RealTime IT News

AT&T to Beam Satellite to Rural Lands

AT&T has announced it will begin evaluating a trio of options to bring broadband to rural customers.

The plan makes broadband and video "accessible to many customers who have had limited access to broadband ... until now," according to CEO Edward Whitacre.

AT&T later this month will roll out satellite as a broadband option, Whitacre told a Detroit Economic Club audience Monday.

With 7.4 million subscribers, AT&T is the largest national DSL provider.

The telecom giant said it will team with Greenwood Village, Colo.-based satellite Internet start-up WildBlue Communications. The new service will use a satellite operated by BCE, Canada's largest phone company.

Re-branded as "AT&T High Speed Internet Access, powered by WildBlue," the service will be first offered in 13 states, according to a statement.

In comparison to AT&T's DSL, which costs $29.95, satellite service subscribers could pay up to $79.95 for a 1.5Mbps connection. Despite the price difference, rural residents seeking broadband have few choices, according to analysts.

Satellite may gain some credibility from AT&T's marketing muscle.

"Satellite will continue to be a niche product, but it is a better option than in the past," said Patti Reali, a research director at Gartner. Speed is chief among the improvements.

However, "satellite is always going to remain second best," according to Joe Laszlo, an analyst with JupiterResearch.

But the image of satellite as second-best to broadband is changing. There is little risk, said Laszlo, for AT&T in the rural market.

The AT&T announcement is a great deal for WildBlue whose closest competitor, Hughes, with 300,000 subscribers, dwarfs the company's 25,000 users.

WildBlue's biggest investor is John Malone, owner of cable-backed Liberty Media.

But satellite isn't the only option AT&T is heavily investigating.

The telecom says it will later this year begin deploying high-speed and long-range WiMax wireless technology in Texas and Nevada, joining fixed wireless services in Alaska, Georgia and New Jersey, according to a statement.

AT&T also announced 5.5 million low-income homes could receive Internet TV within three years, as part of the company's Project Lightspeed network.

Some groups have charged AT&T and other telecoms have ignored low-income areas, a charge Laszlo sees as possibly driving the move into satellite-delivery of broadband.

"There is some regulatory pressure to make broadband available to all," said the analyst.