Article 43


Wednesday, March 11, 2009

AT&T Reinvests In America


AT&T to Invest Billions in Wireless and Fiber

By Tara Seals
Xchange Magazine
March 10, 2009

Femtocells; Wi-Fi; HSPA+; an almost doubling of its U-Verse footprint: AT&T Inc. said Tuesday that it plans to invest $17 billion to $18 billion this year despite the recession in these and other initiatives. And, it will add 3,000 new jobs.

And what, you might ask, is the economy-beating reason for keeping capex humming along in line with its pre-recession 2007 budget of $17.7 billion? The carrier says its still seeing increased demand for mobility, broadband and video - and especially for mobility, with a veritable explosion in demand expected once the economy turns around. It wants to capitalize on what growth areas there are (wireless and IP). And it wants to be ready for the future.

We expect demand will only escalate when the larger economy rebounds, and AT&T’s continued strong NETWORK INVESTMENT will help ensure that were fully ready to support the next wave of economic growth said Randall Stephenson, AT&T chairman and CEO, in a statement. “We recognize the continuing importance of investing in critical network infrastructure, which plays a key role in driving commerce, innovation and job growth.”

It’s wireless that will claim most of the limelight in terms of AT&Ts initiatives this year, with nods to fixed-to-mobile substitution and the increasing thirst for mobile Internet services.

Notably, AT&T will finally start to trial femtocells more widely with the goal of taking its 3G MicroCell service mainstream. These home base stations add carrier backhaul capacity by plugging into a broadband connection in the home to boost wireless signals to broadband levels for voice and data. Since the consumer is typically paying for the broadband in the first place, it’s an attractive way for a carrier to offload traffic and cost from the macro wireless network while encouraging broadband uptake.

Meanwhile it also plans to double its 3G network capacity by adding 850MHz spectrum to the mix, which is a frequency that provides better in-building coverage than the current network. It will also add 2,100 new cell sites and 20 new markets this year. And, in addition to its previously announced trials of 7.2mbps HSPA+, it said it plans to evolve to support speeds as high as 20mbps.

And along with all of this will be a continuing expansion of AT&Ts Wi-Fi footprint and infrastructure, building from the 20,000 hotspot footprint created in 2008 with the ACQUISITION OF WAYPORT.

On the wireline front, AT&T said it will nearly double its U-verse residential fiber footprint, hoping to pass 30 million homes in 2011, up from 17 million today. The carrier will continue to expand its DSL reach as well to cater to those looking for ғaffordable broadband.

It all adds up to AT&T expecting to see data traffic on its core network growing more than 50 percent year-over-year, so its global IP backbone is getting a cash infusion too, including investment in subsea fiber-optic cables.

Meanwhile, AT&T Labs will receive R&D funding to work on LTE, 100-Gigabit backbone network technology and emerging IP applications.

All of this translates into 3,000 new jobs in the growth areas: those building, maintaining and enhancing the company’s networks, jobs for developing and delivering new IP applications and positions in global customer service. Those job additions will be offset, however, by PREVIOUSLY ANNOUNCED JOB CUTS in AT&Ts declining wireline organization.

So the takeaway: AT&T is interested in wireless data, residential fiber, upgrading core capacity and supporting future IP-based technologies. Consider it a glimpse into the future.




In tough economy, AT&T brings off-shore jobs back home

By Rich Karpinski
Telephony Online
January, 20 2009

AT&T today said it has moved more than 3000 previously outsourced and off-shored telecom jobs back into its own operations.

The service provider said the moves put it halfway past its goal of bringing 5000 jobs in total back to the US. The jobs had been placed offshore Җ mainly by BellSouth and were being handled by contract vendors, AT&T said.

The bulk of the jobs are now relocated to broadband support centers in North Carolina, Louisiana, Alabama, Florida and Kentucky, with most of the others scattered across states in the Southeast.

