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

AT&T (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 (CMCSA) or Time Warner (TWC) or Verizon (VZ) - maybe even AT&T. Cue Ed Whitacre, the guy doing General Motors (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! (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 (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 (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

Comments

[SirRealist]

So off point & old news. Per many public statements, AT&T had nothing to do with the Skype iPhone app decision on the wireless network. You are comparing that to the wired network, where all providers carry profit-generating packets for all types of companies, Notably the 2 that you are long on.

Whitacre has been gone from AT&T for a very long time. If you want a relevant quote, use the current leadership.

This article is irrelevant.

2009 Sep 22 10:15 AM

[BobbyW]

SirRealist -

Actually, it's pretty relevant. History is repeating:

AT&T and Whitacre wanted to block Skype and Vonage on the wired network. Today, AT&T is voicing opposition to the new comments from the FCC on net neutrality.

AT&T has more or less lost the battle Whitacre waged on wired services. Now they'll lobby Republicans to help them restrict access to wireless services.

Hardly irrelevant.

2009 Sep 22 10:37 AM

[RLLH]

I do have to agree with his point though. Why would anyone carry a competitors product for free, or be expected to? It would be like Apple allowing Google Voice on the iphone.

2009 Sep 22 12:11 PM

[c smith]

Yes, the cable companies ARE going to take this sitting down, and Ed Whitacre's comments are perfectly consistent. CMCSA and TWX (and the other cable cos.) have already PAID to build at least a portion of the existing network, and therefore are perfectly willing to reciprocate with T and VZ for traffic. Traffic sharing arrangements have been part of the telecom network from the beginning, and will continue to be. What Whitacre (and any other sensible business person) cannot stomach is content providers like GOOG and Skype, who HAVE NOT PAID A DIME towards construction of the network, free riding on their investment.

2009 Sep 22 05:02 PM

[KateKate]

People, get real. So they built the network, so what? Now they're going to decide who pays to send data and who doesn't? Wrong.

This is the big telecoms's last grasp at control before being reduced to a dumb pipe. Why is it that they only care about voice and multimedia traffic? Because they still dabble in those products. But nobody wants lame media products from the likes of Verizon. They want YouTube. Soon nobody will want voice from big telecom either, they'll want Google Voice or whatever comes next.

Where was Ed Whitacre years ago when he made these statements? Why wasn't he pushing AT&T to deliver products like Google Voice? Because Ed ran to the government for protection instead of developing useful products.

Where's Ed now? Running to the government to help bail out General Motors.

Back then Whitacre was trying to preserve the voice model. Seems the phone companies were the last to find out that voice is just another form of data.

If the carriers had a clue they'd offer priority packet service for certain kinds of traffic and ask for money to handle that data. Just like the post office has arrangements with other countries for priority mail.

Instead of proposing solutions the telecoms cry to the government, stifle innovation, and enjoy their oligopoly.

Their days of dominance are coming to a close.

2009 Sep 22 06:42 PM

[c smith]

online.wsj.com/article...


On Sep 22 06:42 PM KateKate wrote:

> People, get real. So they built the network, so what? Now they're
> going to decide who pays to send data and who doesn't? Wrong.
>
>
> This is the big telecoms's last grasp at control before being reduced
> to a dumb pipe. Why is it that they only care about voice and multimedia
> traffic? Because they still dabble in those products. But nobody
> wants lame media products from the likes of Verizon. They want YouTube.
> Soon nobody will want voice from big telecom either, they'll want
> Google Voice or whatever comes next.
>
> Where was Ed Whitacre years ago when he made these statements? Why
> wasn't he pushing AT&T to deliver products like Google Voice?
> Because Ed ran to the government for protection instead of developing
> useful products.
>
> Where's Ed now? Running to the government to help bail out General
> Motors.
>
> Back then Whitacre was trying to preserve the voice model. Seems
> the phone companies were the last to find out that voice is just
> another form of data.
>
> If the carriers had a clue they'd offer priority packet service for
> certain kinds of traffic and ask for money to handle that data.
> Just like the post office has arrangements with other countries for
> priority mail.
>
> Instead of proposing solutions the telecoms cry to the government,
> stifle innovation, and enjoy their oligopoly.
>
> Their days of dominance are coming to a close.

2009 Sep 23 09:56 AM

[User 391904]

I dunno. I don't think it's right for companies to spend billions and billions on their data networks so "competing" companies can use it for pennies on the dollar. Then you have a small group of people and institutions that hog the majority of the bandwidth while the average consumer gets the shaft. All basically paying the same price.

Whitacre deserves his retirement. He rebuilt AT&T. It took years to do this. As you can see, the U.S. Government respects this by hiring and asking him to guide the new GM. It's why you don't see the government going after him. He's did it the old fashion way, he earned it.

2009 Sep 25 08:43 AM