Frontier Communications, fresh off their $8.5 billion acquisition of millions of Verizon DSL and landline customers, has been downplaying the fact the company isn’t offering speeds that can successfully compete with cable in most markets. While Frontier CEO Maggie Wilderotter has been promising these customers a “fast future,” the company really isn’t in a financial or technical position to actually offer it. In an interview with the Oregonian, Wilderotter continues along this vein, insisting the company offers fiber to the home “all across the country”:

Oregonian: Frontier wasn’t heavily in this kind of cable TV, super-fast Internet business before the transaction. Why did you want these markets?

Wilderotter: Oh, nonsense. We deploy fiber to the home all across the country. We don’t call it FiOS. We call it high-speed Internet. For our customers, the technology doesn’t matter. What matters is access, speed and capacity.

Which sounds great, except for the fact that it’s not true. Frontier doesn’t offer fiber to the home anywhere, outside of the 100,000 or so Verizon FiOS customers they acquired in the Pacific Northwest. In fact, the fastest speed Frontier’s capable of offering is 10 Mbps, though many users are closer to 1.5 Mbps. Frontier could follow in Verizon’s footsteps and offer bonded ADSL2+ to some users, but those speeds are distance-constrained, and for many users will top out at 15 Mbps downstream.

In other words, the technology very much matters, and pretending that DSL and fiber are the same thing (which for whatever reason the Oregonian doesn’t feel the need to challenge) is downright bizarre. That said, at least somebody wants to serve these previously neglected Verizon customers, and Wilderotter proceeds to insist they won’t be continually hiking prices on users like Verizon or Comcast. Of course if your network upgrades are going to be of the make believe variety, that’s an easier promise to keep.

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Last week AT&T posted their second quarter earnings, and while wireless connectivity was hot, the company noted they lost a whopping 347,000 traditional DSL customers on the quarter. Some of those customers upgraded to AT&T U-Verse, but many of them were users in un-upgraded AT&T markets who migrated to cable, either lured by faster broadband speeds or the cable triple play. To try and fight back in legacy areas, AT&T’s again tinkering with their DSL pricing, their website indicating that they’ve brought back the $14.95 per month price point for their Basic (768/384 kbps), Express (1.5 Mbps/ 384 kbps) and Pro (3 Mbps/ 512 kbps) DSL tiers, which are all starting to look very long in the tooth, especially upstream. The company’s Elite (6 Mbps / 512 kbps) tier is now $19.95. All of these deals are for new customers, and the pricing is for twelve months before you need to negotiate a better deal.

Link to the original article…

AT&T’s second quarter earnings are out, and despite “Antennagate” and network coverage criticism, the company still managed to activate a whopping 3.2 million Apple iPhones during the quarter. Overall, the company added 1.6 million wireless subscribers (896,000 of those were not phones but embedded devices like e-Readers) for the quarter, to reach 90.1 million total wireless connections. AT&T saw a 27.2 percent growth in wireless data revenues, up $936 million from last year and their new data pricing only really just kicked in.

AT&T added a net 209,000 U-verse TV subscribers for the quarter, totaling 2.5 million. That said, AT&T overall lost about 92,000 total broadband customers, given they lost 347,000 traditional DSL customers, some to U-Verse upgrades, some to competitors. AT&T’s broadband quarter wasn’t a particularly great one, something AT&T attributes to “seasonal” slowdown, but also because competitors in non U-Verse markets are becoming “more aggressive with promotions.”

In other words, users tired of slow and expensive DSL service are upgrading to cable. AT&T hopes to counter this with bonded VDSL, which will extend U-Verse’s reach to 30 million potential users. But the fact that cable is kicking AT&T around in legacy DSL markets is kind of amusing given all the investor pressure on AT&T to skimp on network upgrades. By lamenting telco network upgrades (be they FTTH or FTTN), Wall Street stock jocks like Craig Moffett wind up helping cable companies.

On their earnings conference call, AT&T dribbled out a few interesting tidbits including the fact that their LTE trials will be starting in just a few months, with the service made available to AT&T customers sometime in 2011. The company also noted that they’ve been working hard to improve network performance in their trouble markets like New York City, where they claim dropped calls are down 23% in Manhattan while 3G speeds are up 31% the last six months. San Francisco upgrades are about 90 days behind NYC upgrades, says AT&T.

As for AT&T’s decision to impose low 200 MB and 2 GB caps on wireless smartphone users during the quarter, AT&T’s CFO Rick Lindner called the results “pretty encouraging.” Interestingly, AT&T says fewer people than they expected downgraded from unlimited to 200MB and 2GB capped plans. “To be honest we had expected virtually all of those customers to migrate down to a lower price point.” Perhaps because low caps and high overages (plus fees) isn’t really a lower price point?

Regardless, AT&T acknowledged their new tiered pricing (which Verizon is expected to mimic later this month) “may reduce the growth rate in the next year.” T-Mobile, Clearwire and Sprint certainly hope so.

