The Federal Communications Commission today adopted new, higher download and upload speeds as the benchmark for determining whether or not broadband is being deployed in a reasonable and timely fashion.

The new benchmarks are 100 megabits per second for downloads and 20 Mbps for uploads, an increase from the agency's 25/3 standard set in 2015. The new determination is part of the FCC’s regular assessment of the state of broadband deployment under Section 706 of the Telecommunications Act. The FCC, under chair Jessica Rosenworcel, set the latest review last November, signaling that the Biden administration sees 1 gigabit per second as future table stakes for the definition of high-speed broadband that is today’s “advanced telecommunications.”

The agency said in a statement after meeting today that advanced telecommunications capability is not being deployed in a reasonable and timely fashion based on the total number of Americans, Americans in rural areas and people living on Tribal lands who lack access to such capability, and the fact that these gaps in deployment are not closing rapidly enough. The vote for the new speed standards was 3-2 with the Democrats in the majority.

In setting the new benchmarks the agency considered standards now used in federal and state programs (such as NTIA’s BEAD Program and various Universal Service Fund programs), consumer usage patterns and what is actually available from and marketed by internet service providers, it said.

NCTA: The Internet & Television Association, representing cable companies, called the report “a missed opportunity for the FCC to acknowledge the substantial and undeniable progress that has been made in deploying broadband to all Americans, and to take credit for its role in that success. Indeed, just two days ago, the FCC’s own annual performance report stated that ‘this past year at the agency will be remembered for our progress toward [the] objective’ of ensuring 100% broadband coverage. The FCC’s decision not to recognize this progress in today’s report seems to be driven by an effort to bolster its regulatory authority more than any attempt to assess the pace of broadband deployment objectively. As internet providers work to connect every community to fast, affordable and reliable broadband service, the FCC can further speed this deployment by reducing regulatory barriers instead of imposing onerous new utility rules that will give the agency unprecedented power to micromanage the broadband marketplace.”

NRECA, representing electric co-ops, said: “The commission’s vote is a step in the right direction but still falls short of meeting the needs of rural communities. Affordable and reliable broadband access creates new ways to live, learn and earn in rural America. Rural families and businesses should not be subjected to second-class service simply because of their ZIP code. Consumer residential and business demands have already surpassed the benchmark approved today. With that in mind, the FCC should move to set future-proof benchmark speeds of at least 100/100 Mbps to ensure the broadband needs of rural communities can be met as demand continues to grow.”

Comcast’s Xfinity Internet provides the highest internet speeds in the most states — 20 — according to research by web-services company Hostinger, while Google Fiber is the speediest service in the relatively few states where it is available.

That ranking is based on data from speedtest.net, a Ziff Davis-owned company that compares internet provider speeds.

Cox Communications ranked second with the highest speeds in seven states, with Google Fiber third with top speeds in five states. AT&T was fourth with the top median speed in four states.

Google Fiber has the fastest median average speed by far at 337 Megabits per second, compared to Cox’s median average of 288 Mbps; Xfinity’s 275 Mbps; and AT&T's 243 Mbps.

Elon Musk’s Starlink satellite broadband service sported an underwhelming median speed average of 75 Mbps, below the FCC's proposed new 100 Mbps definition for baseline high-speed internet.

“[N]o provider monopolizes the speediest connections,” Eiviltas Paraščiakas, head of communications for Hostinger, said. “It is clear that while some areas are spoiled for choice, there are places in the country whose only option is slow Wi-Fi.”

Editor's note: Ookla, which runs speedtest.net, says the ranking is not based on its data and has reached out to Hostinger for clarification, as has NextTV.

The majority of Americans have neither the broadband speeds nor prices that would qualify them as having access to the advanced communications that FCC chair Jessica Rosenworcel has proposed as table stakes for broadband availability.

That’s according to a survey from BroadbandNow, a comparison and research site tracking high-speed internet service in the U.S., meant to determine which states have the best and worst broadband.

In its latest proposal for what level of service should meet the congressional definition of advanced telecommunications being rolled out to all Americans in a reasonbable and timely fashion, Rosenworcel signaled that she wants to add 100% affordability to the definition.

The Federal Communications Commission is required to report to Congress periodically on progress toward universal broadband access, with the regulator empowered to regulate access to advanced telecommunications service if it concludes it is not being rolled out on a reasonable and timely basis.

Rosenworcel also wants to raise the FCC’s minimum definition of access to high-speed broadband to service at 100 Megabits per second downstream and 20 mbps upstream. The current standard is 25 Mbps upstream and 3 Mbps downstream, set in 2015.

According to the BroadbandNow survey, based on data from the FCC and other sources, speeds of 100 Mbps downstream and 20 Mbps upstream service are available to just 39% of Americans. While low-cost high-speed broadband access has increased, the survey found that “at least 20%” of Americans have access to broadband for $60 per month or less in all states, but in only one state, Wyoming, do more than half the residents have such access.

The top state for broadband access according to the survey was Delaware, whose former U.S.  senator, President Joe Biden, has made universal access by the end of the decade one of his administration's major goals.

Alaska has the worst access, with 20% of residents unable to access broadband at the current high-speed definition of 25 Mbps upstream and 3 Mbps downstream. 

BroadbandNow aggregates data to help consumers comparison-shop for wired and wireless broadband service. It advocates for municipal broadband and for raising the definition of high speed to 100 Mbps upstream and 20 Mbps downstream.

John Deere. Canon. Mercedes. Samsung. Hyundai. Sony. Honda. Peterbilt. 

Each one and all eight see these two highlighted things in their future. As does the entire global — but especially the Unites States’ — health industry. 

At CES 2023 (the Consumer Electronics Show just passed) nearly every press conference, booth visit, conference session and even most one-on-one meetings involved at least an unspoken element of both the below items. I did not travel far, and long hours, expecting these two. But I sure found them in spades.

One was data. Indeed, data appears to be part of nearly every future business. While 10 years ago I looked and found few data applications, today it’s a surprise when I don’t see them. 

This leads to No. 2: delivery. Data has far less capability if it cannot be properly distributed to other devices, small or large, nearby or far away. 

This suggests two things for most future businesses: first, get deeper into data, including data management and enhancement; and second, the foundational forms of data distribution — such as fiber, and via spectrum services, i.e., wireless and satellite — are worth keeping and enhancing, in lockstep with data collection.

In two long days at CES 2023 last week in Las Vegas, the snapshots below — especially the future of the U.S. health care session — tell a story of future fascination, and of ubiquitous broadband connectivity.

The "fog" in the title above represents the new industry moniker, representing all the interchange of data signals and the transport of that data between devices. This “fog” is expected to get so much thicker in the years and decades ahead (see Fog Computing). 

This list below is a peek into the plans and planning of some of the biggest names in consumer electronics (and related businesses). They include a glimpse of how each one will carry the torch of distributing data between devices, to enhance just about every part of — and item within — each part of their product and service ecosystems.

Canon

The Japanese electronics giant touted its celebrity director-turned-spokesman M. Night Shyamalan. The Hollywood legend cheered Canon’s new virtual reality (VR) headsets under the MReal brand name (together with the Canon software called Kokomo). Additionally, a panel of sports and entertainment executives highlighted low-latency data delivery and collection, to enhance not just the consumer consumption of sports content, but also uses such as improving player and team performances (see Canon at CES 2023). Data distribution was embedded in the entire presentation.

Mercedes

From only a broadband connectivity POV, the titan German vehicle creator, Mercedes-Benz, focused its enhancement of what it calls its in-vehicle “holistic” use and entertainment experience. Key to that, a spokesman explained, is enhancing the simplicity of a customer’s “simple connectivity.” He offered further, beginning in the U.S. this year, customers will be able to “just start a new Mercedes app and immediately get directly into the vehicle’s connectivity.” (See The Standout Cars and Tech of CES 2023.)

Samsung

Samsung is the other huge South Korean conglomerate I visited at CES 2023, and like its fellow Asian electronics entity, Hyundai, Samsung avoided a focus on its main lines, instead pumping messages tied to its lesser-known products. In this case, the Samsung tagline was “Bringing Calm to our Connected World,” the highlight of the “connected” feature being Samsung’s claim of 14 billion connected devices in the world today. Home, car and workplace were the three centers of that connectivity message, championing Samsung’s “SmartThings” application, and a Samsung-estimated 80 million connected devices, themed around … you guessed it, “sustainability.” Broadband connectivity of all that data is paramount.

Hyundai

Hyundai, best recognized in the U.S. for its automobile expertise, spent most of its press conference block highlighting its global shipping, notably ships at sea. Ocean mobility and energy collection were themes, both also immersed in data and data delivery. Hyundai claimed that 40% of the world’s population lives within 40 miles of a coastline, emphasizing the relevance of actions aimed at the world’s oceans. “Hyundai leads the era of smart mobility by providing a platform that combines software and associated hardware, called Mobis,” extolled an online press announcement.

Sony + Honda

Saving its biggest and newest news for last, one of the oldest and largest of the pioneer Japanese consumer electronics concerns, Sony, began predictably illustrating its own latest gaming and VR developments. This was focused on its Gran Turismo product and service. A new Sony camera, labeled “Venice,” coupled with an app called Leonardo, both focusing remarkably on the disabled, and those folks’ abilities to also thrive in a gaming environment. The last 15 minutes of the Sony conference drove home its alliance with its country partner and giant vehicle manufacturer, Honda, to create a new mid-sized road sedan, branded “Afeela.” Needless to say, with 45 total cameras, 16 of which are inside the Afeela car, the importance of data collection, transfer, management, and seamless transfer back and forth will be paramount to its success — inside and outside the car. Further technology foci were autonomous driving and in-car entertainment. Sony’s spokesman used the phrase, “Everyone and everything intelligently connected” (See Electric Pickup Trucks, Flying Cars and More at CES 2023).

Toyota

The MX221 model of Toyota transport features an autonomous, self-driving taxi service, planned for delivery into global markets by 2030. An amazing set of service and entertainment features operate — again, like so much in the consumer technology world today — only because of data and interconnectivity. But one single example, is the spectrum needed to send a drone that drops lunches through the sunroof while the vehicle moves. In-car safety and health monitors, and maintenance and repair, are centered, too, around fog-type interchanges of properly delivered and distributed data. This innovation, too, homes in, like the Sony-Honda vehicle, on capabilities for the disabled.

Peterbilt

The giant U.S. long-haul truck company brand from Denton, Texas, mixed at CES 2023 with partner truck makers and truck ecosystem supporters, PACCAR, Kenworth, and DAF. Working hand-in-hand with mobile-cellular applications aimed at different functions dependent upon whether moving or not, fixed wireless is the other side of the wireless coin that makes these newest machines work, and work better and better, it seems (See, Peterbilt Showcases Advanced Truck Technology at CES). Peterbilt’s focus on autonomous vehicles will necessarily involve both mobile and fixed wireless applications.

John Deere

A huge, fully autonomous, self-driving tractor. How could that possibly exist without reliable broadband connectivity of the highest order? The challenge then becomes getting the best signal for the best value to these rural- and agricultural-based users. After all, how much sense does it make to try and install a wire into a moving combine? The answer is obvious: wireless connectivity is necessary and likely will be a huge part of the foreseeable future. While moving in the open fields, that signal would likely be mobile-cellular based; yet, while parked overnight in the rural barn or warehouse, the software updates in more cases than most would be best delivered via fixed wireless (in large part because installing fiber to singular remote farms and ranches is most likely remaining impractical for a long time to come!) (See, John Deere; and see, John Deere Keeps Revolutionizing Farming).

And a Bonus CES 2023 Presentation: The U.S. Health Industry

A last session of day two delivered the ultimate and perhaps most important and impactful version of the CES 2023 “Ubiquitous Connectivity” message. At the end of the hour-long session, each on-stage session participant was asked: What was the key takeaway for the audience vis-à-vis medicine and technology heading into 2023? To a doctor (there were five on the stage), digital health technology will change medicine primarily in the form of “data,” each opined. This meant not only data creation, but data management, and their closest sibling, distribution of that data.

In Sum

The obvious common CES 2023 thread: broadband connectivity.

The bottom line: If you can, hang onto your fixed wireless and/or hybrid fiber wireless business. Or, if you are not yet in it, consider becoming so, in some related fashion (See, e.g., Big Ambitions: Oregon Co-ops Buy Majority Stake in Data Center). The data fixed wireless and related businesses will soon distribute is moving toward the center of more and more broadband connectivity. Why? Because every business is morphing to data; and most data only makes sense if it can be efficiently and affordably exchanged; in more and more instances, wireless will be the only way to exchange that data; and not all of that will be mobile/cellular wireless; fog will pervade — frequently involving fixed wireless and hybrid fiber wireless combinations, and eventually change the way we do just about everything. The future of data will never be limited to just wires or satellites. ■

With Kevin McCarthy finally getting enough votes to be elected speaker of the House and that body cleared for the takeoff of Republican committee leadership, look for that leadership to launch FCC and NTIA oversight hearings. Of particular interest is the Biden administration's mechanisms for handing out tens of billions of government — meaning taxpayer — dollars in broadband subsidies.

That oversight could come on at least two fronts — the House Committee on Oversight and Accountability (formerly Oversight and Reform) and the House Energy & Commerce Committee, which has principal jurisdiction over communications issues. 

The Commerce Department's National Telecommunications & Information Administration (NTIA) is overseeing the distribution of most of the subsidy money, but the Federal Communications Commission also has billions of dollars through both historic and new subsidy programs.

On January 7, in a speech to CES 2023 in Las Vegas, NTIA chief Alan Davidson talked up the billions in subsidy money being teed up for this year, saying approximately $65 billion would be an investment in a “simple but ambitious’ goal: “[T]o connect everyone in America to affordable, reliable, high-speed Internet service.”

Also: McMorris Rodgers Warns FCC to Stay in Regulatory Lane

But Republicans also have a goal: to make sure that money goes to connecting the unconnected, rather than overbuilding existing service, and without waste, fraud and abuse.

Speaking on CNN, Rep. James Comer (R-Ky.), the incoming chairman of the House Committee on Oversight and Accountability, said government spending programs had gone without sufficient congressional oversight under Democratic control and signaled that would change.

Back in October, House E&C chair Cathy McMorris Rodgers sent a letter to FCC chair Jessica Rosenworcel warning her of what could happen if the Republicans took control of House chairmanships.

“As the committee of jurisdiction overseeing the FCC, I assure you the committee and its members will exercise our robust investigative and legislative powers to not only forcefully reassert our Article I responsibilities but to ensure the FCC under Democrat leadership does not continue to exceed Congressional authorizations,” McMorris Rogers wrote. 

And while Republicans don't control the Senate, Sen. John Thune (R-S.D.) last month wrote Commerce Department inspector general Peggy Gustafson, saying she had failed to do congressionally mandated oversight of past broadband funds. 

Specifically, he said that Commerce had failed to produce the requisite IG reports on the $1.5 billion NTIA has handed out through its Tribal Broadband Connectivity Program (TBCP).

Davidson said over the weekend that 2023 would see another $1 billion going to that Tribal program. ■

Mystery solved. Craig Moffett, the influential principal and senior analyst at MoffettNathanson, said new government figures give him the penetration rate for wired broadband in the U.S.

The rate, which he figures is 87.4% of broadband-available homes, suggests the broadband industry is saturated, a better outcome than finding an industry suffering a share loss to fixed wireless. Moffett’s previous estimate was 81.5% penetration.

As Moffett writes in a new report, which teases its conclusion until the very end: “The single most critical question facing cable investors is what happens to broadband subscriber growth from here. If the problem facing cable broadband today is saturation, then subscriber growth likely flatlines from here. If the problem is market-share loss, it probably goes negative.”

Also: Analyst Asks If Cable Is a Good Business and the Answer Doesn’t Mention TV

Moffett said the latest data from the Federal Communications Commission “strongly supports the ‘saturation’ thesis, in our view. What’s left to penetrate (of what has already been wireline enabled) will have to compete with headwinds that include poverty, illiteracy and, of course, relevance. We’ve seen estimates that suggest that fully half of broadband-enabled but unsubscribed homes don’t own computers. We don’t suggest that 87% penetration of homes is a ceiling … but it is likely not far from one.”

The Federal JOBS Act allocates $43.5 billion to bring broadband to rural areas, Moffett noted. The newest figure shows 7.3% of the country lacks access to a wired internet provider. The program also targets underserved locations, with access to slower than broadband-level service. That raises the target market to 12.8% of the country, or 18.3 million total housing units.

The notion that wired broadband is close to full penetration explains the pivot to rural expansion by Charter Communications, Moffett said.

“Charter’s view is that the 12.8% or so of the country that has not yet been wired for robust broadband service, while undeniably quite rural, will be attractive to build to when the government’s subsidies are included … or it won’t,“ he said. “They will make that choice on a location-by-location basis, just like everyone else. Their expectation is that there will be more than enough opportunity to fully and attractively utilize whatever capacity they can find.” 

Going forward, Moffett expects cable operators in particular to be major participants in the government’s subsidy programs, “bidding aggressively to bring broadband to unserved census blocks on the periphery of their current franchise areas.“

The Holy Grail number that unlocked Moffett’s calculations was the number of homes that have access to broadband. “We know how many homes in America have broadband, and we know how many homes there are in America,“ he wrote. ”But we’ve never known how many of those homes have access to broadband, and how many are too rural and are therefore unserved.” 

Well, this new government report finally fixed that.

Moffett said he continues to rate Comcast “outperform” with a target price of $46 a share. Charter is also rated “outperform” with a target price of $582. Altice USA is rated “market perform,” with a target price of $5, as is Cable One, with a target price of $740. ■

Congressional Research Service, which provides such service to members of Congress, has outlined a host of potential issues with the Federal Communications Commission’s broadband mapping process and the Broadband Equity, Access and Deployment (BEAD) program, and made some suggestions of what Congress may have to do in response.

In an “In Focus” report on the impact of the FCC’s National Broadband Map on BEAD and its $42.5 billion dollars in broadband subsidies, CRS said that among the issues for states and smaller internet service providers are contractual obligations, the resources to challenge the FCC map, and the number of challenges already filed, and potential lawsuits.

The FCC recognizes that the map, a draft of which was released to the public, is an iterative process and sought input on where it might miss the mark on where broadband is and isn't.

The FCC has already received “thousands” of challenges from individuals, according to chair Jessica Rosenworcel.

Also: FCC Launches New Broadband Map

According to CRS, contractual issues involve states' use of data vendors, which may hinder their ability to challenge the FCC's map because if they have leased data they want to use to challenge, there may be use restrictions. “Thus, states may not end up challenging the National Broadband Map — or if they do challenge, they may violate their contract and face legal jeopardy,” CRS said, citing Montana Department of Administration chief data officer Adam Carpenter.

Carpenter also said some of those vendors may be concerned that the third-party vendor the FCC employed to help it come up with the map's location fabric could use that data for their own commercial purposes.

The resource challenge was illustrated by New York state’s October submission of over 31,000 unserved or underserved addresses that the map had not accurately identified. New York clearly had the resources to ferret those out, but CRS points out that other states don’t have such deep pockets. New Mexico, for example, signaled it did not have the staff to fix its map problems by January 2023. Without those fixes, it said, it could miss out on hundreds of millions of dollars in subsidy money.

Among CRS’s suggestions for congressional actions are hearings, potentially mandating an extension to the challenge process, and seeking comment on its eventual resolution of challenges.

The FCC has signaled it wants to resolve map challenges by early 2023 so NTIA can meet its June 2023 timeline for handing out subsidy money to states. NTIA has asked states and territories to submit their challenges by January 13, 2023. 

A bipartisan group of legislators has already reached out to the FCC and NTIA asking for that challenge extension.

The senators want the FCC to extend the deadline for challenges by “at least” 60 days — to March 14, 2023. ■

Michael Powell, president of NCTA-The Internet & Television Association and former Federal Communications Commission chair, will testify December 13 at a Senate Communications Subcommittee hearing on "Ensuring Solutions to Meet America's Broadband Needs."

The hearing is being convened by Communications Subcommittee Chair Sen. Ben Ray Luján (D-N.M.).

The hearing will look at the general availability of broadband and the effort to close the broadband accessibility gap, with a focus on rural, tribal and low-income areas.

Also testifying will be Jonathan Spalter, president of USTelecom, Angela Siefer, executive director of the National Digital Inclusion Alliance, and Kimball Sekaquaptewa, chair of Connect New Mexico Council.

"This hearing will examine ongoing and past efforts within the public and private sectors to bring affordable, resilient and secure broadband to all communities," Luján's office said. ■

A bipartisan House bill has been introduced that would exempt billions of dollars in government broadband subsidy money from taxation.

The bill, the Broadband Grant Tax Treatment Act, was introduced Wednesday (Dec. 7) by Reps. Jimmy Panetta (D-Calif.) and Mike Kelly (R-Pa.) to plenty of applause from the broadband sector.

