Tuesday, August 07, 2007

AT&T's Unwanted Product

As a condition of approval of the merger of SBC and BellSouth into telecom giant AT&T, the company had to agree to offer two services that they really, really don't want to offer in the areas where they are the local phone company (including Texas, where I live): a $10 DSL package (slow DSL, but DSL) and "naked DSL," a broadband service that customers can order without having a land line.

Now, AT&T obviously would rather sell you a faster (and more expensive) DSL service, and would rather sell you a land line along with broadband. (Like an increasing number of customers, I really don't use my landline; I have it because I want my alarm system to be able to dial for help if the house is burning down, and because here in the hurricane-prone Gulf Coast, we have regular reminders that a phone that works when the power's out and the mobile circuits are jammed is a very nice thing to have. If I had reliable alternatives, I wouldn't bother with a land line.)

The "naked DSL" isn't available yet, but in 22 states, the $10 DSL is. Sort of. You have to find out about it. And you have to order it. AT&T is making both of things difficult, because they recognize that this will cannibalize some of their current low-end DSL sales, and the naked DSL will kill some landline sales.

Well, that's not what they claim. They claim nobody wants it.

I checked a few weeks ago because this service will be ideal for my parents, who have been hanging on to their cheap dial-up. (Frankly, I was ready to pay for broadband just so it would be available to me when I visit them.) There was nothing on the AT&T web site; there is now, though it's not terribly obvious.

Given that it's exactly the same service AT&T currently charges $15 for, you can see why they're not eager to promote it. But that's just so short-sighted, and their CEO's comment that the $10 service is not very good (but the identical $15 service is, apparently, just fine) just makes it clear how little interest they have in meeting customer needs.

At $10 per month, there's no reason for anybody in AT&T's service area to have dial-up internet. Yes, they will lose some money from some customers who were going to get the $15 service but will pay $10 instead (if they happen to know about it).

But how many people are there who could become new broadband users - some of whom will decide that they love having broadband, and want to upgrade to faster service - to make up that difference? A lot, I suspect.

And more importantly, they have to offer the service, so they might as well use it as an opportunity to add customers and create a great story about how they're making broadband more accessible to the public, instead of pretending that it's not there.

None of this is surprising; AT&T is one of the most customer-loathing companies you can find, in an industry that's known for its terrible treatment of customers. (The only reason I am a customer at all is that the other option in Houston, Comcast (until recently Time Warner) is even worse; their broadband is faster, except when you have five one-hour-plus outages in a week.

Still, it's sad to see a company with the market power and resources to be a leader behaving this badly. This is, of course, the same company whose executives complain that content providers like Google are getting a "free ride" on their network (who knew Google didn't pay to connect its data centers to the net?), apparently completely unaware that without content, a network is useless.

I expect more shenanigans like this from AT&T. At some point in the near future I'll be ordering that $10 DSL package for my folks; I expect it to be a frustrating experience. We'll see if AT&T, as it usually does, lives down to my expectations.

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