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A surprising admission from AT&T CEO Whitacre. The Telcos have been claiming that competition will lower prices and they have repeatedly used this argument in their push for state and national video franchising. Apparently what the telcos tell Congress is much different from what they tell Wall Street

from: Broadcasting and Cable

Whitacre Sees No Video Price War

By John Eggerton -- Broadcasting & Cable
6/2/2006 2:58:00 PM

AT&T Chairman Edward Whitacre tried to assure Wall Street types at a Sanford C. Bernstein & Co. media conference in New York this week that the entry of telcos into the video space would not lead to price cuts in video service.

When asked whether a price war between telco video, like AT&T's Lightspeed service, and cable wasn't inevitable, Whitacre said: "If I were the cable companies I guess I wouldn't be offering discounts."

He pointed to AT&T's plan to bundle broadband, voice, long distance, wireless, and video (a quintuple play) and said that would give the company flexibility in pricing.

I don’t think there’s going to be a price war. I think it’s going to be a war of value and of services," he said. "I think we will be very well positioned."

Most legislators have pointed to price and service competition as driving forces behind revamping telecom legislation to make it easier to launch video service in competition to cable.

Wall Street is concerned that a price war would affect the long-term health of Lightspeed.

On the issue of 'net neutrality, Whitacre said that he would continue to try to educate Congress that company is "not going to do anything to affect the Internet. Zero."