STAMFORD, Conn., Dec. 27 A new world of communications and entertainment is now available to Stamford area residents. AT&T Inc. today announced the initial launch of AT&T U-verse(SM), which utilizes AT&T's fiber-rich network that extends optical connections deeper into neighborhoods. U-verse services are initially available in limited areas across the Stamford metropolitan statistical area (MSA), including parts of Danbury, Fairfield, Norwalk, Stamford and Trumbull. AT&T plans to expand to additional areas on an ongoing basis.

AT&T U-verse offers customers a combination of next-generation digital television -- including more than 25 High Definition (HD) channels -- and high speed Internet access. The award-winning AT&T U-verse TV includes cutting- edge features that are unmatched in the market, while the new U-verse enabled AT&T Yahoo!® High Speed Internet builds on AT&T's position as the nation's leading provider of broadband DSL.

"Customers have been asking for a new option for their television service, and AT&T has delivered," said Chad Townes, AT&T vice president and general manager for Connecticut. "We're proud to say that Stamford area residents are among the first in the nation to enjoy the personalization, simplicity and new features that U-verse offers."

Beginning today, AT&T U-verse TV will offer Stamford area residents:

-- A compelling variety of TV packages with more than 300 channels, including digital music, local, and premium movie and sports programming.
-- HD technology that produces images more than twice as detailed as standard analog TV delivering rich, realistic video and multi-channel, movie-theater-quality sound. AT&T U-verse offers customers access to a growing lineup of more than 25 HD channels, more than the local cable providers. New HD customers can receive two months of free HD service ($10 a month thereafter).
-- Web remote access to digital video recorder (DVR), which allows customers to schedule recordings using their AT&T Yahoo! Internet account. This feature is unique to AT&T among local providers.
-- The ability to record up to four programs at once using a DVR receiver, another exclusive feature unmatched in the marketplace.
-- Built-in picture-in-picture functionality that allows subscribers to channel surf on any television without leaving the program they're watching.
-- Specially designed set top boxes, manufactured by Motorola, all of which are HD-capable and include universal remote controls that provide backlit buttons and one-touch access to video-on-demand, DVR and other services.
-- A premium Spanish-language package featuring novelas, movies, news, sports, children's programming, talk shows and more. New customers can receive the package at no charge for the first two months ($10 a month thereafter).
-- A growing video-on-demand library with one-touch access to movies and events.
-- Fast channel-changing, eliminating the delay experienced with other digital broadcast services.
-- The ability to search for programs using title or actor's name.
-- Three TV receivers -- one with a DVR, which allows customers to pause, rewind, replay and record live TV -- at no extra charge with most programming packages. (Customers may add more receivers for $5 each a month.)

AT&T plans to continue adding more channels and interactive applications in the future.

Customers can choose from five TV and three Internet packages to customize their entertainment experience. In addition to the popular U300 and U400 packages, AT&T also offers U-family, a market-leading family-friendly programming option. Current AT&T U-verse TV offers start as low as $44 a month, depending on the selected programming and Internet packages (other monthly charges apply).

Now through March 31, qualified new customers can join AT&T U-verse and receive free TV service, including HBO® and Cinemax®, for the first two months when they choose the U300 or U400 programming package (other monthly charges apply). Thereafter, customers will continue to receive recurring monthly discounts when they subscribe to a bundle of TV and Internet service. In addition, AT&T will offer new customers a 60-day money-back guarantee.

Three packages of AT&T Yahoo! High Speed Internet U-verse Enabled will be made available to AT&T U-verse customers:

-- Elite: Downstream up to 6.0 Mbps, upstream up to 1.0 Mbps.
-- Pro: Downstream up to 3.0 Mbps, upstream up to 1.0 Mbps.
-- Express: Downstream up to 1.5 Mbps, upstream up to 1.0 Mbps.

All high speed Internet packages offered as part of AT&T U-verse include wireless home-networking at no charge, giving users the freedom to access online photos, streaming video, games and other information using a wireless- enabled laptop or other device. Subscribers also receive virtually unlimited e-mail storage and powerful anti-virus and anti-spam software.

