Will AT&T's New Plans Influence the Industry?

AT&T plans to offer new service tiers with minimum and maximum speeds rather than "up to" speeds.

An AT&T executive recently made comments to the FCC that the company planned to change its broadband plan tiers to reflect service bundles with minimum and maximum speeds, rather than the previous method of offering customers speeds "up to" a maximum amount. AT&T currently has 14.6 million Internet users spread across all of its offerings, including its fiber-based U-verse product and its DSL services.

The older type of bundle creates overlapping speed plans and is frankly, far easier to deliver than any service with a minimum speed guarantee. It appears that AT&T, other telcos and the cable industry are experiencing very strong mutual competition and companies are searching for ways to stand out.

So will this be difficult to do? Hard to say, but AT&T already offered a disclaimer by stating that actual minimum speeds customers may experience could be different due to factors outside AT&T's control. However, laudably, AT&T also said that if that turns out to be the case it will take steps to bring the customer's service into compliance or give the customer the option to move to a different tier. No word on whether or not there would be additional cost for this.

So you may ask why would I blog on something like a service plan? In my experience delivering minimum committed information rates (CIR) is pretty hard. It requires good quality of service (QOS) software, monitoring tools and a pretty flexible network. This is hard for broadband wireless players to do. Traffic shaping to provide a ceiling is much more straightforward.

If this AT&T move becomes the industry norm, it will signal a tougher competitive environment for everybody. This is good for the consumer, but potentially tougher for smaller wireless ISPs.

Tim Sanders

The Final Mile

Thursday, July 24, 2008 in Business  | Permalink |  Comments (1)