SBC’s Whitacre promises $6 billion build, if rules are right

CHICAGO--Given an appropriate regulatory environment, SBC Communications will embark on a $6 billion fiber buildout that will let it deliver integrated voice, video and data to customers in its territory, CEO and Chairman Ed Whitacre announced today during his keynote address at Supercomm 2004.

SBC’s new fiber network would deliver 15 Mbps to 25 Mbps and is expected to provide video services using the Microsoft IP TV platform currently being tested, Whitacre said. In addition, SBC would offer a voice over IP and “super-fast” DSL over the new network, he said.

“In short, our network will be faster and more capable than any other,” Whitacre said.

Although SBC grew largely because of mergers with other phone companies, but Whitacre said the facilities-based foray into video is an indication that “we are not just trying to become a bigger version of ourselves … we are not just trying to become a bigger phone company.” Whitacre said SBC is confident that its video package will be well-received, because the carrier has been successful bundling Echostar’s satellite service with its voice, data and wireless offerings.

“Clearly, there’s a lot of pent-up demand for competition with the cable companies,” he said.

The prerequisite for SBC making its network investment is that the regulatory environment has to allow the carrier to earn an appropriate return. Last week, Whitacre said he wants the FCC to clarify that RBOCs will not have to let competitors lease their network at regulated rates. Today, Whitacre expressed optimism that  such regulations will be written after the Bush administration decided not to appeal a court ruling that eliminated “badly flawed” FCC rules regarding regulated leasing of unbundled network elements.

SBC’s network buildout would include fiber to the premises (FTTP) for areas of new construction, but the cost would be too great to attempt such an undertaking to all SBC customers. Instead, Whitacre said SBC will utilize a fiber-to-the-node (FTTN) strategy in existing neighborhoods. According to an SBC press release, FTTN calls for fiber to be deployed to a node that would serve 300 to 500 residences, with the existing network delivering download speeds of 15 Mbps to 25 Mbps and upload speeds of 1 Mbps to 3 Mbps.