The House bill mirrors one already introduced in the Senate by Sens. Mark Warner (D-Va.) and Jerry Moran (R-Kan.).

Specifically, the bill amends the tax code to say that broadband buildout subsidies providers get in the Infrastructure Investment and Jobs Act (IIJA) and the American Rescue Plan (ARP) are not taxable income.

"We are grateful that Congress committed tens of billions of dollars to broadband deployment grants through recent bills seeking to help close the digital divide in our country," said Shirley Bloomfield, CEO of NTCA-the Rural Broadband Association. "But taxing broadband grants—requiring recipients to pay back to the government a portion of what they receive from the government—will dramatically reduce the impact of these programs and likely leave the hardest-to-reach communities without essential connectivity for even longer. It is critical that all broadband grant funds go toward their intended purpose of network deployment."

"Representative Panetta's and Kelly's bill to eliminate the counter-productive tax on broadband grants is right on the money," said USTelecom President Jonathan Spalter. "Closing the digital divide in America – especially in our hardest-to-reach rural communities – will require every cent of the $65 billion Congress has dedicated for that critical purpose." ■

Cable broadband operators are all for a new bipartisan bill focused on subsidizing rural broadband buildouts where there is no physical plant and with a thumb on the scale for experience in such buildouts.

NCTA-The Internet & Television Association applauded the introduction Tuesday (November 29) of the Rural Internet Improvement Act of 2022.

Backing the bill is Sens. John Thune (R-S.D.) and Ben Ray Luján (D-N.M.), ranking member and chairman, respectively, of the Communications Subcommittee, along with Amy Klobuchar (D-Minn.), and Deb Fischer (R-Neb.). All of them are members of the Committee on Agriculture, Nutrition, and Forestry.

The bill would "streamline" USDA rural broadband subsidy programs, essentially replacing the current ReConnect Program to better target it to areas without wired broadband service.

In 2021, USDA made $1.15 billion in federal loans and grants available to expand high-speed internet access in rural communities across the country through the ReConnect Program, part of President Biden’s Build Back Better agenda.

Also: USDA Makes $1B Available for Building Better Rural Broadband

Republicans in particular, along with cable operators, generally advocate for such a definition, rather than using speeds or price as a determinant of availability.

Speaking to that was Sen. Thune, who said in a statement: "Our bipartisan legislation would help bridge the digital divide by improving USDA’s ReConnect Program to ensure its funding goes to truly unserved areas.”

Klobuchar was focused on what she characterized as "key" improvements that would "allow for a more convenient application process and more efficient deployment."

The ReConnect program has had a definition of broadband availability that included considering the economic needs of the community to be served; the extent to which a provider will offer affordable service options; and a project’s commitment to strong labor standards.

"[S]ignificantly," said NCTA, "this bill would direct funding for network expansion to areas where at least 90 percent of households lack access to broadband, and it would encourage reliance on applicants with demonstrated experience constructing and operating broadband networks in order to promote network construction that is on budget and on time. These are solid improvements to the current program that should be adopted as part of next year’s farm bill," to which the standalone bill is expected to be attached.

In addition, according to Thune's office, the bill would:

1. "[M]erge and codify the popular Rural e-Connectivity Pilot Program (ReConnect) with USDA’s traditional broadband loan and grant program;

2. "Enhance the participation of all types of broadband providers in the ReConnect Program by removing unnecessary barriers;

3. "Increase transparency by improving the challenge process in the ReConnect Program;

4. "Improve the coordination between USDA and the Federal Communications Commission (FCC) on broadband programs; and

5. "Require USDA to enter into a memorandum of understanding with the FCC and National Telecommunications and Information Administration to facilitate outreach to rural residents and businesses of available federal programs that promote broadband access, broadband affordability, and broadband inclusion." ■

The telecom industry is about to spend a fortune upgrading its broadband networks so that they can deliver crazy-fast, multi-gigabit speeds, symmetrically across downstream and upstream channels.

But nearly five years after Comcast completed its national rollout of 1 gigabit-per-second internet service, only 15.4% of U.S. broadband homes subscribe to even a 1-gig service.

The latest report from OpenVault Broadband Insights (OVI) reveals that gig-speed uptake is accelerating -- 1 Gbps subscribers represented only 11.4% of homes in the third quarter of 2021.

But the vast majority of the market seems to be successfully streaming Netflix, conducting online learning and quitting Twitter using more pedestrian 200 Mbps - 400 Mbps speeds (see OVI chart below).

Is demand for a near-term "10G" future really a thing?

Armed with case studies of future usage paradigms requiring ultra-fast speeds and super-low latency -- think remote surgery -- cable companies and other telecoms insist the massive infrastructure investment remains vitally necessary.

So how much are we talking about?

On Tuesday, Elad Nafshi, executive VP and chief network officer for Comcast Cable, surprised investors at the RBC Capital Markets Global Technology, Internet, Media and Telecommunications Conference when he said the "mid-split" required to deliver symmetrical multi-gigabit speeds on Comcast's current DOCSIS 3.1 hybrid-fiber coaxial (HFC) network would cost less than $200 per home passed.

The investment, Nafshi said, is "not all incremental, because in many ways we would need to make that investment for capacity augmentations, anyway."

Comcast said earlier that it would start introducing multi-gig symmetrical speeds to its customers in 2023, completing its rollout to 50 million homes by 2025.

According to "back of the napkin math" performed by Light Reading, Nafshi's declaration means that passing 50 million homes with multi-gig services will cost Comcast less than $10 billion -- a bargain, given that full fiber-to-the-home delivery would run $1,000 per home passed ($50 billion total).

The move, however, would only "lay the groundwork," Light Reading said, for upgrades to a next-generation "10G" standard like Full Duplex DOCSIS 4.0 -- at a cost that would run tens of billions more.

Usage Continues to Spike

OVI's third-quarter 2022 "Broadband Insights" report does show broadband usage demands in the U.S. continue to increase at a rapid clip. The average subscribing home used 495.5 gigabytes of data in the third quarter vs. 434.9 GB a year ago.

Meanwhile, the number of "power users" -- subscribing households that consume 1 terabyte of data each month or more -- keeps increasing, particularly for those with flat-rate service plans.

According to OVI, 14.6% of flat-rate-billed homes now fall under the power user definition. In fact, 2.3% of this cohort used 2 TB or more in the third quarter.

Charter Communications said Wednesday that it has named Christopher Winfrey president and CEO and that current chairman and CEO Tom Rutledge will become executive chairman effective December 1, ending a 10-year run as the chief architect of the cable giant’s strategy.

Rutledge joined Charter in 2012, after serving as chief operating officer of Cablevision Systems for about 10 years, and led the company through its biggest period of growth, engineering the 2016 purchase of Time Warner Cable that vaulted Charter into the No. 2 spot among cable operators in the country.  Rutledge will serve as Charter’s executive chairman and serve on its board of directors through 2023, where he will maintain oversight of government affairs and help with a smooth transition. He then plans to retire after a 50-year career in the cable industry. 

“It has been an honor and a pleasure to lead Charter and this incredible team over the past 10 years,” Rutledge said in a press release. “We have grown the company through innovation and strategic investments and have positioned Charter to provide the best-converged connectivity products and services available today. During my 50 years in this industry, I have witnessed first-hand its ability to continually evolve and change the world, and our opportunity today is greater than ever with ubiquitous connectivity being central to everything we do.”

Also: SCTE Cable-Tec Expo: Talent Gap Depends on What You’re Doing, Cable Chiefs Say

Rutledge can trace his cable roots back to 1972, when he served as a technician for Eastern Telecom while still attending college. His first permanent job in the industry came in 1977, when he joined American Television and Communications (ATC), a predecessor of Time Warner Cable, as a manager trainee. He eventually became president of Time Warner Cable, and in 2002 left to head up operations for Cablevision, joining Charter a decade later and steering it to its greatest period of growth. Under Rutledge’s watch, Charter’s annual revenue rose more than 600% while its customer base has increased 500%. Rutledge also oversaw the launch of the Spectrum brand, the company’s forays into mobile and 1-gigabit per second broadband. Today Charter has more than 32 million customer relationships, second only to Comcast. 

“When Tom was chosen to lead Charter in 2012, his reputation as a skilled operator was second to none, but we never anticipated the new heights to which he would take this company,” Charter’s lead independent director, Eric Zinterhofer, said in a press release. “He redefined and exceeded every measure of success, establishing Charter as a best-in-class U.S. connectivity provider. He grew the company both organically and through transformative acquisitions, which included Time Warner Cable, Bright House Networks and Optimum West (Bresnan). In addition, Tom has skillfully developed the next generation of leaders at Charter, including Chris. We are pleased Tom will continue to serve Charter and its shareholders as Executive Chairman of the Company and its Board in 2023.” 

Winfrey “has consistently demonstrated significant leadership and delivered an impressive track record of successes. He earned the respect and trust of his colleagues, the industry, the financial community and this Board,” Zinterhofer added. 

Winfrey joined Charter in 2010 as chief financial officer and was named chief operating officer in 2021. He has nearly 25 years of experience in the cable business, and before Charter served as managing director for cable operations, broadcasting and satellite entities at Unitymedia GmbH, Germany's second-largest cable operator. Earlier in his career, he served as senior VP, corporate finance and development at Cablecom GmbH, and was previously a director of financial planning and analysis and director of operations services of NTL’s Continental Europe operations, and a senior associate in the private equity group at Communications Equity Associates. 

“Chris’s leadership and expertise in both operations and finance have been pivotal to Charter’s growth and success,” Rutledge said in a press release. “He has repeatedly demonstrated innate strategic insight and keen market and industry awareness to drive an organization to perform at the highest level. Having worked closely with Chris for more than 10 years, he is the right choice to be our next CEO and will serve Charter’s customers, employees and shareholders with integrity and skill, leading the company to new and extraordinary heights.” 

Also: Texas Judge Cuts Charter Damages Bill to $1.15 Billion in Case of Customer Murdered by Installer

Currently, Winfrey is leading Charter’s rural construction initiative including its $5 billion investment associated with the Rural Digital Opportunity Fund (RDOF), making gigabit broadband connectivity available to more than 1 million currently unserved locations. He also will lead the company’s path to a fully converged broadband offering with symmetrical and multi-gigabit speeds across its entire network. As CFO, he spearheaded Charter’s transformative M&A activity, played an integral role in the Time Warner Cable and Bright House Networks integrations and managed Charter’s financial activities through a period of significant growth. 

“I am grateful to Tom and the Board for entrusting me with this appointment and the incredible opportunity to lead this top-flight management team and company,” Winfrey said in the press release. “I am deeply committed to Charter’s success and will continue our track record of delivering the best connectivity products and service to our customers, investing in the careers of our employees and building long-term value for shareholders.” ■

As companies scramble to build out fiber networks to capture market share in the increasingly competitive broadband market, Charter Communications chairman and CEO Tom Rutledge told an industry audience Wednesday that wireless connectivity will separate the winners from the losers.

At the Goldman Sachs Communacopia + Technology conference Wednesday, Rutledge, when asked about the company's competitive stance against fixed wireless and fiber broadband competitors, said the combination of its broadband and mobile networks only makes it stronger.

Charter does well in markets where it competes with fiber and fixed wireless broadband, Rutledge added. Its mobile network can offer speeds up to 1 Gigabit per second today, and could get even faster as more and more traffic is shifted from its Verizon MVNO to its own WiFi network, he said.

“We can have the fastest mobile product around,” Rutledge said. “Eighty percent of the bits are actually on the WiFi network and we’ve got a pathway to put even more traffic onto the WiFi network and to CBRS.”

He added that more and more of the business is wireless — there are 450 million devices connected to Charter’s network and most are wireless — which also gives his company the upper hand against the competition.

“I think we have a competitive advantage there because we have advanced WiFi, we have an integrated mobile product with that, and even our future video product with the Xumo joint venture is wirelessly delivered,” Rutledge said. “We’re going to an environment where every device connected to our network is wireless.”

Charter entered into the JV with Comcast in April, where Comcast is licensing its Flex streaming platform as well as the retail business of its XClass TVs and its Xumo streaming service. Charter will contribute $900 million over several years.

That Comcast partnership also could serve as a boost to the video business, which  continued to lose subscribers in Q2, but could be on the cusp of an evolution in part spurred along by the JV.

“I don’t think it’s about to precipitously fall apart,” Rutledge said of the current video business, adding that reductions in subscribers and increases in costs will likely remain for the next several years. But as the video business moves to an app-based model, the Comcast JV puts Charter in a strong position.

Also: Could Comcast and Charter’s New Streaming Platform Be The Launching Pad for Something Bigger?

“I think this new platform that we’re developing with Comcast, the joint venture, gives us an opportunity to monetize video and to use our customer relationships to drive that platform deeper into the market and to create an advertising business and a transaction business where we monetize the platform by helping direct-to-consumer media companies get more customers and take a fee for doing that, helping them sell the product,” Rutledge said. “The other opportunity that comes from it is advertising. To the extent that you get a big platform deployed and you’ve got viewership, you can monetize that and get better CPMs because it’s targeted advertising.” ■

Fueled by an accelerated fiber rollout across its footprint, Altice USA, which has endured four consecutive quarters of broadband subscriber losses, should turn the corner in Q4 and beyond, outgoing CEO Dexter Goei told an industry audience Tuesday.

But that means that Altice USA investors will likely see continued declines in Q3. At the Goldman Sachs Communacopia + Technology conference in San Francisco, Goei said while the company has made strides in deploying its fiber network -- it expects to finish 2022 with up to 2.3 million homes passed with the technology -- it is still seeing customer declines in its former Cablevision and Suddenlink footprints. 

In Altice’s former Cablevision systems in metropolitan New York City, gross additions are lower, there is less move activity and churn levels are low, but the company also is competing against a telco -- Verizon Communications -- that has been extremely aggressive on price. In its Suddenlink markets mainly in the Midwest, gross addition activity is high but churn is high, especially in markets where it is being overbuilt.

“We’re still losing subs in both markets but for different reasons,” Goei said. “We feel good about the fourth quarter turning around and looking better next year.”

Altice USA lost about 3,000 subscribers in 2021 -- the only major cable operator to do so -- and shed more than 50,000 broadband customers in the first half of this year.  

Altice began accelerating its fiber rollout last year, with a goal of passing 6.5 million homes by 2025. At the Goldman conference, Goei said the company expects to end 2022 with 2.2 million to 2.3 million homes passed with fiber (an increase of about 1 million homes), and should add another 1.6 million to 1.8 million households by the end of 2023. 

While other cable operators have seen an increase in competition from fixed wireless access providers from telcos, Goei said most of Altice USA’s telco competition is replacing slower DSL lines with fiber, hence the acceleration of its own fiber buildout plans. But he shared his peers’ disdain for fixed wireless access (FWA), agreeing with some pundit predictions that the technology will reach a performance and penetration plateau in the next two or three years.

Goei announced his intention to step down as CEO earlier this month, and will become executive chairman of Altice USA on October 3. In his place the company named Comcast executive Dennis Mathew as CEO, also effective October 3. Mathew has 17 years of experience with Comcast, most recently as senior VP of its Freedom Region (Southeast Pennsylvania, New Jersey and Northern Delaware). He earlier served as senior VP for its Western New England Region (Connecticut, Vermont, Western Massachusetts and areas of New York and New Hampshire) and has extensive experience in running cable businesses. 

Goei said at the Goldman conference that his main motivation for stepping down was a desire to return to Europe, where he spent his childhood and most of his professional career, with his family. He added that he notified the Altice USA board of his decision about a year ago, starting the search process for a replacement about six months ago. He believes he’s leaving Altice USA in capable hands. 

“I interviewed many, many people during the process; Dennis fits the bill across the board,” Goei said, adding that Mathew has a proven track record in operations, running one of Comcast’s most high-profile regions (the Freedom Region) and will fit in well with the Altice team. “He’s just a great guy, a team player, will focus on the prize and is someone who would do very well with the executive team at Altice USA.” ■

After four straight quarters of broadband subscriber losses, a 38% decline in its stock price and the possible sale of its former Suddenlink Communications systems, Altice USA said it has named a new CEO -- Comcast executive Dennis Mathew -- while its longtime chief executive Dexter Goei becomes executive chairman.

The move will become effective as of October 3. Mathew is a 17-year veteran of the telecom industry, and has served in several operational roles at Comcast over the years. According to Altice USA, Mathew was most recently senior VP of its Freedom Region (Southeast Pennsylvania, New Jersey, Northern Delaware) responsible for strategic, financial, and operational performance at those systems. He earlier served as SVP for its Western New England Region (Connecticut, Vermont, Western Massachusetts, and areas of New York and New Hampshire) and has extensive experience in running and transforming cable businesses.

“I am honored to accept the role of CEO at this important juncture for Altice USA,” Mathew said in a press release.  “As Altice USA advances its position as a converged fixed and wireless player, I see immense potential to further connect with and serve customers in new ways while elevating the company as the connectivity provider of choice.  I look forward to leading such an innovative company that has the right vision and long-term strategy centered on investments in fiber infrastructure and a superior customer experience.”

Mathew will be based in Altice USA’s Long Island City, New York headquarters.

“I am pleased to welcome someone of Dennis’ caliber and mindset to Altice USA,” Altice USA founder and chairman Patrick Drahi said in a press release.  “He has an impressive track record at Comcast, driving transformation and success in highly competitive markets and redefining the role of telecommunications services for customers through a superior service experience, all of which will serve us well.  With our fiber network deployment well underway, I am confident that Dennis is the right leader to build on the momentum we have made as we bring the most advanced fiber broadband services to our customers across the country.  Dennis’ leadership approach, along with his commitment to our people, our customers, and our communities, will have a tremendous impact on Altice USA today and into the future.”

Goei, who intends to return to Europe with his family and helped in the selection of a new CEO, was Altice USA’s first CEO, taking over the company that was formed when European telecom giant Altice N.V., burst on the U.S. cable scene after its purchases of Suddenlink  Communications and Cablevision Systems. Goei, a longtime Altice N.V., executive, was tasked with implementing its parent’s strict cost cutting strategy, steering the operations to an initial public offering in June 2017. 

For a while, the strategy worked -- in 2019 Altice USA was one of the top performers in the cable business. But a footprint that was largely saturated -- its New York systems had some of the highest broadband penetration in the industry -- stiff competition from Verizon Fios (which operated in about two-thirds of its footprint) and the pandemic took its toll on subscriber growth. Altice USA lost 13,000 broadband customers in 2021 -- the only major cable operator to do so -- and has lost more than 50,000 high-speed data customers in the first half of 2022.  

In August, Goei acknowledged that the company was seeking a buyer for its Suddenlink systems, with some reports speculating that it expected $20 billion from a sale.  While no deal appears imminent, most analysts believe that Suddenlink will attract considerably less. .   

Drahi praised Goei for his stewardship of the assets, adding that the executive “has effectuated a business and cultural transformation at Altice USA over the past seven years, building the company into what it is today with passionate employees who are committed to our customers and to each other.  Given his intention to return to Europe with his family, Dexter has been involved in our search for a new CEO and I am grateful for his partnership to ensure Altice USA has the best leader to advance the company into its next phase of growth.  I have the highest respect for Dexter as a business partner and confidant and am pleased that he has agreed to serve as Executive Chairman of the Board of Directors while also supporting Dennis in his transition to CEO and working on key strategic initiatives.”

As executive chairman, Goei will support Mathew in the transition and work on key strategic initiatives. 

“Leading Altice USA has been the most rewarding experience in my career,” Goei said in a press release. “From our fiber network deployment and launch of multi-gig fiber broadband offerings to our diversity and inclusion programs and local community engagement efforts, I could not be prouder of what we have accomplished together thanks to the leadership team and the thousands of dedicated employees across the country who enthusiastically serve our customers and communities every day.  In the months ahead, my focus will be on ensuring a smooth leadership transition and working closely with Dennis on our key strategic initiatives.  I welcome Dennis to the Altice USA family and have the utmost confidence in him as we continue to accelerate and deliver on our fiber strategy and embark on the next chapter of our story.”■

Charter Communications chief financial officer Jessica Fischer kind of acknowledged the impact of fixed wireless access competition on broadband subscriber growth Wednesday, telling the audience at an industry conference he technology was one of four factors that led to the cable operator’s first-ever broadband customer loss in Q2.

Charter lost about 21,000 broadband customers in the second quarter, one of several cable operators that experienced actual declines in that segment after months of slow growth. According to Leichtman Research Group, cable operators lost about 60,000 broadband customers in Q2.  Analysts had been predicting a slowdown in broadband subscriptions for months, but didn’t expect growth to go negative so soon. 

At the Bank of America Securities Media, Communications & Entertainment conference Wednesday, Fischer said Q2 performance was impacted by four factors: sluggish new home growth, seasonality, fixed wireless competition, and fiber overbuilds.

