AT&T plans to sell its triple-play U-verse services through more than 600 Circuit City and  Wal-Mart retail stores beginning this month. There are a few things about this plan that just don’t make sense. First, the choice of stores, namely the floundering Circuit City, is perplexing. Why not a more successful electronics retailer such as Best Buy, which already is stocking the iPhone and working to sell other services contracts?

The other odd thing about this announcement is the idea that consumers will go to a retail location to learn about their broadband, voice and video services rather than through a traditional television, mailing or online ad campaign. Essentially this is another, potentially more interactive form of advertising, which could be a good thing given the current cable attack ads around HD channel delivery and what qualifies as a fiber network. However, the strategy looks expensive, and it seems to indicate that AT&T is having a hard time signing up the 1 million U-verse subscribers it says it will have by the end of the year.

Ready for a little Friday humor? Well there’s this British carrier called BT that’s spending £10 billion ($17 billion) to build out an all-IP network that would handle the massive influx of converged data, voice and video traffic coming over the next few years on one network. They’ve been trashed and mocked, as so many visionaries often are, but they’ve kept on building, with the goal of finishing the network by 2011. Only they apparently didn’t build it to talk to the next-generation protocols, which is like spending £10 billion for a machine that translates spoken Latin.

BT told a high-speed broadband provider in the UK that it doesn’t support IPv6, which is a protocol backed by the Internet Engineering Task Force. There are all sorts of dire warnings explaining how as more devices connect to the Internet (like your digital picture frame or thermostat), we’re going to run out of IP addresses to give them. That means we need to upgrade to IPv6 before we’re forced to share IP addresses or take other measures. This requires a big effort from equipment vendors and site owners who have to build and host IPv6 sites. With the doomsday predictions saying IPv6 addresses will run out some time in 2012, it would appear that the BT 21 Century Network will be finished just in time to become obsolete.

AT&T’s move to reorganize itself into four business units is likely a precursor to layoffs, according to sources within the company who asked not to be named. The reorg comes as AT&T tries to adjust to the realities of the credit crunch, a diminishing access line and DSL business, and increased headcount caused by two large mergers in the last three years.

News of the reorg, which will see the creation of consumer, business, infrastructure and diversified products business units, trickled out yesterday. John Stankey, the former president of AT&T’s telecom operations, will head the infrastructure division; Ray Wilkins will remain CEO of the diversified businesses unit; and Ronald Spears will head the business unit. Ralph de la Vega, currently the CEO of AT&T’s wireless business, will head up the consumer business, which will contain wireless, broadband and video services. AT&T subsequently confirmed the moves, saying it wants to make consumer products work better across its portfolio of devices.

The reorganization will better align the company as it competes against the cable carriers. Just yesterday we noted how the phone companies have a hard time attracting customers to their triple-play bundles because of speed issues on DSL lines. Once those broadband connections are upgraded, the ability to combine data, voice, video and wireless for a quadruple play could put the carriers ahead of cable. But in order for that to work, the old division between wireline services, such as U-verse, and wireless needed to come down.

However, as the company streamlines, it’s also likely to find redundancies. Managers inside AT&T expect that they’ll soon get targets for headcount reductions ranging anywhere from 5 percent all the way to 20 percent in some areas of the company (I bet DSL and wireline will be hardest hit). When asked about layoffs via email, AT&T spokesman Marc Bien said, “Regarding headcount, at this time, we have no specific plans for workforce changes related to this new organizational structure.”

Employees believe it’s only a matter of time. News of rising costs related to AT&T struggling to sell its short-term debt, and the recognition that costs still need to be trimmed in the wake of its acquisition by SBC Communications (which then took the AT&T brand) in 2005 and BellSouth in 2006, have many concerned. Earlier this year the carrier announced a workforce reduction of 1.5 percent (about 4,650 workers) in its local phone business, but it still employed 307,550 people as of June 30. I expect that number will drop again soon.

Cable providers rate poorly on both customer service and pricing, but thanks to their speedy broadband service, they have so far managed to score more customers than the phone companies, according to a survey out today from research firm CFI Group. The survey, which quizzed 1,318 households online at the end of June, measured consumer satisfaction with telecommunications providers.

The research showed that while cable providers were getting more customers for the time being, telecommunications firms have a chance to win subscribers back as they roll out faster broadband services, IPTV and even wireless bundles. The research also underlined the demise of landlines (1.6 million gone for AT&T and Verizon in the last year), and customer dissatisfaction with slower DSL offerings from telecommunications carriers (nearly 70 percent of net broadband additions went to cable in the second quarter of 2008).

