What We Know About AT&T/DirecTV’s Proposed Wireless Broadband Service

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Last fall, an AT&T exec claimed that if his company was allowed to merge with DirecTV it could deploy some sort of wireless data service that delivered around 15Mbps to rural customers, but since then there has been very little talk of what this service would actually look like or how and where it would be deployed. But a dig through regulatory filings on the merger turns up a little more info.

If you read this AT&T filing starting at paragraph 47 (they’re numbered so you don’t have to count), you get a slightly better idea of what the company is planning. Here are the major points:

1. It’s Not Satellite Broadband

For some rural consumers, satellite broadband has been one of the few options for getting online. But satellite service has traditionally been expensive and included restrictive data caps that severely limit its use for data-heavy services like streaming video. There is also a latency issue with satellite that prevents many users from accessing VPNs, so many people who work from home can’t use satellite service.

So the good news is that AT&T’s plan is not just slapping the AT&T brand on a satellite broadband offering. Instead, it plans on deploying what’s known as wireless local loop (WLL) technology, which is basically using dedicated wireless spectrum to carry broadband back and forth between a box on the user’s home and one on a nearby cell tower.

2. AT&T Says It’s Not Just Wireless Hotspots For Your Home

The above description may sound no different than what you’d get from using an LTE hotspot from AT&T (or Verizon, T-Mobile, or Sprint), but the company claims this is “not merely a version of ‘best efforts’ mobile broadband service for the home.”

AT&T promises in the filing that the WLL service will “provide consumers with a robust broadband experience, with speeds and usage comparable, and typically superior to, the best wireline services available in the areas in which the fixed WLL solution will be deployed.”

The last part of that sentence is important, because the company is targeting rural areas, some of which only offer slower DSL service.

3. So How Fast Will It Be?

The filing echoes what AT&T said back in September — speeds of 15-20Mbps, which is more than sufficient for streaming video and most online applications. However, it’s worth noting that this number was given long before the FCC voted to revise its definition of broadband to 25Mbps.

The FCC revision wouldn’t prevent AT&T from marketing the service as broadband, but it means that the deployment of even 20Mbps — which is five times more than the previous FCC broadband definition — would still mean that affected areas are without access to what the Commission considers the standard.

4. Speeds Will Vary By Location

Whether or not you get the full 15-20Mbps depends on how close you are to a WLL tower, with speeds slowing as you reach the edges of coverage areas.

However, AT&T claims that “even customers at the cell edge will experience speeds greater than 10Mbps more than 90% of the time.” But take that with a grain of salt as it’s based on lab testing and not real-world deployment.

5. Speed Will Also Vary Depending On Time Of Day

Even though the WLL service will use a dedicated slice of spectrum, that slice still needs to be shared among the local users. So speeds will be at their best during off-peak hours. Of course, when that peak comes will entirely depend on the web-browsing habits of the people in your immediate area.

6. What About Data Caps?

Here’s one question that AT&T won’t yet put a number on, but which will be incredibly important for people considering the WLL service.

AT&T and other wireless data providers love data caps and tiered pricing plans and most consumers can only afford plans covering 2GB-10GB/month. Meanwhile, even the wireline broadband companies that do employ usage caps usually raise the bar significantly higher — between 250GB and 500GB/month — before penalizing users.

All the filing says on the matter is that AT&T “expects the product to be offered with a usage allowance high enough to readily satisfy most customers’ needs.”

The questions is whether the company is basing that usage level based on wireless customers’ usage (which typically ranges in 2-3GB/month range) or in the typical usage of a home with multiple connected devices that can rack up hundreds of gigabytes each month streaming and downloading movies, TV shows, music, books, and games.

7. How Many People Will Have Access?

AT&T is committing to deploying the WLL service in mostly rural areas in 48 states, covering about 13 million households that could sign up.

Because of congestion concerns, most of the areas served by WLL will have fewer than 250 people per square mile.

According to the filing, about 20% of the 13 million households currently have no access to broadband while another 27% only have one option, usually DSL.

8. Do I Need To Be An AT&T Or DirecTV Customer To Get This?

Obviously the goal here is to give DirecTV a marketable broadband offering for millions of its rural customers, and for AT&T to bundle up Internet/TV/voice services for customers, but there doesn’t appear to be anything in the filing that requires WLL customers also be satellite or cellphone customers of either company beforehand.

As mentioned above, the service isn’t using your satellite dish and it’s using a different swath of wireless spectrum than your phone, so there doesn’t seem to be any reason customers of Dish or Verizon couldn’t also get the WLL service.

AT&T claims in the document that 85% of the areas it intends to target are not currently serviced by its landline phone operation.

9. Can’t AT&T Just Do This On Its Own?

The answer is yes, and the company acknowledges as much in the filing. However, AT&T contends that deploying a WLL network of this scale is too expensive of a risk to take without the additional revenue it’s going to be getting via the DirecTV acquisition. Additionally, being able to offer bundled services makes it easier to market the product to consumers rather than trying to sell standalone broadband access.

10. What We Don’t Know

This item could get lengthy, so let’s just keep it to the big ones:
• Price: While we imagine the WLL service will be priced comparable to what consumers pay for wireline broadband, there’s no way of saying that for certain right now.

• Timeline: AT&T says it has made the commitment, but it’s not going to build out any new network until after the merger is done. Even then, we still have no idea how rapidly the company will be able to deploy the service.

• Data Caps: There is the slight hint mentioned above, but without even vague usage numbers, we have very little to go on.

• Whether others will follow: If a combined AT&T and DirecTV are able to make a profit off the WLL service, you can expect that Dish would once again be courted by several wireless companies looking to offer something similar to that satellite service’s rural customers. It would also behoove Dish to get involved as it would give rural American easier access to over-the-top standalone TV streaming services like Dish’s Sling TV.