"I think we have to acknowledge that there is a new competitor in the market in the form of fixed wireless," Fischer said. 

Fischer was quick to clarify that the impact from fixed wireless was more due to customers who may have chosen Charter broadband had FWA technology not been available, rather than existing Charter customers switching providers. And she said she doesn’t anticipate that impact to last long. 

“We expect those customers to come back to us over the long term,” Fischer said. 

Also: Fixed Wireless Will Temper Q1 Broadband Slowdown, Analyst Says 

But the fact that a senior cable executive has actually acknowledged the impact of fixed wireless service on their own wireline offerings is kind of a big deal. In the past, most top cable executives have dismissed the technology as either targeting customers cable has ignored — food trucks and such — or that it has had little to no impact at all. 

In July, Comcast chairman and CEO Brian Roberts, after the company reported flat Q2 broadband growth, was a little less dismissive of fixed wireless’ effect than he had been in the past, adding that although the technology “had no discernible impact” on Q2 performance, its early growth appeared to be a contributor to lower connect activity. But he still stressed that FWA is a poor substitute for cable broadband, with slower speeds and less reliability.  

Also: Fixed Wireless Could Add 10 Million Subscribers by 2027, Analyst Says  

Fixed wireless has been available for a while, but the service has been hampered in the past by slow speeds — while the technology is capable of reaching up to 1 Gigabit per second, most offerings are in the 5 Megabit per second to 50 Mbps range, according to BroadbandNow. That compares to top speeds of 10 Gbps for cable, with some companies offering minimum speeds of 300 Mbps. While 5G has increased speeds and reliability for FWA service — T-Mobile, which added about 565,000 FWA customers in Q2, claims typical fixed wireless speeds of 33 Mbps to182 Mbps — it still lags cable broadband, a fact Fischer believes will keep cable in the high-speed driver seat for at least a while.

Also: Cable’s Broadband Slowdown: Saturation or Share Loss?

“It might be a more robust offering than the offerings that have previously been available in terms of fixed wireless,” Fischer said of 5G, “but in terms of speed and reliability, sort of being able to consistently deliver broadband speeds to customer  in a way that is going to meet the needs of the market, I think it’s still not there.”

Fischer said offering competitive fixed wireless requires the construction of a lot of fiber between radio sites, something she hasn’t seen a lot of telcos committing to. 

“The best wireless networks have a lot of wires,” she said. “As a sale of additional capacity on their networks that works temporarily, I think it’s fine. In the long term, I think that those customers end up being our customers.” ■

Right now, in the case of a particular executive department of the U.S. Federal government, that agency has made a first-ever fact-missing determination that damns one of the industries tasked for decades with delivering reliable broadband to nearly 10 million – mostly rural – Americans, in every state and jurisdiction. More importantly, by what will soon be multiple tens of millions, that agency-level decision damns that industry's constituents, and their constituents' clients, in the form of everyday broadband consumers. Now, that story – and its impact – needs telling. Clearly, it needs fresh support. And it needs significant change. By way of presentation below of the problem, its impact, facts, a couple of comparisons, and a resolution, a clearly better way is urged.

The NTIA Conundrum

The National Telecommunications and Information Administration (NTIA) is a part of the U.S. Department of Commerce. The NTIA is tasked with improving the understanding and distribution of broadband, information, and telecommunications services to Americans. 

The NTIA is different from the FCC, in that the latter is conceived of as an "independent" administrative body. The FCC is controlled and administered by its five commissioners, two of which are typically chosen by the party out of power. In today's context, that means two FCC commissioners and the chair are Democratic appointees, the other two commissioners are appointed by the Republicans. Today and since the start of the Biden Administration, the fifth commissioner is an open and unfilled seat. Conversely, the NTIA is directly controlled by The White House and its appointed secretary is part of the President's cabinet. Thus, the NTIA is, therefore, far less "independent" from politics and lobbying, than is the FCC.   

Somewhat unsurprisingly then, the more easily influenced NTIA was tasked, unilaterally, with the responsibility of assisting the proper distribution of billions of broadband dollars, as authorized by Congress' 2021 Infrastructure Investment and Jobs Act (IIJA) (See, Broadband Equity Access and Deployment Program).

After some gathering of information and viewpoints as to how to best distribute the all-important broadband funds, the NTIA appears to have unilaterally acceded to the demands of a couple of core lobbyists: one being a part of the broadband distribution industry; plus another set of the industry's vendors. Those, respectively, were the wired providers, and specifically, the fiber providers, and their constituent fiber users.

The Real Problem

Strangely, the U.S. fixed wireless broadband companies who rely entirely on unlicensed spectrum to serve residences and businesses were, essentially, intentionally excluded. This is because the NTIA stated incorrectly that broadband networks relying entirely on unlicensed spectrum were not "reliable," and thus should not be funded. Moreover, by not funding fixed wireless access provided via entirely unlicensed spectrum, the NTIA instead also determined that other funded broadband distribution forms – like cable, fiber, and telco – shall receive NTIA funds and thus an unfair competitive advantage. 

Specifically, the language of the NTIA's principal guidelines on the distribution of the IIJA Broadband Equity Access and Development (BEAD) funds, stated that if a provider used only unlicensed spectrum to deliver broadband to end users, then that delivery was, in turn, not reliable. At the same time, the NTIA guidelines mandated that those same Federal infrastructure funds could be used to overbuild – or build in the same geographical footprint as – the existing providers. That's correct: a local competitor could use Federal funds to wipe out another existing competitor's local business. 

This, in turn, either weakens or eliminates the growth of fixed wireless providers, and it strangely restricts the tools they can use. All of the broadband grants are scheduled to focus on either wired services only, or those grants will focus on a fraction of the real-world wireless industry, yet in the form of broadband distributed via only licensed (or exclusive) spectrum. Just one or the other. 

The true problem with the latter is that most of licensed spectrum is derived from FCC auctions, which are expensive. If something is unduly costly, it is mostly inaccessible to small and medium sized broadband operators. 

The additional expenses from the NTIA's new requirements are then typically passed on to the consumer; or likely worse, they cause the consumer to have delays in getting service, or perhaps not getting service at all. That is one of this issue's key bottom lines.

More specifically noteworthy here, are two points: 1) unlicensed spectrum's use in delivering broadband – especially to un- and underserved areas – has been and is proven to be quite reliable, by those that know, i.e., the FCC*; and 2) deploying licensed spectrum is often either very prohibitively impractical and expensive, or totally unavailable. Or worse, licensed spectrum is simply not the right choice for many geographic areas (See, Unlicensed Wireless System Offers High Reliability).

Thus, to make clear, overlooking lobbying to the contrary by the main U.S. fixed wireless association, which is the Wireless Internet Service Providers Association (WISPA), the NTIA decided in its decision dated May 13, 2022, to exempt primarily unlicensed spectrum providers from the receipt of IIJA Funds. And that means several tools in the solution kit that solves the Digital Divide are instantly removed. To emphasize, the action unfairly favors specific market providers without proper due process and rationale. The losers – thousands of  U.S. WISPs and hybrid fiber wireless operators, who use mostly unlicensed spectrum – are simply locked out. They are locked out without ample evidence, proof, and decision-making. That is wrong.

*Fixed Wireless Access (FWA), whether using licensed or unlicensed spectrum or in combination, is "reliable" broadband. The FCC, other federal agencies, and states and their subdivisions have long recognized it as a reliable and effective technology for their various broadband support programs. Numerous federal, state, and municipal projects, among others, depend in some measure on unlicensed FWA to realize their specific broadband-related goals.

The marketplace, too, recognizes the reliability of unlicensed FWA. Millions of Americans get their service from 2,800 WISPs, the majority of which use unlicensed FWA to deliver internet access to their customers. Banks, private equity, and other lending establishments have loaned FWA providers billions of dollars to grow their businesses. A $10 billion+ FWA hardware, software and services industry has emerged as a result. That is because WISP customers like and depend on unlicensed FWA to stay connected (See, "Lift-off" report, accessible for free by going to the home page of The Carmel Group, at www.carmelgroup.com). 

The Impact of The NTIA Decision

The NTIA's recent decision might remind many, clearly, of the cable industry's initial response during the early 1990s, to the deployment of Direct Broadcast Satellite (DBS) pay TV, by operators such as U.S. Satellite Broadcasting (USSB), DirecTV, Dish, AlphaStar and PrimeStar. DBS opponents derisively – and incorrectly -- labeled "DBS" as an acronym for "Don't Be Stupid." Another of those specific inaccuracies was that DBS rivals claimed that rain interference was so severe that it made the DBS service either significantly unusable or inferior. That was soon shown to be false, and wrong to the point that these days no one hears much about "rain fade," at all.

Today, by comparison, the antiquated and truly inferior Digital Subscriber Line (DSL) technology of the telephone industry has been deemed "reliable and future proof," by the NTIA**. This is an embarrassment. It ignores facts and assumes others that are not true. The allowance of DSL in place of proven wireless technologies is absurd.

Further, The Federal Register, vol. 85, No. 118, page 36785, shows the unlicensed bands that were determined authorized to be used to bid in the RDOF program.  Reliability is determined here by implication – the FCC would not allow such bands to be used if they were not reliable (See, 2020-13216.pdf (govinfo.gov).

The point: new technologies regularly face incorrect claims, assumptions, and determinations. It is up to those on the right side of truth to say "that‘s not true." Otherwise, consumers and policymakers make improper decisions based upon improper information. 

The majority of fixed wireless operators in the U.S. distribute broadband mostly using only unlicensed spectrum. And that works. And it especially works for the intended audience, which today includes a couple of scores of millions of rural Americans who otherwise do not receive even the FCC minimum of 25 Megabits per second (Mbps) download and 3/Mbps upload delivery capability.

**In its January 2022 Request for Comments, NTIA made no indication that it might exclude broadband networks using entirely unlicensed spectrum to serve last mile locations.

Fact: Unlicensed Spectrum Is "Reliable," Affordable, and Works

WISPA's National Spectrum Adviser, Richard Bernhardt, Esq., recently penned a very credible description of the facts supporting unlicensed fixed wireless. I strongly recommend reading it. (See, WISPs – Technically, Operationally Competent Purveyors of Reliable Broadband;
Unlicensed Spectrum Does Provide Reliable Internet Access). 

His core messages were that fixed wireless spectrum use:  

-Already works, and has been providing reliable broadband service to millions of customers for decades;

-Generates vital jobs and drives sorely needed economic growth, mostly in rural and suburban America; 

-Via thousands of providers, it delivers a responsive and consistent local presence, with enviable customer service and affordability; and 

-Those operators' services meet the needs of their clients with speed, regularity, and minimal latency; plus

-They operate with very little customer loss (or churn).

Rather than merely accepting his message at large, I of course looked at other objective recent points of view as to the "reliability" of unlicensed fixed wireless. Mr. Bernhardt's depiction of the actual technical capability and reliability behind decades of unlicensed broadband distribution is backed up by these additional experts and reports:

• See, Why Wireless Systems Operating in Unlicensed Spectrum Can Offer High Reliability; and
• See, Reliable Broadband Service Today and Tomorrow.

Another recent example: just look at the Navajo Nation, centered in Arizona at the confluence for the "4 Corners" that include Arizona, New Mexico, Colorado, and Utah, where we can make this comparison (See, NTIA unleashes $1B in IIJA funding for Tribal broadband): Ten fiber installs at $40K and a wait of 3 years, or 90 fixed wireless installs at roughly the same capital outlay, and a wait of just a few months, at most. This would be the likely choice (See, page 19, graphic 8, Liftoff: Comparative Economics of U.S. Internet Access Solutions).

All of these make one wonder what the NTIA was thinking when its executive leaders decided that unlicensed spectrum is "unreliable" now and in the future. The simple truth is, unlicensed spectrum in the U.S. today is not only NOT unreliable. Conversely, in every state, it typically serves scores of markets, plus an estimated 8.5 million U.S. broadband subscribers (See, reference and link to "Liftoff" report, above). That's a lot of broadband.

Reliable Metaphors

The NTIA funding builds tomorrow's broadband highways. Yet, metaphorically, before they even start, the NTIA is explaining to the states and smaller jurisdictions that every highway can only be an ultra-expensive one, made only of concrete. Indeed, that highway has to cost 8 to 9 times as much as reliable alternatives. And it has to be three lanes in each direction. And the cars that drive on it have to all travel at speeds of greater than 200 mph. With those parameters as its base, realistically, most places will never get roads, or, at minimum, most construction will be intolerably delayed. As such, the very purpose of the infrastructure program is thwarted. 

The NTIA seems to have completely forgotten or intentionally overlooked the fact that not every road needs to be built in the form of a four-lane 200-mph freeway, in order to transport commerce, people, products and services. Concurrently, the NTIA has excluded slower, yet entirely capable vehicles, and far less expensive and easy-to-deploy alternatives. The result is thus skewed for only certain "favored" projects. And do those funded alternatives work for just about everyone in a rural audience, with unserved areas, or places where there is little or no competition? 

They don't.

Resolution

Simply, the NTIA needs to go back and obtain more information. It needs to reopen its Notice of Funding Opportunity (NOFO) process.  

Noteworthy in this regard is that no apparent public input was provided as a basis for the NTIA's damning declarations. The NTIA needs to unplug for 30 metaphorical seconds, and plug the process back in. After all, the word "information" is a core part of its very title. And "information" connotes truthful description, which the current NTIA definition of "reliable" clearly is not.

Specifically, the NTIA must in its NOFO reexamine and be more realistic about how it reviews and defines projects and applicants. Additionally, NTIA should provide principles and guidance for the individual states. These would be ones that give the greatest necessary latitude needed to get the job done effectively. Then, press the reset button. 

For emphasis, NTIA has violated its tacit duty of properly distributing truthful data and determinations, by missing this foundational fact and message: unlicensed spectrum is reliable, as is fiber and other delivery modes. Give applicants and projects the funding they need, and let each industry vertical deliver the products and services that fit the objective. 

When the government itself unilaterally determines what technologies are reliable, or futureproof, or effective, it makes the wrong determinations, and it discourages new ideas. It also knee-caps small and medium sized businesses, thousands of which have struggled for decades to provide and invest billions into services in locales where nobody would go. Furthermore, without allowing the commercial marketplace to do so, NTIA effectively tries to choose its own "winners," based upon politics, not facts. This is not the role of the Federal government…no matter which administration.  

The NTIA must not seek only its own self-ordained "perfect" solution. Rather, it should stimulate industry to provide excellent service everywhere. Compromise, and equity – the hallmark of healthy politics – works here, too.

Summary

The current administration learned earlier this month the importance of compromise and of accepting lesser victories as actual real victories. This was seen in the bi-partisan, successful legislation to assist taxing, health, infrastructure, and climate change initiatives. In the case of the NTIA, the agency needs to remember and repeat that effective lesson. Work with the FCC, and come up with a compromise solution, where lots more Americans can be served, well. 

Ultimately, there are many instances when the most expensive and most difficult-to-access solutions are simply the wrong ones. In a dream world, they work. Yet, in the real world, they do not. That is true in every community. Just ask any mayor or city council representative how they come to decision-after-decision in their respective locales. In the case of much of rural America, that is certainly the case. 

For this NTIA funding decision, one broadband pipe, fiber, is one of those expensive and frequently impractical solutions. Its real-world use is limited. As noted above, in addition to its costs, fiber is subject to outage from underground digging, and damages from storms when fiber is hung above-ground on communications lines. Fiber's bottom line: in many cases, it is just not practical for deployment when other options – like fixed wireless using unlicensed spectrum -- are available. This is especially true in low density, high-cost areas. By requiring something very costly, it means broadband solutions will be slower to deploy, or often will never be deployed at all. If that's the only choice, then that community is either lesser served, or not served at all. Conversely, the mission of unlicensed internet service providers (ISPs) is to serve the underserved, serve the unserved, and provide a good solution for all clients. ISPs have a motto: don't make clients wait. 

And to drive -- pun intended -- the above metaphor just a tiny bit further: what the NTIA did is like GM lobbying the DOT to only subsidize the building and distribution of 200-mph electric powered Chevy Corvettes, and convincing the agency to accept the rationale that figures, "We can only move forward with something that is really fast, really expensive, favoring particular parts of the vehicle industry. We can thus all only drive really costly and fast Corvettes, only on high-speed freeways. Plus, in the interim, we can't wait by using other types of roads and by using slower, and non-electric cars!" Such a determination and decision today -- by any governing body -- would be almost laughable. 

Unlicensed spectrum used by thousands of fixed wireless operators is simply a means to a broadband end. Unlicensed spectrum works the same way as licensed, but each have their own constraints (See, "Liftoff" Report, page 8, Figure 2). Applying the metaphor above, fixed wireless operators are the actual vehicles. Spectrum is the type of road they travel using. And unlicensed spectrum is but one of several very effective and affordable types of road. Those small-to-mid-sized U.S. operators are the bulk of the U.S.'s unlicensed providers, and their extremely value laden and efficient spectrum is what they use to deliver something that works well today. Unlicensed spectrum is readily available, its interference can be mitigated, and its quality signal can be readily managed. The technology is constantly improving. In short, for emphasis: today's equipment using unlicensed spectrum is very reliable. 

An old adage has it, "perfection is the enemy of good." Right now, America needs, and needs badly, significant, and timely "good" broadband distribution, so that everyone has access. It does not need a "perfect" distribution method, perhaps lasting into the decades or scores of decades, yet limited by reality. And America does not need a "perfect," where far, far fewer subscribers will ever be served (at many times the cost).

In conclusion, the current statements, and principles in the NTIA's IIJA BEAD NOFO are not proper. And they make no sense. The current Administration and NTIA can do better. The NTIA decision harms the very objectives of the Congressional legislation to fairly and reasonably develop broadband for, and deliver broadband to, everyone! 

It's time for a reset. A real reset.

Post-Script

For nearly a quarter of a century, advocating on behalf of the nation's telecom trade groups has been a core concern for The Carmel Group, especially if that support involves a truthful, positive, and compelling story (always best, in that order). For five decades, we have done that for consumers of first, broadcast, then cable, telco, fiber, cellular, and satellite.

(See, New Carmel Group Study Shows Competition Exclusive to Satellite Radio Market; Carmel Group: XM/Sirius Merger Would Result in Less Choice, Less Diversity, Higher Prices; ACA: The American Cable Association’s Amazing Bandwidth; and see, scores of copies of The Carmel Group's DBS Investor and Phillip's Publishing's Satellite News, upon request).

Jimmy Schaeffler is chairman and CSO of The Carmel Group, a west-coast-based consultancy founded in 1995. He can be reached at jimmy@carmelgroup.com. He has not been compensated in any fashion for these views. They are independent and his alone. Further information about The Carmel Group can be accessed at www.carmelgroup.com.

Reps. Anna Eshoo and Doris Matsui, both D-Calif., have called on the departments of Transportation, and Energy, as well as the head of Commerce's National Telecommunications & Information Administration (NTIA), to coordinate the deployment of broadband plant and EV charging stations, both of which are being subsidized with billions in infrastructure spending.

Eshoo has long advocated for "dig once" policies that pair up road construction or renewal with broadband infrastructure, but this is specifically targeted to electric vehicle chargers.

Their request came in a letter Friday to Transportation Secretary Pete Buttigieg, Energy Secretary Jennifer Granholm, and Alan Davidson, head of Commerce's National Telecommunications & Information Administration (NTIA), which is overseeing most of the Biden Administration's billions of dollars in new broadband subsidies.

They pointed to the connectivity requirements of chargers -- states are required to have an internet-connected charger network for ease of "data collection, accessibility and reliability."

They also talked about the equity issues of both broadband and EV charging stations. "Digital equity disparities exist in areas where access to broadband is non-existent or unaffordable and it proportionately affects rural areas and communities of color," they said. As for EV chargers, "apartment residents are less likely to have access to at-home chargers," they told the secretaries. "This disparity poses a particular challenge to lower-income households and communities of color, who are more likely to live in multi-unit housing."

They said there are similar issues in rural areas, "where limited electric distribution exacerbates range anxiety, the concern that vehicles will not be able to travel the distance needed."

Given that, they said, funding from the Infrastructure Investment and Jobs Act (IIJA) should be used to build out broadband and EV charging networks simultaneously.

"In light of the national electric vehicle charging network’s connectivity requirements, the persistent digital divide, and EV charging infrastructure disparities across the nation, we encourage you to coordinate IIJA broadband and EV charging infrastructure efforts to encourage co-location of EVSE with telecommunications infrastructure when and where appropriate," they wrote the secretaries. ■

Cable One reported Q2 results on Thursday, missing analysts’ consensus targets for broadband subscriber growth, as one influential analyst believes its problems may only be beginning.

Cable One added 1,300 residential broadband customers in Q2, soundly missing analysts’ consensus estimates of 5,200 additions. While some analysts wrote off the miss as part of the overall decline in broadband growth the rest of the industry is experiencing -- the top three publicly traded cable operators either reported flat or negative broadband customer growth in Q2 -- MoffettNathanson senior analyst Craig Moffett feared it could be a sign of stiffer competition from fixed wireless access providers. 

