AT&Ts Whitacre to NARUC: Lets Boost Broadband Deployment

In a rare address to state regulators, AT&T Inc. Chairman and CEO Ed Whitacre on Tuesday described his companys plans to foment competition against cable operators, namely by continuing to roll out services in rural areas to help boost Americas low broadband rankings, which sit at 16th in the world.

Wed like to see that fixed, he told members of the National Association of Regulatory Utility Commissioners (NARUC) at the groups summer meeting in San Francisco. The problem, he added, has my attention it has the attention of the industry.

Key to bolstering those standings, he said, is AT&Ts deployment of satellite broadband and fixed wireless services. Whitacre referred to them as new initiatives, but back when it was SBC Communications Inc., AT&T already was planning deployment of the rural-focused efforts. (see story)

The issue of telcos serving rural areas has been a contentious one, as providers such as Verizon Communications Inc. offer broadband and video to mainly affluent areas. In contrast, AT&T serves more rural customers than any other carrier and will reach 5 million lower-income users with the first deployments of its U-verse video services, Whitacre said. We are going everywhere with this thats our plan.

Along those lines, he touted the recent launch of AccessAll, a $100 million program that provides computers, Internet services and related training to low-income families. Company retirees will be among those helping teach AccessAll recipients how to use their computers.

Because of his companys attention to rural markets, Whitacre called on state regulators to help keep the $7 billion Universal Service Fund (USF) stable so carriers such as AT&T can continue working in those areas. He also lauded commissioners for tackling intercarrier compensation reform. In late July, a NARUC-backed task force presented its Missoula Plan for intercarrier compensation reform to the industry. AT&T was instrumental in the formation of the details, yet consumer advocates, some carriers and even some NARUC members oppose the proposal because, among other reasons, they contend it would impose more charges on subscribers and companies. The plan has been filed with the FCC for comments and possible implementation.

Changes to intercarrier compensation come as federal lawmakers work toward a rewrite of the 1996 Telecom Act; those efforts have been triggered by the technological advances brought about by IP communications. To that end, AT&T continues to lose an unprecedented number of access lines, Whitacre noted, but said the company is making up for those losses by honing in on other communications services. By the time AT&T merges with BellSouth Corp., he said, less than a quarter of the combined companys revenue will stem from consumer wireline services. To offset those changes, AT&T is promoting its wireless and Internet products, and will rapidly expand its U-verse video services, illustrating the evolving nature of the industry, Whitacre said. You just cant call us a phone company anymore, he said.

Finally, in a brief Q&A with NARUC leaders, Whitacre repeated his well-publicized views on the net neutrality debate, saying, Nobodys going to block the Internet. Wed be nuts to do that. Late last year, Whitacre said it would be nuts for an applications provider such as Google Inc. to use his companys pipes for free. He reiterated that stand on Tuesday, calling the debate overtalked and stating, Nobody gets a free ride. Companies such as Google and eBay Inc. argue they do indeed pay to use carriers pipes and fear providers will try to prioritize their traffic depending on how much or whether they are willing to pay.

AT&T Inc. www.att.com
eBay Inc. www.ebay.com
Google Inc. www.google.com
NARUC www.naruc.org