As US deals with digital divide, AT&T talks up broadband, 5G efforts

The pandemic has forced us into our homes and made us even more reliant on online services. Everything from Netflix to Zoom conferencing, the dynamic has shed a light on the fact that millions of Americans don't have access to adequate. Broadband and with a lockdown triggering the worst economic meltdown since the Great Depression. Some may soon find themselves struggling to pay for whatever service they can get. We have one of the biggest players in the telecom world with us as we ask the question. Now what. Jeff Mcelfresh is the CEO of AT&T Communications. The arm of the company that deals with wireless, home broadband, and subscription video services. Now Jeff, AT&T boasts [BLANK_AUDIO]. Nearly 170 million wireless scribers and more than 15 million home broadband connections, but the FCC estimates that more than 21 million people in this country don't have adequate broadband, which right now must be a complete nightmare. So what is at&t doing to help close that digital divide? We've actually seen some pretty impressive demands on utilization of broadband connectivity. Ranging from the kind of Wi Fi home usage that you would have at your at your residence with your broadband service provider up to traffic on the wireless network. And as you might imagine, we track that very closely. We look at the increases in traffic across all types of applications teleconferencing and video conferencing, being of really high utilization rates right now and I'm Pleased to report that the AT&T network is performing superbly during the pandemic. Having said that as we were entering the shelter in place orders that you sided at the opening. There was a rush for many corporations looking to mobilize their workforce to being able to work from home productively As well as consumers of all types looking to ensure that they had the best broadband connectivity to be productive either with your employer or as we have recently learned. Can be very important for their children where schools were closed and teachers needing to connect with their students to continue distance learning. And so yes is the answer broadband is a Strong, high demand product. And we're seeing consumers flocked to more and more utilization of those products and services for us to address the the main question as you think. Think about the digital divide and the capacity that's available for consumers to use. We've been investing roughly $20 billion a year for as long as I can recall in our network investment plan here in the United States, and that network investment plan includes things like Upgrading our wireless infrastructure to providing very high speed wireless data, essentially nationwide. And I'm pleased to report that through the deployment of our First Net program, and a very efficient deployment model where we installed all the spectrum that we have access to on the towers. Provide the service we've been able to achieve by bandwidth and megabit speeds on the network that are in the 3040 and 50 megabit range for customers accessing the internet wirelessly. And just to be clear, FirstNet for those who don't know that that is a network mostly built for first responders, correct? Yeah, that's correct. It's been designed exclusively and specifically for the use case of keeping first responders. Connected in an interoperable fashion, and it provides them a priority access. To resources and areas of the country in case of an event or crisis, and it really facilitates their ability To conduct their mission to support the public Well, we're in, as big of a crisis as you can imagine, around the country. What have you seen with FirstNet usage demand for FirstNet has been at an all time high as you might imagine But I, I think FirstNet in general Roger is more than just a wireless network. I mean, it's it's technically a custom built backbone. It's a custom built wireless access for those first responders where each member of the first responder community that participates with this has a unique sim In their mobile device, they gives them this priority access to the common network. But it goes far beyond just the wireless network. We had the USS mercy doc to provide support for the hospitals in dealing with this pandemic. And that ship needed fiber connectivity and that is the first responder priority mission and so our first net program marshalls the resources needed to get fiber and add it directly to the The USS mercy for example, that activates all of the equipment that's available on that chip to help serve and the demand and the hospitalizations and the doctors and the nurses to deal with the pandemic, when the Javits Center was activated in New York City to provide for not only testing but trauma care In a very rapid fashion, it was FirstNet that was called serve and provide wireless connectivity and devices such that that facility could be transformed into a state of the art. Triage and trauma care location. All right, well circling back to the issue of broadband access and something I wanna talk about is called the homework gap and if you're not aware that probably are if you're a parent, but if you're not, it's the idea that slow or unavailable internet Makes it difficult for your child to you know, keep up school homework doing doing things online. And that's been exacerbated now by the fact that we're all doing things online. Distance Learning is the norm. Now, my oldest is four years old, and I struggled to get him to pay attention to even a 30 minute zoom lesson, and I have decent internet and so for For all folks who don't have a steady connection, this is a real problem. What is att doing to kind of help shore this up?