AT&T will jettison wireless users that engage in P2P file-sharing over its network, the company said Friday in a letter PDF filed at the FCC (and flagged today by Ted Hearn at Multichannel News). Senior lobbyist Robert Quinn answered a question posed at hearing last week by Republican FCC Commissioner Robert McDowell about the company's policies of managing P2P network traffic on its broadband wireless platform.
Quinn said that AT&T's terms of service (as well as the TOS for most other carriers) bars the use of P2P applications on the wireless platform. "Use of a P2P file sharing application would constitute a material breach of contract for which the user’s service could be terminated," he said.
Because P2P file sharing applications typically engage in continuous (rather than bursty) transmissions at high data rates, a small number of users of P2P file sharing applications served by a particular cell site could severely degrade the service quality enjoyed by all customers served by that site.
AT&T hasn't yet booted anybody off the network for using P2P, Quinn said.
The FCC's McDowell is likely to vote against an order, slated for vote on Friday, that finds Comcast secretly degraded P2P traffic in violation of the agency's network neutrality principles. AT&T's written admission that it won't permit any form of P2P on its broadband wireless network is likely to be used by McDowell in arguing against the order, saying, in essence, that Comcast's supposed transgressions aren't as bad as blocking P2P altogether. (One crucial distinction between the two circumstances: Comcast wasn't "transparent" about its P2P throttling while AT&T is apparently upfront about it in its user agreement).
However, it's all but certain that the order will pass given that FCC Chairman Kevin Martin, a proponent of punishing Comcast, likely has the two other votes needed to succeed, with Democratic Commissioners Michael Copps and Jonathan Adelstein no doubt siding with him on this smatter. Less clear is whether any action by the FCC will stand up on appeal. CNET's Declan McCullagh today joins the growing consensus that the FCC does not have the authority to take this action.
Posted by Cynthia Brumfield at 5:35 PM | Print | Comments (15)Verizon issued its Q2 08 earnings earning results this morning and although the company's wireless business helped propel Verizon to strong net income growth, its customer wireline business -- including video and broadband, heretofore growth stalwarts -- seems to be, um, in the toilet.
One clear sign that something is wrong with a product line at any given company is when the company ceases to report statistics on that particular product. Starting with Q2 08, Verizon is no longer reporting total video subscribers -- nada, zip, zilch. At the end of Q1 08, Verizon served a total of 2.154 million video subscribers, but we don't know how many total video customers Verizon served at the end of Q2 08 because the number is nowhere to be found in its investor reports.
Verizon investor spokesoman Ron Lataille confirmed for me that the company no longer gives out this number. That's a good indication that Verizon lost a boatload of DBS customers under its pact with DirecTV during the quarter. At the end of Q1 08, Verizon had nearly a million, or 948,000, DirecTV customers.
Verizon did report its FiOS TV subscriber count, and here again the news wasn't good. During the quarter, Verizon added 176,000 net new FiOS TV customers to reach a total of 1.382 million subscribers by quarter's end. But the 176,000 net adds represents a steep drop from the 263,000 net adds during Q1 08 and is the first time the telco hasn't posted accelerating growth in this service category.
During the earnings call, Verizon President Denny Strigl defended the weak FiOS TV growth numbers saying that they "were about what we had expected." He said FiOS TV growth is already picking up in the third quarter and should continue to make gains throughout the year, thanks in large part to its launch of service today in New York City.
Surprisingly, not one analyst on the call asked Verizon about its DBS service subscriber count. Verizon, like fellow telco AT&T, is banking on video growth from its own network-based services and has viewed its DBS partnership as a stop-gap measure to gain market share as cable makes inroads into the voice business. Still, it's likely that Verizon posted a net loss in video subscribers during the quarter, with the loss in DBS customers outweighing the tepid gain in FiOS TV customers.
Verizon's broadband business didn't fare that much better. During the quarter, Verizon added only 54,000 net new broadband customers, just one-fifth of the broadband net gains added during the previous quarter and the year-ago quarter.
Although Verizon's FiOS high-speed service added a net 187,000 new customers during the quarter, Verizon lost 133,000 DSL customers -- presumably many of these switched over to the superior FiOS broadband option. By quarter's end, Verizon served 8.33 million broadband customers.
Combined with a loss of 92,000 access lines, these losses paint a pretty grim picture for the company's wireline business. During the earnings call, Strigl said that despite these weak results, the recession didn't seem to be causing problems for Verizon, at least not in terms of the bottom-line. "Although we are seeing some softening in the volumes, we do not expect any significant impact on our financial results for the rest of the year," he said.
The still-booming wireless business is the pole holding up Verizon's tent. During the quarter, Verizon added 1.5 million net new customers, up from the 1.3 million added during Q2 07 and on par with Q1 08 levels, even in the face of stiff competition with AT&T's iPhone. By quarter's end, Verizon served 68.68 million wireless customers.
Net income rose to $1.88 billion for the quarter, up from $1.68 billion during the year-ago quarter, as revenues ticked up from $23.27 billion to $24.12 billion.
Posted by Cynthia Brumfield at 1:35 PM | Print | Comments (1)
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