AT&T to shed another legacy Ethernet service, cites low usage, next-gen alternative service growth

Ethernet network
AT&T is going to shut down one of its legacy Ethernet services as more of its customers transition to higher speed fiber-based services it offers over its growing network. (University of Michigan Library)

AT&T has asked the FCC for permission to shut down an additional Ethernet service due to what the telco says is low demand and growing adoption of next-gen alternative fiber-based services.

Like its ILEC brethren Verizon, AT&T has been continually shedding various older services as more of its customers transition to its high-speed AT&T Dedicated Ethernet services and AT&T Switched Ethernet services.

This request comes as AT&T has been enhancing the reach of its fiber network to more business buildings to deliver higher speed Ethernet services. As of the end of the fourth quarter, AT&T had equipped over 400,000 buildings with fiber, enabling it cover more than 1.8 million U.S. business customer locations. The telco said it is “adding thousands more buildings each month.”

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The service provider is looking to shutter its Access Channel Services, On-Net Ethernet Access Channel – Dedicated. This service is a type of Ethernet access channel enabling the transmission of voice and data using digital signals between an AT&T POP and a customer site.

After March 31, AT&T said in a FCC filing that it would no longer accept orders from existing customers for adds, moves, changes or new term plans for these services, adding that existing term plans may not be renewed or extended.

The service provider said it “will continue to provide existing services to existing customers until their existing term agreements expire or until the service is discontinued, which is currently planned for April 1, 2023, whichever is later.” After existing term agreements expire, AT&T will provide these services on a month-to-month basis until the services are discontinued, which is currently planned for April 1, 2023.

“The public convenience and necessity will not be impaired by the discontinuance of this service because there is low demand for these services as there are alternative highspeed transport services available in the market, such as AT&T Dedicated Ethernet services and AT&T Switched Ethernet services,” AT&T said in the filing.

AT&T has continued to see growth in high-speed Ethernet services.

During the fourth quarter, the service provider reported that strategic business services revenues from Ethernet and software-based services grew by nearly 6%, or $176 million year over year.

These services represent 42% of total business wireline revenues and more than 70% of wireline data revenues and are an annualized revenue stream of more than $12 billion. This growth helped offset a decline of more than $400 million in legacy services in the quarter.