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AT&T's Whitacre: 'Nobody Gets a Free Ride'

AT&T Inc. (NYSE: T) CEO Ed Whitacre spoke to state utilities regulators in San Francisco Tuesday on a variety of subjects, but the one topic he seemed to want to block out was the issue of network neutrality. (See Net Neutrality's End Might Turn a Buck.)

Whitacre spoke to a crowd of about 500 state regulators at the National Association of Regulatory Utility Commissioners (NARUC) annual meeting. The chair of that group’s telecommunications committee, Tony Clark mixed his metaphors thoroughly, calling network neutrality the “800-pound gorilla in the room” after Whitacre’s speech.

Whitacre didn’t mention the issue in his prepared remarks and when network neutrality came up during the Q&A session, Whitacre quipped: "Well I’ve got to go; I’ve got to catch a plane.”

Kidding aside, Whitacre likened Internet access to any other kind of service telcos have offered over the years and said commercial interests should be allowed to pay for the amount of access they need.

Whitacre complained that “some people” want AT&T to act as a “dumb pipe that just keeps getting bigger and bigger.”

“This thing is growing at a rate that nobody would imagine,” Whitacre said of the market demand for bandwidth. He said AT&T networks are now handling 5.6 Petabytes of data every day. “There’s more and more content, and you need more and more bandwidth, and somebody’s got to build it."

“If you build it, you have to make a return on that,” he continued. “Nobody gets a free ride, that’s all.”

This kind of language, of course, leaves open the possibility that AT&T will (or already does) offer some of its customers a better ride across its access networks in exchange for fees. But it doesn't necessarily mean the provider would block content that it disagreed with, which is a fear that most net neutrality backers discuss the most. (See AT&T Sets Up Internet Tollbooths.)

“It’s a much over talked issue; it will all get worked out and will best get worked out on a commercial basis,” Whitacre concluded.

Judging by lawmakers’ attempts so far to get meaningful network neutrality safeguards into law, Whitacre will probably get his wish. (See Net Neutrality Debate Wydens.)

Other issues covered by Whitacre include AT&T's reinvention to become a company that's no longer mostly dependant on access line revenues. AT&T is on pace to lose 2.5 million to 3 million access lines this year, Whitacre said.

“After we complete the BellSouth Corp. (NYSE: BLS) acquisition, a little less than a fourth of our revenue will come from voice,” Whitacre said. He added that more than a third of his company’s revenues will come from wireless services. The combined company, he said, will have more than 10 million DSL customers.

He pointed out that Time Warner Cable Inc. (NYSE: TWC) recently announced its one millionth voice customer. “In video, we are trying to return the favor,” Whitacre said. “We’re doing pretty well on that.” (See IDC Reports on Cable VOIP.)

Whitacre said AT&T is testing WiMax technologies using both licensed and unlicensed spectrum. “It’s pretty good most of the time,” Whitacre said. “It’s not quite ready for prime time, but overall it works pretty well.”

As for video, the CEO said AT&T’s fiber-based U-Verse video offering has already reached a 10 percent market share in places where it is available. To date, the service is only available in select neighborhoods in San Antonio, Texas, AT&T’s home town. (See AT&T to Launch Lightspeed Next Month.)

And though U-Verse has launched, Whitacre noted that there's still room for improvement. “It’s not bad, but it’s not where we want it to be." (See Is Lightspeed Slowing?)

On video franchising, the carrier chief was equally outspoken: “Today’s video franchising is like a relic from another era,” Whitacre said. “If we receive one franchise a day, five days a week, in six years we will be able to offer service to all our customers.” (See Video Franchise Gains Steam in DC.)

Clark told Light Reading that NARUC's telecom committee is in favor of a national video franchise but would support legislation that would "grandfather out" existing state-level franchises.

NARUC’s Clark explained later that regulators even in the smallest states are constantly asking for information about network neutrality. He said NARUC’s telecommunications committee hasn’t yet taken an official position on the subject.

— Mark Sullivan, Reporter, Light Reading

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ozip 12/5/2012 | 3:45:58 AM
re: AT&T's Whitacre: 'Nobody Gets a Free Ride' Perhaps the most accurate way of technically describing the problem is that they do not want to allow free transit through there network. However, transit isnt free, operators just dont bill each other.

This is what happens when you build the worlds biggest IP backbone without remembering that the tollgates are at the edge.....


Prediction = Usage volumes for consumer broadband in the US within 3 years.

As consumers, we will get what we pay for... but we will go through a phase where the US broadband operators use filtering and queueing techniques, some simple and some more exotic (DPI) before they realize that the cost of these solutions is high and their effectiveness is short lived. But the more significant driver is that as p2p technology becomes embeded in mainstream applications, customer will realize that they are not getting what they are paying for.