Cable One, like the rest of the cable industry, has seen its stock price slip this year. As of Thursday (August 4), Cable One shares were down about 18% for the year to $1,441.80 each. On Friday (August 5), the stock slipped another 5% to $1,368.19 per share in early trading.  

Also: Analyst Says Telcos Better Positioned to Chip Away at Cable's Broadband Lead 

But even through that difficulty, Cable One has enjoyed one of the strongest trading multiples in the cable business. Cable One stock was trading at a 37% premium to Charter Communications on August 4 -- mainly because its largely rural footprint was free from serious fiber broadband competition and its relatively low market penetrations meant it had a long runway for growth. In a research note on August 4, Moffett noted that those days may be over as fixed wireless offerings take hold. 

“Fixed wireless has found its greatest success in rural markets, where the market is underserved and price sensitive, and when carriers tend to have excess capacity,” Moffett wrote. “Cable One’s broadband growth has slowed along with everyone else’s, and they may now arguably face more competition than peers, at least from FWA.”

Fixed wireless growth has been strong in Q2, with T-Mobile adding 560,000 FWA customers in the period, well above analysts expectations, and Verizon adding about 256,000 FWA subscribers. T-Mobile overlaps between 40% and 50% of Cable One’s footprint, according to Wells Fargo Securities media analyst Steven Cahall, but the company said it hasn’t seen much of an increase in FWA competition so far. 

In a conference call with analysts Thursday, Cable One CEO Julie Laulis said that T-Mobile hasn’t had much of an impact on Cable One, adding that it appears that most of T-Mobile’s additions in Cable One’s footprint are former telco digital subscriber line customers. Verizon’s impact, she said, has been “virtually nothing.”

“Overlap does not take into account network quality/capacity, which we think accounts for the difference here,” Cahall wrote in a note to clients. “[Cable One] has also segmented its customer base with higher speed offerings, which we think further insulates the threat.”

Also: Cable's Broadband Slowdown Hasn't Hit Bottom Yet, Analyst Says

Moffett stressed that he  wasn’t criticizing Cable One management or its business, but merely pointing out that the hefty premium its stock price has enjoyed over the years may not be entirely justified. 

“What we are struggling with is stock selection within a cable sector that we believe is oversold and underappreciated,” Moffett wrote. “As much as we admire Cable One, we struggle to see why such a large premium – indeed, any premium – is warranted here. We believe there are better opportunities to be had elsewhere in the group.”

The analyst also worried that without a wireless play to fall back on, the outlook could be even bleaker. Wireless has been the biggest growth engine for Comcast and Charter as broadband growth has declined.  

“Is any premium at all justified if Cable One’s growth prospects are no better – and arguably, without wireless, worse – than Charter’s?” Moffett asked. 

Adding to the pressure is Cable One’s relatively high prices for broadband -- its $80.44 residential ARPU is 23% higher than Charter’s. Although its ARPU can be a bit misleading -- it has extremely low penetration of video, meaning that those remaining generally pay for much more expensive tiers of service, which helps boost the number -- Moffett noted that Cable One customers also tend to pay for higher speeds of broadband which are more costly. That could mean that Cable One has extracted most of the benefit from the video/broadband mix that lies ahead than its cable peers, he said.

That, Moffett wrote, could be enough to send growth metrics southward. He added that with a predominantly rural footprint with customers that have the least disposable income in MoffettNathanson’s coverage universe, Cable One is more vulnerable to price competition. While that had little effect when competitors couldn’t justify building out their networks to its markets, lower cost FWA makes it a whole new ballgame.

“As a percentage of disposable income, Cable One’s prices are the highest in the industry. This could make them more vulnerable to competitive price-based offers and to macroeconomic weakness,” Moffett wrote.  ■ 

A bipartisan and bicameral group of legislators has introduced a bill that would create what amounts to a National Broadband Plan 2.0.

The FCC released a National Broadband Plan under then-chairman Julius Genachowski more than a decade ago.

The Proper Leadership to Align Networks (PLAN) for Broadband Act would require the President to come up with a national strategy "to close the digital divide" and a plan to implement that strategy.

The legislation stems from a Government Accountability Office report that concluded broadband efforts were "fragmented and overlapping" and recommended the creation of a broadband strategy.

The White House has not decided whether such a plan is needed or not. It has been putting tens of billions of dollars into broadband access subsidies, including pandemic-driven healthcare and distance education dollars as well as some $65 billion in infrastructure money. Some of that money is being overseen by the FCC, but most of it by the National Telecommunications & Information Administration, with much of that money going to the states for them to dole out as they see fit.

The Department of Agriculture also has broadband subsidy money for connected agriculture and other rural service.

The 2010 FCC plan notwithstanding, GAO said in the report that there are some statutory limitations on aligning the current “mosaic” of programs, including differing definitions of eligible areas and broadband speeds.

In 2020 Sen. Ed Markey (D-Mass.) called for an update of that 2010 plan and Blair Levin, the architect of the plan under Genachowski, agreed, saying it was long overdue.

While the NTIA in 2018 led an interagency group that reviewed those different definitions, it did not identify which statutes limited how the programs could be aligned or recommend any changes.

The GAO said change is necessary. “Without legislative proposals for Congress to consider, agencies may continue to face limitations in aligning programs to close the digital divide,” GAO concluded.

GAO's conclusions were based on its own analysis combined with interviews with stakeholders including ISPs and officials.

The legislators obviously are on the same page.

Introducing the bill were Sen. Roger Wicker (R-Miss.), ranking member of the Senate
Commerce Committee; Ben Ray Luján (D-N.M.), chair of the Communications Subcommittee; and Reps. Tim Walberg (R-Mich.), and Peter Welch (D-Vt.).

Wicker suggested a plan was needed to prevent the programs from being "mismanaged" and not coordinated, while Luján, looking at a half-full glass, suggested it was needed to improve the coordination between federal agencies.

The FCC and NTIA this week updated a memorandum of understanding (MOU) on coordinating spectrum policies, which is meant to help speed the freeing-up of spectrum for wireless broadband, among other things. 

"I am pleased that these Senate and House leaders have introduced this bill, which will require a national strategy as well as an implementation plan," said FCC Commissioner Brendan Carr. "It is critical that Congress move quickly to pass this legislation, and I would encourage all federal agencies to administer their broadband programs in a manner consistent with the smart policies included in this bill.” ■

Altice USA said it shed about 40,000 broadband customers in Q2, its fourth consecutive quarter of losses and double the 20,000 decline that many analysts expected.

Altice USA first reported a quarterly decline in broadband subscribers in Q3 2021 (-13,100), and finished the year with a 13,000 high-speed data customer deficit, after shedding another 1,900 customers in Q4. While the company has made some moves to right the ship -- it has accelerated its fiber broadband buildout plans, built new retail outlets and is rebranding all of its systems under the Optimum name, the losses continued. Altice USA lost about 13,000 broadband customers in Q1 and the current decline is its biggest quarterly broadband loss ever. 

Overall revenue was down 2.1% to $2.46 billion and cash flow fell 8.8% to $1 billion. 

Altice USA shares were down about 2% each in after-hours trading Wednesday to $9.49 per share.

Also: Cable's Broadband Slowdown: Saturation or Share Loss?  

Other large cable operators missed broadband growth targets in Q2 -- Comcast reported flat growth and Charter Communications lost 21,000 subscribers, its first loss in the segment ever. The results come several days after reports said that Altice USA had hired Goldman Sachs to seek possible buyers for its Suddenlink systems. 

Leading up to earnings announcements, most analysts expected Altice USA to lose broadband customers, with estimates ranging from a loss of 9,000 to 22,000 customers.   

Despite the decline, Altice USA CEO Dexter Goei said the company is turning a corner, adding in a press release that the company is beginning “to see the benefits of our investments against our growth initiatives.”

Earlier this year Altice said its fiber network passed 1.6 million homes, exceeding expectations, and has more than 100,000 fiber customers. In addition, the company launched multi-Gig service in June, and its Optimum Mobile service, although it still lags behind its larger peers, has more than 200,000 customers. 

“As we remain extremely focused on executing against these key growth initiatives, we expect an improvement in our overall customer growth going forward,” Goei said in the press release. ■

Barclays Group media analyst Kannan Venkateshwar downgraded his ratings on Comcast and Charter Monday in the wake of disappointing Q2 broadband performance, adding that the rapid growth of fixed wireless service from telcos may end up being more of a threat than cable operators think.

Barclays lowered the rating on Comcast to “Equal Weight” from “Overweight” and on Charter to “Underweight” from “Equal Weight,” citing their poor Q2 performance. In addition to non-existent broadband growth in Q2, video subscriber losses at both companies rose significantly during the period -- to 521,000 and 266,000 respectively -- reigniting fears of accelerated cord-cutting for traditional cable. While mobile subscriber growth for both Comcast and Charter exceeded analysts’ consensus estimates for the period, Venkateshwar split from his peers, doubting that wireless will be able to take up the slack. 

Broadband Forecasts Lowered Again

Venkateshwar noted that he now expects Comcast to add about 300,000 broadband customers this year, down from 1.4 million in 2021, and Charter to add about 200,000, down from 1.2 million additions in 2021. He said the debate has shifted to whether or not cable broadband subscribers will actually decline in 2023 and beyond.

The broadband slowdown has weighed on cable stocks for months. So far this year, Comcast stock is down 24%, Charter down 34%, Altice USA fell 35% and Cable One is down 22%. The sector probably will fall even further after Altice USA reports Q2 results on August 3. 

Most analysts have reduced their forecasts for cable broadband subscriber growth again in light of the Q2 results, with Wells Fargo Securities media analyst Steven Cahall cutting his estimates for Comcast and Charter nearly in half. 

Prior to the Q2 results, Cahall had estimated Comcast would add 688,000 broadband customers in 2022 and another 630,000 in 2023. Now, his estimates call for 298,000 residential additions in 2022 and 300,000 in 2023. For Charter, Cahall had estimated residential broadband growth of 499,000 in 2022 and 549,000 additions in 2023. Those predictions have been revised to 152,000 customer additions in 2022 and 295,000 in 2023. 

Fixed Wireless Threat 

The analysts pointed to the potential threat of fixed wireless -- T-Mobile USA added 560,000 fixed wireless subscribers in Q2, far exceeding consensus expectations -- and Comcast’s and Charter’s seeming indifference to that competition. In conference calls with analysts to discuss Q2 results, both Comcast chairman and CEO Brian Roberts and Charter chairman and CEO Tom Rutledge said they believe fixed wireless isn’t much of a threat. 

Roberts called the fixed wireless access Q2 performance a fluke, as excess capacity created a “temporary opportunity targeted at value-oriented customers.” And while he said FWA isn’t having any “discernible impact” on churn, he did acknowledge it was a factor in Comcast’s flat Q2 performance. Not exactly an admission of a threat, but close, even though he added that performance and capacity restraints will likely limit FWA’s overall penetration.

On the call, Rutledge appeared to dismiss the long-term impact of fixed wireless while admitting that it is “an issue affecting growth at the moment.”  

Rutledge said fixed wireless access’s impact is small when compared to Charter’s overall footprint. He said activity levels were the major driver for subscriber losses. And he said that there are other economic factors at play, including low housing occupancy and new construction because of supply chain issues.

“And so we're pretty optimistic, relatively speaking, that as the post-pandemic market activity levels return and normalize, that our share of broadband growth will rise,” Rutledge said on the call. 

Also: Analyst Says Telcos Better Positioned to Chip Away at Cable’s Broadband Lead  

But Venkateshwar warned that fixed wireless could become a factor very quickly, adding that if T-Mobile meets its guidance of 500,000-plus additions each quarter, it will be larger than Altice USA (the fourth largest cable operator in the country) by the end of next year.

Also: Broadband Slowdown Hasn’t Hit Bottom Yet, Analyst Says 

“It is tough to see this not impacting cable structurally when cable [broadband] net adds overall have been [about] 3 million in normal years and T-Mobile and Verizon alone could add 2 million to 2.5 million FWA subs a year,” Venkateshwar wrote. “This is even before the existing DSL base converts to fiber driven by government funding and AT&T’s fiber expansion, which we estimate will result in an additional 20% of cable footprint having fiber overlap.” 

Blame Game

Cable operators have mainly blamed the broadband growth slowdown on lower household moves, an excuse that the Barclays analyst is not buying.

“[T]his is a market share argument and it is not clear why this would drag growth down for the industry as a whole,” Venkateshwar said of slower housing moves. “While cable has gained share vs DSL over time and therefore lower moves would impact growth rates, it is mathematically impossible to get to negative growth as seen last quarter, purely on account of lower move activity. In addition, the decline in move activity is not new and has been going on for years and tends to worsen during recessions. Even if move activity recovers, there are new elements that are likely to reduce cable’s share of gross adds given fiber and FWA entrants.”

Going Mobile 

Other analysts have seemed to side, partly, with cable operators' view on fixed wireless access. In a research note Friday, MoffettNathanson senior analyst Craig Moffett said that while investors will likely focus on broadband performance for a while going forward, they will eventually come around to the thesis that wireless is the new growth engine for cable. According to Moffett, if video was Act I for cable operators and broadband was Act II, wireless is poised to be the industry’s third Act..

Charter added 340,000 wireless customers in Q2, ending the period with 4.3 million customers. Mobile now accounts for 5.5% of Charter’s total revenue. Though the segment isn’t profitable yet, once Charter’s CBRS offload initiatives are completed in the next few years, it will be more profitable than most could imagine, according to Moffett.

The same holds true for Comcast. The largest cable operator in the country added 317,000 wireless customers in Q2, ending with 4.6 million customers. Wireless makes up about 4.9% of Comcast’s total cable revenue and is growing at a 30% annual rate.

“[W]e believe wireless growth remains underappreciated,” Moffett wrote. 

Wells Fargo Securities' Cahall said the jury was still out on mobile valuations, and while unit economics are positive, they don’t yet exceed the cost of service. On the other hand, increased capital spending on wireless could make operators less  reliant on MVNO partnerships and more competitive with telcos. 

“Add it all up, and it's a very logical strategy, but we think the value is too uncertain at flattish adjusted EBITDA margins to offset the [broadband and capex] challenges,” Cahall wrote.

Venkateshwar also was impressed by cable’s wireless performance, but he added that any war between cable wireless and telco FWA will be won by the telcos. 

“Telecom operators have their own issues but their narrative around new revenue sources like FWA is more feasible, at least over the short term, because it is backed by significant capital investments in a fixed cost infrastructure that should provide operating leverage over time,” Venkateshwar wrote. “Cable companies on the other hand have no plans to invest in a full infrastructure based offering, but still believe they can do better with an MVNO model than operators elsewhere in the world have managed. This strategy makes sense to test out the market and launch a service, but to anchor [a] long term strategic pivot of the scale that cable companies are attempting on someone else’s network is not viable in our view.” ■

Comcast reported zero broadband subscriber additions in the second quarter, one of its worst performing periods ever in that metric, soundly missing analysts' estimates, while wireless subscribers continued their strong showing, rising by 317,000, its best second quarter ever.

The slowdown in broadband additions has affected all cable operators after record growth during the pandemic, but most analysts weren’t expecting growth to bottom out so soon for the largest U.S. cable operator. Analysts’ consensus estimates for the quarter were for 84,000 broadband additions, although some analysts predicted higher or lower additions.

Also: Losses at Flat Peacock Take Bite Out of NBCU Media Earnings

The flat additions drove Comcast shares down nearly 9% ($3.82 each) to $39.55 in early trading July 28. Other cable stocks followed suit: Charter was down 7%, Altice USA fell 6% and Cable One was down 3% in early trading Thursday.

For the quarter, Cable segment revenue was up 3.7% to $16.6 billion and cash flow rose 5.3% to $7.4 billion. Consolidated revenue was up 5.1% to $30 billion and cash flow increased 10% to $9.8 billion.  

Also: Eyes Will Be On Comcast Q2 Broadband Results 

In a research note, Wells Fargo Securities media analyst Steven Cahall wrote that while Comcast’s flat broadband performance won't move the needle on earnings per share or free cash flow much, “the market remains concerned about what net adds indicate for growing competition and how cable will have to respond.” 

Heading into Comcast’s results, Cahall noted, Wall Street was anticipating about 340,000 broadband subscriber additions in the second half of 2022 and more than 700,000 additions for the full year. 

“[W]e expect those numbers to fall (again) along with 2023E consensus net adds of [about] 800,000,” Cahall wrote. “Follow-on concerns include what happens to broadband ARPU growth and capex at Cable Communications if, in fact, Comcast is entering a more intense competitive environment due to Fixed Wireless Access at the low end and fiber at the high end.” 

Comcast first launched high-speed Internet service via third-party provider @Home in 1996 and has added customers ever since. In 2002, the company brought high-speed service entirely in-house on its own network and quarterly customer additions fell below 100,000 just once — 65,000 in Q2 2009.

On a high note, mobile wireless subscriber additions were 317,000, the company's best second quarter ever. So far this year, wireless has added about 635,000 wireless lines and ended the period with a total of 4.6 million wireless customers. ■

The Biden Administration has given out the first five grants in its Connecting Minority Communities (CMC) Pilot Program, which is one of many broadband subsidies under the Administration totaling tens of billions of dollars.

The CMC grants total -- to the penny -- $10,642,577.03, according to the National Telecommunications & Information Administration (NTIA), which administers the program.

The money will be used for equipment as well as information technology training and hiring for expanding high-speed internet access to minority colleges and universities.

The first five grantees include Historically Black Colleges and Universities (HBCUs), Tribal Colleges and Universities (TCUs), Hispanic Serving Institutions (HSIs), and Minority-Serving Institutions (MSIs)

The CMC was launched in August 2021 with $268 million in funding.

“Communities of color have faced systemic barriers to affordable broadband access since the beginning of the digital age,” said Secretary of Commerce Gina Raimondo at the time. “The investments we make as part of the Connecting Minority Communities Pilot Program will help communities that are struggling with access, adoption and connectivity, and will inform our path forward as we seek to finally close the digital divide across the country.”

To be eligible for the money, a recipient has to be in what is called an "anchor community," which means that the median household income cannot exceed 250% of the poverty line.

NTIA says it is continuing to vet the more than 200 applications it received in the application window which closed Dec. 1, 2021. ■

Shares in Altice USA soared Thursday (July 21) after a report in Bloomberg News said the mid-sized cable operator was seeking a buyer for its Suddenlink Communications division that could fetch as much as $20 billion.

According to Bloomberg, Altice USA is working with Goldman Sachs on a potential deal, citing unnamed sources.

Altice officials declined to comment on what they called "rumors."  

Altice USA CEO Dexter Goei opened the door ever so slightly to a sale back in May at the MoffettNathanson Media & Communications Summit, when he didn’t rule out a potential deal. 

“Suddenlink in itself is a great asset, great growth matrices, under-penetrated markets, less competitive areas, despite that it’s very rural,” Goei said at the conference. “But strategically, it's not a footprint that makes you sit there and say ‘Wow, that’s the most strategic footprint out there.’ So are we sellers or restructurers of certain of our assets in other areas outside of Cablevision? We're always open to listening to people out there if it makes sense for us to trade, swap, sell certain assets.”

Altice USA shares rose more than 40% in afternoon trading July 21, priced as high as $13.17 each, up 43.5% or $3.99 per share. Trading was halted briefly by the NYSE because of the spike, but was resumed later in the day. The stock closed at $11.24 each on July 21, up 22.5% or $2.06 each. 

Nevertheless, the gains have basically erased year-to-date declines for the shares — they were down 43% since December 31 prior to Thursday — fueled by broadband subscriber losses and threats of more intense pricing competition from telco Verizon Communications.

Altice USA has the greatest exposure of any operator to Verizon’s Fios product: About two-thirds of its Optimum footprint in New York, New Jersey and Connecticut competes with the telco. While its Suddenlink footprint is virtually Fios-free, it faces increasing competition from fixed wireless and fiber builds from large and small providers.  

Suddenlink operates primarily across 17 states in the Midwest, southern and western parts of the country. Although Altice USA does not break out specific data for Suddenlink, in a research note Wells Fargo Securities analyst Steven Cahall wrote that he estimates the unit has about 1.8 million customers and passes about 3.9 million homes. He also estimated that 2022 cash flow could be about $1.4 billion. At a $20 billion take-out price, that implies a 14 times cash flow multiple, which would be considerably higher than recent deals. 

Cahall had previously speculated in May that Altice USA could sell Suddenlink at a 7-to-8 times cash flow multiple, which would imply a $12 billion to $13 billion price tag. But if the Bloomberg report is correct, Cahall wrote that his past enterprise value for the company “was far too low.”