In addition to those 5000 former BellSouth jobs, AT&T said it is about halfway to its goal of bringing back another 2000 former Southwestern Bell outsourced jobs to states including Indiana, Texas, Nevada, Michigan and Arkansas. Those jobs mainly provide support for wired broadband customers.



Posted by Elvis on 03/11/09 •
Section American Solidarity • Section Job Hunt
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The Next Depression Part 27 - Credit Lines


Six months ago I called the credit union for a preapproved new car loan.  They wanted 5.9%.  Last month after the banks got their BIG BAILOUTS and the feds DROPPED INTEREST RATES, I called aqain.  Now they want 8.5%. 

Say what?

For the past 30 years I’ve been paying all my bills on time, while others WALK AWAY from their mortgages, or file for bankruptcy.

Where’s the incentive for hardworking, credit-worthy, honest people looking to stimulate the economy by BUYING A NEW CAR?

There isn’t one.
- Loan Shark Banks, January 15, 2009

Credit Cards Are the Next Credit Crunch
Washington shouldn’t exacerbate the looming problem in consumer credit lines.

By Meredith Whitney
Wall Streey Journal
march 10, 2009

Few doubt the IMPORTANCE of CONSUMER SPENDING to the U.S. economy and its multiplier effect on the global economy, but what is underappreciated is the role of credit-card AVAILABILITY in that spending. Currently, there is roughly $5 trillion in credit-card lines outstanding in the U.S., and a little more than $800 billion is currently drawn upon. While those numbers look small relative to total mortgage debt of over $10.5 trillion, credit-card debt is revolving and accordingly being paid off and drawn down over and over, creating a critical role in commerce in America.

ust six months ago, I estimated that at least $2 trillion of available credit-card lines would be expunged from the system by the end of 2010. However, today, that estimate now looks optimistic, as available lines were reduced by nearly $500 billion in the fourth quarter of 2008 alone. My revised estimates are that over $2 trillion of credit-card lines will be cut inside of 2009, and $2.7 trillion by the end of 2010.

Inevitably, credit lines will continue to be reduced across the system, but the velocity at which it is already occurring and will continue to occur will result in unintended consequences for consumer confidence, spending and the overall economy. Lenders, regulators and politicians need to show thoughtful leadership now on this issue in order to derail what I believe will be at least a 57% contraction in credit-card lines.

There are several factors that are playing into this swift contraction in credit well beyond the scope of the current credit market disruption. First, the very foundation of credit-card lending over the past 15 years has been misguided. In order to facilitate national expansion and vast pools of consumer loans, lenders became overly reliant on FICO scores that have borne out to be simply unreliable. Further, the bulk of credit lines were extended during a time when unemployment averaged well below 6%. Overly optimistic underwriting standards made more borrowers appear creditworthy. As we return to more realistic underwriting standards, certain borrowers will no longer appear worth the risk, and therefore lines will continue to be pulled from those borrowers.

Second, home price depreciation has been a more reliable determinant of consumer behavior than FICO scores. Hence, lenders have reduced credit lines based upon “zip codes,” or where home price depreciation has been most acute. Such a strategy carries the obvious hazard of putting good customers in more vulnerable liquidity positions simply because they live in a higher risk zip code. With this, frequency of default is increased. In other words, as lines are pulled and borrowing capacity is reduced, paying borrowers are pushed into vulnerable financial positions along with nonpaying borrowers, and therefore a greater number of defaults in fact occur.

Third, credit-card lenders are currently playing a game of “hot potato,” in which no one wants to be the last one holding an open credit-card line to an individual or business. While a mortgage loan is largely a “monogamous” relationship between borrower and lender, an individual has multiple relationships with credit-card providers. Thus, as lines are cut, risk exposure increases to the remaining lender with the biggest line outstanding.

Here, such a negative spiral strategy necessitates immediate action. Currently five lenders dominate two thirds of the market. These lenders need to work together to protect one another and preserve credit lines to able paying borrowers by setting consortium guidelines on credit. We, as Americans, are all in the same soup here, and desperate times are requiring of radical and cooperative measures.

