AT&T's MicroCell: What's That You Said, Ed Whitacre?

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by: Murphy Mac

AT&T (NYSE:T) released a femtocell product called a MicroCell on Monday. The MicroCell is a $150 cell tower for your home or office, providing five bars of 3G service in places there'd otherwise be none.

The MicroCell connects via the Internet to the AT&T Wireless network to complete your calls, incoming and outgoing. Your minutes are consumed as they would be when you connect to any other AT&T tower, unless you qualify or pay for an unlimited MicroCell plan.

In other words, your paid voice minute calls are going over your Internet connection, provided by Comcast (NASDAQ:CMCSA) or Time Warner (TWC) or Verizon (NYSE:VZ) - maybe even AT&T. Cue Ed Whitacre, the guy doing General Motors (NYSE:GM) commercials now.

Ed Whitacre was CEO of AT&T when it was known as SBC -- and famously made the following statement when asked this question:

How concerned are you (Ed Whitacre) about Internet upstarts like Google, MSN, Vonage, and others?

How do you think they're going to get to customers? Through a broadband pipe. Cable companies have them. We have them. Now what they would like to do is use my pipes free, but I ain't going to let them do that because we have spent this capital and we have to have a return on it. So there's going to have to be some mechanism for these people who use these pipes to pay for the portion they're using. Why should they be allowed to use my pipes?

The Internet can't be free in that sense, because we and the cable companies have made an investment and for a Google or Yahoo! (NASDAQ:YHOO) or Vonage or anybody to expect to use these pipes [for] free is nuts!

Would Ed like to elaborate on that? Would AT&T? Whitacre's pipe comments are matched only by Ted Stevens and his famous tubes speech. Whitacre has fared far better than former Senator Stevens.

AT&T Wireless won't allow Skype (NASDAQ:EBAY) voice traffic on their network. Yet they're willing to send unlimited voice traffic, that they're paid for, over the Comcast network. Not exactly a consistent point of view.

Other companies are using similar technology, but it's getting plenty of attention this week as AT&T's brand has been tarnished through its relationship with Apple's (NASDAQ:AAPL) iPhone. Are the cable companies going to take this sitting down?

Here's another quote from BusinessWeek's Whitacre profile on why he doesn't do email.

Whitacre doesn't have a computer in his office. He prefers to write notes by hand or have letters typed by his secretary. ''I'm not computer illiterate, but I'm close. If two people are sitting 20 feet from each other and sending each other E-mails, I think that's ridiculous.''

For his genius Whitacre was paid $158M upon retirement. Not bad. Maybe he knows even more about cars.

Disclosure: Long aapl, goog