Tag Archives: comcast

Muni broadband endorsed by Comcast, again

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Comcast jumps on board.

Are you wondering whether or not you live in a place where Comcast will soon upgrade at least some of its broadband infrastructure and technology to the high speed, DOCSIS 3.1 standard? All you have to do is check to see whether there’s a municipal broadband project underway nearby. That’s a very reliable way to gauge the esteem that Comcast bestows upon your town.

According to a story by Daniel Frankel in FierceCable, Chattanooga, Tennessee is the next stop on Comcast’s DOCSIS 3.1 road trip, where it will begin offer much cheaper 1 gigabit service to homes and businesses…

Comcast had been delivering its pricey 10-gig fiber service to local Chattanooga businesses, and 2-gig fiber service to local residences. The DOCSIS 3.1 products are much cheaper, starting out at around $140 a month without contract.

Chattanooga’s publicly owned electric utility built a fiber to the premise system and began offering gigabit speeds in 2010, with faster service following in later years. The project, which was initially funded by a $100 million federal stimulus grant, has been credited with amping up Chattanooga’s economic mojo, with neighboring communities begging for the network to be extended.

Comcast’s Chattanooga announcement comes a week after it promised a DOCSIS 3.1 upgrade in Huntsville, Alabama, which also has a municipal electric utility in the process of building an FTTP system, which will be operated by Google Fiber. Huntsville and Chattanooga join a very short and select list of Comcast DOCSIS 3.1 upgrade targets, which includes two other Google Fiber cities, Nashville and Atlanta.

It’ll be interesting to see what Comcast does with its pricing. The Chattanooga muni system offers a gigabit to residential customers for $70 a month, half of Comcast’s standard rate. On the other hand, Comcast can spread costs and generate profits from a wide range of video and other services, over a nationwide footprint. There would seem to be little point for it to go head to head with a muni system if it wasn’t planning to use that market power to the max.

Competition, and something more, drives Comcast upgrade in Huntsville

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Demand.

Chalk up another win for broadband competition. Comcast announced that it was expanding its next generation – DOCSIS 3.1 – cable modem footprint to Huntsville, Alabama, and would be offering gigabit-level service to at least some customers. Details on service locations, roll out schedule and prices were lacking, though.

What clearly isn’t lacking is a competitive threat. Huntsville’s publicly owned electric utility is in the process of building a fiber to the home network that will be operated by Google Fiber and offer gigabit service at about half the price that Comcast charges in the four cities where it’s already offering it. Those cities include Nashville and Atlanta, where Google Fiber is also deploying fiber to at least some neighborhoods, Chicago, where Google-affiliate Webpass is present, and Detroit, which has neither.

Comcast similarly responded to plans in Santa Cruz to build a municipally-backed FTTH system by upgrading its plant.

AT&T previously announced that it would be offering gigabit service in Huntsville. It, too, has reliably followed Google Fiber’s lead as it prioritises the capital investments it makes in service and infrastructure improvements.

Although Comcast and AT&T are certainly playing defence and trying to prevent competitors from gaining a foothold, there’s also something like a virtuous circle effect going on. Google is – or, at least, was – identifying communities that were favorably disposed towards ultra-fast Internet service and then pumping up enthusiasm even further. For example, according to a story by Lee Roop on Al.com, Google reps spoke at a recent meeting of Huntsville entrepreneurs. One talked up the potential for small businesses and “another Google representative said homeowners can expect a $5,000 increase in their homes’ value if they add fiber optic cable”.

The more enthusiasm and awareness, the greater the market potential for high end broadband service. Competition feeds demand which draws even more competition. That’s how Huntsville is staying on the right side of the digital divide.

Cable, mobile companies fight California rural phone standards

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A California Public Utilities Commission decision slamming the practices of telecoms companies in rural areas – like attaching lines to trees instead of poles – and requiring carriers to notify both the commission and the state office of emergency services when significant telephone outages occur has been met with a broadly based challenge from California cable and telephone companies.

In a filing authored by Comcast lawyers and joined by Charter, Cox, small telcos, Verizon’s fiber subsidiary and lobbying fronts for the cable and mobile industries, the CPUC’s rural call completion decision was characterised as illegal on the basis of a long list of alleged procedural mistakes.