And fourth, along with many important and necessary mandates regarding fairness to consumers, impending changes to Unfair and Deceptive Acts or Practices (UDAP) regulations risk the very real unintended consequence of cutting off vast amounts of credit to consumers. Specifically, the new UDAP provisions would restrict repricing of risk, which could in turn restrict the availability of credit. If a lender cannot reprice for changing risk on an unsecured loan, the lender simply will not make the loan. This proposal is set to be effective by mid-2010, but talk now is of accelerating its adoption date. Politicians and regulators need to seriously consider what unintended consequences could occur from the implementation of this proposal in current form. Short of the U.S. government becoming a direct credit-card lender, invariably credit will come out of the system.

Over the past 20 years, Americans have also grown to use their credit card as a cash-flow management tool. For example, 90% of credit-card users revolve a balance (i.e., don’t pay it off in full) at least once a year, and over 45% of credit-card users revolve every month. Undeniably, consumers look at their unused credit balances as a “what if” reserve. “What if” my kid needs braces? “What if” my dog gets sick? “What if” I lose one of my jobs? This unused credit portion has grown to be relied on as a source of liquidity and a liquidity management tool for many U.S. consumers. In fact, a relatively small portion of U.S. consumers have actually maxed out their credit cards, and most currently have ample room to spare on their unused credit lines. For example, the industry credit line utilization rate (or percentage of total credit lines outstanding drawn upon) was just 17% at the end of 2008. However, this is in the process of changing dramatically.

Without doubt, credit was extended too freely over the past 15 years, and a rationalization of lending is unavoidable. What is avoidable, however, is taking credit away from people who have the ability to pay their bills. If credit is taken away from what otherwise is an able borrower, that borrower’s financial position weakens considerably. With two-thirds of the U.S. economy dependent upon consumer spending, we should tread carefully and act collectively.


Posted by Elvis on 03/11/09 •
Section Dying America • Section Next Recession, Next Depression
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Orlando Economic Ills


Orlando unemployment climbs again

By Marva Hinton
March 6, 2009

The unemployment rate is up again in Central Florida. It hasn’t been this bad since Jimmy Carter was president.

Unemployment in the Orlando area now stands at nine percent.

"That is the highest rate since June of 1977, so we have to go back over 30 years to find numbers in this range,” said Workforce Central Florida’s Larry Strickler.

And UCF economists say the situation won’t improve anytime soon.

“In the near term, there’s not a lot to prevent a double-digit unemployment rate,” said UCF’s Sean Snaith in a release. “There’s no glimmer of hope that’s going to quickly reverse our course.”

Pronouncements like Snaith’s have a lot of workers on edge these days, but Strickler says now is the time to be proactive. He says if you’re lucky enough to still have a job, you should be working hard to keep it.

“Whatever your job is, make yourself appear to be, to your boss, as valuable as you can be,” said Strickler. “Be as productive as you can be.”

If you’re out of work, Strickler says friends and family often have better leads on jobs than you’ll find online. He says you shouldn’t be shy about letting people know you’re looking for a job.

“Identify your network, your social network, your business network, your neighbors, people you go to church with,” said Strickler. “That’s generally HOW JOBS ARE FOUND especially in a market like this.”



Layoffs or pay cuts on the way for city of Orlando

By Mike Synan
March 11, 2009

The city of Orlando is facing huge cuts and a 30 million dollar budget hole.

The city broke the news to its unions Tuesday. Each department in the city needs to cuts 12 percent of its budget, and layoffs could be on the way. City CFO Rebecca Sutton says one of the two, either pay cuts or layoffs are inevitable.

“90 percent of adding those budgets together are salaries. If I took everything out of the budget, 100 percent, no vehicles, no gas, none of those kinds of things, no supplies, we still would not get to this number we are talking about.”

Steve Clelland with the firefighters union says they’re willing to deal, but first they want to “trust but verify” this 30 million dollar hole.

Department heads need to each trim 12 percent, including the Mayor’s office



Posted by Elvis on 03/11/09 •
Section Dying America
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