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.

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