Nexstar Media Group said it reached a new multi-year retransmission consent agreement with Verizon Fios, ending a two-week blackout.

Terms of the deal were not disclosed.

The dispute impacted more than 3 million subscribers in 10 markets, according to Nexstar.

Also: Nexstar Risks $6.7 Million Per Month in Lost Fees During Fios Blackout

Also being restored to Fios subscribers is Nexstar's cable news network NewsNation.

"We're pleased that our customers' programming will be restored and that we can continue delivering content they enjoy," Verizon Fios said in a statement.

The agreement will ensure that Verizon subscribers won't miss a moment of Major League Baseball's World Series, which begins Friday, or any of this weekend's college and NFL football games, Nexstar noted.

Nexstar's stations also add distribution as midterm election races reach an end. Political advertising is generating millions of dollars for local station groups. ■

Fox said it reached a new multi-year distribution deal  with Verizon that will add Fox Weather and Tubi to Verizon’s Fios TV platform.

The agreement extends the retransmission agreements for Fox’s TV stations in markets served by Fios including New York, Washington, D.C., and Philadelphia.

Fox News Media and Fox Sports channels will continue to be carried. 

In addition, Fox Weather, launched last year as a streaming service, will be added to the Fios TV lineup. Tubi, acquired by Fox in 2020, also will be including on Fios set-top boxes and on other Fios platforms.

Financial terms were not disclosed.

“Fox  is pleased to extend and expand our long-standing relationship with Verizon as we add Fox Weather and Tubi to our industry-leading portfolio of news, sports and entertainment available to Verizon’s subscribers,” said Michael Biard, president, operations and distribution, Fox Corporation. ■

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. ■ 

Verizon has included a popular promotion for its Fios wireline and 5G Home Internet FWA service to now include the Disney Bundle. 

Starting on February 11, new customers for these home broadband services will get up to12 free months of the Disney Bundle, which includes Disney Plus, Hulu and ESPN Plus. 

Verizon previously supported an "on us" promotion that provided new home broadband users with subsidized Disney Plus. 

Also read: T-Mobile Says Majority of Customers for Its Now 'Mainstream' Fixed Wireless Service Are Coming From Cable

Verizon added 78,000 fixed wireless access customers in the fourth quarter and now has 228,000, second only to T-Mobile. 

For its part, T-Mobile, which provides its unlimited wireless customers Netflix and Apple TV Plus at no cost, was asked about the value of such promotions during its fourth-quarter call on Wednesday. 

"When you look at all of that put together, we love how that's working," said Jon Freier, president of T-Mobile consumer group. ■

J.P. Morgan media analyst Philip Cusick lowered his fourth quarter broadband subscriber growth estimates for Verizon Communications on Wednesday, but maintained his “overweight” rating and $62 per share price target on the stock.

In a research note Dec. 22, Cusick wrote that he now expects Verizon to add about 70,000 Fios broadband customers in Q4 -- down from previous estimates of 80,000 customer additions. He also lowered his consumer wireless customer expectations in the quarter to about 575,000 additions, down from the previous mark of 600,000 additions. 

Verizon stock was relatively unaffected by the change in estimates, priced at $52.68 per share in afternoon trading Dec. 22, down 10 cents (0.18%) each.  

Analysts across the board have rejiggered their broadband subscriber growth estimates for cable and telco service providers alike, as record growth rates during the height of the pandemic are expected to slow substantially.  

Cusick attributed his lower estimates to recent comments by Verizon executives at industry conferences, continued low move activity and potentially higher involuntary churn after New York state ended its COVID-19 related utility service (including broadband) shutoff moratorium on Dec. 21. The state still offers financial assistance and consumer protections to help consumers maintain services and pay off accumulated charges. 

On the wireless front, Cusick wrote that competition remains high, and although he expects business wireless customers to increase in the quarter -- he raised business net estimates to 200,000 from 175,000 customers -- he anticipates residential growth will be lower -- about 375,000 additions instead of the previous estimate of 450,000 additions. 

“The wireless consumer competitive environment remains high, and it sounds like store traffic, while good, has not been robust, but small business formation and enterprise continue to see positive trends,” Cusick wrote.  