The phone guys even lose out on bundled services. Of the 60 percent of users surveyed who had a bundled service plan (usually a combination of voice, video and data), only 31 percent purchased their bundles from a telecommunications firm. The remaining 69 percent bought their bundles from a cable provider, but that doesn’t mean they like it; twice as many consumers would actually prefer to bundle communications services with a phone company as with a cable company.

This could be a case of the grass being greener, but I do think IP services built on faster fiber-to-the-home networks like Verizon’s FiOS service, could beat cable. I’m less convinced that AT&T’s fiber-to-the-node strategy will be as compelling, since the speeds are more comparable to today’s cable speeds.

source: CFI Group

Last week, when the FCC published an order aimed at halting the collection of and reporting on the quality of telephone service on a nationwide basis, we were pretty disappointed, as it came off like the agency was just throwing in the towel on real regulation and reform. Since one of the reasons behind the FCC decision is that the data is available at state utility commissions, I surfed and called around to the commissions at the five most populous states to see how difficult it is to compile and compare quality of service data.

My conclusion? It’s no picnic. Beginning with my home state of Texas, it took a phone call to get a basic report faxed over (they can’t email it). The report offers the total complaints registered against telecommunications companies vs. those lodged against electrical companies and lists the top offenders in each category. More details require a Freedom of Information Act request and a wait of up to 10 business days. California required a phone call and some back and forth to get some information, which includes data on the number of repairs and the amount of time a customer waits for refunds. A week later, I’m still waiting to hear back from the commission in New York.

Illinois publishes its quarterly quality reports on its web site, and tracks information ranging from length of time services were out and whether credits were issued for no service to the amount of time it took to get an operator on the line. Florida also published the reports on its web site, but the most recent one for AT&T (the company I was trying to track) is from 2007. Florida tracks a lot of stuff (their reports are about 24 pages compared to one in other states) from the timeliness of repairs and to how long it takes to get a number listed in directory assistance.

So compiling and comparing these reports to get a measure of how network quality and customer service complaints are settled is not all that easy and may not even be doable, since the information might be old and may not match across all states. At the least, it would at least take multiple FOIA requests and weeks rather than days. My research covered five states where about 36 percent of the population lives, but an apples-to-apples comparison on a nationwide basis seems to be impossible.

Another FCC objection to collecting this data is that it only covers access lines, the wireline telephone service rapidly going out of style in many households. I agree with the FCC that this data is bordering on obsolete, but instead of ditching it, the federal government should really expand the regulatory oversight of other voice services, from wireless to cable VoIP.

The difference between regulation of various broadband delivered services from video to voice should be eliminated, and it should be done at the federal level. Cable companies and telecommunications firms should not be held to different standards when it comes to reporting quality data, getting local franchise agreements for deploying television services or even requirements to serve rural areas. There will be plenty of fights over which questions to ask given how different the cable and telco networks are, but at the end of the day both types of companies are offering video, voice and data over broadband. They should play by the same rules.

AT&T has decided not to renew its contract to resell television services provided by Dish Networks. The announcement, made last night in a filing from Dish with the SEC, have sent shares of the satellite company tumbling and analysts rushing to point out that this may not be the end for Dish and AT&T. My question is, why not? Where the heck is AT&T’s belated IPTV service?

Several analysts said that AT&T’s refusal to automatically renew the five-year-old contract means the telco will try to negotiate a better deal by bringing Dish rival DirectTV to the table. Others say this kills any hope that AT&T might buy Dish. But Dish has been a stopgap measure to give AT&T a triple play of voice, data and video as the cable guys encroached on the voice business. AT&T has always wanted to offer its own video service.

Six years ago I sat through demos of AT&T’s Project Lightspeed (now Homezone) and marveled at the coming television service options ahead. By that measure I’ve spent a fifth of my life waiting for U-verse as it worked through technical hurdles and issues with the Microsoft platform. And only now is the service getting widely rolled out. Dare I hope that AT&T is actually getting close to owning its own triple play?

Right now, according to an emailed response from an AT&T spokesman, “U-verse TV is our primary offering in the areas where it is available, but AT&T | DISH is available across our footprint.” As U-verse expands, losing the AT&T contract may not be such a blow.