In a research note in September 2021, MoffettNathanson senior analyst Craig Moffett assigned a 12 times cash flow multiple to an upgraded Suddenlink, in line with past deals like Cable One’s purchases of Fidelity Communications (11.7 times) and Hargray Communications (17.2 times); adding that any possible buyer would not have as many cost-cutting opportunities as Cable One in those prior deals.

The list of possible buyers could run the gamut of private equity and strategic players, including Cable One, Breezeline (formerly Atlantic Broadband), Stonepeak Infrastructure Partners, TPG and others.    

Whatever the price it is likely to be far in excess of the $9.1 billion Altice paid for Suddenlink back in 2015. That purchase was the international telco’s first in the U.S., and led to its $17.7 billion purchase of Cablevision Systems in 2016.

While Altice was able to cut a lot of costs out of the two companies, more recently it has had trouble gaining broadband customers, reporting a loss of 13,000 high-speed data customers in Q1, after shedding about 3,000 broadband subscribers in 2021.

In a note to clients Thursday, Moffett said while the idea that Altice would sell Suddenlink isn’t that surprising — equity values across the cable landscape are short of their intrinsic values — he was surprised they would attempt a sale while they’re still publicly traded. Altice shares have been on a steady decline over the past several months -- prior to today (July 21), the stock was down 68% since September 3, 2021. That had some speculating in the past that Altice management could take the company private.  

“A large part of our recent reticence in taking a more constructive stance on the company despite its appealing valuation has been our fear that majority owner Patrick Drahi would be much more likely to take the company private first, potentially at only a modest premium, in order to capture the upside of a Suddenlink sale for himself,” Moffett wrote Thursday. ■

Shares in AT&T were down nearly 11% on Thursday (July 21) after the telecom giant said its free cash flow guidance for the year would be lower than expected. That, coupled with a loss of 25,000 total broadband customers in Q2, wasn’t enough to offset near-record growth in its fiber division.

AT&T shares fell to $18.24 per share in early trading on Thursday, down 10.9% or $2.24 each. While the stock rose slightly in later trading — it was priced at $18.61 per share at 10:40 a.m.—- driving the decline was the company’s decision to reduce full-year free cash flow guidance to “the $14 billion range” to reflect heavier investment in growth. Previous guidance was for about $16 billion in free cash flow for the year. The stock closed July 21 at $18.93 each, down 7.6% or $1.55 per share.

“Our results the last eight quarters demonstrate that our deliberate strategy of focusing on growth is helping us gain valuable customer relationships, and we’re confident in our ability to maintain this momentum while also continuing to reduce debt and deliver an attractive dividend,” the company said in a press release.

Consolidated revenue was down 17.1% to $29.6 billion, mainly due to the separation of its DirecTV video business in Q3 2021. Excluding that deal, revenue was up 2.2% in the quarter. AT&T completed the spin-off of its WarnerMedia business in a deal with Discovery Inc. valued at $43 billion in April.

AT&T managed to beat its own estimates for fiber growth, 316,000 compared to guidance for 275,000 additions. But steeper losses in its IP broadband business — 341,000 vs. company estimates of a 275,000-customer loss — pushed overall broadband subscriber performance into the red. For the period, total broadband losses were 25,000 customers.

AT&T said it now has about 6.6 million fiber broadband customers — up by 2.3 million customers from two years ago — and is available in 18 million locations in more than 100 metro areas in the U.S.

Wireless subscriber growth at 813,000 bested analysts’ consensus estimates of 542,000 additions. Consumer wireline revenue rose 1.1% in the period, driven mainly by fiber broadband increases (revenue was up 28%), offset by non-fiber broadband revenue declines of nearly 10%.

Business wireline revenue fell by 3% in the period, while EBITDA at the unit was down 14% year-over-year. ▪️

Taking a couple of pages from the Biden administration’s parameters for some $65 billion in broadband deployment subsidies, Federal Communications Commission chair Jessica Rosenworcel has proposed upping the agency’s minimum definition of high-speed broadband availability and making "affordability, adoption, availability, and equitable access" part of that definition.

Rosenworcel put that high-speed stake in the ground Friday, circulating a notice of inquiry launching its annual state of broadband review.

Also: FCC Seeks Input on Coordination of Broadband Subsidy Bucks

Rosenworcel is proposing to increase the minimum definition of high-speed broadband availability from 25 Megabits per second for downloads and 3 Mbps for uploads to 100 Mbps/20 Mbps and setting its sights on speeds of 10 times that number.

“The needs of internet users long ago surpassed the FCC’s 25/3 speed metric, especially during a global health pandemic that moved so much of life online,” Rosenworcel said. “The 25/3 metric isn’t just behind the times, it’s a harmful one because it masks the extent to which low-income neighborhoods and rural communities are being left behind and left offline.”

The NOI proposes to increase the national broadband standard the FCC uses to determine broadband availability to 100/20, which is the baseline for new buildouts being funded by the Biden Administration's infrastructure subsidies.

Rosenworcel pointed out that the FCC set the previous baseline way back in 2015, which to put into perspective predates the creation of TikTok and Snapchat's IPO.

The NOI also proposes setting a goal of 1 Gbps/500 Mbps “for the future.”

It is no surprise that Rosenworcel, now that she is chair, is moving to up the baseline.

Back in 2018, when she was a minority commissioner under Republican chair Ajit Pai, she said 25 Mbps was “insufficiently audacious.” That, too, came as the FCC was launching its annual broadband deployment report. “It is time to be bold and move the national broadband standard from 25 Megabits to 100 Megabits per second,” she said at the time. It didn't happen.

The lower the speed that qualifies as broadband availability, the higher the percentage of Americans considered served by broadband.

Now, rather than audacious, Rosenworcel is suggesting that 100 Mbps is table stakes, and 1 Gigabit per second is the prize the FCC’s eyes should be on. 

NTCA–The Rural Broadband Association CEO Shirley Bloomfield applauded the proposed speed change.

 “NTCA has long advocated that, as a nation, we need to aim higher and do better when it comes to setting broadband objectives," she said. "From proposing higher speed targets for universal service policy, to advocating for better broadband in the development of infrastructure funding grant programs, NTCA has consistently urged longer-term perspectives rather than short-term incremental views of what represent efficient investments and the ever-evolving level of services that consumers will need over time. We applaud Chairwoman Rosenworcel’s announcement today that she is proposing to increase the national standard for minimum broadband speeds and to set a long-term objective as well.”

Bloomfield did not specifically address the proposal to add "affordability, adoption, availability, and equitable access" to the definition of available broadband. 

“We are pleased to see Chairwoman Jessica Rosenworcel taking this important first step toward increasing internet speed benchmarks, and we encourage the entire FCC to think bigger and bolder by setting gigabit goals today that unleash a faster, better future for all American families and businesses," said Chip Pickering, CEO of INCOMPAS, which represents competitive carriers and some edge providers.▪️ 

Critics of U.S. ISPs are always quick to hold up Europe as overperforming its counterparts in price, speed and coverage, but the Information Technology & Innovation Foundation said that comparison does not hold up to the facts about business cases and cost structures.

According to a new report, “Apples vs. Oranges: Why Providing Broadband in the United States Costs More Than in Europe,” any comparison to the respective broadband markets must take into account their major differences.

“Comparisons between U.S. and European broadband prices are meaningless at best and misleading at worst when they fail to account for the difference in deployment and operating costs that must necessarily be assumed, at least in part, by consumers,” the report said.

The report illustrates what ITIF said are several key takeaways within the larger takeaway that U.S. providers must spend 53% more for the equivalent labor, infrastructure investment, spectrum licenses and advertising and taxes, even taking subsidies into account.

1.) The unfair narrative that U.S. broadband prices are exorbitantly higher than in Europe undergirds calls for unbundling and a regulated U.S. marketplace.

2.) U.S. ISPs have to pay more in wages while spending more on infrastructure, neither of which even U.S. ISP critics would argue for cutting. For example, the average wage among Comcast, Charter Communications, AT&T, T-Mobile and Verizon Communications is $64,510 while for European ISPs Vodafone, Deutsch Telekon, Telefónica and Telecom Italia is $55,935 (U.S. dollars).

3.) European telecoms are taxed at a lower rate and get more in government subsidies. “In every regard, U.S. providers must pour proportionately higher amounts into essential expenditures,” the report said.

4.) European ISPs actually have higher average profits than U.S. ISPs.

Authors of the report were ITIF research assistant Jessica Dine (who gets top billing) and ITIF founder and president Robert Atkinson.

“The idea that Europe has a better broadband system has been a perennial favorite for critics angling for a strong government role instead of relying principally on the private sector,“ Atkinson said in releasing the report. “But it turns out to be a false comparison, and when you break it down, the U.S. system actually provides better value for the money.” ■

ACA Connects said it has vetted FCC broadband data and the conclusion is that 1) fixed broadband competition is "thriving"; 2) any added regulation--like Title II-based net neutrality rules--is unwarranted and unhelpful, and 3) if the FCC does decide to regulate ISPs anyway, it should exempt the smaller providers ACAC represents.

That is according to a new ACAC white paper, the aptly titled "Broadband Competition Is Thriving Across America," which paints a rosy picture of competition both now and in the future, and of government subsidies that will further boost deployment and serve as governors on price and spurs to speed.

Based on the FCC broadband data, which is collected from ISPs, ACAC predicts that that "thriving" competition will become even more intense in the near future, and even where there may not be at least two providers, the government's investment of tens of billions of dollars in broadband buildout infrastructure funding means that those areas "already have or soon will have access to a subsidized provider of fixed broadband service whose prices and other terms of service are already subject to regulatory oversight," it said.

That is in addition to the tens of billions of dollars annually that ISPs continue to invest in their plant, the association said.

The paper says that more than 90% of households can get at least one provider offering high-speed broadband at 100 Megabits per second (Mbps) download speeds and 20 Mbps-plus upload and at least one other provider offering 25 Mbps/3-plus Mbps. It projects that by 2025, at least 74% of the country will have access to two providers with 100/20-plus speeds and probably more like 84% given plans for ramping up fiber to the home.

ACAC concedes there is a potential problem with the FCC data, specifically that the commission's data on households with access to broadband considers service to be available to any census block where at least one household can get service. In less dense areas, that could lead to overestimating the number of households with broadband.

Also: FCC Schedules Broadband Data Collection Webinar

But ACAC sees a competitive silver lining, arguing that "a provider offering service to some, but not all, households in a census block is often in a position where it could expand service to all the remaining households in the census block at relatively low cost. Thus, the provider poses a threat of relatively quick entry, and this will likely affect the prices charged by rivals, even to households that the additional competitor is not immediately capable of serving."

ACAC concludes that any justification there may have been for Title II-based regulation of cable access has "vanished."

Any chance that the FCC could re-institute net neutrality rules in the near term is also fading given the stalled nomination of third Democratic commissioner Gigi Sohn. 

“After decades of investment by multiple fixed broadband providers in every local market – amounting to well over $1 trillion during that time – the vast majority of American consumers now have a choice of broadband providers offering robust, reliable, fixed broadband service," said ACAC president Grant Spellmeyer. "And the reach and intensity of competition will only increase..." ■

The vast majority of locations in New York State — 97.4% — are already served with high-speed broadband, raising the issue of just how much broadband subsidy money the Empire State will need from the tens of billions of dollars the Biden administration is putting toward closing the digital divide.

The 97.4% figure is according to the Broadband Assessment Program overseen by the New York State Public Service Commission. States were charged by Congress in the Comprehensive Broadband Connectivity Act of 2021 to conduct an annual assessment and map of broadband availability.

According to that report and map, 5,139,017 locations (97.4%) in New York are served by at least two providers with at least one of those offering high-speed service, defined as speeds of at least 100 Megabits per second downstream and 10 Mbps upstream. 

Also: FCC Slates Broadband Data Collection Webinar

Less than 1% (it does not even register on the above graphic), or only 5,997 locations, are consider underserved, defined as speeds “of at least 25 [Mbps] download but less than 100 Mbps download,“ and with only one ISP.

That leaves 132,601 locations, or 2.5%, unserved, which is defined as having either no fixed wireless service at all, or service “with speeds of less than 25 Mbps download available.“

All those definitions were assigned by the New York State Legislature.

The availability map drew from four data sources: 1) the New York State “Street and Address Maintenance (SAM) Program” for the location fabric; 2) data collected from ISPs; 3) a “Fiber Optic and Coaxial Asset Inventory Program;” and 4) input from the public and other stakeholders.

In a story about the new map, WGRZ Buffalo reported that some of the ISP data comes from the FCC’s Form 477 collection, which has been highly criticized and is still in the process of being revamped.

The PSC did field testing in some of the remotest areas to fact check the ISPs, but the station's consumer reporters said they clearly found some gaps in the numbers.

The PSC provided this caveat about the ISP numbers: “The information contained in this Map has, in part, been collected from ISPs operating in New York who were asked to provide reasonable representations of their respective internet service areas. Determining each ISP‘s service area without a field inspection verification of every address may yield discrete inaccuracies, and while the Department conducted field inspections in the most remote areas of the State of New York to corroborate information received from the various ISPs, it was not feasible to verify 100% of the addresses in the field.” ■

Cable stocks fell hard for the second time in three days, this time after Verizon Communications introduced a new pricing plan that offers its Fios broadband service for just $25 per month when coupled with its 5G wireless product. 

To some analysts, the new Verizon plan isn’t as much a ploy to gain Fios broadband customers as it appears to be a move to beat back competition from cable broadband, MoffettNathanson senior analyst Craig Moffett said in an email message. But he fears the price drop — less than half the $50 to $60 per month cable operators charge for broadband — will be bad news for all involved.

“It’s bad for everyone, most obviously Altice, but it’s also a bad sign for Verizon itself,” Moffett said of the Fios price drop in an email message. “I suspect it’s not so much to sell more Fios — Fios is doing fine — but instead to try to protect against wireless losses versus the cable bundle. It’s bad for cable because Verizon had been talking about RAISING Fios pricing as recently as May, but it’s also probably a sign that their wireless business is just continuing to get worse … and worse … and worse.”

Investors suspected the same. While Verizon was relatively flat — it closed at $48.34 each, down less than 1%, cable stocks fell hard on Thursday. Altice USA, the cable company with the most exposure to Fios, dropped the most: Its shares traded as low as $7.58 (down 17.6%, or $1.62 each) on Thursday, a new 52-week low, before rallying slightly to close at $7.88 per share, down 14.4%.

Other cable stocks weren’t hit as hard, but a combination of market forces — the Dow Jones Industrial Average closed Thursday down 740 points — and continued fears of a broadband slowdown put pressure on shares. Charter Communications finished the day at $415.35, down 7.5%, while Cable One closed at $1,171.52, down 5.6% and Comcast closed Thursday at $37.91, down 5.5% each. 

Cable wireless has been gaining steady ground over the past several quarters, with Comcast and Charter combining for more than 7 million customers. Altice USA has had less luck on the wireless side — Optimum Mobile added just 12,000 customers in Q1 and has a total of 198,000 subscribers as of March 31. But the company has been aggressive with discounts. It began offering unlimited data at $30 per line recently and has offered steep discounts on phones, and is in the midst of a massive rebranding effort.  

Also: Bears Take a Bite Out of Cable Stocks, Too 

There is little doubt that Verizon is going after cable companies with its newest wireless plan. According to the plan, new customers would get Verizon’s entry-level Fios 300 Megabit per second home service, basic 5G Home and LTE Home service, but only if they also subscribe to one of three ultimate mobile plans — 5G Play More, 5G Do More or 5G Get More mobile plans — which cost about $50 per month. 

“At a time when the cost of almost everything seems to be going up, Verizon is offering home internet at a price you'll love,” the company said in a press release. “With this new offering, the price is the price, guaranteed. So, ditch cable and switch to Verizon Home Internet with absolutely no regrets.”

While Verizon is urging consumers to ditch cable, it looks like the slowdown in broadband subscribers could start to pick up some speed in Q2. 

Also: Has Cable Broadband Hit the Wall? 

Charter chief financial officer Jessica Fischer, speaking Wednesday at the Credit Suisse Communications conference, said that a “small portion” of customers that had been part of the Federal Communications Commission’s Emergency Broadband Benefit program have not made the transition to its Affordable Connectivity Program. 

The EBB was launched last May, a $3.2 billion program established by Congress as part of a larger COVID-19 aid package. The EBB offered eligible households a subsidy of up to $50 per month ($75 per month on tribal lands) for broadband service and a one-time award of up to $100 for a computer or tablet. 

The ACP was launched in January, part of the Biden administration’s infrastructure package, offering a subsidy of up to $30 per month ($75 on tribal lands) for broadband service and $100 toward purchase of a laptop, desktop or tablet computer.  

But according to Fischer, not as many EBB customers made the transition to ACP, either because they failed to opt in to continue service or didn’t meet qualifications, particularly the one that required them to use the service each month. As a result, Fischer said that between 60,000 and 70,000 former EBB customers will be removed from Charter's subscriber rolls.

Fischer said Charter still expects to add broadband customers in Q2, even with fewer EBB customers, and that the outlook is that broadband is “absolutely still a growth business.”

Whether other cable companies will see the same effect from the ACP transition remains to be seen. But it is yet another uncertainty in what has been a year of uncertainties for the sector. ■ 

Frontier Communications chief financial officer Scott Beasley said the mid-sized  carrier does not expect to introduce a mobile product in the near future, mainly because returns on its fiber-based broadband service are so high.

Frontier emerged from bankruptcy protection about a year ago with a goal to upgrade its network and vastly improve its customer experience. The company built out about 640,000 homes to fiber in 2020, and expects to pass another 1.1 million to 1.2 million homes with fiber this year -- up 20% from the original forecast. The plan is to pass 10 million households by the end of 2025.

At the Credit Suisse Communications conference Tuesday, Beasley said the build has been progressing well, adding that the company also is exceeding expectations for its goal of removing about $250 million in costs annually out of the business. 

“We’re about a year ahead of that plan. We expect to meet the $250 [million] a year ahead of schedule, plus add to it,” Beasley said.  

But one thing the company will not be focusing on is launching a mobile product, something overbuilder WideOpenWest  did earlier last month. 

At the Credit Suisse conference, Beasley said mobile has had no impact on Frontier’s fiber success, adding that at this point, the returns on the fiber product are so high, it doesn’t make sense to shift resources at the moment toward a mobile product.

“The demand for fiber is clear, we’ve had three successive quarters of record net adds without a wireless product,” Beasley said. “Consumers are choosing the best connectivity product separately from the potential to bundle it with wireless. Secondly, we haven’t done it yet because the returns on capital from building fiber are so strong for us that we’ve chosen to stay focused, we’re going to allocate capital to our fiber build. The unlevered IRs are in the mid-to-high teens there.” 

Also: Cable Wireless Grows Up 

But the CFO added that if consumer behavior does change, Frontier has the resources and the leadership -- Frontier chairman John Stratton and CEO Nick Jeffery have extensive experience in the wireless business -- to quickly launch a mobile product. 

“If we decided to do that we could do it quickly, we could do it well,” Beasley added. “But it hasn’t been a part of the core strategy this far.”

Also: It’s Time to Take Frontier Communications’ Fiber Plans Seriously 

In April, Frontier made 2 Gigabit per second data speeds available across its entire footprint -- making it the first carrier to do so, according to Beasley -- and the CFO said the company has been “very pleasantly surprised with the uptake.” While he conceded that not everyone needs that level of bandwidth -- “power users” like gamers and those who need to download and upload massive files are the main customers -- that may change sooner than you think. 

Beasley estimated that data consumption has risen between 30% and 40% annually over the past few years, with the average Frontier fiber customer consuming almost 1 Terabyte per month of data, up 30% from pre-pandemic levels. Also, as the number of devices connected to the network rises -- he estimated that the average household in Frontier’s footprint has 22 devices -- so will the need for bandwidth.

“We think demand is there now for a portion of our customer base, and we think it’s going to  continue to rise as data consumption rises,” Beasley said. ■ 

Total global revenue for the broadband access equipment market was $4.4 billion in the first quarter, up 14% and fueled by fiber and fixed wireless access projects, according to a study by the Dell’Oro Group.    

“Despite all the challenges with supply chains, logistics, and labor, service providers continue to invest heavily to expand their fiber broadband networks, particularly in North America,” Dell’Oro Group Vice President, Broadband Access and Home Networking Jeff Heynen said in a press release. “Many of these deployments are to deliver multi-gig services, as operators look to stay one step ahead of their competitors.”

Also: Equipment, Worker Shortage Could Delay Fiber Buildout 

In its 1Q 2022 Broadband Access and Home Networking quarterly report, Dell’Oro found that total cable access concentrator revenue increased 5% year-over-year to about $257 million as solid growth in Distributed Access Architecture (DAA) deployments help offset declines in traditional CCAP licenses. Total fixed wireless CPE unit shipments reached 3.8 million units in the quarter, with 5G Sub-6GHz units showing the fastest growth.