Also: Verizon Fios Subscribers Facing Tegna Blackout in Fee Dispute 

The J.P. Morgan analyst also believes that while the recent completion of Verizon’s purchase of prepaid wireless provider Tracfone will add substantial incremental service revenue, it will be offset by increased investment.

Tracfone has about 20 million subscribers, 13 million of which are already on Verizon’s network. In his note, Cusick added an incremental $15 in ARPU for those customers, while the 7 million Tracfone customers on competitive platforms, he added in $30 of ARPU. Cusick’s revenue estimates for the partial quarter -- the deal was closed in November -- are about $500 million in incremental service and around $125 million in adjusted EBITDA for Tracfone in Q4. For 2022, Cusick estimates Tracfone will add about $4.8 billion in incremental service revenue from Tracfone and $1.2 billion in EBITDA.

“We expect to see more Tracfone-branded dealers over time challenging Cricket and Boost – and could see a turn in prepaid sub trends to positive but don’t look for that now,” Cusick wrote.  ■ 

Verizon, which recently reached a multi-year carriage deal with MSG Networks that means Fios subscribers can continue to watch NBA and NHL games on the regional sports network, plans to use its 5G  to bring more experiences to fans in the famed New York arena and at home. 

The plan is to use Verizon’s 5G Ultra Wideband wireless service to deliver enhanced statistics, augmented reality, virtual reality and, eventually the ability to place bets to mobile devices.

Also Read: MSG Networks Blacked Out on Comcast in N.J., Connecticut

“We’ll really be leaning in with them to innovate around next-generation fan experiences,” said Erin McPherson, Verizon’s head of content and partnerships.

Verizon sees 5G connectivity changing game day from the time a consumer buys a ticket. Through their phones, they’ll be able to arrange for parking, find their seat and make sure there’s a cold beer waiting. With predictive technology, the arena would know they’re going to want nachos and another beer at halftime and, when the game’s over, it can deliver the kid-sized jersey the fan’s daughter is expecting.

Also Read: Verizon Has 150K Fixed Wireless Customers

During the game, 5G can deliver the kind of advanced statistics fans are used to seeing during broadcasts when they’re at home. And at halftime the crowd can use Verizon’s bandwidth to compete in a virtual half-court shooting contest,. “We’re enabling everyone to do it at once and perhaps we’re offering prizes,” McPherson said. 

The fast speed of 5G Ultra Wideband also delivers that kind of low latency that makes it possible to do real-time in game betting. 

“The kinds of data-rich experiences that were hard to access in crowded venues will be easy and seamless,'' McPherson said.

Verizon also works with social media partners like Snapchat and McPherson said fans will be better able to share pictures of themselves rooting for their favorite teams using team filters. They also might be able to share highlight videos from the games, if those rights can be secured.

Some of those applications require multiple levels of rights and that is what makes MSG Networks a good partner, McPherson said. MSG Networks has rights not only to the arena but has ownership links to the Knicks and the Rangers. It also has ties to the leagues.

Also Read: MSG Marks 50th Anniversary of Knicks’ Championship

MSG Networks is thrilled to work with a company like Verizon that stresses innovation at every turn,” said Andrea Greenberg, president and CEO, MSG Networks. “We have a celebrated history of innovation as well, and are ideally suited to work with Verizon Fios to bring unique experiences to fans and viewers.”

McPherson said she didn’t have a firm timeframe for when fans could start to see the new experiences at the Garden, but said Verizon was committed to providing them in 2022.

Verizon will be creating some experiences that will be unique for its subscribers, but other features will be available to anyone in the building with internet access. “We recognize that the venues have an interest in ensuring that all the fans get some level of assets. Verizon customers will get extra,” she said.

Having fans hooked up to the Verizon network would also create excellent opportunities for advertising and commerce, but those will wait. “In these early days, it’s really about engaging fans and learning from doing,” she said, adding that “the possibilities are endless. Longer term, this is a whole new world for brands and advertisers.”

While Verizon and MSG Networks will initially be focusing applications in the arena, they will also look to serve spectators at home.

“The plan would be to really enable a fan to feel like they’re part of the action,” McPherson said. 

The living room or family room is a viable place for viewers to wear a VR headset and feel like they’re right there at courtside or next to the glass.

While experiencing the excitement of the venue, those viewers can have social interactions with other fans. “So every fan of the Rangers or the Knicks can feel like they are in the arena,” she said.

