Today's Top Stories AT&T's (NYSE: T) proposed $48.5 billion deal to acquire DirecTV will not only make it a powerhouse video provider. As part of the deal with DirecTV, AT&T has committed to expand its broadband services footprint to 15 million customer locations, particularly in unserved rural areas where the telco does not provide service today, using a combination of fiber to the premises (FTTP) and wireless local loop technologies. Set to be completed four years after the deal closes, the new broadband expansion plan is complementary to AT&T's $14 billion fiber and Project VIP expansion plan. Rural customers also will have the option to buy broadband service stand-alone or as part of a bundle with other AT&T services. "We're getting very close to closing out our VIP build commitment," said Randall Stephenson, CEO and chairman of AT&T, during the conference call discussing the transaction. "That was a multi-billion dollar commitment to deploy 4G LTE across our network and significant amount of fiber into our network to extend our broadband footprint." During the most recent quarter, AT&T's broadband customer base grew 4 percent as it added 634,000 U-verse broadband and 201,000 U-verse TV subscribers, ending the quarter with a total of 11 million and 5.7 million subscribers, respectively. "As you look at that broadband footprint, we got more conviction that if you could get your video product to a profitable level then you could take that VIP build and extend it out and that's where those 15 million lines come from," Stephenson said. "If you put a profitable video product, best in class, on top of our broadband build to another 15 million subscribers, we have a really exciting growth opportunity here." It will also work to appeal to customers that want to use over the top video services like Hulu or Netflix (NASDAQ: NFLX). AT&T also plans to offer wireline broadband service at speeds of at least 6 Mbps (where feasible) in areas where AT&T offers wireline IP broadband service today at guaranteed prices for three years after closing. In delivering video services, Stephenson said it will use a number of platforms to deliver services. "I think you're going to see over the next 3-4 years a broad array of video transmission medium," Stephenson said. "There's going to be a significant amount of satellite. You're going to see as we deploy fiber to the home that video platform will be a fiber-based video platform, and you'll see it delivered wirelessly to the laptop and the car." Stephenson added that "you'll see the experiences merge so the user interfaces will look and feel the same, but I don't see it displacing our fiber product in our U-verse footprint." The other question is how will this deal it impact the commercial relationships DirecTV had with both CenturyLink and Verizon, both of which resell the satellite service in areas where they don't offer their Prism TV and FiOS TV products? "We value our relationship with Verizon, and I know AT&T has commercial relationships with Verizon," said Mike White, president and CEO of DIRECTV. "We expect continue that relationship as we do our relationship with CenturyLink." Neither CenturyLink (NYSE: CTL) nor Verizon (NYSE: VZ) would comment to FierceTelecom on what they thought of the deal and what impact it could have on their existing relationships. Both AT&T and DirecTV's boards of directors have approved the deal, but it still must still be approved by the FCC, the U.S. Department of Justice, a few U.S. states and some Latin American countries. The acquisition is expected to close in around 12 months. For more:
- see the release
- here's FierceCable's take Related articles:
AT&T consumer wireline revenue up 4.3% to $5.7B on strong U-verse video, broadband adds
AT&T, Chernin Group $500M online video pact plays into bandwidth, content hunger
AT&T targets 100 cities for its fiber-based broadband service
AT&T to bring 1 Gbps FTTH service to North Carolina Read more about: Directv, AT&T, CenturyLink
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Openreach, BT's (NYSE: BT) local access network business, is ramping up its employee base, announcing that it will create 1,600 new engineering positions to keep up with its ongoing rollout of its fiber-based broadband services. The new engineering recruits will be tasked with enhancing customer service by cutting installation and repair call times and bringing the service into new communities. Earlier this month, BT announced that it passed over 19 million UK homes with fiber-based broadband service. Initially, BT said it would cover 19 million premises with fiber by the end of 2015. However, it passed that goal in March of this year, about 21 months ahead of schedule. In addition, Openreach plans to track its customer service performance more closely by publishing regular reports on its website beginning this summer. BT said that these reports will illustrate how it "is delivering against its service targets." Many of the engineering roles will be taken by former UK Armed Forces men and women. A particular focus is centered on hiring more female engineers and Openreach has launched a campaign encouraging women to enter the world of engineering. This latest hiring effort is just one of many it has taken in recent years as it continues to scale its broadband footprint. In 2012, Openreach increased the total number of new engineers hired to over 1,000 with a focus on employing ex-armed forces personnel. For more:
- see the release Related articles:
BT Openreach turns up 40, 100G wholesale service
BT's fiber-based subs top 1.9M in Q3
BT dedicates $82.5M to bring fiber broadband to 400,000 more locations
BT, Alcatel-Lucent push 1.4 Tbps over existing fiber during trial Read more about: FTTH, BT
