AT&T buys BellSouth; Net Neutrality Conditions

AT&T will be our new telecom overlords.

AT&T’s (nee SBC) purchase of BellSouth was made certain yesterday when the FCC’s Democratic commissioners forced Net Neutrality, wireless data competition, and other conditions on AT&T in exchange for allowing its combination to go through.

Expect a new name on your phone bills. (And a new funder for anti-Lafayette lawsuits–AT&T/SBC has, if anything, a worse history than BellSouth in regard to such legal tactics.) The name of our new phone overlords is the biggest news for Lafayette in the event. For the rest of the country the news is quite different. Says Columbia’s Tim Wu on the website says:

To the lay reader the AT&T merger agreement may appear highly technical. It is, however, a milestone, and may even be remembered as an important moment in Internet history. Most notable is the agreement’s striking inclusion of the first strong Network Neutrality language yet seen in any broadband regulatory device.

As hopeful as that is it should be noted that this Net Neutrality requirement is temporary…it mainly establishes a precedent. Congress will have to act if the internet is to be protected from the sorts packet prioritizing charges that the CEO of AT&T has promised.

Yesterday’s conditional approval by the FCC was the last step in what had once looked like a completely unconditional approval by Federal authorities. Most disconcerting to many was the unconditional approval by the Justice Department–charged with enforcing anti-trust laws–of a merger that will make AT&T the largest telecom company by far. The LATimes reports that:

AT&T would end up managing more than a third of the nation’s land lines and dominating local service in California and 21 other states. It would hold 23% of the broadband Internet market, leave nearly 95% of the offices in major cities without real choice in service and run the nation’s largest cellular carrier, Cingular Wireless.


AT&T’s political might already is unrivaled in its sphere. In the last eight years, it has contributed more to federal politicians and spent more on lobbying than the entire cable and satellite TV industries combined — and more than any communications, media or technology company, according to the Center for Public Integrity.

It’s no surprise, then, that AT&T generally gets what it wants. What made a difference this time was a combination of last November’s sweep of Congress by the Democrats and a conflict of interest by the deciding Republican member of the FCC that resulted in his not casting a vote. Deadlocked for months while the FCC chair, Martin, maneuvered to allow the Republican with the conflict of interest a special dispensation to vote. When he was finally allowed to do so he decided that–allowed or no–he’d be better off not voting. That decision was no doubt influenced by blunt language from incoming Congressional leaders to the effect that he really shouldn’t be looking for, or accepting, a special dispensation. When he finally refused outright to vote on this matter AT&T moved quickly to accept the compromise we see today.

They’re several more conditions beyond the net neutrality question. The FCC also imposed temporary pricing controls on inexpensive DSL and on the sorts of lines AT&T’s competitors use for backhaul.

Also significant for people in the BellSouth footprint was the requirement that BellSouth divest itself of all, all, of its 2.5 gig spectrum. That might turn out to be more important than it appears on the surface as it will mean that around here the new AT&T won’t own that significant chunk of the wireless spectrum. That divestiture is the most secure and permanent promotion of competition in the order.

“Tech dreams become reality”

In today’s article “Tech dreams become reality” the Advertiser initiates a series on the local economy with a piece that touts technology as the basis for future growth—and portray’s Lafayette as having a leg up on most communities.

The story focuses on LONI, LITE, and the Fiber To The Home projects. The first two of those made significant progress during ’06. LONI, the Louisiana Optical Networking Intitiative, links projects in Louisiana to each other and to the next generation internet. That project became a substantial reality this year. LITE, the Louisiana Immersive Technologies Enterprise, opened for business this year and its advanced visualization resources promise a wealth of spin-off projects.

