The battle over next-generation home broadband service is well underway. While AT&T’s bet on existing copper lines is expected to cost 1/4th as much, the prevailing sentiment seems to be that Verizon’s technologically superior fiber-to-the-door will ultimately leave AT&T in the dust. The reality, however, is that AT&T may actually be the one betting on the more advanced technology.
In addition to its U-verse wired network, AT&T is also in the process of building out its 4G wireless network. Like Verizon’s, Sprint’s, and T-mobile’s, AT&T’s 4G network will be capable of delivering up to a super-fast 300Mbit of wireless bandwidth. With the FCC approving unlicensed use of white spaces, at least one, if not several, other major wireless super-broadband networks will likely make their way onto the scene as well. So whether consumers use AT&T, Verizon, Sprint, or someone new, we are quickly approaching a future where everyone will have a wireless connection faster than any wired connection available today.
No doubt Verizon’s wired Fios broadband will keep pace with the 4G wireless speeds. But while Verizon is spending $850 per subscriber just to run a strand of fiber to each home, AT&T will likely be spending most of that money to build 4G cell towers.
More importantly, Verizon won’t be finishing its fiber network until 2010. According to most road maps, 4G will be in wide roll out by 2012. The question is, if each of us has a 300Mbit personal wireless broadband connection wherever we go, will anyone bother to pay for Verizon’s wired broadband as well? Just as consumers have rapidly abandoned landline phone service, landline broadband may quickly become a superfluous expenditure.
Obviously, no transition is perfectly efficient, and certainly consumers will seek faster broadband connections between now and 2012. As a temporary stop gap, though, Verizon’s $23 billion wired strategy is an expensive bet compared to AT&T’s $6.5 billion. In an economy mired by recession and tight corporate credit markets, it makes you wonder who will really be left behind with the inferior technology.
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