AT&T’s latest home broadband service isn’t DSL or fiber. It’s LTE

AT&T(s t) has found another use for its LTE and HSPA networks besides connecting iPhones and Android devices to the internet. It’s connecting homes. Ma Bell has started offering a residential broadband and voice service that relies on a 3G/4G modem for its link back to the network rather than traditional wireline access technologies.
FierceWireless first spotted the new service on AT&T’s website, which shows that that its is now available in Delaware; Maryland; New Jersey; Pennsylvania; Virginia; West Virginia, Washington, D.C.; and parts of eastern Kentucky on the West Virginia border. If those locations sound a bit odd, that’s because they’re all — with the exception of Kentucky — outside of AT&T’s traditional wireline operating territory. In fact, they’re squarely in the middle in of Verizon Communications’(s vz)(s vod) turf.
ATT home phone broadband LTE diagramThis home router is clearly the tool AT&T plans to use to expand beyond its wireline footprint, giving it a means to sell residential broadband and phone services to its mobile customers nationally as well as an access component to its Digital Life connected home platform. The question is whether customers will pay. This service isn’t cheap and would likely appeal to customers with few other broadband options.
The baseline service is $80 a month, which includes unlimited local calls and domestic long-distance for $20 and 10 GBs of data for $60. The home router (free with a two year contract) supports 10 simultaneous Wi-Fi connections and can connect to any standard home phone. AT&T is promising speeds between 5 and 12 Mbps where LTE is available, which could make it faster than the slower DSL connections, but 4G still doesn’t come close to the bandwidth that a cable modem, fiber or U-Verse link will deliver.
Given the price of AT&T’s service, though, you probably wouldn’t want too fast a connection anyway. You can buy 20 GBs a month for $90 and 30 GBs of $120, but each additional gigabyte over the cap will cost you $10. This is clearly not the connection you want to use to stream Netflix to your HD TV or download iTunes movies.
AT&T flagship store logo AT&T has been hinting at using its mobile networks for home broadband for two years now, so the launch is hardly a surprise. Verizon has been in the market for more than a year with a data-only home service called HomeFusion. Verizon — along with Sprint(s s) and U.S. Cellular(s usm) — sells a separate home phone service that taps 2G mobile signals rather than the copper wire.
The idea of using a mobile network to connect homes that have either no or slow broadband access is definitely an admirable idea, but it has its limitations. Today’s mobile networks simply aren’t designed for the intense data demands of are increasingly hungry home broadband appliances — they have limited capacity and that capacity must be shared with all of the other users on the network. That’s why the per-gigabyte costs of mobile broadband are so much higher.
The other problem is that mobile operators aren’t just using mobile technology to get to places they couldn’t normally reach. In some cases, they’re proposing it as replacement for wireline. After Superstorm Sandy wiped out the copper line network on New York’s Fire Island, Verizon petitioned the FCC for permission not to replace that infrastructure, promising to deliver voice and broadband through its wireless networks instead.
In fact, AT&T is trying to eliminate the distinction between residential and mobile service entirely. Customers who sign up for the new home broadband plans can actually opt to include the new residential router as a device on one of its shared data plans. By that logic there would be no distinction between your smartphone and your connected TV when it comes to how AT&T charges for data. That’s great for AT&T, but not for the consumer who has to pay the monthly bill.
Clarification: Though the router will work anywhere AT&T offers mobile data service, AT&T won’t be marketing the router inside its own Bell wireline territory. It will, however, sell the service in retail stores in eastern Kentucky towns like Ashland that serve West Virginia communities. This post was updated Tuesday at 9 AM PT to reflect that.