When cable isn't enough

Putting on its competitive local exchange carrier mask, AT&T announced plans for a wholesale digital subscriber line offering that will round out its high-speed access portfolio.

"The main reason [for this] is to complement our other services," said Manish Malhotra, offer manager for broadband IP services. "AT&T does not have a nationwide cable market, and even in the markets that we have cable, we can only reach 25% of the businesses," he said.

Initially, the company will offer wholesale services to Internet service providers in nine markets-Boston, Los Angeles, New York, Philadelphia, Sacramento, San Diego, San Francisco, Seattle and Washington.

The company has a two-pronged approach for accessing territory already staked out by CLECs. The first option is to build out its own network, setting up shop in the local central office through its CLEC subsidiary, AT&T Local Services. The second is to buy and resell DSL services from other facilities-based carriers.

"We don't see ourselves as competing with [CLECs]; we see ourselves as buying from them," Malhotrasaid.

Four of the nine markets will be reached through the IBM Global Network, which AT&T moved to acquire last year (Telephony Dec. 14, 1998, page 6). Within the next year, the company plans to have 1200 points of presence in 40 markets.

Like most carriers, AT&T expects heavy interest in DSL to come from small and medium-sized businesses looking for high-speed Internet access, as well as large business with telecommuters and branch offices, said Malhotra. Although AT&T does not have plans to target residential users with these services, the ISPs buying the services may go after them.

"They may be hedging their bets," said Virginia Brooks, vice president of networking and telecommunications with The Aberdeen Group. "I don't think we are going to see AT&T pass up any opportunity to get into the converged [voice and data] market," she said.