The deployment of next-generation video services reflects AT&T's strategy to become customers' preferred communications and entertainment provider and to deliver a video solution through its traditional footprint that provides greater value, flexibility and simplicity than competitors' offerings. AT&T U-verse TV represents a critical new service in the company's video portfolio, which today includes AT&T | DISH Network and AT&T Homezone(SM) service, which integrates AT&T | DISH Network and AT&T Yahoo! High Speed Internet. AT&T U- verse TV also underscores the company's strategy to deliver integrated services to the three screens many consumers say are most valued today: the PC, the TV and the wireless phone.

Customers seeking additional information on AT&T U-verse -- or to find out if it's available in their area -- can visit http://uverse.att.com . The site will be regularly updated over the coming weeks as AT&T expands to additional areas. Additionally, AT&T will soon begin direct marketing in the areas where the service is initially available.

CEO's Doing Okay

CBS News has reported that in 2006, more than 100 of the Fortune 1,000 biggest companies have terminated or frozen pension plans, complaining of the costs. But in many cases the companies' leaders' benefits are getting bigger. For example, AT&T's CEO, Edward Whitacre, will be entitled in November to a yearly pension of $5.4 million for life. The Wall Street Journal found that 45 percent of AT&T's pension expenses go to just 1,500 top executives - less than 1% of the total number of AT&T workers. The rest covers the other 189,000 employees.

AT&T Changes Privacy Policy. Data Belongs To Them, Not Customers.

AT&T has issued an updated privacy policy that takes effect Friday. The changes are significant because they appear to give the telecom giant more latitude when it comes to sharing customers' personal data with government officials.

The new policy says that AT&T -- not customers -- owns customers' confidential info and can use it "to protect its legitimate business interests, safeguard others, or respond to legal process."

The policy also indicates that AT&T will track the viewing habits of customers of its new video service -- something that cable and satellite providers are prohibited from doing.

Moreover, AT&T (formerly known as SBC) is requiring customers to agree to its updated privacy policy as a condition for service -- a new move that legal experts say will reduce customers' recourse for any future data sharing with government authorities or others.

The company's policy overhaul follows recent reports that AT&T was one of several leading telecom providers that allowed the National Security Agency warrantless access to its voice and data networks as part of the Bush administration's war on terror.

"They're obviously trying to avoid a hornet's nest of consumer-protection lawsuits," said Chris Hoofnagle, a San Francisco privacy consultant and former senior counsel at the Electronic Privacy Information Center.

"They've written this new policy so broadly that they've given themselves maximum flexibility when it comes to disclosing customers' records," he said.

AT&T is being sued by San Francisco's Electronic Frontier Foundation for allegedly allowing the NSA to tap into the company's data network, providing warrantless access to customers' e-mails and Web browsing.

AT&T is also believed to have participated in President Bush's acknowledged domestic spying program, in which the NSA was given warrantless access to U.S. citizens' phone calls.

AT&T said in a statement last month that it "has a long history of vigorously protecting customer privacy" and that "our customers expect, deserve and receive nothing less than our fullest commitment to their privacy."

But the company also asserted that it has "an obligation to assist law enforcement and other government agencies responsible for protecting the public welfare, whether it be an individual or the security interests of the entire nation."

Under its former privacy policy, introduced in September 2004, AT&T said it might use customer's data "to respond to subpoenas, court orders or other legal process, to the extent required and/or permitted by law."

The new version, which is specifically for Internet and video customers, is much more explicit about the company's right to cooperate with government agencies in any security-related matters -- and AT&T's belief that customers' data belongs to the company, not customers.

"While your account information may be personal to you, these records constitute business records that are owned by AT&T," the new policy declares. "As such, AT&T may disclose such records to protect its legitimate business interests, safeguard others, or respond to legal process."

It says the company "may disclose your information in response to subpoenas, court orders, or other legal process," omitting the earlier language about such processes being "required and/or permitted by law."

The new policy states that AT&T "may also use your information in order to investigate, prevent or take action regarding illegal activities, suspected fraud (or) situations involving potential threats to the physical safety of any person" -- conditions that would appear to embrace any terror-related circumstance.

Ray Everett-Church, a Silicon Valley privacy consultant, said it seems clear that AT&T has substantially modified its privacy policy in light of revelations about the government's domestic spying program.

"It's obvious that they are trying to stretch their blanket pretty tightly to cover as many exposed bits as possible," he said.

