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Get your satire meters cranked up: AT&T has come up with an advertising effort designed to shame you into paying your bills online (thanks, Consumerist). The telecommunications company that got into hot water with warrantless wiretapping is pushing its online bill payments with a series of characters who are members of the Online Liberation Movement. Cute theme, with one super ironic character — Ms. Suspicious, who is worried about online privacy. Well, AT&T says she shouldn’t be because, with 128-bit encryption, her financial data is safe from prying eyes. Now if only her conversations were so secure.

AT&T today announced more details of its expected effort to enter the teeming content delivery network market, naming three software partners and saying it would spend nearly $70 million on network infrastructure before the end of this year. For smaller CDN companies, the move is an ominous one. Continue reading at NewTeeVee.

About two months ago, I wrote about my decision to get rid of my land line and rely strictly on my cell phone — with its unlimited plan — for my voice needs. It was a mistake. My social network (namely in the form of my mother-in-law) couldn’t take it, so my husband and I capitulated and returned to AT&T for a basic land line with no frills for about $20 a month.

I should note that when we lost the land line, neither my husband nor I really noticed. There was one awkward moment when I had to send a fax and realized I couldn’t unless I went down the street to the grocery store, but other than that, I never missed the cord. My mother-in-law, on the other hand, a wonderful woman who still carries around a copy of the Yellow Pages in her car for when she needs to look up a number or an address, was very uncomfortable with the idea.

Since she regularly comes over to watch our daughter, and never charges her cell-phone battery, I saw her logic. And it got me to thinking about babysitters in general, and the possibility that we may one day hire one who didn’t have a cell phone (hey I suppose it could happen). More likely would be a case of bad reception, but if that coincided with any sort of emergency, they’d essentially be left incommunicado. It just seemed safer and easier to keep a cheap, dedicated land line.

To me it’s an important reminder that technology is essentially about linking us to one another (and being able to carry 10,000 songs in a gadget smaller than a cigarette case). To really make it work, your friends and family have to participate as well. That’s obvious on a social networking site, but less so when it comes to hardware and networking. For when I tried to cut the cord, my family wouldn’t let me

photo from wikiHow

I was at a very crowded High Tech Happy Hour event last night in Austin, and I speculated that attendance was so robust because people are once again out looking for jobs. I was quickly told no, people were out looking for deals and few folks were worried about their job situation.

Maybe they should be. The economy isn’t doing well, and several technology firms are looking at ways to cut costs, either as a response to the economy or merely to keep a struggling ship afloat. Yesterday, AMD cut 420 workers worldwide, including 215 in Austin, as a step towards its stated goal of reducing its workforce by 10 percent (680 people).

Also affecting Austin were layoffs at computer manufacturer Dell Inc. I don’t have details about the move, but was told by two Dell employees that cuts were made on Thursday, likely as part of the PC maker’s announced c10 percent workforce cuts. Today, telecommunications company AT&T said it would lay off 1.5 percent of its 300,000-member workforce. Spokesman Brad Mays says that number will be less than 5,000 jobs spread across the company. However, no customer-facing positions would be affected.

As I promised a few weeks ago, I’ve disconnected my land line. Actually I had my husband do it, because after several random snafus that involved my office line going dead and then randomly dialing 9-1-1 at odd times during the day and night, I can no longer deal with talking to AT&T.

It only took 15 minutes, but involved speaking with four different people because he was transferred to the wrong department twice. Incidentally, as a former employee of the phone company, my husband shed some light on why you have to give your phone number to the IVR when you call and again to each successive person. Apparently the first time it helps route the call, but the number doesn’t actually pop up on an agent’s screen when they answer the phone. And your information typically doesn’t go with you when you’re transferred from one agent to another because the various departments’ back ends aren’t connected.

The timing of my voluntary disconnection, however, is perfect. Aside from not paying AT&T $60 a month, the best part of killing my land line will be the end of all the campaign calls. I had five of them on the Tuesday that Texans went to the polls. It drove me crazy that despite being on the Do-Not-Call List, I still had to hear from political campaigners multiple times a day in the weeks leading up to the primary. Now I’m off the hook.

Since everybody likes lists, here are the 10 things you need to know about the 4G technology known as Long-Term Evolution, or LTE, standard.