UL’s role in the technological life of Lafayette is underplayed—in this story and more generally—while ZEKE, the new supercomputer, is mentioned in the sidebar and as one more valuable tech resource, the really valuable resource the university offers is simply the intellectual center that any university represents. Lafayette’s tech nexus offers advanced computation, networking, and modeling resources. But for those to be valuable they must be used. And for them to be valuable to Lafayette in a substantial way they need to be used by people in Lafayette. By far the largest body of folks eager to apply cutting edge tools to their life’s work lies in academia. We need to make better use of that more generalized resource. (see “background remarks” below)

Unlike LITE and LONI Lafayette’s Fiber to the Home Project (LaFTTH?), hung up in lawsuits designed to delay it, didn’t make significant progress in 2006. The current lawsuit is in its final appeal in the Louisiana Supreme Court. If Lafayette can get what it wants out of this decision there is nothing else to stop the bond sale and subsequent construction of the system. From Keith Thibodeaux, Lafayette CIO:

“We’re at the point now where there’s going to be a decision. It’s hard to get excited about something when it’s hung up in the courts for months and months. But certainly a lot of people have not lost the fire and the desire for what it could mean,” he said.


Thibodeaux said fiber-to-the-home is the last link needed to make the city’s technology future really take off.

I’d go considerably further than that….the project is the real differentiator and the real powerhouse for Lafayette’s hopes of a technology-driven future. We must find a way to implement what the community has voted in. Neither LONI, nor LITE, nor the university are unique in and of themselves. In combination they are formidable but, frankly, benefit only a segment of the community and are not enough of a differentiator in and of themselves to remake our future. Fiber to the home, done right, will make a difference on every block in the city and potentially every street in the parish. It could put full access to LITE (and similar institutions around the world) and a 100 megs or more of connectivity to next generation internet through LONI or our own direct connects into every garage startup in Lafayette. At prices real people, not just big corporations, could afford. The value of any technology, and especially any communication technology, lies in its widespread use and the things people learn to do with it that its originators didn’t imagine. (The internet is considerably more than a nuclear-hardened communications system for controlling NORAD….or even passing bits of academic research back and forth.)

Fiber to the home and what Lafayette’s people are encouraged and allowed to do with it are the true key to a tech future for Lafayette. Everything else represents valuable but temporary buisines advantages. FTTH is a permanent structural difference. Eyes on the prize folks.

[timeout for background remarks]
I’ve talked with enough folks here in Lafayette to know that in tech business circles there is a feeling that innovation arises in business and that academics, with a special emphasis on UL’s academics, are dubious partners. That is simply not true and the attitude gets in the way of the sorts of collaboration that are possible–and I think crucial to the tech business community’s own success. With apologies to the business community, academics are much more likely to pursue new tools than are the business community. Researchers are rewarded for simple risk-taking if the endeavor doesn’t fail obviously and dramatically and appears to have some downstream hope of success. Business folk are looking for immediate payoffs and are punished unmercifully for deferring immediate success for dubious long term payoffs. This structural difference between business people and academics make university people the canary in the mine for business–they are able to take risks and experience failures that more risk-averse businessman simply cannot afford. Lafayette business ignores and excludes its academic resources at a terrible risk to itself.

It is true that academics are hard to understand and do not necessarily act in predictable ways…or at least not in ways the business community finds easy to predict. Truth is they simply do not care much about the sorts of motivations that drive business people. Success is measured differently in the intellectual community and while academics generally understand the difference (being in the minority in our larger culture) business people generally do not and tend to be unwilling to respect what their academic “partners” do to become successful in the university world. The usual business solution is to ally solely with those in the university whose motivations are most “entrepreneurial.” This is a mistake in that it forfeits much of the value making alliances with academics.

Long story short: Encouraging academics to make creative use of these resources for their research and service projects is the quickest path to both full usage of the resources and the development of models of technology use that work for Lafayette. I’m not sure that Lafayette’s tech business community gets it.
[/background remarks]

“Justices let LUS add brief in case”

The Advocate’s Kevin Blanchard has a story in this morning’s paper that reviews the latest in the LUS Fiber to the home lawsuit—the court accepted additional written arguments from LUS. From the article:

The brief expounds on points of law raised in questions by justices when they heard the case Nov. 28.