Gail Hillebrand, a staff attorney at Consumers Union in San Francisco, said the declaration that AT&T owns customers' data represents the most significant departure from the company's previous policy.

"It creates the impression that they can do whatever they want," she said. "This is the real heart of AT&T's new policy and is a pretty fundamental difference from how most customers probably see things."

John Britton, an AT&T spokesman, denied that the updated privacy policy marks a shift in the company's approach to customers' info.

"We don't see this as anything new," he said. "Our goal was to make the policy easier to read and easier for customers to understand."

He acknowledged that there was no explicit requirement in the past that customers accept the privacy policy as a condition for service. And he acknowledged that the 2004 policy said nothing about customers' data being owned by AT&T.

But Britton insisted that these elements essentially could be found between the lines of the former policy.

"There were many things that were implied in the last policy." He said. "We're just clarifying the last policy."

AT&T's new privacy policy is the first to include the company's video service. AT&T says it's spending $4.6 billion to roll out TV programming to 19 million homes nationwide.

The policy refers to two AT&T video services -- Homezone and U-verse. Homezone is AT&T's satellite TV service, offered in conjunction with Dish Network, and U-verse is the new cablelike video service delivered over phone lines.

In a section on "usage information," the privacy policy says AT&T will collect "information about viewing, game, recording and other navigation choices that you and those in your household make when using Homezone or AT&T U-verse TV Services."

The Cable Communications Policy Act of 1984 stipulates that cable and satellite companies can't collect or disclose information about customers' viewing habits.

The law is silent on video services offered by phone companies via the Internet, basically because legislators never anticipated such technology would be available.

AT&T's Britton said the 1984 law doesn't apply to his company's video service because AT&T isn't a cable provider. "We are not building a cable TV network," he said. "We're building an Internet protocol television network."

But Andrew Johnson, a spokesman for cable heavyweight Comcast, disputed this perspective.

"Video is video is video," he said. "If you're delivering programming over a telecommunications network to a TV set, all rules need to be the same."

AT&T's new and former privacy policies both state that "conducting business ethically and ensuring privacy is critical to maintaining the public's trust and achieving success in a dynamic and competitive business climate."

Both also state that "privacy responsibility" extends "to the privacy of conversations and to the flow of information in data form." As such, both say that "the trust of our customers necessitates vigilant, responsible privacy protections."

The 2004 policy, though, went one step further. It said AT&T realizes "that privacy is an important issue for our customers and members."

The new policy makes no such acknowledgment.

Did SBC Bite Off More Than It Can Chew?

The gem at the center of the new AT&T is looking a little tarnished already. Last month's $16 billion merger paired the massive local phone reach of San Antonio's SBC with the global network of New Jersey's Ma Bell. The deal was billed as creating a bruising communications titan whose shining star would be the old AT&T's top-tier corporate clientele.

But less than a month into the merger, the combined company seems a little banged up. The struggles are apparent particularly at the business service operation that made up the core of the old AT&T.

For starters, Ma Bell's top brass was almost entirely replaced by SBC leadership in the first round of cuts. Then Comcast, AT&T's largest wholesale customer, said Monday it would build its own optical Internet. And some big business customers have complained lately that they are feeling neglected.

Industry watchers worry that San Antonio's finest -- the SBC holdovers who run the new AT&T -- are out of their league in trying to lead a multinational business communications and services operation.

"The enterprise business is the big reason why this deal occurred," says Standard & Poor's analyst Todd Rosenbluth. "It was an opportunity for the combined company to grow as a result of taking SBC's operations and old AT&T and offering a bundle of services, including wireless to customers, that wasn't available before." Rosenbluth has a hold rating on AT&T.

AT&T already has made aggressive promises on the cost-savings front, saying it would wring $15 billion in costs out of the company. But there's more to integration than slashing staff and consolidating office space, say observers.

"My concern is that new AT&T sees this as just another Bell acquisition like Ameritech or Pacific Telesis. "As we know, AT&T serves a disproportionate number of Fortune 500 companies, and my concern is that innovation and customer care could suffer."

Pierce consults with big businesses over issues like service provider offerings and communications technology. She says she's heard customers complain recently that they "can't get a knowledgeable account rep on the phone." AT&T didn't respond to a request for comment.

