Mark Wineka
mwineka@salisburypost.com
AT&T’s venture into television doesn’t come as a surprise to Salisbury city officials, and they don’t see it as a threat to their own “fiber-to-the-home” cable utility.
“Their business model is similar to Time Warner’s,” says John Sofley, management services director for the city. “…They still have the same limitations as far as Time Warner in terms of bandwidth and capacity.”
Salisbury secured $34.9 million in financing last week to build a fiber-to-the-home network.
Months ago, representatives from AT&T officials met with Sofley, Salisbury Mayor Susan Kluttz, City Manager David Treme and Information Technology Services Manager Mike Crowell to outline their plans for adding video (television) and high-speed Internet to their telephone services.
The meeting came at a time when Salisbury had still not committed to its cable business.
City officials asked at that time whether AT&T would be installing fiber-optic cable all the way to homes and businesses, Sofley said, but they received no definite commitment from the company.
Instead, AT&T plans on running fiber-optic cable to neighborhood “nodes” and not taking it “the last mile” to the doorsteps of most residences and businesses, Councilman Mark Lewis says.
Lewis and Councilman William “Pete” Kennedy participated closely in the city’s study of the fiber-to-the-home project.
Crowell says AT&T U-Verse and High-Speed Internet’s fiber will stop at node, but from those nodes, AT&T and Time Warner will continue to use copper wiring to reach their customers, city officials say.
The copper wiring significantly limits AT&T’s and Time Warner’s bandwidth capacity, Salisbury officials argue, touting the faster speeds and capacity of fiber-optic cable.
In the years to come, Salisbury residents and businesses will demand what fiber-optic is able to give them, Lewis predicts.
Lewis, Sofley and Crowell say they are not discouraged that AT&T is getting into the video business before the city does.
The competition will lead to better TV, telephone and Internet rates for Salisbury consumers, they say.
“If we reduce prices for citizens, no matter how we do it, it’s good,” Sofley says.
AT&T’s entry into television services means Salisbury will lose some potential customers, Crowell says, but he contends Salisbury will have a better overall product, including customer service.
Lewis says the city’s fiber-to-the-home also could lead to economic development benefits.
Crowell expects Salisbury to launch its new telephone, Internet and television utility by mid-2010. The official launch could be preceded by 100 to 200 test customers who will be offered free services for several months while the city tries to ready its network.
Crowell calls them “beta customers.”
Lewis says the city’s business model still depends on a 28 percent market penetration within the first four years.
The E-NC Broadband Report says the United States has approximately 400 independent or cooperative fiber projects today and 44 public ones. Salisbury’s will be considered a public project.
“Communities that have FTTH (Fiber to the Home) networks are likely to attract high-technology businesses and compete successfully in the emerging knowledge-based local economy,” the report says.
The report also questions AT&T’s and Time Warner’s commitment to increased bandwidth and higher speeds in the future.
“Time Warner Cable and AT&T argue that the money needed to upgrade their networks for higher speeds can be better utilized on other projects,” the Broadband Report says.
“The philosophical divide will have big consequences for the camp that gets it wrong. If customers end up flocking to the superfast connections, Time Warner Cable and AT&T will be caught flat-footed without a high-end offering.”
Lewis notes from the same report that Verizon was the only telecommunications company that has embarked on an aggressive strategy to deploy fiber-optic cable all the way to the home. But its construction is only happening in parts of 16 states, the report says.
When the system is fully deployed, it will cover only 15 percent of the country.
Verizon is concentrating first on major cities and ignoring the communities outside the urban rings ó something Salisbury officials feared would be the approach of Time Warner and AT&T.
Lewis says the nation, already in danger of falling behind other countries, will have to develop a national broadband strategy.