“Due to the diverse and extensive questioning from the Court during our oral arguments, we felt it was in the best interest of Lafayette citizens that we further explain the merits of LUS’ Fiber-to-the-Home initiative,” city-parish attorney Pat Ottinger said…”

This story emphasizes questions from the judges that focused on the consequences of accepting the plaintiff’s argument that all loans are prohibited. That interpretation, Lafayette and at least some of the judges thought, made the law absurd—it would effectively prohibit building the project at all. That’s not what the law says its purpose is. (As I’ve mentioned before this is one of those situations in which the meaning of a law is supposed to be found in part by eliminating those interpretations which would defeat the law’s clearly stated purposes.)

Keep those candles lit…we need the right outcome on this one.

FCC “Ruffles Feathers”

TV Technology NewsBytes posts a refreshingly unrespectful recap of the FCC’s recent order. This is the link to follow for an update with a bit of zing. A qoute from the National Association of Telecommunications Officers and Advisors, better know as NATAO, natch:

“Today, the FCC played Scrooge to local governments when they changed the agency from a regulatory to a legislative body,” said Libby Beaty, executive director of NATOA. “Unfortunately, unlike Scrooge, it’s highly unlikely the FCC will see the error of its way absent court or congressional intervention. We will look forward to providing them both opportunities.”

And a bit from a dissenting Commissioner’s remarks I’ve not seen elsewhere:

Shyeah, Commissioner Jonathan Adelstein kind of said in his unabridged statement, which is not posted online.

“I cannot support this order because the FCC is a regulatory agency, not a legislative body,” he said. “In my years working on Capitol Hill, I learned enough to know that this is legislation disguised as regulation.”

Hopefully this affair will serve notice that simply servicing the phone companies and loudly claiming it benefits the public will be meeting with more resistance than it did in the last 6-10 years. The FCC and Commissioner Martin would be well-served to recognize the new realities.

Additional Arguments Accepted in Supreme Court Case

The Advertiser this morning carries a brief story reporting on a additional filings that Lafayette made in the Naquin bond case.

That post-oral argument filling is, as I understand it, unusual. There is no discussion of what points the city made, much less why this unusual step was taken. The closest the article comes to reporting on substance is a quote from Terry Huval:

“We wanted to provide them with some additional information to help them keep everything in perspective, since it is a complex matter.”

Frustratingly uniformative.

Huval is also careful to warn that no one knows when the court will render a verdict.

All we can do is wait……

“FCC kills build-out requirements”

Ars Technica does it again. The tech site displays political savvy that is completely missing by traditional newsgathers like the NYTimes and the LATimes, to wit:

“But more importantly, the vote does away with most build-out requirements. Those requirements generally insist that companies offer service to all the residents in the town, rather than cherry-picking the profitable areas “

That’s in reference to Wednesday’s partisan FCC decision that handed the phone companies, but especially AT&T, what they couldn’t win in Congress: Federal control of the local franchises. Wireline cable TV providers have paid for the right to use public property to get their lines to customers. The elimination of the community’s ability to insist on full buildout in its boundaries in trade for the use of its property is, As Ars Technica insists, the most important issue.

The FCC’s move remains murky since the Republican majority voted in the change without releasing the “details” to the public. There will be a 90 day “shot clock” on local negotiations. (What happens if they can’t reach an agreement? The corporation is allowed to just take what it wants? It’s not yet clear–but probably.) The order will not allow local communities to propose “unreasonable” buildout requirements. (Hmmn. What’s unreasonable? Anything that the corporation won’t agree to during that 90 day window? It’s not yet clear–but probably.)

One thing that is clear is that municipalities and consumer groups are revving up to sue, claiming that the FCC doesn’t have the authority to issue the sort of extra-legal change in policy. (BusinessWeek bemoans the upcoming era of litigation.) The incoming chair of the House Subcommittee on Telecommunications and the Internet, Ed Markey, has made it clear in a message remarked on in Ars Technica that he felt the FCC had overstepped its bounds by aiding the phone companies end run around Congress:

Markey worried that the FCC had upstaged Congress by taking the matter into its own hands after Congress failed to pass pending legislation on the topic earlier this year. “Overall, I believe the haste with which the Commission has acted may lead to problematic and unintended consequences,” Markey went on to say. “In some instances, the Commission may be acting without clear legal authority.” Markey then said that he looked forward to “reviewing today’s decision and examining its implications for consumers, communities, and competition next year.”