AT&T and Frontier – the primary targets of the decision – aren’t a part of this challenge and have yet to be heard from.

The big issue is whether carriers will have to report smaller telephone service outages to the CPUC than previously required, and also quickly notify emergency officials. That’s a three part problem, in the eyes of the challengers. First, they’re not completely clear about whether “carrier” applies to all phone companies, including cable companies that offer phone service, as the plain word would imply, or just to certain ones, such as traditional rural incumbents. Second, they don’t like the idea of having to tell state emergency operations centers when lines go down, because they’re used to keeping that kind of information secret and if they tell public safety officials then someone might find out the phones are out. Hey, no one would notice otherwise.

Finally, the threshold for reporting outages to the CPUC was lowered to a level that’s more consistent with rural circumstances. The previous standard was geared for large, densely populated areas and was high enough that a small rural community could be completely cut off and no report would have to be filed. The whole point of the decision and investigation behind it was to address problems that rural communities have with phone service, which doesn’t set well with companies that provide the service and, at times, cause the problems.

Usually, these kinds of challenges amount to we don’t like the decision so it’s gotta be illegal, and are typically rejected by the commission. This one might be different, though. The challengers are correct in pointing out that the process was out of the ordinary. The decision was written by former commissioner Catherine Sandoval and it was scheduled for a vote at her final meeting. Usually, when commissioners have objections to a draft decision – as some did in this case – the matter is bumped to a later meeting so changes can be made and reviewed. Instead, the document was rewritten on the fly during the meeting, and then a vote was taken, with two commissioners – Carla Peterman and Liane Randolph – dissenting.

If the CPUC rejects the challenge, it’s not likely to end there. The tone and the substance of the arguments make it clear that Comcast, Charter, mobile carriers and the rest think they’ll win if they take it to court.

CPUC decision on rural call completion issues, 15 December 2016
Coalition application for rehearing of decision on rural call completion issues, 3 February 2017

Haven’t seen the facts about AT&T, Time Warner merger, Trump says

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Translation: never mind.

Donald Trump is backing off from his stated opposition to the AT&T – Time Warner transaction. According to the Axios blog, Trump said in an interview

“I have been on the record in the past of saying it’s too big and we have to keep competition. So, but other than that, I haven’t, you know, I haven’t seen any of the facts, yet. I’m sure that will be presented to me and to the people within government.”

Wall Street’s optimism about a kinder attitude toward big mergers in Washington, DC appears to be a safer bet.

Yuge telecoms companies expect to get yuger

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Big money is leaning in the direction of a permissive, rather than populist, Trump presidency, at least when it comes to big telecoms mergers. AT&T CEO Randall Stephenson met with Trump last week. Although both AT&T and Trump’s team insist that the pending acquisition of Time Warner wasn’t discussed, Stephenson continues to project optimism that federal regulators – the justice department’s anti-trust unit and, possibly, the Federal Communications Commission – will allow it to go forward. That’s despite Trump’s initial – and probably knee jerk – public opposition to it.

Now comes word that Verizon wants to buy Comcast or Charter. That’s a much different beast. According to a story in the New York Post, Verizon CEO Lowell McAdam is on the prowl for a big cable company

The CEO told friends at the Consumer Electronics Show in Las Vegas earlier this month that he wants to buy into cable, one source said.

“They need it for 5G,” said a second source, confirming McAdam’s interest.

The most likely targets would be “Charter or Comcast,” the source noted.

“Altice is too small,” the source speculated.

To be sure, Verizon is not in talks with any cable company and may not ever make such a move.

A vertical integration play, like AT&T and Time Warner, is one thing. The Obama administration allowed Comcast to vertically integrate with its acquisition of NBC-Universal. But up until now, there’s been a limit on large scale horizontal combinations – Comcast wasn’t allowed to buy Time Warner Cable (although Charter, a smaller company, was) and neither Sprint nor AT&T gained permission to hook up with T-Mobile.

In addition to the Verizon rumor, there’s renewed speculation about another try at a T-Mobile and Sprint combo, or maybe even a three-way Comcast-Charter-Cox takeover of T-Mobile. The mere fact that the possibility is taken seriously says that Wall Street analysts and big company CEOs – arguably the people who know Trump best – see him as the deal maker he’s always been rather than the anti-establishment candidate he became.