1. It began in 2004 as the next-generation networking technology pushed by the 3GPP
2. It’s fast — with peak data rates of 1o0 Mbps down and 50 Mbps up
3. It makes CDMA and GSM debates moot
4. It offers both FDD and TDD duplexing, which means the upload and download speeds don’t have to be synchronous, so operators can better optimize their networks to use more upload channels
5. It won’t be deployed until 2010 or so
6. Verizon is testing it with Motorola equipment, and AT&T has backed it too
7. LTE will have lower latency, which makes real-time interaction on high band-width applications using mobiles possible
8. It competes against WiMax, and some want to subsume WiMax into it
9. China Mobile is testing it, which means China may skip 3G networks altogether
10. While it will make mobile data faster, it may not bolster sales of networking gear

Sprint’s loss has certainly been AT&T’s gain. The San Antonio, Texas-based carrier reported its fourth-quarter results this morning, saying its profits more than doubled to $3.14 billion thanks to strong wireless growth that helped push sales to $30.3 billion.

AT&T (T) saw its wireless revenue hit $11.4 billion in the latest three-month period, driven primarily by data use and new customer adds — the number of wireless subscribers totaled 70.1 million by the end of the qaurter. Much of the credit for the $2 billion in wireless data revenue goes to the iPhone, as 40 percent of those buying iPhones are new AT&T customers. Smart phone subscribers, including the iPhone buyers, also tend to have double the ARPU of AT&T’s average wireless user.

In total AT&T added 2.7 million new wireless subscribers during the fourth quarter. But for those tempted to credit all of AT&T’s success in wireless data to the iPhone, consider that 9 million smart phones and devices are using AT&T’s 3G network, rather than the 2.5G EDGE network on which the 2.3 million AT&T iPhones run.

In other high-end services, AT&T saw its U-Verse subscribers almost double over the third quarter, to 231,000 from 126,000. Speaking on the conference call, AT&T CFO Rick Linder said the churn on U-Verse is comparable to churn rates for the company overall, but said he expects that number to level out at about 2 percent in the coming year. The U-Verse platform includes high-speed data and video services.

Broadband growth slowed in the fourth quarter, with 396,000 new customer adds compared with 499,000 for the third quarter. For the full-year 2007 period, 14.2 million customers received service, up 16.4 percent from from a year ago. However, revenue from those services were up only 13.7 percent year-over-year, at $1.4 billion. The economic weakness that’s expected in the coming year will likely continue to cause slower broadband adoption, Linder said in the conference call.

It may also cause a few hangups in the company’s wireline voice services as customers stop paying their bills. Although Linder said he expected wireless to be a defensive service through any economic turmoil, I do think revenue associated with media packages and downloads might dip. While businesses may pay for smart phones, if it comes down to paying AT&T or paying rent, I’m sure some of the consumer users might start to question their data plans.

Cynthia Brumfield is a long-time communications, broadband and media analyst at Emerging Media Dynamics, and a blogger at IP Democracy.

AT&T CEO Randall Stephenson triggered a mini-free fall in the shares of phone companies last week when he told investors at a Citibank conference that non-pay disconnects are “happening all across consumer products lines,” with the possible exception of wireless voice accounts. In other words, a larger-than-expected chunk of customers aren’t paying their bills. And AT&T is pulling the plug on them.

This bit of concrete evidence that a recession is indeed underway spooked an already jittery stock market, dragging down non-telecommunications shares in the process. Hardest hit, though, were the leading telecom and cable companies, which managed to recovered slightly but continue to labor under a cloud of investor suspicion.

Comcast CFO Michael J. Angelakis echoed Stephenson’s claim. Speaking at the same Citibank conference, Angelakis said that during the second half of 2007 “we clearly saw bad debts increase, and we clearly saw a pickup in churn.” Translation: A growing number of cable customers aren’t paying their bills, either.

Against this backdrop, earnings season is about to get underway, meaning we’ll soon get a look at some hard fourth-quarter 2007 numbers from the top telecom and cable companies. If Stephenson and Angelakis are any indication, we’re in for disappointing results from the country’s top broadband, voice and video providers.

But a recession-driven slowdown for either cable or phone companies would be a new thing. Historically, cable has prided itself on being recession-proof. During the recession of the early 1990s and the downturn in 2001 and 2002, cable companies didn’t lose customers. In fact, in 2001 and 2002, cable was in the midst of digital TV and high-speed Internet rollouts, which cranked up growth (although the telecom and dot.com meltdowns, not to mention the accounting scandal that brought down WorldCom, made cable seem like it, too, was in the doldrums).

