July 1, 2005

An Open Letter to SBC's Ed Whitacre and Yahoo's Terry Semel

I find it ironic that SBC, a regional "Baby Bell" and the dominant telco in Wisconsin, that makes its money on two way voice conversations and a growing data business would invest heavily in legacy one way media (more cable TV). SBC is offering customers bundling deals with satellite tv providers along with their Yahoo DSL service. [Stephanie Mehta's article]:
Whitacre may well be honing his schmoozing skills for his newest—and unlikeliest—role: aspiring media mogul. In a few short months, SBC will unveil what it hopes will be the ultimate weapon in the war between cable and the Bells—a high-tech TV service that Whitacre insists will offer viewers as many channels as they currently receive from regular cable and then some. SBC has anted up $4 billion just to get its network ready to offer the service, known as Internet protocol TV, or IPTV, and it will spend additional hundreds of millions to acquire TV content. But much more is at stake: SBC’s future as a major player.
Ironically, and with perfect timing, it appears that true high speed fiber networks are starting to appear (The US lags well behind other countries on broadband costs and performance).
  • Cablevision is implementing 50Mbps service in NY (slashdot discussion)
  • LaFayette, Louisiana is going to a local referendum to fund a municipal fibre network July 16, 2005
  • Verizon, far more aggressive than SBC in broadband implementation is actually rolling out fiber to the home in some markets.
SBC, in trying to become a TV player when there is little meaningful growth in that market, evidently refuses to spend the money required to upgrade its network (keep in mind that we, the ratepayers, paid for the copper network years ago). Why Yahoo, ironically, a major beneficiary of the two way web, would spend any brand capital on this is a mystery.

SBC, in an effort to keep the cash flowing for these forays, still requires that the purchaser sign up for traditional phone service as a tax on the dsl product. This is a blatant attempt to stifle VOIP service across sbc dsl service.

Meanwhile, IEEE Spectrum says goodbye to AT&T (SBC plans to acquire what's left of AT&T).

Update: Bellsouth plans to accelerate their fibre rollout. Posted by James Zellmer at July 1, 2005 7:57 AM | Subscribe to this site via RSS:
Posted to Broadband | Media