AT&T Eyes Rural DSL Upgrades

By Josh Long

Rural America, AT&T may be planning to bring a faster flavor of DSL to your neighborhood.

The Dallas-based telecommunications giant is aiming to use an improved version of digital subscriber line technology to increase the speeds of Internet access in rural areas, AT&T CEO Randall Stephenson said last week during an investment conference, according to a story from Bloomberg News.

AT&T has considered selling the lines, but Stephenson said an agreement would require multiple state approvals and face regulatory hurdles, the news agency wrote, noting that AT&T’s chief expects to make a decision to sell or upgrade the lines by the second half of this year.

John Cioffi, CEO of ASSIA, and a Professor Emeritus with Stanford University, is impressed with AT&T’s proposed solution for increasing broadband speeds.

“AT&Ts proposed solution for rural DSL, installing a fiber-fed small terminal in each neighborhood and then using the existing copper to the home, is a brilliant approach to improving Internet access and is also booming around the world,” said Cioffi, whose company’s product optimizes the performance of DSL lines, in a statement. “Germany, Britain, Austria, and Belgium are all implementing this solution. Unlike fiber to the home, this solution does not require trenching of streets and lawns, so deployment is not only many times less expensive but also much faster.”

AT&T served a total of 16.5 million broadband lines as of the first quarter of 2012. Less than half of those lines (5.9 million) are served by AT&T’s high-speed Internet service called U-verse, although the potential for growth is significant: About 40 million homes are within AT&T’s U-verse broadband turf, according to McCall Butler, an AT&T spokeswoman.

DSL upgrades presumably would occur in areas outside of the U-verse territory. AT&T doesn’t reveal the number of broadband lines that are served in rural areas where it is typically more expensive to build infrastructure.

“I do feel more optimistic about the opportunity to get more broadband into rural areas,” Stephenson was quoted by Bloomberg as stating on a recent investor conference call.

AT&T and other landline phone companies have seen their base of DSL customers significantly shrink as subscribers move to cable and other speedier technologies. For instance, even though AT&T added 718,000 U-verse High Speed Internet customers in the first quarter, its total wireline broadband connections only grew by 103,000.

Translation: It lost hundreds of thousands of other broadband connections such as DSL. AT&T defines such connections as including DSL lines, U-verse High Speed Internet access and satellite broadband.

Even if AT&T chooses to upgrade its lines in rural America, millions of customers still won’t have the option to obtain high-speed Internet access. James Ratcliffe, an analyst with Barclay Capital, told Bloomberg that 5 million homes in AT&T’s coverage area are too far away from a network hub to receive any kind of broadband.

The Federal Communications Commission said last year that about 28 percent of rural residents still don’t have access to any kind of broadband.

Butler declined to comment about a potential sale of the rural lines beyond Stephenson’s remarks.