Phone companies have also held up well during economic downturns. Even though the big incumbent companies that now make up AT&T, Verizon and Qwest started losing access lines in 2000, those losses were mostly restricted to the commercial sector and were due to the rapid late-90s rise of competitive local exchange carriers. Consumer spending cutbacks typical of a recession didn’t come into play.

Things could be different this time around, because unlike in the past, cable and phone companies now sell a lot of services that consumers feel are discretionary. During past downturns, customers clung to their voice and pay-TV services because the telephone was considered essential and subscription TV was a bargain service, relative to other entertainment options.

However, that held true before the days of triple-play or quadruple-play bundles, before multiple digital service tiers and HD packages came along and before broadband either existed or was widely adopted. The thing to watch out for now is the possibility that the proverbial bundles of voice, video and data services might unravel.

For example, homes that buy both mobile and landline voice services could feel free to simply cut off the wired voice connection. During his Citibank talk, Stephenson cited this cost-savings measure as one cause of what will in all likelihood be stepped-up line losses for the company in the fourth quarter. Not that wireless substitution hasn’t been going on for a while, but tight household budgets could no doubt accelerate this trend.

Contrary to what I would normally expect, broadband service might turn out be a dispensable expense during a recession. “It’s non-pay disconnect that is driving the disconnect on access lines and on broadband as well,” Stephenson said during his Citigroup talk, reiterating several times that residential broadband growth has suffered some kind of a setback.

Cable companies, which posted very disappointing growth rates across the service board for the third quarter of ‘07 — before the economic slowdown truly took hold — have already started drawing up lower-cost service options and are about to market “double-play” packages of voice and high-speed services.

So what will we hear from cable operators and phone companies in the upcoming quarterly reporting season? Comcast officially confirmed back in December that it won’t make its fiscal 2007 guidance, citing weaker-than-expected subscriber gains. Based on the sounds Stephenson made, AT&T is managing expectations in advance of a weak fourth-quarter report as well.

Most of the other cable and phone companies will probably not have much better news, with the possible exception of Verizon, whose CFO, Denny Strigl, told the same Citigroup investors that the weak economy had “minimal” impact on his company. Moreover, in contrast to its peers, Verizon issued relatively robust third-quarter numbers last fall.

But compared to a lot of other industries, and despite any short-term hit that cable and phone companies may take, the communications network business — be it cable, telco or wireless — is a relatively sure bet in the long term. Both AT&T’s Stephenson and Comcast’s Angelakis, while acknowledging the challenges of increased competition and a weak economy, stressed this fact. “We are in the middle of a growth industry,” Stephenson said.

Policy-makers want to split the Universal Service Fund, which brings in around $7 billion or so every year and is used to subsidize the old-fashioned phone systems in rural areas, into three distinct parts: one to subsidize wireless services, another for the old-fashioned phone services, and a slice to subsidize the broadband buildout in rural areas.

The Joint Board recommended capping the total amount of money the three funds could distribute to companies at $4.5 billion a year, about as much as it expects to use for subsidies this year. The rest of the $7 billion would be spent on programs that ensure high-speed Internet connections for schools and libraries.

It is not such a bad idea, and other countries, India for instance, have put similar policies in place, but I am with FCC Commissioner Michael Copps on this one. We need more money set aside for broadband, or in fact scrap the USF as we know it and set up a more broadband-focused rural fund.

“That’s like fighting a bear with a fly swatter,” Copps said in a statement. “Bringing broadband to the far corners of the nation is the central infrastructure challenge our country confronts right now.”

After a long wait, the Indian government has decided that it will auction 3G spectrum, and will allow foreign players to participate in the bidding. The spectrum is going to be released in the 2100 MHz band, which would make it compatible with rest of the world, barring a few countries such as the U.S.

Here are some specifics:

• Winners will be required to pay 0.5 percent of total adjusted gross revenue to the state on an annual basis for the first three years of operation, rising to 1 percent thereafter.
• Winners will not be allowed to trade or resell the spectrum and they will not be allowed to merge in the first five years after the grant.
• About 30MHz of spectrum will be sold in total.
• India will also auction licenses for broadband wireless (WiMAX) services, with the reserve price fixed at 25 percent of the amount for 3G spectrum.