It’s not over till its over…Congress has yet to weigh in. What you can do is write your Congresscritter and suggest that turning local property and local decision-making over to partisan federal bureaucrats was not the sort of thing they should be allowing to happen on their watch if they’d like to be re-elected.

Visit Boustany, Landrieu, and Vitter‘s web contact pages and write ’em a little note.

“Suburbs against the U(ni)verse”

Ars Technica is the surprising location of the absolutely best article I’ve yet to see on the video franchise issue. It discusses, in detail, the conflict between AT&T and suburban towns outside of Chicago. If you want to understand what is beneath the main media stories that present a “balanced” repetition of competing press releases this is the story to read first. –And since this conflict is coming to Louisiana and Lafayette you might want to set aside the time to develop a little background.

As has been true before our sister-in-arms city, Geneva, is giving us an advance view of trouble headed our way. Phil Peter and Annie Collins’ experience with AT&T’s tactics in Geneva during a fiber referendum that was beat back by push polling, a blizzard of misleading FUD motivated the “innoculation” tactics successfully used by Lafayette Coming Together in our own fight. We owe Geneva a lot…and it looks like they’re out front again. When AT&T buys BellSouth we’ll be dealing with exactly the same tactics here in Louisiana that the suburban towns near Chicago are dealing with today.

In a nutshell: AT&T claims that their new cable-work-alike Uverse video offerings are not really cable TV and so they don’t have to mess with the video franchises that cable companies have to in order to offer cable TV services. This is there claim wherever they introduce the service–and it was their claim here in Louisiana during the last general session. But the suburbs of Chicago aren’t buying it. Disturbed by the secretive deployment of new, large, and ugly DSLAM boxes to support the video offering and insistent that AT&T follow the same rules that cable companies have to follow and offer the service to everyone in their town if they want to use the towns rights-of-way, the towns have refused to allow the installation of the boxes that would support the service. AT&T has sued.

There are two ironies here– First, the phone company now claims that its fiber upgrade is necessary to offering moderns services when it recently fought two attempts of the Tri-Cities to do do real fiber, calling it “unnecessary.” Second, AT&T wants to deploy in parts of these relatively wealthy suburbs and not in Chicago at all right now as part of its larger cherry-picking plan. The objection to state-level plans such as the one suggested in Louisiana last year, was that we all thought that wealthy suburbs would get it and less profitable areas would be ignored. (Cravin’s speech) AT&T’s move in Illinois makes it clear that concern was valid. They are only preparing to deploy in wealthy areas like these Chicago suburbs. You’d think AT&T would agree to serve all of at least these sorts of communities. But they won’t and the towns, with a relatively active and aware citizenry are not willing to approve cherry-picking within their privledged areas. If that proves generally true it could prove disasterous for AT&T ‘s business plan. (Hence the attempt to get the FCC to clear their path…see yesterday’s post.)

Do take a look at the full text of the story and rest assured that we’ll be faced with these issues ourselves soon enough.

(Don’t miss the comments both at Ars Technica and at Slashdot where the story was referenced. Seeing intelligent, thoughtful commentary on news stories is really refreshing.)

It’s great to see such a story on the web. Ars Technica has long been the premier place to get well-written articles on arcane technical issues. (It’s the absolute best place to read up on user interface issues in new revisions of operating systems, for those that care.) But Ars Technica has begun applying its intense, exacting, methodical style of reporting to the social and political issues that touch upon the technical core that defines its readership.