Big companies typically expect a lot of support and hand-holding from their phone and data service providers, say analysts. This is a challenge that Verizon also will face after its pending acquisition of MCI.

The need has become so large that the market has grown, and several big tech shops like EDS and IBM have moved in as service integrators and system managers. This is a key role that AT&T has long played in the enterprise, and one it would hope to hold onto, say analysts.

"They've been losing market share, and nothing says AT&T has leveled off," says Pierce.

Investors haven't exactly cheered the new AT&T. Shares have been trading in the $25 range since the merger was completed Nov. 18.

"It's a stock to watch," says one money manager with no position. "But I'd rather own Verizon."

Controlled Launch

11/16/05
SBC says it's on schedule for a limited launch of TV service next summer, but industry observers continue to doubt the costly project will actually lift off anytime soon.

Speaking at the UBS Global Communications Conference in New York Tuesday, SBC's technology chief, John Stankey, said the San Antonio communications giant will start a so-called controlled launch of its Internet protocol TV service by the end of the second quarter. SBC will by then be known as AT&T, following the expected close of the big telcos' merger later this month.

Stankey told investors at the Grand Hyatt hotel in Midtown Manhattan that SBC has been testing the service with what he described as 40 friendly customers. Starting in the middle of next year, the company is hoping to start rolling the service out to its user base.

SBC has high hopes for the TV service, as it hopes to cash in on its expanding fiber-optic network by delivering consumers a range of lucrative advanced video services. Both SBC and Verizon have been extending fiber further into communities to compete with cable and satellite companies.

SBC has vowed to spend $4 billion on a fiber optic-network expansion plan that would deliver the so-called triple play of video, phone and Internet access. The IP-TV portion of the project promises to deliver advanced video services like high-definition programming, video-on-demand and video recording features over upgraded telephone lines.

Using Internet protocol and fiber optics, SBC hopes to beat cable and satellite players at their own game by offering users more control over their TV programming. But some observers have been skeptical about SBC's ability to pull it off, pointing out that it is much harder for phone companies to add video than it is for video outfits to add phone service. Some telecom industry observers have also questioned the Baby Bells' capacity to pull of such a big project without setbacks.

SBC's presentation Tuesday won't likely put those concerns to rest.

Stankey said SBC isn't yet ready to deploy the set-top boxes it will be using for the commercial launch. He said the company is waiting for an updated IPTV software release from Microsoft. In August, SBC signed nonexclusive contracts with set-top box makers Motorola and Scientific-Atlanta to provide the hardware for the fiber television service.

Stankey stressed that SBC isn't awaiting a release of the actual set-top box operating system itself. He said Microsoft is updating some added features for the boxes, which will give users access to the bells and whistles that communications giants hope to take their profit growth to.

Stankey defended the project and the pace of the rollout. "The system performed very, very well" in the trials, he said.

But some observers weren't persuaded. "They seem to be taking that typical telco tiptoe," said one person at the conference. "It feels like they are on a two- to three-year road map, not a six-month to 12-month road map."

Another attendee asked Stankey whether the company had considered software vendors other than Microsoft. "I don't think there's anything we've seen in the architecture that would make us want to change horses," Stankey said. Asked if a rollout toward the end of next year is inevitable given the looming technical hurdles, Stankey said, "I won't be here talking to you if that happens."

SBC To Use Funds From Operations To Pay Off Debt

Tuesday June 21, 2005

SBC Communications Inc. said Tuesday in a filing with the Securities and Exchange Commission that it will redeem $809.3 million in long-term debt held by its subsidiaries.

San Antonio-based SBC intends to redeem this debt by issuing commercial paper and using funds from operations. SBC will redeem debt held by subsidiaries Southern New England Telephone Co., Pacific Bell Telephone Co., Southwestern Bell Telephone LP, Illinois Bell Telephone Co. and Wisconsin Bell on July 21. SBC expects this will cost the company $847 million in cash. The company will record a $37 million pretax charge to its third-quarter 2005 earnings.