The spectrum is going to be plentiful; our sources say that it will be enough to accommodate six carriers. The carriers we expect will make it to the finish line include the current leader, Bharti Airtel; Idea Telecom; Reliance and Vodafone (VOD). The two international cell phone companies likely to win the spectrum bid include AT&T (T) and Sistema.

If the rollout of voice services over past decade is any indication, this is a big opportunity for equipment makers. Ericsson (ERICY) and Nokia (NOK) have done well in India, and there is little reason why the situation would change, though one suspects the Chinese equipment vendors are going to act as deflationary counterweights to their Western counterparts.

The 3G services in India will eventually have to compete with WiMAX, which is being seen as the wireless broadband technology of choice by lawmakers. More importantly, this auction is a way for the Indian government to keep the telecom sector specifically and the economy overall growing at a healthy clip. India’s economy was catalyzed by telecom and call center businesses, then spread to other sectors.

Vonage (VG) reported its third-quarter earnings today — ho-hum; much of it was bad news we already knew about. They have settled their legal problems with AT&T (T) as well, and so now the company can focus on the future. Vonage founder Jeffrey Citron told Reuters that his focus is going to be addressing customer complaints and improving customer service. Excellent idea, Jeffrey and we support you in this rebuilding of your company.

Because if you don’t, then now your customers can take their Vonage number and go elsewhere. That’s right, the FCC has approved the long rumored “number portability” for VoIP services. I, for one, am about to take one of my VoIP accounts (non-Vonage) and switch it to wireless. A lot of consumers complained about the lack of number portablity when Sun Rocket shut down.

Recently, a brouhaha has broken out over Comcast (CMCSA), the second-largest U.S. broadband provider, and its policies regarding the management of peer-to-peer traffic. The company contests that it doesn’t block traffic to P2P services, web sites and other applications, but rather that it tries to “manage” traffic in times of congestion on various parts of its network where clogging is most acute. Semantics?

From what I understand, the company delays the P2P packets in order to decongest the network, but P2P applications by nature are set to autodial and try again. Is this an infinite delay or just a temporary management issue? Regardless of what you might think about Comcast and its policies, the issue is not limited to the Philadelphia-based broadband and TV services company.

Comcast, according to published reports, has been using network management tools from a Canadian company called Sandvine, which is publicly traded on both the London Stock Exchange and the Toronto Stock Exchange. And if you dig through the documentation on Sandvine’s web site, it becomes pretty clear that there are other carriers out there indulging in traffic shaping and management.

Carphone Warehouse, a UK-based service provider well-known for its broken promises over free broadband, is listed as a customer of Sandvine. In a recent investor presentation, Sandvine said it had 51 cable and 38 DSL providers as customers as of the end of the third quarter, including, it bragged, 13 of the Top 100 service providers. Nearly 89 percent of its revenue came from North America.

If you correlate these facts, you know there are other big North American companies using their gear as well. In another publicly available document, Sandvine claims that “eight of the Top 20 broadband service providers in the U.S. are Sandvine customers.” Now while Sandvine has a whole slew of products, the company’s real value proposition is helping carriers make money and better manage their networks.

Growth in network traffic continues to stress network capacity due largely to the mass market popularity of bandwidth-hungry applications, such as file-sharing and streaming video from popular sites like YouTube…By accurately identifying various “conditions” that are occurring on its network, a broadband service provider can then apply “actions” (i.e. policies) based on those conditions to pursue the broadband management objectives sought by that service provider.

Sandvine doesn’t identify its customers; it refers to them as Company A, B, C or whatever, but never by name. I guess that’s because this is potentially sensitive information and a potential PR disaster. I have left a message for their PR spokesperson, but so far no response. I am also checking with some of the major broadband providers. An AT&T (T) spokesperson emailed with this:

AT&T does not treat P2P traffic any differently than other Internet traffic. And, we are not a customer of Sandvine. Beyond that, we do not comment on vendor relationships outside of product announcements.

We will update the story as we hear from others, but one thing is becoming quite clear — this won’t be the last time you’ll hear the phrase “traffic shaping.”

Update: A spokesperson for Cox Communications’ high-speed Internet division said, via email:

As with any ISP, Cox uses a variety of tools to make sure all our customers have the best possible customer experience with our high-speed Internet service. However, to protect the integrity and security of our network, we don’t disclose specific methods or vendors used.