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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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paolo.franzoi 12/5/2012 | 3:45:29 AM
re: AT&T's Whitacre: 'Nobody Gets a Free Ride'
Actually, no. The easements are for utilities and are contracted with your local government. They are NOT directly between you and the utility.

seven
whyiswhy 12/5/2012 | 3:45:29 AM
re: AT&T's Whitacre: 'Nobody Gets a Free Ride' Brooks:

Change on any of the terms is grounds for a new deal all around. If cable wanted to change, I'd say the same. Fair.

-Why
rjs 12/5/2012 | 3:45:29 AM
re: AT&T's Whitacre: 'Nobody Gets a Free Ride' Right On! Why is right.
No double billing.

Mr. Whitacre wants his hands in the cookie jar so
he can get his hands on the higher margin business so that he can support the bloated cost of his business which is being commoditized and as such cannot bear such higher margins.

And, my access is NOT free! I paid for it the day I signed up for the service. It is none of his goddamned business what kinda of bits I receive at
home.

Mr. Whitacre can always jack up the price of end customer access - make DSL access $100 a month, I will switch to cable. He will never dare do that as long as there is competition. He is flexing his
muscles where there is no competition. This is downright nasty monopolistic behaviour.

As another reader has descibed it, it is tantamount to mob racketeering --- blackmailing big business to coughup cash. The gall of this man is mindboggling. He wants a higher margin business
and thinks the world owes it to him.

-RJS

telco1158 12/5/2012 | 3:45:23 AM
re: AT&T's Whitacre: 'Nobody Gets a Free Ride' Dear Mr. Witacre,
I have big, fat, dumb pipes connected to your network.
I've had them for years.
They're called burstable OC3s.
You call them Money Makers.
You were very happy to sell them to me.
I am happy to pay you.
For I sell portions of it to other people.
If they are not happy, they won't buy from me.
They seem to be happy, for I get their checks every month.
What they do with their dumb pipes is their business.
If they want to hog up their pipes downloading music or videos, that is fine.
They can MP3, MP4 and WMA all they want.
My net heads don't care.
It means eventually, they need to buy more.
If my customers don't like me, they go to a competitor.
We call it capitalism, the free market game.
I am happy.
My customers are happy.
But you are very unhappy.
You say Goog and YouTube are playing foul.
Can't you see they are on our side?
My net heads and I don't detest how they play.
And neither should you.
We call their participation Job Security.
There is plenty of fun to be had by all if everybody plays by the rules.
We all know, Ed, you have the biggest team with the brightest uniform.
Please don't change the rules just because your team can't score.
If you do, generations will know you as the Big Loser who took the fun out of the game forever.
whyiswhy 12/5/2012 | 3:45:18 AM
re: AT&T's Whitacre: 'Nobody Gets a Free Ride' Actually, yes. Cable had to trench the streets to build their HFC system in my city. The coax to the house is the same as it always was, as is the junction box. As far as I know, no private property was "eased", certainly not mine.

Telephone was considered a public utility in my deed, and as such operated under public control of rates and profit. Controlled monopoly.

Today, name is same, game totally different. Ergo, contract void, no longer meets the definitions, original intent, etc.

Just plain ol' conservative issues.

Gotta love it.

=Why
startup_shutup 12/5/2012 | 3:45:16 AM
re: AT&T's Whitacre: 'Nobody Gets a Free Ride' http://post.polls.yahoo.com/qu...

What is the greater risk facing the U.S. economy?
Inflation 50%
Recession 51%
35431 Votes to date

Larry, Monkey 12/5/2012 | 3:45:15 AM
re: AT&T's Whitacre: 'Nobody Gets a Free Ride' Wow!
101%
That IS inflation!
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