Also: It’s Time to Take Frontier Communications’ Fiber Plans Seriously 

Telco and cable operators across the country have stepped up fiber and fixed wireless deployments, especially as federal funding has emerged to help finance buildouts in rural areas. In addition, Altice USA said earlier this year it would accelerate its fiber-to-the-home build, expanding the technology to 6.5 million homes by 2025. AT&T has plans to pass 30 million additional homes with fiber by 2025 and Frontier Communications said it would extend its fiber network to 10 million homes by 2025,  while other smaller operators like TDS Telecommunications -- which plans to nearly double its total service addresses from 1.4 million to 2.2 million over the next five years, mainly through fiber expansion -- Shentel and MetroNet have all expressed plans to step up buildouts to bring faster speeds and greater capacity to broadband customers.  ■ 

About one year after emerging from Chapter 11 bankruptcy protection, Frontier Communications has been a surprising success story, moving full-speed ahead with building out its fiber footprint, doing it at a cost lower than even the company expected and watching its stock, driven by changing investor sentiment, rise more than 20% in the past three weeks. 

Frontier’s outlook wasn’t always so bright. In 2020, saddled with huge debt, a dwindling subscriber base and an outdated network, the company cleaned house under bankruptcy protection, refinanced its debt and refocused on delivering broadband via a state-of-the-art fiber network. About 14 months later — Frontier emerged from Chapter 11 protection in April 2021 — the company has a clear vision and a mission to beef up broadband speeds and reliability in its predominantly rural markets. Topping it all off is a new logo launched in April to reflect the company’s new direction and commitment to “relentlessly pursue betterness in our business and for our customers,” CEO Nick Jeffery said in a press release at the time. 

That Frontier decided to merely change its logo rather than scrap its name and conduct a total rebrand was telling to MoffettNathanson telecom analyst Nick Del Deo. In a May research report, Del Deo wrote that the decision to refresh the brand was “indicative of the positive effects the changes being made throughout the organization are already having on customer perceptions and marketplace traction.” 

Also: Equipment, Worker Shortage Could Delay Fiber Buildout

Del Deo added that management’s data-driven approach to the business has improved customer perceptions — its American Consumer Satisfaction Index scores are steadily moving up and its Net Promoter scores have surged in markets where it has fiber. 

“Put simply, the choice to refresh the company’s font and logo rather than totally rebrand is further evidence that changes to the business are working,” Del Deo wrote.

That change in sentiment also is evident in Frontier’s stock price. Frontier shares have risen about 21% between May 12 ($22.21) and June 3 ($27.03). While the stock is still down about 8% from the beginning of the year, Del Deo’s $33 target price for the stock seems to signify some decent upside.

Wells Fargo Securities telecom analyst Eric Luebchow was even more optimistic, calling Frontier the “best risk/reward opportunity that has meaningful exposure to fiber overbuilds” in a recent research note. Luebchow estimates Frontier will see an internal rate of return (IRR) of 20% or more at 40% penetration on its fiber build, well outpacing its cost of capital. 

“[Frontier] also has proven metrics that its fiber deployment is gaining traction, with its 2020 cohort of homes already exceeding 40% penetration just 24 months after completion (vs. its 25-30% initial expectations),” Luebchow wrote. “We believe this early success can continue, in part because FYBR on average is undercutting its cable peers on price by ~20% on average over a 3-year period for symmetrical broadband.”

Luebchow added that although year-over-year EBITDA and revenue growth was negative in Q1 — at $1.4 billion, revenue was down 10.7% in the period and  EBITDA of $509 million fell 22%, but both were in line with consensus estimates — he expects them to turn positive in late 2022 and 2023, respectively.

”We strongly view [Frontier] as a mispriced asset and presents a unique opportunity for the longer-term investor,” he wrote.

In a May research note, J.P. Morgan telecom analyst Phil Cusick wrote that Frontier’s fiber buildout was beating expectations, with the third phase of construction -- targeting the last 5 million households of its 15-million home footprint, costing less than the $900-to-$1,000 per passing earmarked for Phase 2. In addition, sell-through was higher and faster than earlier expectations. 

Cusick added that the company was optimistic concerning federal support of the network buildout, and that Frontier has already staffed up to pursue those funds, with the greatest impact expected in 2023. Nevertheless, Frontier believes Phase 2 of the buildout is funded through 2024.

Cusick noted that Frontier plans to build the network out to another 6 million homes in Phase 2, bringing the total number of homes where fiber is available to 10 million. So far, he wrote, Frontier is tracking ahead of schedule, building 640,000 fiber passings in 2021 (ahead of a 500,000-home target) and plans to finish 1.1 million to 1.2 million passings this year, up to 20% ahead of its earlier goal of 1 million additional passings.

In the first quarter, Frontier added 52,000 residential fiber broadband customers, its biggest quarterly addition in that metric ever, and beat analysts’ consensus expectations of 48,000 additions. 

In his report, Luebchow estimated that Frontier would more than triple its residential broadband subscribers over the next five years, from 1.5 million in 2022 to 4.8 million in 2027. Most of those additions will be fiber customers, as the analyst predicts that its legacy copper broadband customers will fall from 1.1 million in 2022 to 650,000 by 2027.

“[Frontier], in our view, remains the best ‘pure-play’ operator given its relative exposure to residential fiber, with a pathway toward revenue growth in early 2023 and a current valuation that makes for an attractive entry point,” Luebchow wrote. ■

While the rest of the country complains about the inconvenience associated with finding cheap fuel, Alaskan cable and telecom company GCI has got them all beat. Earlier last week the frontier cable operator began what has been an annual tradition — bringing more than 100,000 gallons of fuel to some of the harshest, most remote mountaintops in North America to help power nearly two dozen tower sites connected to its 3,300-mile Terrestrial for Every Rural Region in Alaska (TERRA) network.

The sites are far from commercial power grids and are reachable only by special helicopter and need to stay running and self-sufficient for months at a time. According to GCI, the 22 towers are some of the most remotely located in all of North America.

GCI said its crews will make more than 200 round trips this summer to deliver 106,000 gallons of diesel fuel to the tower sites. Through the TERRA network, the towers connect 45,000 Alaskans in 84 rural communities to the internet and other communications services. 

“Working closely with local partners like Bering Air is vital to keeping GCI’s TERRA network running smoothly,” senior manager of GCI Rural Network Operations & Maintenance Earl Merchant said in a press release. “Local pilots with years of flying experience in the region and a long history of working with GCI ensures both the safety of our crews and of the pristine wilderness in which we work.”

Also: Cable’s Last Frontier 

The TERRA initiative is just one of the programs GCI has started to bring faster, more reliable broadband service to Alaskans. Last May, the company committed to making 2 Gigabit per second service available to 77% of its footprint this year and increasing that to 10 Gbps in five years. 

As of February, more than 80% of its footprint had access to 2 Gbps. 

GCI said it takes special precautions to ensure that the impact on the environment is minimal during the refueling efforts. Flights are planned for certain times of year to avoid interfering with things like caribou migrations and subsistence hunting. During the TERRA refuel, helicopters fly at least 1,500 feet above the ground, weather permitting, to minimize disturbances to wildlife. And if there are caribou or other animals visible near the site, crews will adjust flight routes to avoid contact.

“Serving a state as big as Alaska with so many rural and remote communities is a challenge, but our dedicated rural-based technicians are more than up for the task,” senior director of GCI Facilities & Rural Network Operations JD Schultz said in a press release. “We have technicians and site agents in nearly every community we serve. We’re your neighbors. Our family and friends live here, too. That’s why we work so hard to make sure our techs are well-prepared to keep our network running and ready to serve all our customers.”

Each mountaintop repeater site has one or two 4,500-gallon tanks. Arctic diesel fuel is transported between 410 gallons and 440 gallons per load by helicopter and refueling each site can take as many as 16 different trips up the mountain, according to GCI.

GCI purchases the fuel from Alaska companies and works with local businesses throughout the process. The company expects the annual refueling project to be complete by mid-October. ■  

The slowdown in cable broadband subscriber growth has been well-documented — spiking during the pandemic and dropping off as workers and students returned to offices and schools — but there has always been the hope that while increases won’t ever return to pre-pandemic levels, they might at least get close. Now, some analysts aren’t quite so sure. 

Cable operators added 3 million broadband subscribers in 2019 and 4.6 million in 2020, according to LightShed Partners analysts Walter Piecyk and Joe Galone. Those increases began to slow to 2.7 million additions in 2021, and are expected to dip even further in the next five years. While the pace of the decline varies by analyst — Piecyk and Galone predict cable broadband additions will fall to 1.6 million in 2022 and to 637,000 by 2026, while others predict the erosion will be less dramatic — most believe that a return to past growth rates is unlikely.

The result has been a precipitous drop in trading multiples for cable and telecom stocks alike. Cable has been hit hard: trading multiples on former high flyers like Comcast and Charter Communications have fallen from 9 times and 11.2 times cash flow 12 months ago to 7.3 times and 8.3 times, respectively. Cable One, which sported a trading multiple of nearly 14 times cash flow a year ago, now trades at around 10.6 times. 

As a result, stock prices have fallen. As of May 5, Comcast shares are down 19% on the year, Charter has dipped 30%, Altice USA is down 37% and Cable One has fallen 38%. 

“The concern, of course, is that slowing broadband net additions are a sign of a longer-term decline, and that a lower terminal growth assumption is therefore warranted,” MoffettNathanson senior analyst Craig Moffett wrote in a recent research note.  

For Piecyk and Galone, the biggest factors in the continued slowing of cable broadband growth are fiber competition and the disappearance of digital subscriber line or very-high-speed DSL customers. For years, operators have feasted on DSL/VDSL customers who switched to faster, more reliable cable broadband service. But that success has depleted the DSL/VDSL ranks significantly. LightShed estimated that DSL/VDSL broadband market share, once 22.7% in 2017, fell to 13% in 2021 and will further decline to just 1.7% by 2026.

“DSL has been a share donor to its ISP competitors for more than a decade, losing 10 percentage points of market share over that period,” Piecyk and Galone wrote, adding that even at its current 13% penetration rate, there’s not much “low-hanging fruit on which cable operators can feast.”

Adding to the pressure is the rise in fiber-network construction and fixed-wireless access (FWA) offerings from telcos and other ISPs.  

In their report, Piecyk and Galone reminded investors that telcos have announced plans to build fiber to an additional 30 million homes over the next five years, and that smaller telcos and even cable operators have put forth their own fiber initiatives. How those ultimately play out is anyone’s guess, but it is safe to say that there will be significantly more homes passed by fiber in the next few years than the current 40 million. 

That should worry some cable operators because fiber-to-the-home offerings generally attract a big chunk of the market, with an adoption rate of about 30% over the past three years, according to LightShed. Cable operators have claimed those gains will be hard to continue as cable deploys lower-cost, speed-boosting upgrades to their networks, but Piecyk and Galone said fiber builds should attract 15% of market share in the first year and 40% by year four. 

“We believe consumer dissatisfaction with the cable company runs a bit deeper,” the analysts wrote. “Consumers are smarter than many acknowledge and might not be easily mollified by a boost to their upload speeds in the months preceding a new fiber offering by a competitor.”

Fixed Wireless Worries

Moffett predicted the broadband slowdown will continue, but he’s more optimistic cable operators will be able to successfully beat back the fixed wireless threat. The analyst sees fixed wireless as more of a rural play — and that wireless additions will offset high-speed data sluggishness.  

“Like everyone else, we’ve been worried about broadband net adds, and we still are,” Moffett wrote in a recent report, adding that he doesn’t think overall growth will go negative and sees positive signs from wireless. “Wireless is neatly taking the baton from broadband as cable’s next growth driver, just as broadband did from video so many years ago.”

Moffett said he expects broadband growth to fall by nearly half in 2022 at Comcast (to 749,000 additions from 1.3 million in 2021); and by 43% at Charter (from 1.2 million in 2021 to 828,000 in 2022). At Altice USA, which lost 3,000 broadband customers in 2021, Moffett sees more of the same — he predicts it will lose about 8,000 residential broadband customers in 2022. 

But for this analyst, 2022 is pretty much the growth bottom for the top three operators, as he anticipates a gradual uptick in broadband additions over the next four years. Moffett predicted Comcast will add 756,000 broadband subscribers in 2023, 772,000 in 2024, 789,000 in 2025 and 806,000 in 2026 for a compound annual growth rate of 1.8%. That’s about half its 3.7% CAGR in the pandemic years of 2019 and 2020, but not far off its 2.3% CAGR between 2016 and 2017. 

Moffett is more encouraged by wireless subscriber growth, which reached record levels for Comcast in Q1 and near-record levels for Charter in the same period. 

Comcast is expected to add about 1.3 million wireless customers in 2022, up about 14% from the prior year, and consistently add 1.25 million news per year for the following three years, according to Moffett. At Charter, wireless additions should reach 1.2 million in 2022, leveling off to 778,000 by 2026, the analyst wrote.    

As for telcos like T-Mobile and Verizon, Piecyk and Galone estimate they will add about 9.3 million fixed wireless broadband customers by 2026 — impressive growth, but slower than the guidance the companies themselves have given. T-Mobile has predicted fixed wireless broadband growth of 5 million access lines, with Verizon’s guidance for 4 million to 5 million additional fixed wireless broadband customers by 2025. 

“Our wireless home broadband estimates may be tamer than consensus or the guidance of the companies themselves, but they are still a contributing factor to our expectation that cable broadband growth will slow,” Piecyk and Galone wrote. “Cable’s unfettered feast on DSL subs is coming to an end, and wireless offers a legitimate alternative to a disgruntled subset of cable’s subscriber base. If wireless operators can deliver on their own guidance, cable operators might face a contraction in their sub base rather than simply a deceleration of growth as reflected in our models.” 

Fixing to Grow the Pie

Many have feared fixed wireless access would take share from cable operators, but Moffett isn’t convinced it will have the impact some predict. For one, he noted that much of T-Mobile’s fixed wireless access (FWA) growth
has come in rural areas where there wasn’t an incumbent broadband provider. And much of Verizon’s FWA additions have come from B2B customers, and have been particularly strong in new segments like food trucks, construction trailers and mobile COVID-19 testing sites.   

“For FWA in particular, it is obvious that some of the growth at T-Mobile and Verizon is coming from cable,” Moffett wrote. “But it is equally clear that much of it is not.”

The reality is that FWA’s impact is probably somewhere in the middle. Moffett estimated that total broadband subscriber growth was 2.3% in Q1 without considering T-Mobile and  Verizon FWA, and up 3.2% when they were added. 

“FWA is unquestionably having some competitive impact,” Moffett wrote. “But much of its growth is best viewed as expanding the market, either into new categories and/or new geographies.” ▪️

Fixed wireless access broadband could add more than 10 million subscribers in the next five years, driven by programs geared toward rural markets, according to a report by Wells Fargo telecom and media analysts Eric Luebchow and Steven Cahall.

In their report, the analysts predict that total broadband subscriber additions will accelerate to 4.5-to-5 million annually in 2023 and 2024, fueled mainly by FWA and fiber overbuilds. Over the next five years, Luebchow and Cahall predict FWA will rise from 7.1 million total subscribers at the end of 2021 to 17.6 million in 2027. That growth will come at the expense of cable operators, who the analysts predict will watch their market share erode quickly over the next few years. 

While fixed wireless has been around for awhile, Luebchow and Cahall expect competition to heat up significantly in the next three years as federally funded programs spur both wireless and fiber build outs for broadband. In their report, they estimate that FWA would capture 60% of net additions through 2024. Then momentum shifts to fiber overbuilders as new inventory comes on the market. 

“In total, we expect +50 [million] new premises to be connected with fiber through 2027 that will reach [two-thirds] of addressable locations,” Luebchow and Cahall wrote. “The competitive dynamics will make the net add story increasingly difficult for the cable players, as we project cable’s share of industry net adds will fall to ~30-35% in 2023 and beyond (vs. ~94% on average the past three years).”

Wells Fargo estimated that fiber builds passed about 50 million homes in 2021 and would more than double that pace to 102 million by 2027. 

While there has been some concern around the lack of a labor force to build fiber networks the analysts believe that is less of a factor with bigger telcos. 

Initially, Luebchow and Cahall see FWA as being the biggest disruptor, mainly because of its low price -- in some cases as much as 50% lower than wireline broadband offerings -- and adding about 5 million new customers in 2022 and 2023. Fiber will take hold in 2024 and beyond, about the time that many of the build out projects started in the past few years will be completed. While that includes some cable operators -- Altice USA plans to pass 6.5 million homes with fiber by 2025 and Charter and Comcast have extended their fiber reach by about 1 million homes per year over the past few years -- Luebchow and Cahall don’t believe it is enough to reverse the coming share shift.

“The net impact is cable players will have to face stiffer competition within their footprints, and they threaten to be crowded out of a secular story that only has room for [about] 3-5 million net adds per year,” they wrote, adding they expect cable’s share of broadband net additions to drop from 87% in 2021 to 30% to 40% by 2027. 

Cable has punched back by bundling broadband and wireless phone service -- Comcast and Charter are both pairing high-speed data service with mobile offerings at a discount. 

T-Mobile and Verizon Communications have been most aggressive on the fixed wireless front, adding 532,000 FWA customers in Q1, according to Leichtman Research Group.  But so far, most cable companies claim they haven’t seen much impact from the service, which for the most part has been concentrated on less populated areas and has targeted business customers like food trucks and construction trailers. 

At the MoffettNathanson Media & Communications Summit May 18, Comcast Cable CEO Dave Watson said so far, FWA hasn’t been a major competitive factor, but that the company is keeping a close eye on the service.

“It doesn't mean that it's not competitive. It doesn't mean that we're going to take it lightly. We're not,” Watson said at the conference, adding that fixed wireless has some issues around speed and latency. T-Mobile advertises FWA speeds between 33 Megabits per second and 182 Mbps, while Verizon FWA service can range from 300 Mbps to 1 gigabit per second. Watson added that two-thirds of Comcast broadband customers take 300 Mbps and higher.

“We're coming from a position of strength in regards to network performance and WiFi performance in the household and we're not going to stop,” Watson said at the conference. 

In their report, Luebchow and Cahall noted that FWA speeds are lower than cable, but they are more than adequate for the most popular applications like streaming video.

“FWA should not be dismissed and will be a viable competitive threat, particularly in rural areas and for customers that prioritize a lower price vs. higher speeds,” the analysts wrote.  ■ 

The White House has put out a Technical Assistance Guide to the massive federal resources in the President's Bipartisan Infrastructure Law that includes tens of billions for broadband deployment and access.

"In the past, too many communities have lacked the resources to apply for and deploy transformative infrastructure opportunities," the White House said. 

More than 90% of the billions in funding -- $65 billion of which is going to broadband infrastructure and uptake -- is going to non-federal partners so the administration is providing a list of federal programs that will help local communities "navigate, access, and deploy" infrastructure money.

Also: Charter Chief Says There Is No Labor Force for Fed-Funded Fiber Builds

Those programs include a State Digital Equity Planning and Capacity Grant and a Digital Equity Competitive Grant Program, as well as a Middle Mile Grant Program to help reduce the cost of connecting to the internet "backbone." Under orders from Congress, the FCC is currently seeking input on how to define digital equity in terms of the allocation of all that broadband subsidy funding.

To check out all the  broadband programs, resources and contact info, the White House guide is here. ■

Charter Communications chairman and CEO Tom Rutledge gave voice to one of the telecom industry’s biggest dilemmas at an industry conference Wednesday. Despite the billions of dollars the federal government is pouring into programs earmarked to create fiber networks to bring broadband to rural areas, there aren’t enough workers to build them.

“There is no labor force,” Rutledge said at the MoffettNathanson Media & Communications Summit in New York, when asked about the worker shortage. “For all the construction that hasn’t been done, there is no skilled labor force that is currently out there.”

Adding to the dilemma is that many of the areas where the build outs are taking place have small populations, meaning that workers have to be brought in, which creates logistic and transportation issues.

Also: Equipment, Worker Shortage Could Delay Fiber Buildout

Rutledge added that the problem is greater for smaller operators.

“We are a big operator and we can manage through these big projects,” he said. “We’ve already invested a lot of money in new construction equipment and hired a couple of thousand people just to manage the contract process of building out these new assets.”

Still, it hasn’t been entirely smooth sailing, even a company the size of Charter.

“We have thousands of unfilled positions,” Rutledge said.

Colleges and companies throughout the country have started training programs to fill the gap. In April, AT&T and Corning launched a fiber optic training program in North Carolina and trade organizations like the Wireless Infrastructure Association and the Fiber Broadband Association have launched training and certification programs to beef up and educate the future workforce.

But training takes months and even years to fully complete. And in the meantime, the shortage continues. In 2021, a group of industry associations warned that there could be a need for as many as 850,000 additional workers in the telecom business through 2025, as more and more fiber projects go online.