Update: Trump is backing off from his stated opposition to the AT&T-Time Warner transaction. According to the Axios blog, Trump said in an interview

“I have been on the record in the past of saying it’s too big and we have to keep competition. So, but other than that, I haven’t, you know, I haven’t seen any of the facts, yet. I’m sure that will be presented to me and to the people within government.”

Comcast accused of not doing an inside job

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Getting ready for the service call.

What, exactly, is inside wiring? That is the $3.6 billion question facing Comcast in Seattle. The Washington attorney general is accusing Comcast of offering a bogus $5 a month service plan and wants a King County judge to impose the maximum fine – $2,000 each for the 1.8 million violations of the state’s consumer protection law.

According to a story in Geekwire by Nat Levy

The lawsuit alleges that Comcast marketed the service plan to customers as a “comprehensive” option that promised to cover service calls without additional fees.

But the lawsuit alleges the plan only covered a narrow scope of repairs and many customers ended up paying for repairs and technicians’ visits that they thought would have been covered by the plan. The complaint alleges Comcast charged thousands of customers for service calls related to its own equipment or network problems.

The marquee accusation is that Comcast’s service plan claimed to cover “inside wiring”, which it defines as the wiring between the terminal mounted on the outside wall of a subscriber’s home and the outlet jacks where they plug in equipment like set top boxes and telephones.

Except.

Except, wiring that’s inside a wall isn’t covered. So if there’s a problem and the service tech figures out that it’s a problem with the inside wiring but the wiring is too far inside, the customer is told that it’ll cost extra to fix.

Comcast’s defense is that the attorney general hasn’t produced anyone who was actually harmed by the fine print. The judge is expected to decide this week whether he’s going to throw the case out, or let it go to trial, which would likely happen next summer. If the consumer fraud theory flies in Washington though, other states in Comcast’s footprint are likely follow. Comcast’s inside-inside exception could prove very costly.

Comcast uses monopoly muscle to claw back profits from cord cutters

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Odd. He always seems to win.

Comcast’s operating profit drops by $5.50 every time a customer cancels bundled television service and goes with Internet service alone. That’s according to a story by Daniel Frankel in Fierce Wireless about some back of the envelope modelling done by Wall Street analyst Craig Moffett. His conclusion is that bundling prevents cord cutting, and I think he’s right. But another way of looking at it is that Comcast – and its mega-cable brethren – are using their monopoly control of high speed Internet service to extract significant rents – profits beyond what a competitive market would allow – from consumers.

Moffett estimates that when a customer stops buying video, Comcast loses $38 in operating profit, but immediately gets back $25 of that by raising the price of standalone Internet service and scores another $7.50 when about half of those customers upgrade to a higher speed tier, so they can still watch TV over the top.

Cable operators can price their service that way because they are typically the only source for high speed Internet service available to the average consumer. The California Public Utilities Commission’s investigation into the competitiveness – or rather, lack thereof – of the market for broadband service showed that at least half the homes in California do not have a choice between two or more wireline broadband providers offering the federal high speed minimum of 25 Mbps down and 3 Mbps up, and perhaps fewer than 30% do. In large part, that’s why the CPUC declared the consumer broadband market in California to be “highly concentrated”, which is term of art that translates to monopoly or near monopoly control.

It gets even worse as you move up the speed tiers towards 100 Mbps. AT&T and Frontier’s DSL services don’t go that high, and the only competition comes from the rare cable overbuilder or is found in the few communities where Verizon installed fiber to the home systems (which are now owned by Frontier).

It’s classic case of a monopolist separating out customers based on their willingness to pay for a product and, then raising its price to the maximum they’ll pay in each of those segments.

Advertising group sides with Verizon, slaps Comcast Internet claims

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When elephants mud wrestle.

Comcast’s advertising claims that it “delivers America’s fastest Internet” and “the fastest, most reliable in-home WiFi” aren’t supported and should be pulled. That’s the finding of the advertising industry’s self-regulation board, called the National Advertising Division (NAD). Responding to a complaint filed by Verizon, which naturally would prefer you think it has the fastest Internet service, NAD said Comcast used dubious data to back up its pitch

As support for its claims that XFINITY delivers America’s “fastest Internet,” Comcast relied on crowdsourced data from Ookla’s “Speedtest” application. Ookla’s “Speedtest” is an application which consumers download on their mobile devices and can run to measure their current upload and download speeds. Ookla’s “fastest Internet in America” award is based on a different methodology than previous NAD cases involving superior speed claims, but is also intended to show the “top-end performance of a given ISP.”