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The service provider community's ongoing movement to deploy 100G in 2013 drove up the segment to nearly $2 billion, according to a new Infonetics Research report. "100G spending worldwide in 2013 was breathtaking, with total port shipments tripling during the year," said Andrew Schmitt, principal analyst for optical at Infonetics. "This equates to around $2 billion in spending related to 100G." Schmitt added that 100G represented nearly 20 percent of all WDM spending. The overall WDM segment saw its seventh straight quarter of year-over-year growth, up 8 percent. Much of the 100G optical revenue is being driven by five companies: Alcatel-Lucent, Ciena, Cisco, Huawei and Infinera. Alcatel-Lucent (NYSE: ALU), for example, reported that first-quarter 2014 100G shipments represented 30 percent of total WDM line card shipments compared with 19 percent in the first quarter of 2013. Infinera also reported that 100G was strong in the first quarter with overall revenues rising sequentially to $142.8 million. However, the vendor reportedly suffered a setback in January when it was passed over for a large-scale long-haul optical contract with Verizon (NYSE: VZ). However compelling the 100G opportunity is, global optical spending declined as legacy SONET/SDH spending continues to slide. Optical network hardware revenue, including WDM and SONET/SDH, declined 2 percent year-over-year in the first quarter of 2014, while total optical spending was roughly flat. For more:
- see the release Related articles:
Infinera, Fujitsu, Cisco, Ciena see strongest growth, support in optical market, says Infonetics
Huawei, Alcatel-Lucent, ZTE lead optical market share, says Infonetics
Optical growth in 2013 driven by 100G, says Infonetics Read more about: WDM, Alcatel-Lucent
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XO Communications is giving its business customers more control over their service experience with its new myXO online customer portal. Set on enhancing service and support, the new portal features role-based personalization and instant visibility to help customers manage what the company says are their critical business functions. Customers can also access the portal 24/7 from any device to see the status of service requests and orders, advanced feature management and insight into network performance and usage information. In addition, there's a one-button access to a callback feature that eliminates time-on-hold waiting for an answer. "By providing customers with a new level of control over their own service and scheduling, customers can now choose how and when to interact with XO, streamlining their user experience and allowing XO to be more flexible and personally responsive to each customer," said Don MacNeil, chief operating officer, XO Communications, in a release. The new portal is just one of many enhancements the service provider has made to give its customers more control over their experience. In April, the service provider introduced a bandwidth-on-demand capability for its suite of WAN-based services that will give them automatic, burstable bandwidth to satisfy short- and long-term needs. For more:
- see the release Related articles:
XO serves up new bandwidth-on-demand capability
XO lays path for network expansion, completes $500M financing round
VSG: tw telecom, XO, Level 3 take dominant competitive Ethernet position Read more about: Carrier Ethernet
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Average cable TV prices continue to go up faster than the rate of inflation, the FCC said in its latest sampling of rates operators charge for basic cable television service. More surprising, the report found for the third straight year that areas with competition actually saw higher price increases than those without competition.  | | Click here to view a larger version of this image. | The most recent report, released Friday, said that the average monthly price of expanded basic cable service, excluding taxes, fees and equipment charges, climbed four times faster than the rate of inflation (5.1 percent compared to 1.6 percent as per the Consumer Price Index). "The price of expanded basic service has increased at a compound average growth rate of 6.1 percent during the period 1995-2013 (while the CPI) increased at a compound average growth rate of 2.4 percent during the same period," the report stated. Over 12 months ending in January 2013, the FCC found the average price of expanded basic service went up 4.6 percent to $63.03 for operators serving communities with "no effective competition" but went up 5.8 percent to $66.14 for "effective competition communities." On the other hand, the results found that "operators in effective competition communities carry, on average, more channels on expanded basic service than operators in communities without this finding." Thus, even though the price per channel in competitive communities went up 2.6 percent, compared to 1.7 percent in non-competitive markets, the average channel cost only 45 cents compared to 51 cents in non-competitive markets. In a bit of positive news for price-conscious consumers, the federal agency said that price per channel is actually lower by 0.3 percent on an average annual compound basis in the 18 years between 1995 and 2013. The increases cannot be laid solely at the feet of ever-increasing content costs, either, since the report found that equipment prices for basic and expanded services both increased with basic going up 4.4 percent and expanded up 4.2 percent. The trend now appears to be that expanded basic service will cost more in effective competition communities than those without competition, the FCC report stated, calling the difference "statistically significant." "The three previous surveys also found that the price of expanded basic service in effective competition communities was higher than the price of expanded basic in communities without a finding," the report stated. "Prior to that, surveys found that effective competition in communities in general had lower prices." For more:
- see the FCC report (.pdf) Related articles:
Unbundling cable won't save consumers money
Industry split on whether NBC overpaid for Olympics
Pay-TV subscribers devour TV Everywhere, study shows Read more about: FCC, CPI
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