>> And so there's a there's a couple of solutions. No one solution, I think is the perfect one. I will tell you there's many activities underway. It's probably a better way to describe it. As we've expanded our coverage and our capacity of our wireless network itself, not only are we putting Spectrum up on the towers, but we're having to connect fiber to all of those towers. And as you well know, a wireless network and its ability to provide high speed broadband over wide geographic coverage areas Is a lot more than just the cell tower itself. You've got to get that fiber infrastructure deployed to all of those locations to ensure you've got enough capacity and performance for subscribers, whether they live in rural America or they live in downtown USA. So the network investment strategy and the expansions that you see a TNT, partaking in. Helps bring more capacity to the rural parts of America. But at the same time, getting the network built is only one part you've got to provide for devices and access to that network. I'm really proud of the work that at&t has done in partnering with school districts across the US and many states during this pandemic, to offer a special promotional offers for students to connect for free during the pandemic season. Despite a pandemic period, and that's, that's also not just the end user, the students, but also the teachers and the faculty as well because we're all part of this. Educators are living all over the place trying to educate their students who are now scattered. And so really it's the full population of the Educational provider system that we have to address and and so with that what we're seeing is the technology and wireless specifically where physical terrestrial broadband speeds Don't match up to the demand like you described with your son needing a little bit better bandwidth. More and more consumers are flocking to these wireless offers to provide that connectivity. Want to talk about affordability? At least 30 million people have filed for jobless claims over the month past month and a half. That's a jaw dropping number. How's at&t making sure that people continue to have access if they can't afford it? And so this is part of at&t s heritage. I believe Roger and I And our commitment to keeping Americans connected, and I think most of your viewers are familiar with a pledge that many service providers and operators in the US signed up with the FCC to provide for some facilities and assistance To address the current economic hardships that COVID is certainly placing on all of us Americans. And with that pledge, essentially we're offering no late fees we promise not to terminate any service for an ability to pay so long as the customer. The individual notifies us that they're indeed impacted by COVID. And they really don't have any means at which right now to be current on on other service plan, if you will. And so we've extended that to the end of June. For the prior topic that you asked me about, that is coincident with generally when most schools. Are complete for the school year. And that was not done out of accident that was done purposefully to ensure that our young Americans had the ability to remain connected even if the parents or the provider doesn't have necessary means to pay right now. And as the US government has acted swiftly with stimulus To provide some assistance for multiple participants in the economy. As we see that stimulus start filter into the economy we're seeing that those transactions start to shift towards the purchase and the support from all broad band activities to maintain the mission critical for the family. The mission critical services that are needed at the time like this Just as you mentioned the SEC is keep Americans connected pledge has most of the service providers I think almost all pledging to keep things going till June 30. I'm curious though what what happens after that clearly the fallout from this pandemic this crisis That's going to last a lot longer than that there are going to be folks who have lost jobs who just aren't going to have the money. Have you discussed having plans for for how we keep things going, how we keep broadband broadband access going through, next year through the, for however long the fallout really last We are well prepared and have policies in place that are available on our AT&T.com/COVID website where consumers that are struggling to pay through the FCC pledge duration There's the procedures of how they get some assistance and some support from AT&T. And beyond that, we've got a multitude of products and services that we can offer, ranging from not only payment plans to assist and maintaining service, but also other products and services, rate plans in our wireless business and different sorts of prepaid Offers that would help support certain individuals that might need that kind of assistance. And so we're just going to work through that as a society I think, knowing all good and well that the demand for broadband connectivity and the necessity of having wireless