However, NAD noted in its decision, instead of relying on an aggregation of crowdsourced data on download and upload speeds, Ookla based its award on the top 10 percent of each ISP’s Speedtest download results.

NAD determined that Ookla’s methodology wasn’t a good fit for the purposes of substantiating Comcast’s overall superior speed performance claim that “XFINITY delivers the fastest Internet in America.” NAD recommended the claim be discontinued.

The WiFi claim was skating on even thinner ice – it was based on an in-house comparison of Comcast’s and Verizon’s home routers.

NAD also dinged Comcast for saying “Verizon is eliminating its traditional home phone service in certain markets” and that “Verizon is discontinuing its copper wire-based home phone service”. It called the statements “potentially confusing” and recommended Comcast change it to avoid giving the impression that Verizon was eliminating phone service completely.

Comcast’s response was to disagree and say it would appeal the finding.

Broadband gets lowest satisfaction rating of any industry in latest survey

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Consumers are a wee bit happier, on the average, with Internet service providers, but that’s not to say happy, according to the latest American Customer Satisfaction Index (ACSI) telecommunications company rankings. Overall, Internet service providers get an average score of 64 (out of 100), up one point from 2016. It is the lowest industry average of all those ranked by ACSI. Subscription TV companies – there’s quite a bit of overlap, of course – are nearly as bad on the average, getting 65 out of 100. By comparison, mobile phone companies get a 71, and consumer electronics manufacturers and full service restaurants share the top spot at 82.

Verizon’s fiber to the home customers are the happiest of all, rating their satisfaction at 73, up five points from last year. From there, though, it is bleak. AT&T drops five points to 64, Comcast is three points better at 59 and Frontier slides five points to the bottom of the ISP rankings at 56. The survey was completed before Frontier took over 2 million Verizon customers in California.

That also means it happened before Charter, Time Warner and Bright House merged together. All three companies are up from last year, scoring 63, 66 and 67 respectively. It’ll be interesting to see how the new combined company rates in 2017. ACSI cautions that “mergers tend to cause customer satisfaction to deteriorate, at least in the short term”.

Consumers are the least satisfied with their ISP’s customer service, choice of plans and delivered speed, including video streaming quality; all those factors rate 69 out of 100 or worse.

Online consumer cancellation law threatens broadband monopolies

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That’s not the AT&T logo about to explode, is it?

Sometimes the simplest laws bring the biggest changes. That might be the case for a proposal from California assemblyman Mike Gatto (D – Los Angeles) to make it as easy to cancel broadband or video service as it is to sign up for it. Assembly bill 2867 adds one sentence to California consumer protection law

If a cable or Internet service provider enables an individual to subscribe to its services through an Internet Web site, it shall also enable all of its customers to cancel their subscriptions through the Internet Web site.

A one-click disconnect puts consumers’ fingers on a trigger that can blow a giant hole in service providers’ financials. Churn is the leading killer of business models in subscription services businesses. It’s the rate at which subscribers leave. The cold math involved means that a rising churn rate stops growth, raises marketing and other subscriber acquisition costs and can send a company into a death spiral.

That’s what killed muni WiFi utilities back in the day, as I’ve previously written. It’s holding back overall growth of broadband adoption in the U.S. And it’s what drives Comcast customer service reps to go feral on dissatisfied customers.

It’s also a sign of a competitive market, with customers facing fewer barriers to switching and providers aggressively poaching each other subs. That would be less true, of course, in the duopoly market that cable and telephone companies have lobbied themselves into, and not at all where pure monopolies can be found. But punching a hole in the surly walls Comcast, AT&T and their brethren use to fence in customers is a useful step in the right direction.

Gatto is well positioned to move his bill through the California legislature – he’s the chair of the assembly’s utilities committee. But that also makes him well positioned to either benefit from cable and telephone lobbyists’ largesse, or become their target. They will fight it like they’ll fight no other piece of legislation in Sacramento this year. His enthusiasm, or lack thereof, depends on which side he’s on.