We should all be grateful–it leads to well-written articles, which do not try to fit themselves into some sort of pre-defined length, and that are intended for a readership the author regards as competent. That alone is refreshing. But even more invigorating is the presumption of their technically-oriented authors that the point of exploring an issue is to come to some sort of reasoned, sensible conclusion. Modern reporting conventions lead to mushy stories that report both sides of any conflict as if there were no basis for actually chosing between the positions espoused by the different sides’s press releases. That is seldom true–as we became aware of during Lafayettes fiber referendum. This suburbs article accurately recounts both sides–but doesn’t hesitate to call one sides nonsense nonsense, if that is what is called for. For instance:

When asked about Wheaton and Geneva’s six- and three-year time frames, AT&T’s Rob Biederman responsed, “Requiring new competitors to build their networks everywhere immediately will likely mean they cannot afford to build their networks anywhere.” This is probably true, but is not what any of the people I spoke with were suggesting.

How refreshing! The author notices the little deceptive slide and doesn’t hesitate to point it out to the reader. Standard reporters just repeat the misleading reply with poker-faced even-handedness. The reporter also doesn’t hesitate to point out that much of the argument for “competition” is being made by organizations that are funded by the phone companies even while they present themselves as grassroots organizations.

Good stuff.

FCC Sides With Baby Bells: News & Action

The News:
There’s been a rising tide of articles on the net, (e.g. B&C, Alliance) breaking out into major media over the last week (AP, Reuters) on the subject of the FCC chairman’s attempt to end-run Congress on the subject of authorizing a federal regime to regulate local video franchises. He proposes to set a time limit on how long a locality can

The FCC Chairman, Kevin Martin, in the aftermath of the collapse of Senator Stevens’ (“the internet is a series of tubes“) attempt to overhaul telecom law in the last congress has come up with a novel idea: if the big business that the FCC exists to regulate can’t get what they want from the representatives of the people, well, why not give it to them through the regulatory process?

Some Background:
The idea of the FCC doing an end run on Congress is by itself an astonishing exhibition of partisan arrogance and an overweening will to bureaucratic power.

Martin is suggesting that the FCC take up the failed phone company effort to create a federal video franchising regime and meet their demands through purely regulatory channels. Such a program would replace the current system where the owners of the local owners of the rights of way (usually municipalities) negotiate non-exclusive “franchises” to use that property with cable companies. Phone companies hoping to roll out a video product desire this simply because they want the ability to “compete” with established cable companies on unequal terms. Long time readers will recognize “video franchising” as a battle which the phone companies have been waging at every level of government. (examples: 1, 2, 3) In the process citizen interests in real competition and local control are lost. In Louisiana a bill to move franchising power to the state level was vetoed after intense opposition from local government and citizen’s groups (including Lafayette Coming Together and this blog). Readers will have also seen posts on Steven’s federal version of the same bad idea which was opposed by a wide range of pro-consumer groups.

The objections are both structural and practical: Taking local control of local property and turning it over to either state or federal government in order to serve the interests of a single major phone company in each region of the country is, on its face, an unconscienceable use of power. It is a taking of the property rights of local communities, one of the few remaining income sources local governments have, and turning that over to huge monopolies that have no sympathy for local interests. That is a structural mistake of the first order and should be enough to defeat the idea without further discussion. (The utter lack of “conservative” opposition to this “taking” is a index of how unreflectively subjugated the movement has become to anything big business wants.) Political practicality, at least at a local level, mitigates against the phone companies ideas as well. Local politicians will rightly never agree to the basic demand the phone companies are making: to use public land to serve only the mot profitable parts of the community. The key and crucial issue on which the phone companies have been unwilling to compromise is what the feds call “build-out requirements.” The media in general have yet to quite figure this one out, and some stories neglect to mention it. But the one overriding reason the phone companies have for eliminating local control is the requirement of local communities that, in exchange for using local property owned by all the people, the phone companies ought to serve all the people. In various places the phone company has been willing to compromise on every other issue from costs to services provided, to additional PEG channels for local use. It has never been willing to compromise on restricted service. Universal public service in exchange for the use of public resources has been the deal made by both the phone companies and the cable companies from the beginning of their history. The phone companies want to break this compact in order to gain a competitive advantage over their entrenched cable opponents. (For a fuller explanation of how this works see “Sharks.”)