as a cornerstone to your family's productivity Is vital. I do want to have any feel maps, but for then I want to get into 5g because I'm a giant telecom geek and I love talking about 5G. Towards the end of last year, you launched that the wider range sliver 5G, the one using low band spectrum that's the part that essentially gives you, The nationwide coverage how far along are you with into play? Give us an update on that. Yeah, well we continue to progress well, even during the pandemic field a lot of questions from folks and friends you know, has this impacted your ability to deploy 5g and I'd say in most large in large part, very little Certainly we're seeing in the cases of where we need to go physically, do work on towers and get permits that maybe the permitting office at a local municipality might be closed for business due to the pandemic. But fortunately for us at AT&T About three years ago, when we began investing heavily as we were deploying the FirstNet network, when our technicians went to those cell towers to install the equipment necessary to turn that program up, we went ahead and deployed radios in the spectrum that we would need for 5g in the future such that we wouldn't have to visit the site again. And in fact, we're able to activate a sector on a cell site or a grid of cell sites in a city from a keyboard stroke via software when timing is right and we are ready to go. And we just recently announced we're up to 90 markets, where we have turned up the low band 5G signal As you suggested, and we're well on our way, we've publicly committed to turning up nationwide coverage here towards the end of the summertime. I think right now we're roughly at 120 million pops covered so far, and we'll continue progressing that until we achieve a roughly a 200 million. Covered subscriber coverage map. And at that point we we've got the majority of the major markets and the major geographies covered. And that's when I would say okay, we now have a nationwide foot print for the low band or low yellow band 5G. We've been deploying however, since late 2018 millimeter wave, the really high broadband superfast 5G connectivity we roll out 5G Plus, I like the I like to compare that to it's five G your standard freeway Of millimeter wave 5G's sort of the autobahn right? It just supercharged as much faster. There really isn't a speed limit. This was, 2020 was supposed to be the year that 5G really started to hit the mainstream. That's obviously been shaken up a bit by the pandemic. I'm curious how you think it's going to affect the adoption of 5G You know the network's being rolled out but you know we've seen a few devices launch but stores are shut down folks are out of work. Are people actually is there even an appetite for 5g right now? We're launching 15 5g devices this year. We've got the lineup of our majority of the lineup of our smartphone devices will have 5g capability in them. And I think it will become an automatic in the offering of wireless providers and access to 5G networks like milimeter wave,hotspots and gigzones like we call them will become components on some of the larger unlimited plans that we have available to subscriber base today. Well, that's a good point there because it right now 5g is sort of prices a premium service. You can really get 5g unless you're on one of the upper tiers and that's pretty industry standard at this point. Like, is there something you're doing to make 5g more accessible? It seems like This network is potentially the solution for a lot of problems we discussed earlier. Right? So how do you get five you rolled out more broadly and get more people on it, especially given the fact that there are you know, there are still folks dealing with economic hardships, but they there still is the need for reliable broadband service. And so, we've lived through several recessions and crises in the past and technology continues. And the market responds and I would say that as scale increases, with the number of choices and devices that are available, you will see those. Be affordable you know you should not assume that Ig is an exclusive capability only for the most expensive handsets and only in the most expensive rate that service providers offer. We were literally deploying the infrastructure Rodger on our initial launch sites one of which was done in a week ago in Texas. Technically speaking before the standard had been ratified. We were iterating code for that network and fixing bugs with before the standard had been ratified in a 24 hour agile approach. To fix things to test, both the device and the network, and we did that iteration as an industry faster than we've done anything else with 4G, and it's very answer 3G. So the speed at which the technology is beginning to make its way into the network is unparalleled. I mean, we are moving at breakneck speeds. As an industry to do that in comparison to how we've done it in the past. for consumers and enterprise customers in order for them to have access to it, they need a rich portfolio of devices and a rich portfolio of services and they've got to determine how best to use that technology to improve their business and their And their performance or what they wanna do with the service if you're a consumer. And those models, those capabilities are gonna evolve. We're gonna see some things that we probably don't think about today