AT&T increases broadband investment in Kentucky

AT&T (NYSE: T) on Wednesday said it would dedicate between $600 to $800 million in capital over the next two years to simultaneously support current broadband network capabilities and expand access to next-gen services like U-verse in its Kentucky market.

The telco said this planned investment will have an impact on both its wireline and emerging LTE-based wireless broadband services in this market.

Its plan to expand broadband services in Kentucky is being enhanced by its ambitious three-year, $14 billion Project Velocity IP (Project VIP) initiative, which is designed to expand and enhance AT&T's wireless and IP-based wireline networks throughout the U.S. market.

On the wireline IP side, AT&T plans to expand its growing set of U-verse services, including TV, broadband Internet and VoIP. As laid out in its Project VIP plans, the telco will upgrade its network infrastructure to support speeds from up to 75 Mbps to 100 Mbps.

In addition, the company will expand its on-net local fiber network footprint into more buildings in Kentucky to deliver a host of IP-based services such as VPN and Ethernet.

This latest investment in Kentucky is significant for AT&T as it follows the passing of the Kentucky Senate's SB 88 bill, which among other things "authorizes telephone utility companies to no longer provide state-wide land-line access." However, traditional wireline operators like AT&T still will be required to provide basic voice service in certain circumstances.

Kentucky is representative of a larger regulatory movement AT&T is trying to drive across its entire footprint. In filings it submitted to the FCC last year, the telco asked the FCC to set a date to phase out circuit-switched POTS voice service.

Arguing that the "PSTN and POTS are now relics of an earlier era," the company said its requirement to maintain the PSTN network--which is rapidly hemorrhaging customers and revenue--is now diverting much needed funds from investments in broadband networks.

The FCC is paying attention to AT&T's drive. Last December, the regulator created an agency-wide Technology Transitions Policy Task Force to address the issue of service providers moving away from TDM to all-IP networks.

For more:
- see the release

Earnings roundup: Wireline telecom earnings in the fourth quarter of 2012

Special report: It's a wrap: Counting down the major trends in 2012

Related articles:
AT&T sees consumer services grow to $5.5 billion in Q4, driven by IP data
AT&T, Verizon to see mixed Q4 wireline results, says Morgan Stanley
AT&T Q3: Consumer, business IP drive up wireline revenues 2%
Verizon's Q3 wireline earnings get a boost from consumer FiOS services

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