AT&T’s Plan for Ditching Copper

Jeff Baumgartner of Light Reading recently reported on a wide-ranging discussion by AT&T CEO John Stankey. One of the most interesting parts of the discussion was about AT&T’s plan to use cellular wireless in rural markets to replace DSL.

I’m not going to repeat everything in the article, but the gist is that AT&T hopes to be able to start walking away from rural copper. Stankey was quoted as saying that there is already a voice alternative in rural markets – meaning cellphones. Unfortunately, that ignores the many rural homes with poor cellular coverage. The FCC was going to plow something like $4 billion into a grant program to expand rural cellular coverage, but the misreporting of existing cellular coverage areas by the big cellular carriers put that plan on hold.

Stankey believes that cellular broadband will be the alternative to rural DSL. Verizon has the same strategy but doesn’t serve as many rural markets after having unloaded most of them to Frontier over recent years.

What might a rural cellular data network look like? In most rural counties there are generally only a few existing cell towers – it’s not unusual for this to be a half dozen or less. The traditional older cell towers often don’t reach a lot of rural homes since the towers were built for the old cellular model of making sure that cars could get cell signal along numbered highways. But over time, many counties have added a few more towers for public safety purposes that reach a lot more homes for voice service.

Most people don’t realize that cellular broadband has a lot of the same characteristics as other rural wireless broadband. The signal from the cell towers quickly dies with distance. Depending upon the spectrum being used, cellular broadband can hit speeds of 50-100 Mbps for the first mile from a rural cell site, but the speeds drop off pretty rapidly from that point. Cellular broadband does not travel nearly as far as cellular voice, and rural people are used to the idea of being to make a call but not being able to grab the web. Cellular data also gets slowed and stopped by hills and other impediments. Any county without a flat topology will have lots of cellular dead spots.

What this means is that cellular broadband is not a pure replacement for landline service. For the typical rural county with a limited number of cellular towers, there are going to be plenty of homes that can’t get a cell signal. There will be a lot more homes that can’t get enough broadband speed to be meaningful.

What Stankey failed to mention in the interview is that AT&T has already walked away from the DSL market. As of last October, the company won’t sign new DSL customers anywhere in the country – in towns or rural areas. That means everybody buying or building a rural home in an AT&T area doesn’t have DSL as a broadband option. I’m sure AT&T will continue to milk existing DSL revenues for the next few years. But is the company going to care a whit if some rural households can’t get the cellular data?

The various rural grant programs are filling in some of the rural broadband gaps – but not close to all. As large as the RDOF grants were, the FCC says those grants will reach 5 million rural homes if the grants are all awarded. There are still 10 to 15 million more homes in rural America that don’t have adequate broadband – maybe more. Unfortunately, some recent federal grants went to providers like Viasat or to ISPs that might not be able or willing to fulfill the RDOF requirements.

Don’t get me wrong. I’m happy for the rural home that can finally get a decent cellular data plan. I just don’t want regulators or politicians to think that companies like AT&T are taking care of rural America with this new strategy. I would characterize AT&T’s strategy as providing cover for the company to pull down rural copper. The copper is old and at end of life and has to come down – but it’s disingenuous to not tell the public that cellular broadband means the end of copper.

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