Verizon has a long, tortured history with video. 

How else can you describe a twisting, disjointed 15-year journey, in which the company spent billions laying out fiber and launching a highly sought-after IPTV-based pay TV service, Fios TV, only to abandon it when shareholders lost their nerve amid the Great Recession?

What other words can you use for the billions more the No. 1 U.S. wireless company spent buying companies, technology and content for the very first mobile-first video platform, Go90, only to watch consumers reject it outright?

These days, Verizon’s video strategy has been diminished to marketing third-party streaming platforms including Disney Plus and YouTube TV. How’d Verizon get from there to here?

In the Beginning…

Verizon was borne out of the 2000 merger of Bell Atlantic and GTE, its name a portmanteau of veritas (Latin for "truth") and horizon. 

In 2005, Verizon announced the launch of Fios (a contraction for "fiberoptic service"), a bundled internet, TV and phone offering based on a hugely ambitious plan to beat the cable industry with a $23 billion fiberoptic rollout. 

Launching in Keller, Texas, and nationally promoted with an expensive TV ad campaign featuring action-movie director Michael Bay, Fios debuted with the tagline, “This is Fios. This is big.” 

The Verizon Fios triple-play featured an innovative IPTV-based pay TV service—which would soon be parroted by competitor AT&T and its U-verse platform. Fios TV and its state-of-the-art user interface caught the imagination of key consumer markets, notably New York, where users eagerly anticipated an alternative to the James Dolan-led Cablevision. 

“Fios was greatly anticipated when it first launched, to the point where there were protests where people wanted to try and get Fios into their towns. It was noticeably faster and the TV interface was [better than] everyone else,” said Alan Wolk, co-founder and lead analyst for TV[R]EV.

But the will to keep growing the Fios footprint was gone, culminating in Verizon’s deal to sell a huge chunk of its Fios system to Frontier Communications for $10.5  billion in 2016.  

That deal didn’t work out so well for Frontier. For weeks after the deal was closed in April 2016, the switchover from Verizon’s network to Frontier’s was riddled with outages and increasingly poor service. Frontier later blamed the spotty transition partly on insufficient customer data supplied by Verizon. Frontier filed for bankruptcy protection in April 2020 -- it emerged in April 2021 -- and said it plans to spend about $1.4 billion on expanding its fiber network through 2024.  

Fios TV has been in an accelerating decline for several years, losing about 62,000 video customers in Q2 2021 (144,000 customers in the first half of the year) and  finishing the period with about 3.7 million customers. Since Q2 2016, not including the Frontier deal, Fios TV has lost about 1 million subscribers. 

At the same time, its Fios internet service has gained ground, adding 194,000 high-speed data customers in the first half of 2021, to finish the period with 6.4 million customers. The company has said its trailing 12-month total Fios Internet net additions of 440,000 are its best performance since 2015.  

GoFish

The ebbing of Verizon Fios coincided with another ambitious launch—the highly promoted debut of Go90, Verizon’s pre-Quibi attempt to create a video service aimed at mobile phones. 

Named after the mobile viewing behavior of tilting a smart phone from vertical (profile) to horizontal (landscape) modes, Go90 was launched with huge fanfare by Verizon in 2015, billed as a can’t-miss opportunity for the No. 1 U.S. wireless carrier to justify its $4.4 billion purchase of AOL and its copious advanced advertising assets. 

Actually, AOL was among a number of purchases that culminated in the creation of a Verizon operating unit called Oath Brands, which was headed by former AOL chief Tim Armstrong, and ran Go90 into the place many Armstrong business went … into the ground. 

Earlier, in 2014, there was a $200 million acquisition of Intel’s OnCue video tech assets There was the $4.83 billion purchase of online media company Yahoo, and the purchase for an undisclosed sum of Vessel, the online video company founded by former Hulu CEO Jason Kilar. 

Amid anemic audience numbers, Verizon Go90 was discontinued in 2018. Various reports have priced Verizon’s Go90 bath at around $1.2 billion, but who really knows how much higher it goes. Notably, Verizon wrote down its Oath media unit to the tune of $4.6 billion in 2018. 

Also Read: Verizon Set to Double 5G Millimeter Wave Deployments to 60 Cities

At that time, former Ericsson executive Hans Vestberg took over for Lowell McAdam as Verizon CEO, ushering in new priorities (namely 5G) and deemphasizing Verizon’s role as a first-party bundler of video entertainment services. 

