AT&T's rural broadband solution makes satellite look cheap

9 June 2014 by Steve Blum
, , , ,

Something for everyone off the turnip truck.

As it shuts off new rural DSL connections, AT&T is talking up the wonders of its wireless service. It’s only going to get better if regulators allow it to take over DirecTv, at least according a statement the company filed with the SEC…

Today, many Americans in rural areas lack access to a high speed broadband service or have access to only one provider. With the cost synergies and increased revenue from this transaction, AT&T will expand its high speed broadband build to offer a competitive bundle of high speed fixed wireless broadband and satellite video service. We expect fixed wireless broadband to provide speeds of 10 –15 Mbps during peak periods with even higher maximum speeds during off peak times.

One tiny detail is missing: AT&T’s so-called fixed wireless solution, which is now rolling out nationwide, is actually based on its mobile network and sold at mobile prices. How much is that? $30 a month to hook up, then $100 for 10 gigabytes and $15 for every gigabyte over the cap, according to AT&T’s blog. Karl Bode at dug a little further and writes that it can be had for prices that start at $60 for 10 GB, with extra GB costing $10 each. Not much better.

I’ve ripped ViaSat for trying to get subsidies from the California Public Utilities Commission to provide satellite-based Internet service to rural areas at $5 a gigabyte. And I still think that’s outrageous. AT&T isn’t asking for public money to expand its service area, but it is using political influence to try to block wireline competition and get permission to consolidate and protect its grasp on the U.S. market.

That’s an economic rent, no different than ViaSat’s bid for a direct cash subsidy. At twice the price, it’s twice as outrageous.