OZIP
Upside_again 12/5/2012 | 3:45:56 AM
re: AT&T's Whitacre: 'Nobody Gets a Free Ride' I'm sorry but I'm really tired of hearing free internet spew. Whitacre has balls to make the stand. He will be the best in the business yet take the miminmal blame for telling free-riders to shut thier traps.

You pay 19.99 you get service. Fine. Just like a electric company, voice, water, utilty. But if you want more you will have pay for it. You use 10,000 gallons of extra water to fill your pool - you pay for it. You run 5 air conditoners in the summer - you pay extra for it. You make hundreds of extra international calls for a telemarketing campaign - you pay for it. The intial service is still the same price and you get delivery. Just know that you want the best service or product or more of it - you pay for it. That's true to all industries. Quit whinning that it should all be the best service and it be for free. You want a VW to behave like a BMW, then expect to pay the GD prices. If you want cheapie no-frill vonage - go for it. If it pukes - you got what you paid for.

The absurd notion of the free purple internet by the Pulver loving latent hippie rah-rah free-riders is garbage. Stop it before we have more Vonages all around who are doomed for failure. Worst IPO and business plan ever. Free is not going to work.
Rearden 12/5/2012 | 3:45:40 AM
re: AT&T's Whitacre: 'Nobody Gets a Free Ride' To answer your question. Everyone pays for internet access in the States.


Now as far as this Fascists are concerned, they're trying to double bill their customers.

Paying to get online is like paying a toll to get on the freeway.

What these fascists want to do is instead of charging the customer to exit to the business of choice ( since the customer has already paid Toll, he should be allowed to ), they're charging the Businesses to allow business customers to enter their Business property.

These Fasicts are very much like a Mafia organization gone amok. Their ultimate goal is to be able to track each and every website and content online so as to be able to censor those websites.

The internet is the only information medium they do not yet control, and if I were a betting man I'd say we'll see them controlling the internet in our lifetime

alchemy 12/5/2012 | 3:45:39 AM
re: AT&T's Whitacre: 'Nobody Gets a Free Ride' Rearden writes:

Now as far as this Fascists are concerned, they're trying to double bill their customers.

Paying to get online is like paying a toll to get on the freeway.


Right. And if you go 100 mph on the freeway, the Facists throw you in jail.
DoTheMath 12/5/2012 | 3:45:38 AM
re: AT&T's Whitacre: 'Nobody Gets a Free Ride' Whitacre is spinning. Nobody gets a free ride EVEN NOW. My company sends about 100 GB per month of data, and we pay for every one of those GBs to the ISP. And the recipients of that data also pay their ISPs.

Whitacre is not talking about $19.99 end consumers. He is talking about businesses like ours getting a "free ride". Except that we are *not* getting a free ride - but are paying fees that are metered based on our usage. It has always been that way too.

What I detest about this man is his dishonesty. He runs one of the most inefficient corporations in the world, with a massively bloated cost structure, and he has the gall to tell us customers are getting a free ride.
whyiswhy 12/5/2012 | 3:45:37 AM
re: AT&T's Whitacre: 'Nobody Gets a Free Ride' Nice try Whitacre. Boofus.

Using your same logic, I should be able to charge you for running your wires and fibers across my property. Let's see, theres about 20 fibers and a big annoying junction box. I figure about $20,000 per month is fair. Afterall, I'm tired of just being a property owner.

Deal?

-Why
paolo.franzoi 12/5/2012 | 3:45:36 AM
re: AT&T's Whitacre: 'Nobody Gets a Free Ride'
Why,

Except you agreed to Utility Easements.... :)

seven
telco1158 12/5/2012 | 3:45:35 AM
re: AT&T's Whitacre: 'Nobody Gets a Free Ride' "Whitacre is spinning. Nobody gets a free ride EVEN NOW..."

Amen.
whyiswhy 12/5/2012 | 3:45:31 AM
re: AT&T's Whitacre: 'Nobody Gets a Free Ride' Brooks:

Whitacre agreed to be a "dumb" path provider, not a content provider....which is why we have sucky things like utility easements embedded in our deeds...greater good for the community sort of thing.

If Whitacre wants to change the deal and be a "smart" content provider, then we have to re-negotiate.

-Why
paolo.franzoi 12/5/2012 | 3:45:30 AM
re: AT&T's Whitacre: 'Nobody Gets a Free Ride'
Why,

Your easements apply to cable as well. They are a "smart" content provider. So, I think your view does not wash.

seven
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