In normal circumstances there’d be no question but that such a suggestion from the bureaucrat in charge of executing (not making) public policy would be deemed inappropriate and slapped down hard. Especially if it followed the legislatures failure to endorse the same concept. But these have not been normal times. The previous Congress, already going down in history as a prime example of a “do-nothing” body, had developed a sly (we’d say canille) form of making sure that its large corporate special interests would get what they wanted without our Congressment needing to dirty their hands. All that was required was to gut regulatory agencies, replacing long-term servants with new, partisan leadership whose mandate was clearly political: to simply refuse to actually do the regulation and oversight of the buisness community for which their departments existed and which the law requires. With the bureaucracy remaking federal policy by fiat the Congress was relieved of the uncomfortable necessity to actually change the law in order to change Federal policy.

Nifty eh?

Seen in that light the FCC chairman’s willingness to substitute bureaucratic action for new laws is not so surprising. It just a continuation of business as usual.

Trouble is that was the way the previous Congress worked. The new one might well not appreciate having Martin substitute his idea of what best benefits the phone companies for Federal law. It is already objecting Martin’s attempts to get an ethics exception which would allow one of the Republican members of the FCC to vote with Martin to allow the AT&T/BellSouth merger to go through without any conditions. Congresional leadership has written Martin letters suggesting that wouldn’t be a good idea and have made noises about holding hearings on the merger. So far Martin has wisely declined to defy the Congress.

But this latest game suggests he really doesn’t quite get it yet.

Take Action:
Acadiana Open Channel (AOC) head Ed Bowie recognizes the threat the FCC poses to local public access channels like AOC. Those channels are provided for in the local franchising agreements which Martin would like restrict. While local folks understand the value of local programming–particularly in unique cultural situations like those that exist in Lafayette. it is doubtful that distant Federal bureaucrats can be counted on to protect our interests.

The FCC’s suggestion would put local programing and local universal service at risk merely to serve the a few companies like BellSouth. At this point the only people the FCC is likely to listen to is our congresscritters.

Ed suggests in a recent email that you participate in the Alliance for Community Media’s web-based protest. He also provides links to the Boustany, Landrieu, and Vitter‘s web contact pages. A letter posted from your representatives own sites would probably be even more effective than using the Alliances form.

These folks are supposed to represent us. Let ’em know how you feel…and let ’em know that you expect the new Congress to loose the “do nothing” ways of its predecessor.

BellSouth-AT&T Merger Good for America?

A friend of LafayetteProFiber from California recently forwarded the link to a post on that dealt with the AT&T-BellSouth merger. (Thanks, Jeff!) BellSouth and AT&T have claimed that their merger is in the public interest–basically reasoning that bigger is better. Isenberg remarks on a filing by Sumit Majumdar in the FCC review of the merger that contests AT&T’s position that the merger is good for the country. Majumder qoutes AT&T as claiming:

the merger will solidify and secure the nation’s status as a world leader in telecommunications and that it will strengthen national security. And we have shown that all of these benefits will be realized without any cognizable harm to competition

That is just nuts. How a major telecom consolidation benefits national security or can be not harmful to competition runs up against common sense. Eliminating a major competitor by absorbing their entire base has got to be, on the face of it, anti-competitive. That is so nuts that mostly nobody feels obliged to contest the obviously self-serving claims of the companies involved. Majumdar is not so sangine…he actually does the hard work of demonstrating that in the past such mergers have emphatically not benefited the public. But Majumdar goes further: he, in his academic way, claims that the evidence indicates the real reason for consolidation is to gain raw market power–that is to achieve a monopoly status that will allow the company to make larger profits without any of the benefits to the public that accompany price increases in truly competitive situations. That’s the gist of the challenge in the following paragraph:

We have started with the expectation that if market power acquisition was, indeed,
not the motivation for the mergers we would see no changes in relative cash flows that were
generated by revenues. On the other hand, we would observe significant cost declines and
significant improvements in measures of technological progressiveness. If market power was
the true motivation, then we would observe enhancements n relative cash flows that were
enerated by revenues reflecting the exercise of market power due possibly to price
increases. We would also observe no efficiency gains. Neither would we observe any improvements in measures of technological progressiveness.

