In the grand scheme of things, it’s not news if a multichannel video provider offers high-definition channels. But, AT&T has staked a lot of its future on the delivery of multichannel video over souped-up DSL lines, which, to date, haven’t been able to deliver high-definition video. The bandwidth constraints limited the ability of the telco to offer the increasingly popular, but bandwidth-intensive, high-resolution video service. Without high-def capabilities, AT&T will always be an also-ran in the triple-play race against cable.
All that has seemingly changed…at least in one market. AT&T announced this morning it is offering an HD line-up of more than 25 channels in San Antonio, the first market where the company offered its U-verse TV service. In addition, AT&T has added other new bells and whistles to U-verse, including the ability to program DVRs from the web (for AT&T Yahoo! high-speed customers), the ability to record up to four programs at once with a single DVR unit, an expanded programming line-up of more than 300 channels and, finally, Motorola set-top boxes — AT&T had been making do with generic boxes cobbled together for U-verse.
The telco is also dangling a cool incentive to prospective customers — two free months worth of TV service, including HBO and Cinemax, which could represent a couple of hundred dollars in savings.
Still, it took a long time for the company to rectify the HD problem even in San Antonio. It’s not entirely clear that it’s an easy feat for the telco to offer a rich menu of video, voice and increasingly higher-speed broadband services, which is what AT&T must do if it wants U-verse to be a viable competitive alternative to cable.
(Hat tip to Alan Weinkrantz, whose family loves the U-verse service.)
Posted by Cynthia Brumfield at 11:02 AM | Print | Comments (1)Business Week’s Steve Rosenbush has this piece about the continued delay faced by AT&T and BellSouth in getting their merger deal approved by the FCC. With the big Democractic sweep of Congress, getting a thumbs-up vote on the deal is even more problematic.
Representative John Dingell (D-MI), slated to head the House Energy and Commerce Committee next Congress, is giving the telcos a hard time. Incoming Senate Commerce Chairman Daniel Inouye (D-HI) has said he wants to drag things out until his committee has had a chance to look at the deal.
And even though the FCC is still dominated by Republicans, one commissioner, Robert McDowell, has recused himself under conflict of interest concerns that stem from his past job lobbying for small and independent telcos. That’s left the FCC deadlocked on the deal with two Democrats opposed to the deal with no tough conditions and two Republicans in favor of the deal with no conditions at all, or with conditions that AT&T can accept.
It’s possible that McDowell could be ordered to vote by the FCC’s General Counsel, but given his past job working for AT&T’s foes, it’s not clear that McDowell will tow the party line. In other words, the merger approval is still in limbo.
Worse, Rosenbush offers some calculcations that show how the deal has become even more expensive over time. What had been a deal valued at $67 billion is now valued at $79.3 billion due to the rise in stock prices for both companies since March 3, the last day of trading before the deal was announced.
In the meantime, vendors to the two telcos are growing increasingly anxious because the deal’s delay has also delayed spending by the companies. Companies such as Lucent, Tellabs and Redback had expected to book lower sales in Q3, but not Q4 of this year. Now, the pause in spending at AT&T and BellSouth could extend into next year, not a happy prospect for the tech suppliers.
Rosenbush, however, cites analysts who think that deal-cutting is underway and that the merger could get approved as soon as the FCC’s December 20 meeting. Stay tuned.
Update: Yikes! I don’t know how I missed this yesterday but Dave Burstein is speculating that AT&T CEO Ed Whitacre is willing to walk away from the deal because it has become too expensive. Burstein’s idea got picked up by a few influential blogs (see here, here and here.) Weirder things have happened, but I don’t for a second believe that AT&T will give up on the deal…if no other reason than CEOs like Whitacre typically have egos that match their paychecks. To back away from such a bold deal after so long, even if the price isn’t right, would be a blow to Whitacre’s pride and he isn’t going to let that happen.
Posted by Cynthia Brumfield at 9:00 AM | Print | Comments (0)
The rumors were true — meteroic video sharing site YouTube is hitting the mainstream under a deal with Verizon Wireless. The Google-owned company has a pact with the wireless giant to provide selected videos for Verizon Wireless’ broadband mobile service Vcast.
Verizon Wireless and YouTube will hand pick short videos that can be viewed on Vcast-enabled phones. For a monthly fee of $15, Vcast also provides customers with other video services, including news, sports, weather and games. YouTube will presumably be one of the menu options among this mix.
Clearly Google is moving quickly to leverage its $1.65 billion investment in YouTube. Kelly Liang, Senior Director of Business Development for YouTube, proclaims this “marquee” partnership to be the first of many. It’s a natural — Vcast videos are short, typically snippets, and YouTube’s specialty are short, typically amusing videos.
How much YouTube is getting out of the deal is unknown, although the company agreed to give Verizon Wireless an exclusive deal for some period of time. Verizon Wireless needs high profile content to push its premium Vcast service to more customers and may have been willing to give YouTube more just for the marketing boost the YouTube name will give the service.
Posted by Cynthia Brumfield at 8:05 AM | Print | Comments (1)
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