Dear AT&T Broadband,
I’m a little confused. I hope I have the name right this month. «Dear striped blue deathstar» seems too informal (and may infringe on a high school classmate’s intellectual property—sorry, George). «AT&T» I understand; «Broadband» I’m not so sure about. But never mind. I’m one of your customers and, I suspect, a hot prospect to get where you and other convergence operators need to be—and I just don’t see it.

The Goal?
I’m no businessman, but I read the business section. Don’t we all? As I understand it, you and your primary competitors are investing tens of billions in infrastructure and content with the expectation that you’ll get it back (and more) in monthly fees. I’ve seen a target number floating around $150 to $170 per month for a middle-class household, for a full range of «broadband» services and content.

"Maybe your goals are more modest. Would $120 per month be enough? I know you’re not the only ones in the game; the frequency with which they tear up El Camino Real to lay new fiber demonstrates that.

The Quandary
Here’s my question: How do we get there from here? To put it another way, what combination of services and content will convince a moderately skeptical, college-educated, literate householder to pay you $150 to $170 per month?

I should be an easy sell. Consider where you touch me already:
• You know I use your cable TV. There’s no decent rooftop reception around here and your competition is typically nonexistent. That’s $32 a month. Your customer service is no worse than TCI was—but then, how could it be?
• You’re not as big a player in the Internet business, but you’re my ISP, and in that area, I think you’re great. Consistent 50K connections, fast connections, good Web hosting with plenty of space: I see why you come in tops on PC magazine studies. That’s another $19.50 a month.
• I still use your long distance, mostly because we don’t do enough long distance calling to justify any fancy plan—and I even carry one of your credit card/calling card combinations (with the $1/month plan to reduce calling-card costs).

That’s $52 a month, plus maybe another $3 to $6 in long distance revenues. I notice that there are no price breaks for using multiple AT&T services, which doesn’t entice me to consolidate more stuff with you.

The Possibilities
Sure, I know you want my local phone service and keep throwing that «digital» line at me. But I like having some competition, thank you—and you’d only get another $12 or so if I did switch.

You’d love to have me add $10 for digital cable and $20 for @Home Net access. Given the lack of bundling price breaks, that would bring me up to $82, or even $94 with local phone service.

But that highlights one of our problems. Offer me all the cable I can eat, TV and high-speed Net alike, for (say) $55 a month, and we might have a deal. Otherwise—well, I know the reputation of TCI Digital for overcompressing signals; if I had enough Net use to justify @Home, I wouldn’t have time for digital cable (and vice versa); it just doesn’t add up.

Even if it did, $94 is a long way from $150. I don’t comprehend what you’re going to offer that makes $1,800 a year sound like a great deal. Some kind of content? You’re doing that already, with the expanded cable service that proves Bruce Springsteen’s point. Once I knock the shopping, foreign language, sports, and ultraconservative news stations off my TV’s channel-surfing list, I come up with almost exactly 57 stations—and sure enough, most of the time nothing much is on.