Also: Could Fiber Save Netflix?

Charter has extended its fiber footprint by about 1 million homes per year over the past few years through its edge-out programs. And the company was one of the biggest recipients of federal Rural Digital Opportunity Fund (RDOF) grants to extend service to unserved and underserved areas.  

Rutledge said that Charter will be an eager participant in federal projects to bring broadband service to rural areas.

“We’re very interested. There’s $42 billion there. That’s a lot of money,” Rutledge said. ■ 

Altice USA said it will launch a 5 Gigabit per second broadband service in parts of its Long Island, New York footprint in June, along with a lower-priced 2Gbps product, more than twice the speeds offered by its competition in the market. 

The 5Gbps service will be priced for new customers at $180 per month, with the 2Gbps offering costing new subscribers $120 per month. Altice USA CEO Dexter Goei said in a press release that the multi-gig offering will be available across its New York, New Jersey and Connecticut fiber footprint by the end of the year.    

Altice USA said it would speed up the build out of its fiber network throughout its footprint earlier this year, aimed at bringing faster speeds to customers. The  company lost about 13,000 broadband subscribers in Q1 -- the only major cable operator to do so -- and has made some big changes in the past few months including rebranding its service, to win them back. 

Other operators have offered multi-gig service -- Comcast currently offers a 3Gbps service (Gigabit Pro) in all its markets for $299 per month and recently tested a 400Gbps service -- but offerings generally top out at about 1Gbps. And CableLabs’  DOCSIS 4.0 standard is supposed to enable speeds of up to 10Gbps once it is deployed.  

There are critics that have said most users don’t need speeds that fast -- most can stream video and access the internet with speeds as low as 100 Megabits per second -- but as bandwidth hogging applications like virtual reality, 4K TVs and multiple connected devices proliferate, they may  benefit from faster service. According to researcher OpenVault, average data usage for US consumers has doubled since 2018.  

In a press release, Altice USA said the multi-gig services are symmetrical, meaning customers will receive the same upload and download speeds. The higher speeds also will allow customers to access higher resolution video streaming up to 8K; lower latency which helps in data intensive applications like virtual reality and gaming; greater reliability and Smart WiFi6 for greater whole home coverage. 

“As we continue to expand our new 100% Optimum Fiber Internet network across our footprint, we are pleased to bring the fastest residential fiber internet service to the tri-state area,” Goei said in a press release. “Customers on our Optimum Fiber network are already enjoying fast, symmetrical speeds and a reliable connectivity experience, and we look forward to bringing even faster service with more bandwidth than ever before with our 5 Gig and 2 Gig Optimum Fiber Internet speeds.”   

NCTA-the Internet & Television Association has told the FCC that cable operators do not discriminate in the provision of broadband service because they provide equal access, which NCTA said means "comparable deployment."

"FCC and census data demonstrate that cable operators provide equal access to broadband by deploying high-speed networks, including gigabit offerings, throughout their service areas," NCTA said.

That came in comments on the FCC's congressionally mandated inquiry into what rules it needs to adopt to insure that Americans get equitable access to the broadband connections that the Biden Administration is spending tens of billions of dollars to insure go to all Americans.

NCTA said the FCC's focus should be on "the deployment of comparable broadband offerings across providers’ service areas." It said issues like adoption and affordability are beyond the scope of Congress' direction to the FCC and are already being addressed through other legislation and programs.

NCTA points out that the Infrastructure Act defined equal access to broadband as “the equal opportunity to subscribe to an offered service that provides comparable speeds, capacities, latency, and other quality of service metrics in a given area, for comparable terms and conditions, and specifically talks about preventing "deployment discrimination."

Even just focusing on deployment the FCC added, the FCC should make the standard similar rather than identical. "In a dynamic and competitive marketplace, in which intermodal competition is only increasing, some differences in speeds offered and service quality metrics across a provider’s service area are to be expected and should not give rise to a claim of unequal access to broadband within the meaning of the statute." Such differences in speed and quality can also occur during plant upgrade cycles it pointed out, something the FCC has recognized.

Some other commenters, including the Multicultural Media, Telecom and Internet Council (MMTC), have argued that the definition of nondiscriminatory access should include a bunch of other factors like price and quality, and other actors like content providers and others in the broadband ecosystem.

MMTC said the FCC should define the statute's equal opportunity to subscribe from a consumer perspective and should look beyond whether comparable services on comparable terms and conditions are available. "[A]vailability" is not equity if the cost prohibits its adoption in low-income or minority neighborhoods, MMTC told the commission. ■

Convergence Research Group estimated that over-the-top revenue in the U.S. rose 37% in 2021 to $39.4 billion and is expected to nearly double to $69 billion by 2024, as subscriber additions, about 80 million this year, should level off to 50 million by 2024. 

According to its just-released report -- The Battle for the American Couch Potato, which analyzed more than 75  OTT services (and over 50 providers) including Netflix, Disney Plus, Hulu, Amazon Prime Video and Warner Bros. Discovery -- Convergence said it expected U.S. OTT revenue to rise about 30% to $51 billion in 2022. 

At the same time, revenue and subscribers for traditional linear TV will continue their steady decline. Convergence said U.S. cable, satellite and telco TV access revenue fell 4% in 2021 to $91 billion, and should drop another 6% to $85.5 in billion in 2022, with further slippage in 2023 and 2024. Total U.S. TV subscribers dipped by 6.5 million in 2021, about the same as 2020, according to Convergence. That number should pick up to a loss of 7 million subscribers in 2022 and 7.2 million in 2024. 

The percentage of cord cutter/never households also should increase. Convergence estimated that  47% of U.S. households did not have a TV subscription with a cable, satellite or telco TV provider in 2021, rising to 53% in 2022 and 64% by 2024. 

Broadband customer growth is continuing to slow -- Convergence estimated that about 3.7 million high-speed internet subscribers were added in 2021, down  from 5.1 million in 2020, while revenue grew 10% to $79.6 billion. The researcher predicts that total broadband subscriber additions will tick up to 4.3 million (with a 7% revenue boost) as telco and fixed wireless additions improve, offsetting any sluggishness on the cable side.■

After Netflix’s disappointing first quarter — and another one due on the horizon — a general sense of panic that streaming video may not be what unseats traditional pay TV from its throne has enveloped the entire industry over the past few months. Wouldn’t it be an actual hoot if what saves Netflix and its broadband-delivered brethren ends up being something as mundane and dumb-pipe-like as fiber deployment?

Netflix said back in April that it lost about 200,000 global subscribers, its first quarterly loss ever, adding that it could lose another 2.5 million in Q2. At the same time cable and telcos are furiously building out fiber networks, fixed wireless access and 5G offerings across the country to close the broadband gap, mainly in rural markets. With that fiber deployment, fueled in part by billions of dollars of federal money, could come millions of new broadband customers itching to try out streaming for the first, or maybe the second or third time.

Netflix obviously has other problems — it has shed nearly $200 billion in market cap since December 31 as its stock price has fallen 71% and investor sentiment has literally done a 180-degree turn on the company. Investors who were unconcerned about the ever-escalating content spend (about $17 billion in 2021) as long as the subscriber growth trajectory was maintained, are now urging Netflix to close its wallet.  

And while Netflix stock has seen its ups and downs in the past, this time it was serious enough to force the company to embrace two things it has vehemently resisted in the past: offering a lower-priced ad-supported version and going after paying subscribers that share their passwords. According to reports, an ad-supported version of Netflix could come as soon as the fourth quarter of this year. 

 Fiber Blowout

Fiber deployment and construction are the new buzzwords in the cable and telco business, with AT&T claiming they will pass an additional 30 million customer locations with the technology by 2025. Cable operators are regularly extending their existing footprints with fiber — Comcast and Charter Communications are adding roughly 1 million homes per year through fiber edge-out programs — and smaller operators are constantly announcing new fiber builds. So far in May alone, nine small operators and telcos have announced plans to build fiber networks, with TDS Telecom pledging to pass an additional 160,000 homes with fiber this year and Wide Open West pledging $400 million to extend fiber to an additional 400,000 homes by 2027. 

Forget that there are still some questions as to whether there are enough skilled techs to actually build networks. Forget that these networks won’t be fully built for another five years at least.  Chances are if there wasn’t a worker shortage, the number of projects would be even greater — because nothing creates a growth surge more than money, and the federal government has earmarked $65 billion for network buildouts in areas they deem have insufficient broadband speeds. And even though a lot of those projects will be done in areas that have incumbent providers, more choice and higher speeds can only be good news for streaming service providers, right? 

Netflix obviously needs more subscribers. And cable operators, telcos and soon-to-be-Twitter owners are all spending huge amounts of cash to extend broadband services to rural areas. And since some of the customers in those markets don’t have Netflix or other SVOD services -- because you need broadband to stream video — that would appear to represent a pretty big untapped market. Maybe not hundreds of millions of people, but at least a few million. And every little million helps. 

Sounds pretty simple?

Some Gray Areas

Not really. Like everything else in the media business, there are some gray areas. 

Perhaps the grayest is just how many homes don’t have sufficient broadband. The federal government says there are 30 million people that live in areas that don’t have sufficient high-speed data, but doesn’t say how many homes that works out to be. And though DSL service may be a lot slower than cable broadband, with top residential  speed of 100 Megabits per second vs. 1 Gigabit per second for cable, it’s still fast enough to stream video. So technically, truly new broadband customers — those who have never had broadband and therefore, SVOD — are probably pretty few. 

That’s what  Leichtman Group president Bruce Leichtman thinks. Sure, he said in a recent interview, new fiber builds may attract some new subscribers to Netflix, but it will be a marginal amount. More likely, he added, is that a combination of faster networks, lower prices for ad-supported streaming and the advent of free ad-supported TV (FAST) could present an opportunity to convince customers in those areas to subscribe to other SVOD services.

“I think it's an opportunity, but it’s more of a gradual opportunity,” Leichtman said of the fiber build’s impact on Netflix and other SVOD providers. “Remember, they have to build these markets, and the building takes a while. And we’re talking about the 86th percentile. These are not the early adopters that we’re talking about.”

But Growth is Growth, Isn’t It?

Although there has been a lot of talk about the slowdown in broadband growth, it’s still growing. Leichtman believes that one of the biggest catalysts for Netflix and other streaming services would be a return to new housing growth, which has been stagnant throughout the pandemic. New homes means new subscribers for broadband as well as SVOD services.

“While the breadth [of the SVOD market] is mature, the depth will continue to grow,” Leichtman said. “That means more services per household.” 

LightShed Partners expects total broadband subscriber additions to be fairly constant over the next three years: 3.5 million in 2022, 3.3 million in 2023, 3.2 million in 2024 and 3.2 million in 2025. 

At the same time, traditional pay TV losses are accelerating. Wells Fargo Securities media analyst Steven Cahall estimated that traditional pay TV lost 2.2 million subscribers in Q1, 400,000 more than in the same period last year. 

Our own Next TV estimated that cord cutting accelerated 31% in Q1, due mainly to losses at virtual MVPDs and satellite TV service providers.    

MyBundle.TV CEO and founder Jason Cohen said what some observers are missing is that broadband is still growing.

“That’s the piece of the puzzle that the streaming marketplace isn’t very focused on,” Cohen said, adding that his company has nearly tripled its number of broadband partners from 31 in June 2021 to 90 currently, including many small market ISPs that are bringing broadband to people for the first time.

“Some of these people still don’t have Netflix,” Cohen said. “Is there another 100 million households for Netflix to gain in the US? No. But we’re talking about, on the margin, there are millions left. If you're talking about the smaller streaming services, there are still tens of millions [of subscribers] to gain. There's a lot of investment happening to bring more broadband to the table.”

Streaming is Not Dead 

Cohen bristles at those who claim streaming is dead, pointing to the roughly 68 million households who spend about $120 per month on traditional linear pay TV subscriptions. (That’s $98 billion annually, for those without a calculator) Those ranks are definitely going to deplete as those homes cut the cord, but that doesn’t mean they are going to start reading books and learning how to play the piano for entertainment. They’re going to stream video, either through a service they already have or via one to which they will soon subscribe.

“This idea that streaming is saturated we think is 100% incorrect. Those dollars are going to be shifting from those cable bills. Whatever it is, more broadband means there is going to be more streaming,” Cohen said, adding that consumers unwilling to pay $15 per month for a streaming service may be attracted to paying $9.99 for an ad-supported one.

Netflix won’t be alone in its ad-supported efforts. Others like HBO Max — which introduced its ad-carrying version in June 2021 -- Paramount Plus, and NBCUniversal’s Peacock all have introduced AVOD tiers to varying degrees of success. Disney Plus said it would launch a lower-priced ad-supported version later this year.

Disney Plus added 7.9 million new customers worldwide in fiscal Q2, exceeding analysts’ consensus estimates of 5.9 million additions. Including its Hulu, ESPN Plus, and Disney Plus Hotstar brands, total customer additions were about 9.2 million in the period. But the company warned that because the first half of the year came in so much better than expectations, the second half may not be as strong.

“...[T]he first half came in better than expected, so that delta that we had initially anticipated may not be as large,” Disney chief financial officer Christine McCarthy said on a conference call with analysts Wednesday to discuss quarterly results. “But we still do expect an increase in the second half to exceed the first half.”  

The push towards AVOD is a logical next step for streaming, and could ease the pressure to spend heavily on new content just from the nature of the business model. With AVOD, the longer a consumer watches, the more money the service makes, while the absence of advertising means as consumers burn through shows, more content has to be created to keep their attention. 

FAST and Furious 

At the same time, free, ad-supported TV (FAST) services like Paramount’s Pluto TV, Fox’s Tubi TV, the Roku Channel and others are becoming the fastest growing segment in the streaming universe. Pluto TV has about 68 million monthly active users, Tubi about 51 million and indications are that the segment will continue to soar as new players enter the fray. 

Cohen added that the FAST segment is where he believes the ad dollars once earmarked for linear networks will go, adding that MyBundle.TV is building a FAST component into its platform to take advantage of that growth.

“We know people want free TV, they want to pay for no adds, they're willing to pay less to get ads, and then some of them are willing to lean back and say, ‘You know what, I’m willing to take a little bit lower quality content so I can flip through channels,’ ” Cohen said. “Whether it's Pluto or Tubi, you name it, there's a real market for that free TV.”

MyBundle.TV obviously is in the position to take advantage of the shift in how programming is delivered, and Cohen believes that his service, which enables customers to navigate the growing number of streaming services to find the content they want to watch, will become even more valuable as choices increase and traditional linear bundles erode. 

That is even more true today as the number of services increases and the sheer amount of available programming balloons. Tubi alone has a content library with more than 40,000 titles. And as more and more content providers are focusing on originals and other exclusive shows, finding programming across the various streaming services can almost become a full-time job.  

It’s About Aggregation, Not Consolidation

“It’s not what I’m paying for my apps, it’s what am I getting out of it,” Cohen said. “Right now if I subscribe to an app and I'm not going to it to find the content and I’m not finding new shows or movies, then that might be a problem. There’s a lot of content out there, and a lot of good content, on multiple different streaming services. … By helping consumers discover new shows and movies across their services there's another way to increase that value.”

“To me, it’s not streamer vs streamer, it’s still streaming vs the $160 billion [in revenue] between the subscriptions and the advertising that is still spent by advertisers on traditional linear TV,” Cohen continued. “That money is shifting over through this new delivery mechanism that is streaming.”

And Cohen believes that the industry can support more streamers, just as long as there are simple ways for consumers to access the content they want.   

“I think that ultimately our view of the market, there doesn't need to be consolidation, but there needs to be aggregation,” Cohen said. “There needs to be a way for consumers to more simply navigate this process. We think this because the way that consumers build their own bundle that will still include Netflix, that will still include these other big services, as well as the niche services for people’s  interests. 

The pay TV industry is not blind to the need for aggregation either. Comcast and Charter Communications unveiled a joint venture earlier this month that would serve as a streaming platform for its broadband-only customers, one that could easily become a streaming app aggregator.

Cohen acknowledged that larger pay TV companies will likely go on their own when it comes to app aggregation. But he added there is plenty of room for the smaller guys, adding that there is a growing number of ISPs with 200,000 or 300,000 subscribers that would welcome help. 

“We do not think Comcast is going to be using MyBundle.TV,” Cohen said. “But for everybody else, we view ourselves as that aggregator. We consider ourselves the streaming aggregator for the broadband industry.” ■

The Biden Administration is expecting Friday the 13th to be a lucky day for Americans who need government help to get online.

As expected, the White House announced that Notices of Funding Opportunity (NOLOs) have been issued for $45 billion worth of broadband subsidies that were in the President's massive infrastructure bill.

Those grant programs are the Broadband Equity, Access and Deployment (BEAD) program ($42.5 billion), the Enabling Middle Mile Broadband Infrastructure Program ($1 billion), and the State Digital Equity Act programs ($1.5 billion).

Also: ISPS Team to Track Biden's Broadband Billions

Together, they have been branded the Internet for All Initiative, complete with its own .gov web site.

The programs, the majority of whose money goes to states, are being administered by the Department of Commerce's National Telecommunications & Information Administration and ISPs and other broadband stakeholders have already been hard at work planning for grabbing a piece of that multi-billion subsidy pie to help further close the digital divide.

For Example, the Fiber Broadband Association in concert with NTCA - The Rural Broadband Association, developed a Broadband Infrastructure Playbook to "help state and municipal broadband leaders leverage funding from the BEAD program." FBA plans to update that playbook following the Fridays release of the NOFO.

Secretary of Commerce Gina Raimondo planned to travel to Durham, North Carolina, to launch the initiative, though President Biden and Vice President Kamala Harris, the latter charged with overseeing the push for universal broadband, already held a Rose Garden event to talk up the importance of broadband deployment and adoption.

Promoting broadband as a way to give small businesses a better chance for success was one of Biden's issues when he was Vice President. Universal broadband was also one of Biden's State of the Union promises.

“In the 21st century, you simply cannot participate in the economy if you don’t have access to reliable, affordable high-speed internet,” said Secretary Raimondo. “Thanks to President Biden’s Bipartisan Infrastructure Law, Americans across the country will no longer be held back by a lack of high-speed internet access. We are going to ensure every American will have access to technologies that allow them to attend class, start a small business, visit with their doctor, and participate in the modern economy.” 

“With release of today’s Notices of Funding Opportunity by NTIA, the country marks another important milestone on our national journey to promote digital equity and connect unserved Americans to robust broadband service," said NCTA-The Internet & Television Association, in a statement. "With networks that now reach over 80% of American homes with gigabit-capable technology and comprehensive broadband adoption programs, cable internet providers are continuing to expand private efforts and work in partnership with government officials to shrink the digital divide.  We look forward to reviewing the notices and continuing to engage with policymakers as plans are developed that will promote fair, efficient and transparent processes in federal and state programs, distribute funding where it is needed most, and bring the benefits of broadband to all.”

“Last year, as part of the Infrastructure Investment and Jobs Act (IIJA), Congress enacted new broadband support programs designed to narrow, if not permanently close, the country’s broadband availability and adoption gaps," said ACA Connects President Matt Polka. "With today’s release of the Notices of Funding Opportunity for the BEAD, Middle-Mile, and Digital Equity programs, Commerce Secretary Raimondo, Assistant Secretary Davidson, and the entire National Telecommunications and Information Administration (NTIA) team take a major next step toward achieving that goal."

“As the country’s top rural broadband provider, Charter applauds NTIA’s recognition of the importance of promoting streamlined permitting processes and cost-effective access to poles, which are increasingly identified as essential to achieving 100% connectivity across the country as quickly as possible," said ISPs. "Faster access to poles can shave months – or even years – off of the time to deploy and is essential to getting 100% of the country online."

“NTCA [The Rural Broadband Association] welcomes the BEAD Notice of Funding Opportunity and thanks the leadership and staff of NTIA for their hard work in preparing today’s release," said NCTA CEO Shirley Bloomfield. "NTCA’s small community-based members already provide high-capacity broadband services in some of the hardest-to-reach parts of the country, and today’s notice initiates a once-in-a-generation opportunity to bridge the digital divide in other areas still left behind. We need to get this right—and I am encouraged by the notice’s focus on prioritizing fiber projects capable of delivering high-quality services for decades to come, along with detailed expectations for demonstrated capabilities and performance and a strong indication that providers of all kinds should be placed on equal footing when it comes to seeking funds."

"The Benton Institute congratulates the NTIA on the Herculean effort to stand up its new broadband programs," said  Benton Institute for Broadband & Society Executive Director Adrianne Furniss. "The Infrastructure Investment and Jobs Act recognizes that affordable, reliable, high-speed broadband is essential to full participation in modern life in the United States. The Internet for All initiative is the biggest federal investment in broadband infrastructure and digital equity ever. As states review the funding guidelines, their eyes must stay on the prize: a fully connected nation ready to realize the economic, educational, health, and civic potentials of the internet. We must seize upon our broadband moment."