The evidence shows that it is increased market power, (e.g. increasing levels of monopoly power) that is the real effect of telecommunications mergers.

Our comprehensive analysis, which is the only empirical evidence on the question
that we are aware of, in which we have used several performance measures and stringent
statistical procedures, has revealed that mergers have not created the expected synergy
effects. Mergers have led to possibly increased market power. What has increased for the firms have been their ability to generate relatively higher revenues. No sales volume growth
is noted; hence the revenue increases are due to likely price increases. No cost efficiency
gains are noted at all. In fact, the most important measures of operational performance have
deteriorated in the post merger period. Under investment of technology, especially
broadband, is observed following merger activities. Expectations that mergers will lead to
increased investments and up gradation of the communications infrastructure, and for
technological progressiveness of the US telecommunications infrastructure, have been
vitiated. (emphases mine)

In short the AT&T merger with BellSouth is only likely to be good for the new, more powerful AT&T–not because the larger body is more efficient or more innovative (Majumdar’s research indicates otherwise), but because the larger entity, operating in a less competitive field has “revenue increases [that] are due to likely price increases” unaccompanied by service improvements.

So we here in Lafayette should not expect the benefits of efficiency, better service or a more innovative company to emerge from the AT&T/BellSouth merger the current administration is so eager to complete.

On the historical evidence, all we can expect are price increases.

AT&T’s Explosive Growth (coming to a BellSouth DSLAM near you?)

Light Reading magazine has an interesting article about a recent explosion in an AT&T DSLAM cabinet (you know, the big boxes where their fiber to the neighborhood will connect with their copper to the home?).

Here are a few key paragraphs:

AT&T Inc. (NYSE: T – message board) is still searching for the real killer of its Houston DSLAM cabinet, which exploded back in late October, flattening an old man’s fence and sending shrapnel hurtling as far away as 50 feet down the street. (See AT&T Investigates DSLAM Explosion.)

“We continue to thoroughly investigate the possible causes of the incident, but it’s still too early to speculate on the outcome of our testing,” writes an AT&T spokesman, in a reply to Light Reading’s inquiries.

The spokesman says AT&T has assembled a strong forensic team and is working with “one of the world’s top independent technical analysis firms” to gather evidence and probe the mysterious circumstances surrounding its broadband flambé. He adds that tests are time consuming and the company can’t talk about the details of the investigation while it’s ongoing.

Typically, the company first pointed the finger at others:

In the early going, AT&T said it would check on all the things that might have caused the explosion. AT&T in November said gas leaks, electrical issues, and vandalism were possible causes.

But, the problem might be related to some of the equipment used in the network itself:

A non-AT&T source close to the investigation says two causes are being vetted carefully these days. The first is a high-resistance short across the battery terminals inside the base of the cabinet. The second is a possible power supply problem with the Alcatel-Lucent (NYSE: ALU – message board) DSLAM housed in the cabinet.

Could this problem be bigger than Houston? It’s possible:

AT&T apparently does know enough about the explosion’s cause to say that the DSLAM cabinet caper is not a network-wide concern.

Officially, AT&T says they’ve got this under control. They are focused on accomplishing their mission of bringing their customers an over-priced, under-performing broadband experience worthy of 20th Century corporate concepts of connectivity:

“We remain confident in our plans to pass approximately 19 million living units by the end of 2008 as part of our initial deployment.”

Get ready. The FCC’s clamoring to approve the AT&T merger with BellSouth. The biggest change in Louisiana is going to be that many of BellSouth’s former lobbyists are finding new jobs. Was that listed as a benefit of the proposed merger?