Of course rumbling beneath all of this talk about wireless is AT&T’s continued loss of traditional landline voice customers and associated revenues, which AT&T happily insists saw their “smallest year-over-year decline in five quarters.” AT&T saw their wireline voice total (and they include U-Verse Voice in that total) drop to 44.3 million from 46.3 million on the quarter. Those continued losses mean continued layoffs at the company this year.

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As the broadband stimulus bill was being hashed out, you’ll recall it was stripped of some very lucrative, carrier-lobbied-for tax credits that would have given companies like Verizon billions for doing absolutely nothing differently – after the credits were exposed by the NY Times. With no cash giveaways, fears that taking funds could lead to additional regulations and restrictions requiring that ISPs use the money on under-served areas, last summer found the biggest ISPs saying no thanks to $7.2 billion in stimulus funds. Thousands of companies who actually want to deploy to rural markets wound up applying instead.

Ever since the first round however, the mega-carriers have been lobbying the government to have the restrictions on how they can spend the (your) money removed. Specifically, carriers wanted language removed that required fund recipients to adhere to neutral network principles, and they didn’t want to be restricted to using the funds for rural and/or under-served markets only. Judging from Qwest’s comments to the Denver Business Journal, they’ve been successful in getting those provisions removed. Qwest’s Colorado president seems to indicate that Qwest will apply for the second round of funding:

“The good news is that they seem to have heard us in Washington, D.C.” said Chuck Ward, Qwest’s Colorado president. “It almost gets us able to apply.” The U.S. Department of Agriculture s Rural Utilities Service and Department of Commerce’s National Telecommunications and Information Administration (NTIA) adjusted rules for the nearly $3 billion second round of broadband stimulus grants. “We’ll see – we’ve put everybody back to work and dusted off the analysis we did for the first round,” Ward said.

Of course what Ward means by “we’ll see,” is that his lawyers are still digging through the language of the new round of funding, and if Qwest sees anything at all that requires them to actually do anything, they probably won’t apply. History is full of giant corporations that prefer their taxpayer funds with absolutely no accountability, and that is essentially what the biggest ISPs want if they’re going to apply for these funds.

You might recall that Qwest insisted that just $1 billion dollars from taxpayers would help them deploy regular DSL service to 95% of the company’s current footprint. One question is whether a company like Qwest deserves a taxpayer subsidy to deploy service to under-served areas, given the fact that Qwest has a bit of a history with skimping on network upgrades, yet has spent millions of dollars fighting under-served communities’ efforts to wire themselves with broadband. Most notably Qwest spent millions trying to derail municipal fiber efforts in Utah, suing to stop Utopia from using state utility poles, while claiming that municipal fiber to the home service caused “long term harm to consumers“.

Not exactly a bailout, but if these huge carriers can get tax money and not do anything differently, it sounds a lot like AIG to me.

Link to the original article…

The other day it was noted that AT&T was getting ready to raise prices on U-Verse broadband, TV and VoIP customers (see the fine print on this U-Verse pricing page). Judging from some leaked AT&T talking points posted to BroadbandReports.com forums, AT&T is getting ready to hit regular DSL customers with some price hikes as well.

According to the leaked memo, AT&T says they’re making some “modest price adjustments” to both U-Verse and DSL pricing soon, and that users should be notified by mail of the changes. AT&T is currently offering “DSL Xtreme 6.0″ (6 Mbps), “DSL Xtreme” (3 Mbps) and “DSL Ultra” (1.5 Mbps) tiers – for the same price. Users who sign up now are given any one of the tiers for $24.95 for twelve months, after which the pricing reverts to $42.95, $37.95, or $32.95, respectively. Keep in mind of course that AT&T continues to test low caps and high per gig overages in two markets and may or may not expand those ambitions in 2010 as well.

Update: AT&T reached out to us to note that there will be a few price reductions on their higher end U-Verse tiers, and they’ll be eliminating their slowest U-verse tier:

On the U-verse High Speed Internet side, there are some changes for new customers, starting with decreasing the price of our higher-speed packages – Max (up to 12 Mbps) and Max Plus (up to 18 Mbps) – by a month across all of our 22-states. The Express (up to 1.5 Mbps) service will no longer be offered to new U-verse customers as of Feb. 21.

AT&T tells us the changes “reflect the greater demand and interest we’re seeing for higher bandwidth packages among our U-verse customers.”

Too bad “greater demand” is met only with “greater prices” and not “greater service”.

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Ask and ye shall receive. Windstream has confirmed that the company has raised the upstream speed of their DSL tiers. Windstream says they’re responding to a request by users who found 386 kbps to be a little dated for 2009. Both the company’s 3 Mbps and 6 Mbps tiers have seen the upstream side of the equation nudged from 384 kbps to 768 kbps at no additional price.

The upgrades apparently started in early November and will be ongoing through December – so if you haven’t seen them yet readers can apparently nudge Windstream to get the upgrade now.

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[ Related: Windstream Acquires NuVox ]