wireless, not copper.

ATT flagship store logo

WLL has long been used around the world as a DSL replacement, including by many rural broadband carriers in the U.S., but it’s not a technology AT&T has ever made extensive use of. AT&T Mobility recently started offering a fixed wireless option on its LTE network, which connects to an external antenna rather than directly to a smartphone or mobile hotspot. But AT&T’s Wireless Home Phone and Internet Service is hardly what you would call a full-fledged broadband service. Its data caps range from 10 GB to 30 GB depending on the plan, with the cost ranging from $60 to $120 a month.

If that’s all AT&T plans on offering in the U.S, then it won’t be increasing home broadband options in the U.S. It would just milk more money out of its LTE network, by asking users to pay what are basically mobile data rates for wireline access.

But AT&T may have other plans than just repackaging its 4G service. Though it didn’t say specifically what technology it would use or what spectrum, its use of the term “WLL” might offer a hint.

Way back before AT&T got the Bell band back together, its various companies tested wireless local loop technologies in several parts of the country (including in the brothel capital of the U.S. — Pahrump, Nevada), testing a variety of fixed wireless technologies including WiMAX. Nothing really every came out of those trials, mainly because the spectrum band AT&T was using was loaded with problems.

AT&T, however, still owns those 2.3 GHz airwaves in the Wireless Communications Services (WCS) band. In fact, it recently consolidated its WCS holdings across much of the country. And through a compromise with the satellite radio industry, it managed to clear the interference issues that previously made the band useless for wireless data services.

AT&T has said it will use WCS for LTE, but it’s beginning to look like it won’t build the same kind of LTE network it uses to connect phones, tablets and cars. Broadband spectrum analyst Tim Farrar believes AT&T plans to use those 2.3 GHz frequencies for its planned air-to-ground in-flight network. It may choose to use WCS for its fixed wireless network as well. Instead of transmitting to a plane in the sky, the network could link to an antenna. And that antenna could be conveniently mounted on a DirecTV satellite dish – all part of a bundled broadband and TV package.

Source: Flickr / Cantoni
Source: Flickr / Cantoni

AT&T says its WLL network could deliver speeds of 15 Mbps to 20 Mbps. That isn’t as fast as the speed we’ve come to expect from cable, but it’s certainly not bad either, especially considering the limited options in rural areas. The big question is whether it can deliver the monthly capacity to individual subscribers to make it a truly competitive offering.

Average monthly broadband consumption in the U.S. is 39 GB per month, and for hard-core video streaming users that number climbs to well over 200 GB, according to Sandvine. Unless AT&T prices fixed wireless data at a tremendous discount to what it’s charging for regular mobile data, then it’s not going to create a competitive broadband option, just an expensive broadband option.

10 Responses to “AT&T’s hard sell on DirecTV: A new type of broadband network”

  1. nikatomuirhead

    They are essentially going to try to take Charlie Ergen’s ideas for fixed wireless and re-brand them. The sell is hard considering that they do not have the patented technology required to make ultra-low bandwidth video streaming across millions of users a reality, as Dish does. The FCC is fairly stupid though. At&t can sell them the goods, as non-existent as they may be.

  2. Brucerads

    Anyone remember the bang-up job ATT did when they bought cable MSO TCI? Yeah, that went really well. Lost billions of shareholder value and propelled Comcast to the top when they bailed out. We used to have ATT DSL and it was a joke. Max speed was 6mbps but unless you were 50 feet away from the hub, your speed was actually around 1-2mbps but they still charged at the 6mbps level. Notwithstanding frequent outages. ATT is a complete clown show. DirecTV will become their latest clown car.

  3. Ian Littman

    Thing is, AT&T doesn’t have quite enough WCS spectrum to do anything really amazing with it. 15-20 Mbps? Sure, they can do that. But don’t expect caps to be much above where they are on WCS WLL service, versus their (and VZW’s) current LTE, unless one of the upcoming Big Three (mark my words, the Sprint-T-Mobile merger will go through) offers something disruptive. Sprint might…Verizon won’t if they can help it.

    • Kevin Fitchard

      Hey Ian,

      Yep, I agree. Compared to Sprint it’s a meager amount of spectrum. The difference is AT&T is talking about rural access and a network that isn’t designed to compete with the big metro broadband. Son is talking about building going directly after Comcast in a dense urban areas. I find both proposals hard to believe, but Sprint’s is particularly questionable.

    • Jim Jackson,

      Thanks for the link to the Bruce Kushnick article in the Huffington Post on how AT&T has broken their promises to the FCC for 10+ years on broadband internet. Fantastic documentation, that should be used IMHO to stop the DirecTV acquisition.

      In our onw lives when we don’t hold our family members, our coworkers, or our business contacts responsible for their broken promises, we only encourage their continued bad behavior. So, the lesson for the FCC is clear. Hold AT&T responsible for their broken promises.

  4. AT&T will have its hands full trying to provide wireless broadband service to DirecTV subs, all over the US. Too many big city columnists assume that AT&T serves the entire US, when it’s lucky if it serves 25%. . In Illinois, AT&T only serves Chicagoland, and most of the larger metros, including Peoria. However, in Peoria, AT&T only has 6Mbps DSL max, and never started on U-Verse. So, AT&T will have to provide this new wireless broadband to 75-90% of Illinois’ land mass if they want to cover the state with something other than its current wireless or U-Verse. Frankly, I don’t see AT&T having the money or the guts to do that in Illinois. So then, if you extend that out to the entire US, it also seems hard to believe.

    • Kevin Fitchard

      Hey Bob, in much of Chicago proper it’s the same story. I live a few miles away from downtown, and last I checked, no U-Verse. Just pokey DSL.

  5. Madlyb

    Meh…same old pitches, just wrapped in a new way.

    If they hit the promised speeds they will definitely exceed my current DSL, but wireless is very spotty in the mountains where I live and I will have the some of the same challenges as Satellite delivered broadband (rain fade, latency, etc.) on top of the pricing challenges you already mentioned.

    Then there are changes required at each house that they would have to do and the costs are similar to doing it without DirecTV, so this is just smoke and mirrors.

    But, honestly let them do it. Would love to watch AT&T dump $50B into a business that will essentially be dead in 10 years.