'Winning' Without Content

Under Vestberg, Verizon has pulled back from content acquisition and is instead focused on partnerships, such as the agreement with the Walt Disney Company to offer a year of free Disney Plus service to Verizon unlimited wireless customers, as well as Verizon’s Fios fiber internet and 5G fixed wireless subscribers. 

The Disney agreement is similar to one struck by Verizon earlier last year with Google, enabling Verizon to bundle virtual MVPD service YouTube TV along with Fios, fixed 5G and other services. 

On a January earnings call, Vestberg called these partnerships a “win-win” and the strategy “we want to have going forward.”

Verizon hasn’t revealed how much money it’s spent underwriting Disney Plus subscriptions, but the deal appears to have sparked subscriber growth. Verizon added 790,000 unlimited wireless customers in Q4, its biggest increase in six years.

In Q2 2021 Verizon added about 275,000 postpaid wireless phone customers, ending the period with 90.5 million subscribers. 

Verizon further emphasized its commitment to wireless telephony, agreeing to purchase prepaid phone giant Tracfone for $6.25 billion in September 2020. That deal is still being scrutinized by the Federal Communications Commission.  

In November, Verizon got into the OTT device game, quietly launching a new set-top box called Verizon Stream TV, targeted to its fixed 5G customers. 

The device is powered by Google’s Chromecast OTT software interface, with Android TV elements included too, and it features “nearly unlimited” cloud DVR storage space, according to Verizon. Verizon Stream, which retails for $70 and has been given away to Verizon 5G Home customers, also has access to Google Assistant and its voice-control feature.

In addition to providing a platform for its Disney Plus and YouTube TV integrations, Verizon Stream has access to Google Play, so users can download YouTube or pretty much whatever third-party streaming app they want … save for the biggest OTT app of all, Netflix. Indeed, Verizon Stream launched without support for the No. 1 streaming service in the world, causing the tech press to largely scratch its collective head, given the surfeit of OTT device competition that includes Roku, Amazon Fire TV and Apple TV, just to name a few players. 

Also Read: Verizon Declares Disruption on Cable with 'Mix & Match' Model

In January 2020, Verizon announced a new way in which it bundles its wireline Fios services, allowing customers to choose internet, TV and landline phone services a la carte, and ostensibly eliminating hidden fees and contracts in the process.

The so-called “Mix & Match” model lets consumers pick from three internet speeds: 100 Mbps for $40 a month; 300 Mbps for $60; and 1 Gbps for $80. No contracts are required. 

For video, customers can subscribe to Verizon’s virtual pay TV partner, YouTube TV, and get a month free of the $50-a-month service. 

Or they can choose Fios TV--Verizon is now offering a “test drive’ of its full 425+ channel bundle, allowing customers to pay $50 a month for two months, plus $12 a month per set-top. Once that two-month trial is over, Verizon said it will “recommend” what video package its customers should settle into permanently. 

One option is the “Your Fios TV” bundle, which includes around 125 channels for $50 a month (plus $12 per month per set-top). Subscribers, however, can choose the five cable networks they absolutely have to have. Local access to major broadcast networks are included in all bundles. 

For $70 a month, customers can get the “More Fios TV” bundle, which features around 300 channels, including regional sports networks, and waives the $12 charge for the first set-top. 

The Full Monty is the $90-a-month “The Most Fios TV” package, which is includes more than 425 channels, one set-top gratis and a $12 DVR service credit. 

“Customers have been loud and clear about their frustrations with cable, and we’ve listened. As a result, we’re transforming our approach to Internet and TV offers by giving customers more choices and more transparency,” says Frank Boulben, senior VP of consumer marketing and products at Verizon, in a statement.

Mix and Match received notable praise from one consumer group. “Finally, a major cable company has gotten the message,” said Jonathan Schwantes, senior policy counsel for Consumer Reports, seemingly unaware that Verizon is not a cable company.

Three years after it said it would spend more than $100 billion (including assumed debt) for Time Warner Inc., AT&T is a pure-play phone company again, agreeing to spin off its WarnerMedia business into a separate entity with Discovery Inc., effectively ending its years-long experiment in the TV distribution and content business. 

