U-verse Gets Into Bonding

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AT&T is turning to a cheaper way to expand its U-verse to reach 30 million homes.

This week the telco is starting to deploy digital subscriber line "pair bonding" in the last-mile copper portion of its U-verse fiber-to-the-neighborhood network, according to Randy Tomlin, senior vice president of U-verse field operations.

The technology -- which uses two copper wires together, instead of one -- will extend U-verse's reach by between 1,000 and 2,000 feet in a neighborhood. The variety of DSL that AT&T is using, very high bit-rate DSL, has a useful range of around 3,000 feet from the video-ready access devices (VRADs) that are the fiber-fed nodes in the U-verse network.

Using DSL pair-bonding combined with new U-verse buildouts, Tomlin said, AT&T expects to pass 30 million homes by end of 2011, up from 23.8 million at the end of March 2010. Pair bonding is much less expensive than planting new fiber, he noted, though he declined to specify costs.

"It uses the network we have in place," he said. "We don't have to dig up streets, alleys or yards."

The telco plans to use pair-bonding across its entire footprint, encompassing 22 states and 122 markets. Its existing DSL vendors, Alcatel-Lucent and 2Wire, are providing the low-power equipment for pair bonding.

AT&T had previously expected to use pair-bonding starting in 2008. Tomlin said the telco worked with its suppliers to get the electronics to be lower powered and reliable enough to deliver voice, video and data to its satisfaction.

Pair bonding won't increase the bandwidth AT&T can deliver over the network, Tomlin said. The current maximum downstream speeds for pair-bonded DSL will be 18 Mbps, while the telco offers the 24-Mbps Max Turbo tier to certain customers located closer to VRADs.

In the last two years, AT&T has reined in U-verse's expansion plans. The company had previously targeted passing 30 million homes by 2010, according to its December 2007 forecast. At 30 million homes, U-verse TV will have coverage of about 50% of the residential living units and 33% of businesses in its footprint.

And in the first quarter of 2010, AT&T cut on spending on U-verse. Wireline capital expenditures for the first three months were approximately $2.1 billion, down 14% from the year-earlier period, according to the telco's quarterly report. AT&T said it had decreased spending on U-verse services "as the upgrades to our existing network become more mature." Still, for the full year 2010, AT&T expects total capex in the range of $18 billion to $19 billion, up approximately 5% to 10% from last year.

AT&T is scheduled to report second-quarter 2010 earnings on July 22, when it will provide an update on U-verse subscriber and network deployment figures.

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