Alex McCollough Deregulation of the local cable market

Short History of East Lansing Cable Market ~1980 TCI Cable (Tele-Communications Inc.) Purchased by AT&T in 1999 AT&T (AT&T Broadband) then sold out to Comcast in 2001 for about $44.5 Billion, which included about 22 million subscribers nation wide. HB the Michigan Legislature took away control of local franchising, and opened up the market for competition. HB 6456

AT&T now and then… With the acquisition of TCI and Media One, AT&T created the largest cable provider in the United States. But it did not come without a cost: TCI - $48 Billion all stock transaction to purchase Assumed $16 Billion in TCI debt. Media One - $54 Billion cash and stock deal. This price was come upon after a bidding war with Comcast. Total $118 Billion.

AT&T now and then…(Continued) AT&T Broadband turned out to be a victim of the corporate restructuring. AT&T was ordered to “spin off” several components of its monopoly into: AT&T Wireless (Cingular) AT&T Business AT&T Consumer AT&T Broadband Only portion that was actually spun off into its own company was AT&T Wireless which became Cingular. AT&T Broadband was acquired by Comcast before it was allowed to be a separate entity. (2002)

Comcast… In 2001/2002 when Comcast purchased AT&T Broadband, the proposed new name of the company would be AT&T Comcast But at the last minute the decision was made to call the company just Comcast as to not confuse customers. Comcast eventually acquired AT&T Broadband for $44.5 Billion in 2001/2002. (after the bidding war with Media One) Most of Comcast’s history is tied closely with AT&T Broadband…

What does it mean to have AT&T in the market? Much more complicated than switching from/to Comcast, Millennium, or Charter. AT&T U-Verse IP Television… IP TV vs. CATV (Traditional Cable) IP TV = one stream to your house (3 SD, 1 HD) CATV = all customers get all the channels at one time. Infrastructure: IP TV requires fiber optic cable AT LEAST to the switch box at the pole, then regular coax to the customers house (but many times requires fiber all the way to the persons house) [Fiber-to-the-node or FTTN] (4.4 Billion total)AT&T expected to pay in 2006 $1.4 Billion in infrastructure upgrades, $1.7 Billion in 2007, and $1.3 Billion in (4.4 Billion total) Expected growth would be 3 million homes in 2006, 9 million this year, and 18 million in 2008.

IP-Television In selected cities subscribers to AT&T’s U-Verse have seen broadband speeds at rate of 25 MBPS. (Megabits per second) Current areas of operation are: Texas – San Antonio, Houston California – San Jose, San Francisco Connecticut – New Haven, Stanford, Hartford Indiana – Indianapolis, Anderson, Bloomington, Muncie. “How is AT&T U-verse TV different from cable TV?“ (Taken from ATT FAQ) Channel changes on AT&T U-verse TV are so fast they seem instant.The AT&T U-verse TV experience is very different from cable TV viewing. For example: Channel changes on AT&T U-verse TV are so fast they seem instant. The TV signal is distributed using Internet Protocol via a broadband connection. AT&T U-verse TV has a Video on Demand library available 24 x 7. see what’s on a one channel while watching anotherA&T U-verse TV uses Picture in Picture channel browsing – see what’s on a one channel while watching another only one live HD channel can be viewed at a time.Each receiver will have all of the cabling that is required. While all receivers are High Definition (HD) content enabled, only one live HD channel can be viewed at a time. Enjoy many channels of sports, sports and more sports. Don’t just watch – record!

What does competition mean for you? It means that local communities stand to lose between $47-57 million from franchising agreements alone. The possibility of lower rates from the competition. Full build-out in all communities is not required Meaning that all residence in the community will not have the same service “AT&T told investors that it will cover 90 percent of high-value customers — those who spend more than $160 a month — but only 5 percent of low-value customers — those who spend less than $100 a month.”“AT&T told investors that it will cover 90 percent of high-value customers — those who spend more than $160 a month — but only 5 percent of low-value customers — those who spend less than $100 a month.” AT&T offered Michigan an investment of $260 million, and the creation of 2,000 jobs as an incentive to pass the legislation.

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