"WISPA is encouraged that the NOFO provides States with the maximum latitude to meet the unique needs and challenges they face in delivering broadband services," said the fixed wireless internet service provider association. "This means State broadband officials can select the right tool for the right job, minimizing delay and optimizing the use of limited taxpayer dollars. WISPA agrees that this adaptable, technologically neutral approach is the best way to realize the promise of the BEAD program."

The Biden Administration has suggested it favors fiber, but is allowing for technology flexibility so long as it meets baseline high-speed speeds and quality standards.

The Free State Foundation cheered NTIA's launch of the program, but also found some reason for concern. 

"Although the Notice does indicate that Eligible Entities shall prioritize unserved locations when scoring and awarding funding for last-mile deployment projects, much of the Notice gives the appearance of putting unserved and underserved locations on equal footing," said Free State director of policy Studies and senior fellow Seth Cooper. The BEAD Program will fail in its essential purpose if Americans are still left unserved by broadband services after the $42.5 billion allocated for the program is spent. Going forward, it will be important for NTIA to emphasize that unserved locations are to be given first priority for receiving grant awards for broadband deployment. And states awarding grants should be responsible for ensuring that every last unserved location within their jurisdiction gets connected to broadband. Otherwise, BEAD Program dollars may end up going to so-called 'underserved' locations wherein most Americans already have access to broadband Internet services with 80 Mbps download speeds," Free State said.

"And while it is good that NTIA's Notice does not impose "open access" or "net neutrality" regulatory conditions on the awarding of funds by states under the BEAD Program, the Notice includes a misguided recommendation that states ought to favor open access wholesale last-mile broadband services in setting their criteria for awarding grants. Open access requirements do not and would not help unserved Americans gain access to broadband. It is essential that states keep focused on connecting the truly unserved and not bog down the process or the program's ultimate success by pursuing open access requirements."

“The BEAD requirements effectively address many of our concerns about the failure of past programs to bring reliable, high speed broadband and good, union jobs to rural and underserved communities,” said Communications Workers of America (CWA) President Chris Shelton. “Once again, the Biden Administration has made it clear that they are listening and responding to working people and holding corporations accountable for the way they use federal dollars.”

“The Administration worked very hard to produce this initial guidance to bring internet for all in America and we appreciate their efforts," said USTelecom President Jonathan Spalter. "USTelecom’s members stand ready to go to work to quickly achieve our shared vision of a fully connected America and ensure that this historic funding will be put to its best and highest uses.”

“Funding leveraged through the BEAD and the middle-mile programs, combined with other funding programs, must support ubiquitous 5Gm: said the Competitive Carriers Associatoin. "All Americans, especially those in rural and hard-to-reach areas, must have access to nationwide connectivity, which means access to both fixed and mobile services. Fiber is an important input to support the deployment of 5G and successor wireless technologies throughout the U.S., but in areas where fiber is not possible, wireless will play a key role. To meet the communications needs of Americans everywhere, it is important for policymakers to leverage the IIJA programs and all other tools and programs available to support ubiquitous access to fixed and mobile wireless services in the U.S.”■

The Senate appears to be getting serious about making edge providers including streamers and search engines pay into the Universal Service Fund. The USF subsidizes advanced telecommunications — essentially broadband — to low-income and hard-to-reach areas of the country.

Currently, the fund is paid into by telecom providers, but with the move from traditional phones to broadband as the connectivity of choice, the sustainability of the subsidy program is at issue.

The Senate Commerce Committee on Wednesday (May 11) approved S. 2427, the Funding Affordable Internet with Reliable Contributions (FAIR Contributions) Act, which now heads to the Senate floor.

Edge providers still have plenty of time and opportunity to lobby against the move since the bill only requires the Federal Communications Commission to study the feasibility “and effects” — the additional language was added as an amendment — of making edge providers pay into the fund.

Streaming content providers are telling the FCC it would be unwise and unworkable for Congress to expand the broadband subsidy base to include over-the-top video and others in the vague “Big Tech” basket and essentially impossible for the FCC to administer.

Also: OTT tells FCC That USF Streaming Fee Would Be Impossible to Administer

Committee ranking member Roger Wicker (R-Miss.), who authored the bill, said it was about the sustainability of the fund and that it would require Big Tech, as well as broadband providers and other users, to be added to the base of those having to pay into the fund. If past is prologue, that cost will be passed along to customers.

Wicker said expanding the base would ensure support for rural broadband "for years to come" and lower consumer bills. "These companies have benefited from the connectivity the USF supports but have not yet had to contribute," he said.

Also approved was a related bill, the 3692 Network Equipment Transparency (NET) Act, which requires the FCC to “evaluate and consider the impact of the telecommunications network equipment supply chain on the deployment of universal service." The FCC is specifically asked, to the extent there is relevant data, to "determine whether a lack of network equipment significantly impacted the deployment of advanced telecommunications capability during the applicable year.”

Bill backer Sen. John Hickenlooper (D-Colo.) said that closing the digital divide is a bipartisan goal and that a resilient supply chain is a key to achieving that “federally funded goal.” He said companies in his home state of Colorado were complaining about delays in getting batteries, antennas and fiber-optic cable, all crucial to broadband buildouts.

Hickenlooper said the bill will charge the FCC with monitoring and reporting any supply chain delays to Congress. ■

Backers of Democratic Federal Communications Commission nominee Gigi Sohn argued that getting Sohn to the commission, where she would give it a three-Democrat majority, should be a top priority and one those same ISPs were impeding.

That came in responses to the Monday (May 9) tag team event featuring Vice President Kamala Harris and President Joe Biden praising ISPs at the Rose Garden for helping connect 11.5 million households to high-speed through the American Connectivity Program (ACP).

MediaJustice, which says it advocates for "a more just and participatory media," was not joining the broadband bandwagon, suggesting securing a full complement of FCC commissioners, rather than patting ISPs on the back for partnering on the subsidy effort, would have been a bigger boon to connectivity.

Also: CWA Launches Ad Campaign Backing Sohn

“Instead of applauding corporations that continue to fail families needing to stay connected to healthcare, jobs, school and one another through the pandemic, President Biden should be applying pressure to Senate leadership to confirm his [FCC] nominee Gigi Sohn,“ MediaJustice said. “While Sohn’s confirmation has stalled for over six months, preventing the full functioning of the FCC, these Internet Service Providers watched their profits rise as 21 million Americans go without home broadband. These companies don’t need a White House ceremony, they need the oversight and regulation that only a complete FCC can provide.”

Former acting FCC chairman and Common Cause special adviser Michael Copps was on the same page when it came to Sohn being a key piece in the broadband connectivity puzzle.

“[N]one of the White House’s initiatives around halting ongoing consolidation in the broadband sector, restoring a free and open internet, and ensuring marginalized communities have equitable access to communications services can be fully achieved if the FCC remains deadlocked,” he said in a statement following the event. “Congress must take action now to ensure Ms. Sohn receives a vote,” Copps said. 

Copps said those gatekeepers were conducting a “sleazy” campaign to undermine Sohn because they knew that “a functional FCC would hold them accountable and prevent them from engaging in anticompetitive and discriminatory practices that undermine our ability to get online.”

Sohn was nominated, then renominated, and has had not one but an unprecedented two nomination hearings in the Senate Commerce Committee. But her nomination was not favorably reported out of committee because it was a 14-14 political draw. To get confirmed, Sohn would need the Senate to first vote to discharge the nomination from the committee, then vote to confirm her, perhaps even requiring a tie-breaking vote from Harris.

But that Senate vote has yet to be scheduled and Sohn fans see the handiwork of ISP lobbyists working against a return of Title II-based net neutrality rules and, writ larger, Republican legislators hoping to stall a Biden re-regulatory agenda until after the midterms.

The FCC’s current 2-2 political tie has left it unable to act on controversial items, like net neutrality and media ownership regulations. ▪️

The White House is promoting its ongoing Affordable Connectivity Program (ACP)  with a big splash Monday, announcing that it has gotten commitments from almost two dozen private sector ISPs to lower service costs for high-speed broadband (at least 100 Mbps) for millions of rural and urban Americans, and announcing the launch of a GetInternet.gov web site on how to sign up for the government program.

The reference, in a fact sheet issued Monday, is to the Bipartisan Infrastructure Law's Affordable Connectivity Program, provides subsidies that help cut the cost of internet service by as much as $30 per month ($75 per month on tribal lands). The FCC is overseeing the $14.2 billion subsidy.

The Biden administration said Monday that it has gotten 20 large and smaller ISPs covering 80% of the U.S. to “either increase speeds or cut prices,” saying “too many families go without high-speed internet because of the cost or have to cut back on other essentials to make their monthly internet service payments.”

Also: FCC Won't Set Minimum Service Standards for ACP

A number of ISPs have had low-cost programs for lower-income residents for years, Comcast's Internet Essentials program for example.

“We have been working on digital equity issues for over a decade and believe this new program offers even more support to achieve those goals,” Comcast Cable president David Watson said in a statement circulated by the White House. "We are proud to work together with our government and community partners to close the digital divide.”

"From large providers like AT&T, Comcast and Verizon serving dozens of states, to smaller providers serving rural areas like Jackson Energy Authority in Tennessee and Comporium Communications in North Carolina, the commitments will allow tens of millions of ACP-eligible households to receive high-speed internet at no cost," said the White House.

President Joe Biden and Vice President Kamala Harris held a Rose Garden event Monday to talk up broadband connectivity and its investment in closing the digital divide.

Harris kicked off the event, which hosted ISPs, legislators, and others--including FCC Chairwoman Jessica Rosenworcel. Harris was flanked by the President and someone who was identified as having fallen behind in her studies because she did not have access to high-speed internet, but thanks to the subsidy had caught up and was going to be the first in her family to go to college..

Harris said affordability is more often the issue than availability and that everyone should be able to afford high-speed internet, no matter how little they earn.

She said more than 11.5 million had had their bills lowered thanks to the Administration subsidies and the ISPs that had answered the call to help close the digital divide, a line that drew applause from the President and the assembled audience.

President Biden thanked Harris for leading the broadband connectivity effort, then repeated the oft-cited McDonald's parking homework session example of a lack of internet connectivity.

He talked of the $65 billion broadband investment that had been made, and echoed Harris' assertion that affordability is a key barrier to connectivity.

Biden said big business had stepped up after working with the White House, and cited the 20 providers most of whom had representatives in the Rose Garden. He thanked ISPs by name, calling out AT&T and Comcast, Frontier, Spectrum and Verizon, asking them to stand and saying "Thank you, thank you, thank you."

"I want to thank the companies who are working with us to deliver this for all families," he said. "It’s a big deal.  And this is a great example of what we can achieve if the federal government and the private sector work together to solve serious problems. 

The President said that not only have 11.5 million signed up for low-cost broadband through ACP, but thousands more are doing so each day. He even gave out a phone number--877-384-2575--for those who hadn't signed up but wanted to. 

Biden also talked about the lack of broadband competition that he is working to change, including by getting rid of exclusive contracts for apartments or condos. He said 30 million Americans live where there is no broadband or with insufficient speeds.

He said the subsidy is also another tool in his toolkit to get a handle on inflation.

The ACP is requiring ISPs to allow the subsidy to apply to a wide array of broadband plans--rather than simply the lowest tier of service; implementing prohibitions on credit checks or existing debt as a bar to enrollment; prohibiting upselling or downselling; disallowing restrictions on switching providers; and helping prevent bill shock--the Emergency Broadband Benefit (EBB) that the ACP supplants was a $50-per-month boost while the ACP is only $30 (except on tribal lands).

ACP participants, says the White House, are Altice (Optimum and Suddenlink), Astound, AT&T, Breezeline, Comcast, Comporium, Cox Communications, Frontier, IdeaTek, Jackson Energy Authority, MediaCom, MLGC, Spectrum (Charter), Starry, Verizon Communications (Fios only), Vermont Telephone Company, Vexus Fiber and WideOpenWest.

Essentially the announcement was spotlighting existing efforts, rather than anything new, outside of the new website and ISPs commitments to higher speeds and lower prices.

The administration also put in a plug for the $40 billion-plus grant program being administered by the National Telecommunications & Information Administration and the Broadband Nutrition Label the FCC is overseeing, as well as the FCC decision to allow for more competition for internet service to apartments and condos.

"[T]he President’s competition agenda is focused on providing Americans with more good options for internet service where they live — driving down prices and increasing the quality of service," the White House said. ▪️

The Microsoft-led coalition, Connect Americans Now (CAN), which is pushing the closing of the digital divide by any means necessary, applauded the White House. 

“Connect Americans Now commends the Biden Administration’s dedication to bringing affordable, reliable broadband to every American community,” said CAN executive director Richard T. Cullen. “[W]e encourage President Biden and Vice President Harris to additionally affirm the administration’s commitment to an all-of-the-above approach to ending the digital divide that gives states and broadband providers the flexibility needed to maximize the positive impact of federal broadband programs in communities with differing needs and challenges.”

“Today’s White House announcement will improve affordable access for low-income families," said Benton Institute for Broadband & Society Executive Director Adrianne B. Furniss. "In addition, the work supported by the Infrastructure Investment and Jobs Act and the American Rescue Plan that will be done in the States should ensure that affordable, robust broadband networks reach every address in the country. The commitments secured by the White House from 20 leading internet providers covering 80% of the U.S. population to either increase speeds or cut prices to make sure that ACP-eligible households get high-quality, affordable internet are small steps to the U.S. realizing full digital equity. We have a long way to go, but it is critical that the Administration continues to lead on ensuring that broadband is truly universal.”

MediaJustice, which says it advocates for "a more just and participatory media" (and whose board includes a representative of net neutrality advocate Free Press), was not joining the broadbandwagon, suggesting a full complement of FCC commissioners would have been a bigger boon to connectivity.

“Instead of applauding corporations that continue to fail families needing to stay connected to healthcare, jobs, school and one another through the pandemic, President Biden should be applying pressure to Senate leadership to confirm his Federal Communications Commission nominee Gigi Sohn. While Sohn’s confirmation has stalled for over six months, preventing the full functioning of the FCC, these Internet Service Providers watched their profits rise as 21 million Americans go without home broadband. These companies don’t need a White House ceremony, they need the oversight and regulation that only a complete FCC can provide." 

It has been a big week for government broadband subsidies.

The FCC said Wednesday (May 4) that it had committed another almost $39 million in its 14th tranche of the Emergency Connectivity Program Fund, a COVID-19 driven program targeted at closing the homework gap.

President Joe Biden has said that one of his administration's goals is to make sure that kids aren't having to go to a fast food restaurant parking lot to get the requisite connectivity to do their homework.

The latest round of funding is going to 140 schools, 14 libraries and a consortium in California, Georgia, Hawaii, Kentucky, Michigan, New York, Puerto Rico, and Virginia.

Also: FCC Hands Out More Rural Broadband Funding

FCC Chairwoman Jessica Rosenworcel said that the fund has now gotten more than 12.5 million students connected. Closing the homework gap has been a Rosenworcel priority sense she came to the FCC as a commissioner.

Elsewhere on the connectivity front, the National Telecommunications & Information Administration said it had awarded $77 million for broadband connectivity for dozens of tribes in 10 states. "This critical funding will bring affordable, high-speed internet service to tribes from Alaska to Rhode Island, and many places in between, expanding access to telehealth, distance learning, and workforce development," said Commerce Secretary Gina Raimondo.

The Tribal Broadband Connectivity Program is funded by the 2021 Consolidated Appropriations Act, which set aside $980 million for broadband to eligible Native American, Alaska Native and Hawaiian Native entities. The Biden infrastructure law authorized another $2 billion infusion for the program, so there is plenty of money left -- so far $83 million has been handed out including this week's $77 million.

The FCC also announced earlier this week that it had authorized an additional almost $200 million for rural broadband development through its Rural Digital Opportunity Fund (RDOF). ■

The Conference of National Black Churches along with five other groups representing Black clergy and congregations, has called on the National Telecommunications & Information Administration to allow the $40 billion-plus broadband subsidy money it is handing out to states to be used for whatever technology -- fiber, wireless, etc. -- best fits their communities.

That came in a letter to Commerce Secretary Gina Raimondo and NTIA administrator Alan Davidson. NTIA has been given the primary oversight role of the broadband subsidies in the President's -- and Congress' -- massive infrastructure plan.

"America’s mosaic of diverse people and communities argues for the government’s deployment of broadband to be done in a way that takes advantage of diverse technology options that will provide the best broadband services across remote and underserved areas," they said.

The Biden Administration has suggested fiber to the home get priority status in the subsidy handouts, but has not ruled out other technologies so long as they provide sufficient speeds and quality.

In a February letter to Davidson, groups including Connect America Now called on the Biden Administration to use a technology-neutral approach to handing out billions in broadband funding as a way to make sure those buildouts can handle “differing levels of infrastructure, as well as differing topographies and population densities.”

The administration has been signaling that it prefers fiber buildouts but the groups said everything from wired to wireless to fixed wireless to satellite broadband should have a shot at the money. That, they said, “allows for rapid deployment of broadband network solutions and maximizes the reach of government dollars in building networks and connecting consumers.”

A tech-neutral approach is the best one for several reasons, they argue, including that it gives providers the flexibility to use the most cost-effective approach, will help them deploy rapidly and will cut down on the likelihood of overbuilding incumbent providers, though the administration is anticipating some overbuilding will happen in order to reach the unserved while staying in business. ■

A day after Charter Communications announced a joint venture with Comcast to create a streaming platform based on the latter’s Flex broadband-only product, chairman and CEO Tom Rutledge said that he sees a day when the bulk of its Spectrum video customers receive service via internet protocol delivery. He called the Comcast partnership a step in that direction. 

“I expect that incrementally most of our customer base will be all-IP,” Rutledge said after being asked about the JV on Charter’s Q1 earnings conference call with analysts. He added that unused video spectrum can be recaptured and used to increase broadband speeds or provide additional capacity over time.

In a research note Friday, MoffettNathanson senior analyst Craig Moffett noted that if the Flex box does become Charter’s new set-top, effectively moving all of its video to IP-based apps, it would free up enormous amounts of capacity. 

Rutledge didn’t say when that would happen, and what he said is something that cable operators have been quietly moving toward for years. But it was a public admission that cable is acknowledging that streaming is becoming the dominant force in video. This is coming from one of the better performers in the video space — Charter lost about 112,000 video customers in Q1, compared to a loss of 512,000 video subs for Comcast. Later on the call, Rutledge said that he still believes in the video business and Charter’s ability to keep its pay TV losses low can be attributed to its knack for packaging.

“We’re continuously improving the rights structures around what we’re able to sell,” Rutledge said. “It’s been difficult because of the way historically video’s been packaged in this very fat, expensive bundle that is driven by sports rights costs. We’ve been able to get some of the content out of that ecosystem and put it into tiers and we’re successfully selling those. I think that over time, we’ll be able to build a very nice video business.” 

Also: Could Comcast’s and Charter’s New Streaming Platform Be the Launching Pad for Something Bigger? 

That’s a key point, and whether or not Rutledge was making it as a hint of bigger things to come, being able to package video correctly is going to be crucial going forward no matter what delivery system is used. I talk a lot about the day when cable operators will aggregate streaming apps and sell them in bundles, replacing the current video model — and Rutledge has hinted at that in the past, too. But with streamers starting to feel the pressure from high costs, competition and viewer fatigue, having someone with a proven track record driving subscriptions could be invaluable. Whether they take the industry up on it remains to be seen.

Maybe streamers are beginning to learn their lesson. Netflix, after years of saying they didn’t care if subscribers shared passwords, last month said they would crack down on the practice. Other streamers are keeping a closer eye on password sharing, something that Rutledge warned about years ago. 

And though it would have been easy to gloat about Netflix’s current dilemma, aside from a brief “I-told-you-so” joke, Rutledge took the high road, pointing out that the practice affects the entire media industry. 

“It’s not just a problem for the companies that are not controlling their passwords, it’s a problem for everybody in the industry, because all of that content that comes out without anybody paying for it affects the supply and demand of all content, not just the provider that is selling the content,” Rutledge said. “[That] diminishes the value of content for everybody, which is a point we had been trying to make for years.”

Another plus for Charter is that Rutledge actually likes the video business. He doesn’t see it as an albatross, or as a roadblock to offering more profitable broadband service, but as a good product in a growing lineup of good products. It helps that he has seen the various transformations of that product over the years, and not just in video. During the call, he was asked how he felt about the explosion of new fiber builds and fixed wireless offerings geared at taking broadband share away from cable. 

“There have been periods in my cable career where sentiment has gone up and down, and my sentiment has remained the same,” Rutledge said. “I think it [broadband] is a great business and I think we have a great opportunity to continue to grow the business successfully. When everybody’s euphoric it’s probably odd, and when everybody’s pessimistic it’s odd, and I’m unchanged.” ▪️