Whitacre Finds New Way To Increase Salary

July 14, 2004

Here's one way to get a higher interest rate on your savings: Just become a CEO.
While many corporations allow top executives to defer part of their multimillion dollar pay for tax purposes, some companies give those executives interest on that deferred compensation which is far more generous than an ordinary person can get through a money market fund or a bank CD.
Some companies go even further, paying a guaranteed interest rate on par with the return an average investor might hope for from stocks, but with none of the risk.
About 60 percent of the companies in the Standard & Poor's 500 offer deferred compensation plans to their executives, including 73 which pay above-market interest rates, according to the compensation consulting firm Equilar Inc.
It's a topic that rarely draws attention -- as it did last year with news the New York Stock Exchange had been paying 8 percent interest to former chief Richard Grasso on part of his $139.5 million in deferred compensation -- probably because the rules of disclosure invite confusion, if not obfuscation.
McKesson Corp., a major distributor of prescription drugs, disclosed in June it owed $329,775 in "above market interest" to chairman and chief executive John Hammergren.
Similarly, Computer Sciences Corp. reported two weeks ago it owed $83,312 in "preferential interest" on deferred compensation for chairman and CEO Van Honeycutt in its latest fiscal year.
But those dollar amounts do not represent all of the interest the companies owe these executives on their deferred compensation.
Unfortunately, it's impossible to tell how much more they are due thanks to the convoluted disclosure rules.
To start with, a company only needs to disclose interest owed on deferred compensation if the rate being paid is more than one fifth above the market rate being used for the calculation.
So, for example, if the company decides the "market rate" is 5 percent, it wouldn't need to disclose anything about interest on deferred compensation unless the rate it is paying is greater than 6 percent.
Then the rules get more complicated. There's no fixed definition or benchmark to determine what the prevailing market rate is, so it's up to the company to determine what rate to use. However, the company isn't required to disclose the percentage it chooses or the actual amount it is paying above that rate. Nor does it need say the total dollar amount of interest owed or the amount of deferred compensation on which it is being paid.
Instead, the company need only disclose any amounts paid above 120 percent of whatever market rate it has chosen. So, using 5 percent again as the hypothetical market rate, if the interest rate on deferred compensation was set at 8 percent, a company would only need to report the dollar amount owed on the interest above 6 percent.
That means at SBC Communications Inc. -- identified by Equilar as the company that paid the most in above-market interest to its CEO in the last fiscal year -- the $1.1 million in disclosed interest on CEO Edward Whitacre's deferred compensation was only the "excess" interest he is owed. He likely earned more than twice that amount including the interest the telephone company wasn't required to disclose.
Though such gestures are not common, some companies who pay above-market interest voluntarily reveal some fragments of information, thereby prompting a few more head scratches.
In March, the drug maker Wyeth reported in its annual proxy that it pays a guaranteed 10 percent yield on deferred compensation, 4.23 percentage points of which were deemed above market. That means it was using a market rate of about 4.8 percent -- which in itself is a risk-free yield many investors would be happy to take.
Why would a company voluntarily pay more than twice the market rate? The problem is that ideas with a logical business justification often get exploited for unintended purposes. The same would seem to hold for deferred compensation plans, which make sense in basic concept.
Because the tax wallop can be harsh on a multimillion dollar salary, many companies allow their top executives to steer some of their pay or bonus into a deferred compensation plan to be withdrawn in later years, somewhat akin to a 401(k) retirement account. (In another very lucrative perk patterned against the world of 401(k) plans, many companies provide a matching contribution on a portion of the deferred compensation.)
But unlike a 401(k), deferred compensation plans are generally "unfunded," meaning the company doesn't actually set aside the cash into a separate account which the employee can allocate among a selection of mutual funds.
Instead, deferred compensation is more like a loan to the company by an executive, with potential benefits for both parties. The company can use the cash for more immediate needs, while executives can postpone the income tax liability until a time when they are retired or earning less.
Since the company derives a benefit, and the executive can't invest the money like a 401(k) saver, it's perfectly logical that the company should compensate the executive with interest.
It doesn't make economic sense, however, for a company to pay in excess of the going rate it might pay on a normal bank loan.
Nevertheless, it's become one more way that many companies seem determined to reward top executives who are already well-paid by any normal yardstick.

AT&T Stock Price Chart

52 Week High	$41.93
52 Week Low	31.09
Last Trade	$39.87
52 Week Change (S&P)	13.48%

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