AT&T Chairman Ed Whitacre spoke this morning at Sanford C. Bernstein and Company’s Strategic Decisions Conference and raised more questions than he answered. Along with the usual optimistic assessment of the company’s future, Whitacre addressed two hot-button topics for AT&T.
The first was the giant telco’s IPTV efforts, known as Project Lightspeed or AT&T U-Verse. Skeptics question whether AT&T’s fiber-to-the-node (FTTN) architecture will deliver enough bandwidth for the long-term. This blueprint allows for the switched channel delivery of content, voice and data services at a typical capacity of 25 Mbps, not enough, some say, for multiple channels of HDTV, very fast broadband and multichannel video, not to mention VoIP.
When pressed on this possible bandwidth limitation, Whitacre said he’s not worried…but offered little else by way of reassurance. He did say that in some spots (and they surely can’t cover wide areas), the FTTN architecture is getting 50 Mbps, enough for every conceivable service. Other than that, Whitacre addressed this critical question by saying “I suspect as this technology moves forward, we will be able to get more and more speed.” He also added “If you have 25, 35, 40 or even 50 Mbps capability, I’m not really worried about that.”
On the other hot-button topic, net neutrality (or as the Sanford analyst questioning Whitacre called it “packet prioritization services for content providers”), the AT&T Chairman was downright confusing. He didn’t say much, but what he did say is a head-scratcher.
Here’s what he said:
We’re not going to do anything to affect the Internet - nothing, zero, no packet prioritization there.
Huh? Is this the same man who said
The Internet can’t be free in that sense, because we and the cable companies have made an investment and for a Google or Yahoo! or Vonage or anybody to expect to use these pipes [for] free is nuts!
What does this mean? Is this just a misstatement? Has AT&T given up on its plans to create “fast lanes” on the Internet? Or was Whitacre just promising not to mess with the Internet as frozen at a given point in time, while something new will happen in the future, like private content connections that don’t have anything to do with the public Internet?
Cynthia Brumfield at 8:57 AM|Comments(2)
Mike's explanation of Whitacre's revised language makes sense to me. The RBOCs (and, increasingly, the major cable operators) have private long-haul networks that can provide virtually end-to-end IP connections for content and services that bypass the "public" Internet.
At last week's Senate Commerce Committee hearings on the Stevens bill, Verizon's Tom Tauke kept making a distinction between "Internet access" ("we'll never limit that") and access to other (presumably IP-based) services delivered on Verizon's network.
Tauke used "home monitoring of a heart patient" via an "end-to-end managed virtual private network" as an example of what Verizon wants to charge for (he said they'd charge the hospital). This may be a smart move politically...what politician would want to support net neutrality legislation that would put heart patients at risk?
This speaks to the increasing muddle surrounding what is a "private IP network/service" and what's "the Internet," and the issue of an incumbent-controlled IMS-based "smart networks" that charge fees by managing bandwidth and features and providing QoS-related services (which pipe-equipment vendors like, since they'll sell new gear to do the "managing") vs. the "end-to-end" model of the Internet, which pretty much puts pipe-owners in the "bit transport" business and requires less complex network gear, which neither the pipe-owners, the pipe-component vendors, nor Wall Street likes.
The "smart network" model invests in enhancing network operator control and billing mechanisms, and integration within the network:
http://www.ipdemocracy.com/archives/001573ims_designing_the_non-neutral_smart_network.php
The "stupid network" model invests in expanding bandwidth and ubiquitous access, and let's the network's end points (providers and users of services) deal with control, billing and integration:
http://www.ipdemocracy.com/archives/001120getting_from_internet1_to_internet2.php
Incumbents want to build smarter networks to leverage their duopoly market power. It's a smart business move. At the same time, some communities want the chance to pursue the "stupid network" model, which tends to be less attractive to private investors, but could arguably deliver more value to be captured by network end points (service providers, end users) and society as a whole.
Posted by: Mitch Shapiro at May 31, 2006 10:07 PM
Whitacre was "promising not to mess with the Internet as frozen at [this] given point in time, while something new will happen in the future, like private content connections that don’t have anything to do with the public Internet."
Posted by: Mike Bookey at May 31, 2006 8:02 PM
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