as what would be a valuable capability that is enabled by 5G that has not been enabled today. By 4G, 4G LTE or 5G evolution network in terms of getting 5G realized to its full potential. It's more than 5G as we were talking earlier, and if I can turn on, the team can turn up 5G spectrum and radiate the signal On a cell tower anywhere in the US, but if that cell tower is not connected with a very broad pipe of fiber optics, then the performance of that radio and the performance of that spectrum won't feel very 5g And so the continued investment year after year that TNT is making,deploying more and more of fibre,to our sore site,drawing out more spectrum on our stale sites,and making that spectrum accessible by the devices we're offering in the market place Is the formula to get more speed and more bandwidth to more parts of America. Coming up later this month may 27, exactly as HBO Max, the latest video service launch. I know you're focused more on the distribution than on the content side but I did want to get your thoughts on how you think this will fare given that. Is actually the last of the big video services i launch. It's also the most expensive. How do you think it's gonna fare in this in environment? Me personally, I think it's gonna fare quite well. I've had the opportunity to test and trial as part of the Beta users you might expect. And as a I wouldn't call myself a connoisseur of all streaming platforms, but I can tell you, for example, I am watching my at&t TV streaming service for my live channels from my iPad. I don't need a device for that. I've got it on my smart TV. So software delivered programming Clearly the direction that consumers are gravitating towards. And on one hand, software delivered over the top, whether it's live or on demand requires connectivity that requires really good broadband. And we happen to know a thing or two about providing good quality broadband. And so when you bring those two capabilities together, we think we can offer a unique value proposition to consumers, and certainly a level of service where we don't encounter service interruptions. We know how to scale mass audience platforms and massive networks. And so we're looking forward to the march 27 launch of HBO Max, which is our general entertainment, streaming service, you'll see us deeply integrate that service as part of our offerings for wireless and broadband. Customers and our existing subscriber base and those customers who choose to come to AT&T. And I would also share with you probably a question that's on your mind is well okay. I understand HBO max [INAUDIBLE] and I kinda know a thing or two about AT&T TV how many video services do you have? Got a whole lineup of them? Definitely we've, we've had our share of fun at AT&T expense. I'll just break it down for audience because there are a number of services. U-verse TV, there's DIRECTTV, AT&T tv now, which was DirecTV now there's AT&T TV ,HBO Go HBO NOW and of course the upcoming HBO max That's a lot. It's really confusing even for us, we're supposed to be experts and it's hard for us to keep it straight. So for consumers clarity wise, like what exactly why are there so many surfaces? We've been in business for a long time, and we are a combination of many different companies who have been in business a very long time. And so we have many subscribers of all the products that you just mentioned. And in order to take care of those subscribers and help them process through the lifecycle of the products, we can't simply turn off a product. We've got to help the customer migrate and therefore, Having to care and nurture eight video products is something that is our responsibility to do, that is not our strategy going forward. We've got three primary product offers and the way I would encourage you to think about it is the following Where there is broadband available, at&t TV is the best product that we have. That is our go forward live linear, subscription based service. We just recently announced a hold on a stop on selling new universe subscribers. And as time progresses, the U verse subscribers will migrate to the AT&T TV platform. And then we can sunset the U verse platform and then that brand that product brand will no longer Longer be resident on websites and support sites, because we have cared for those customers that have been loyal to us for so long. Likewise if I'm in a part of the world, a part of the US, that I don't have access to really high speed broadband. I've got, two three Meg's of service if I'm lucky. The wireless network doesn't provide me 2030 megabits of bandwidth coming into my home. Our Direct TV satellite offering is the best product available and so we are pointing in those parts of the US. Our lead product for that area is our satellite offering and that will remain branded as direct tv. But for areas where there is broadband available, our our lead offer is at&t TV. And then everywhere regardless of the underlying network everywhere we transact. With our hundred and 70 million customer relationships that are growing daily, the over the top streaming service for general entertainment with HBO max will be available to any subscriber that wants to subscribe. Jeff Miguel fresh runs the wireless home broadband and subscription video services for at&t. Jeff, thanks for joining me. Roger, it's been my pleasure. Stay safe. [MUSIC] [BLANK AUDIO]