AT&T's Stephenson says its legacy DSL is 'obsolete'

Randall Stephenson, CEO of AT&T (NYSE: T), during this week's National Association of Regulatory Utility Commissioners (NARUC) summer meeting in Los Angeles, admitted that the copper-based DSL network that delivers its broadband data services is "obsolete."

Of course, AT&T's chief competitor Comcast (Nasdaq: CMCSA), which had its own EVP David Cohen speaking at the event right after Stephenson, wasted no time reporting on Stephenson's comments.

Sena Fitzmaurice, Vice President, Government Communications tweeted: "AT&T CEO: to chase comcast we built dsl, it is obsolete now."

Obviously, this statement is a shot in AT&T's foot in that DSL (VDSL2 for a growing amount of its U-verse customers) continues to be the dominant broadband vehicle for its customer base. Compounding the issue is that AT&T said earlier this year that it would start winding down its U-verse rollout, meaning that those customers that have not been upgraded yet probably won't be for a long time.

When AT&T was asked later by GigaOm to clarify Stephenson's comments, AT&T spokeswomaqn Mari Melguizo said he was answering a question from an audience member about how state regulators should think about new technology cycles when they are considering things like USF.

She added that Stephenson believes that new technology like DSL used to be amortized over a 10-15 year period, but that has shrunk to about 5 years now. Since DSL was introduced in the 1990s, it has been surpassed in speed by its U-verse product and Comcast's DOCSIS 3.0.

And much like how 4G wireless has surpassed the speeds and available applications on 3G wireless, Stephenson's main point was that new technology is being surpassed by the next generation much quicker than ever before. "We have millions of customers using DSL and remain fully committed to the technology -- even as we constantly look to bring innovation to the marketplace," Melguizo said. July 20, 2011 — 11:46am ET | By Sean Buckley


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