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Microsoft Differs With AT&T Over Exclusion of Games From Broadband

What do you expect from your high-speed Internet connection? If you listen to AT&T, it wouldn't necessarily include the ability to play Halo or Call of Duty online, even as online gaming has become one of the most popular things to do on the Web.

Microsoft and game makers, as you'd imagine, don't share that view. Robbie Bach, Microsoft's president of entertainment and devices, says that AT&T's definition, which was recently submitted to federal regulators, flies in the face of what consumers want.

Robbie Bach, Microsoft's president of entertainment and devices.

That disagreement lies at the heart of some of the biggest struggles taking place in telecom and technology, as network operators grapple with new business models and move to digital networks from their shrinking traditional business of voice communications.

The Federal Communications Commision is trying to come up with a new definition for broadband, as it creates a plan to bring high-speed Internet service to all Americans. The agency recently received a submission from AT&T outlining the company's vision of broadband, which would rank gaming behind other services.

"It's pretty difficult to argue given the volume of activity that happens in gaming, either simple casual gaming or serious gaming like on Xbox Live, that it isn't part of the broadband experience," Bach said in an interview at Microsoft's Washington office.

Indeed, a Pew Report in 2008 showed 97 percent of all teens between 12 and 17 said they played video games either on computers, over the Web or on consoles. Last May, there were 87 million visitors to U.S. online gaming sites, up 22 percent from last year, according to Comscore, a survey firm. The firm noted that consumers have turned to online gaming during the recession because it is cheaper than other forms of entertainment.

But AT&T appeared to be setting a different bar for broadband services than gaming companies. It said in its comments to the FCC that when considering a national broadband plan, it said basic e-mail should come before Halo or Mob Wars.

"But for Americans who today have no terrestrial broadband service at all, the pressing concern is not the ability to engage in real-time, two-way gaming, but obtaining meaningful access to the Internet's resources and to reliable email communications and other basic tools that most of the country has come to expect as a given."

Microsoft, which partners with AT&T, Verizon, T-Mobile and Sprint for its mobile operating system and applications for phones, has to tread carefully in the debate.

Bach said he sympathizes with network operators, which have to recoup the costs for services -- like gaming -- that take up lots of bandwidth. Some network operators are increasingly moving in the direction of tiered pricing models, in which consumers pay for what they consume.

I asked Bach if such a shift would hurt his company's business by discouraging people from using video services and gaming applications online.

"There is a general expectation from consumers is that if I have a connection, I should be abel to access what I want," he said. "The flipside is cost and how it should be managed."

"We have a great relationship with AT&T and others and we have to do what makes sense for everyone's business. If we allow the debate to be polarizing, then its not good for anyone."

By Cecilia Kang  |  September 17, 2009; 8:00 AM ET  | Category:  Cecilia Kang
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The Carriers need to get serious about this Broadband market and acknowledge their limitations, especially in the return path side of the business. Serious gaming in the Wireless environment will always suffer when dependent upon the existing and even near term Carrier Cell nets. Even with the emerging LTE nets there will be issue when Video downloads and sharing (uploads)and Interactive Multiplayer Gaming become prevelant. The WiMAX approach, focusing their nets mainly on delivering robust Data/Video connections, and not attempting to claim Unlimited while using obscure Terms and Conditions to limit actual usage/bandwidth, will dominate near term. Where On Line MultiPlayer Gaming will shine is in the Home (Wired FTTH especially)and in and around HotSpots with a Wifi connections.

Posted by: jimaimone | September 17, 2009 10:29 AM

Funny that they keep bringing up email as a priority. Email is one of the least bandwidth intensive services out there! Really this just illustrates the need for net neutrality.

The tiered service packages sound nice, but I can't help but think that providers will use them as an opportunity to raise profits at the consumers expense!

Posted by: crogerskc | September 21, 2009 2:13 PM

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