This is the second spin-off the phone giant has made in about three months. In February, it said it would spin off DirecTV in a separate, publicly traded unit that would include private equity giant TPG, for about $16 billion, or less than half the $49 billion ($66 billion including debt) it paid for the asset in 2015.  

With the Discovery-WarnerMedia deal, AT&T has effectively given up on its media strategy, which a mere three years ago was supposed to be the foundation of the new AT&T. Now, AT&T gets $43 billion for an asset it paid $85 billion ($108.7 billion including assumed debt) for in 2018, and becomes a pure-play phone company again. 

In a research note, Bernstein media analyst Peter Supino said that AT&T management came to the realization that Time Warner executives did when they decided to look for a buyer three years ago: the new content model is tough.

“We think this merger discussion evidences AT&T's concern about the cost to make HBO Max a long-term winner in global streaming,” Supino wrote. “We believe that the capable [Time Warner Inc.] management team was elected to sell the company because it could not solve [Time Warner’s] market share problem as a public company prioritizing profits. In that context, we have thought it almost inconceivable that the phone company would solve that same problem. That the phone company is anxious about its adjusted leverage approaching 3.8x makes it even less likely to lead Warner Media to glory.”

Supino’s Bernstein colleague, media analyst Todd Juenger, wrote in a note to clients that the WarnerMedia-Discovery deal is proof that neither company believed it had the scale to make streaming a success alone. But he had doubts that this transaction will make the combined company big enough. 

“Taking two businesses where the vast majority of the cash flow is derived from linear TV, which is in our opinion a structurally impaired business (with cyclicality as well), does not create a better business,” Juenger wrote. 

Also Read: AT&T: Taking a Mulligan on Media 

In a conference call with analysts about the deal on May 17, AT&T CEO John Stankey talked a lot about 5G and fiber, two things that probably haven’t been top of mind for many investors as the company struggled with DirecTV subscriber losses and concerns over HBO Max’s sluggish customer growth. Now, with the distraction of the media business gone, maybe they can focus on what they appear to be good at -- the phone business. 

AT&T is coming a bit late to that decision. Its chief wireless rival, Verizon Communications, came to that realization a few years ago, after dipping its toes in the content creation and distribution businesses. Earlier this month it cleared the media deck with the sale of its remaining media assets to Apollo Global for about $5 billion. Verizon still has its Fios TV pay TV distribution business, but it's clear the real emphasis there is on broadband.

Now AT&T gets to focus on broadband too. During a conference call with media, Stankey  said the goals for the new AT&T would be “simple and straight-forward”: growing its wireless network to reach 200 million POPs by the end of 2023, and to more than double its fiber footprint to 30 million homes by the end of 2025. That sounds like a phone company talking to me. 

For WarnerMedia, which has been on a bit of a roller coaster ride in the past few years, it gets an owner that actually knows the TV business. In a conference call with analysts, Discovery CEO David Zaslav, who will head the new entity, noted that he’s known a lot of the media unit's employees for 30 years. Zaslav had a long career running NBC Cable before joining Discovery about 15 years ago, and he has managed to grow that company through acquisitions and organically. Now he’s leading it into the next stage.

That’s really important. Whatever your thoughts about WarnerMedia under the watchful eye of AT&T management, it’s pretty obvious that the old structure wasn’t working. Since taking over Time Warner in 2018, WarnerMedia has had three CEOs -- Stankey, who became CEO of AT&T last year; Bob Greenblatt, who was fired after about a year on the job; and Jason Kilar, the Hulu founder who suddenly made himself extremely available in the past few weeks, keynoting the MoffettNathanson Media & Communications Summit conference on May 13  and becoming the subject of a sprawling Wall Street Journal profile on May 14.

According to at least one outlet, in hindsight it appears Kilar was beginning to see the handwriting on the wall, and was trying to put himself and his accomplishments out there just in case he had to make a sudden move. The New York Times reported Monday that Kilar was assembling a legal team to negotiate his exit.  

Kilar was thrust into the role after Greenblatt, who had past successes with Showtime and NBC, was shown the door. About seven months after taking the job, Kilar caused some uproar in the talent ranks when he unveiled a plan to shatter theatrical windows, opening up Warner Bros. Studios’ entire 2021 slate to streaming and theaters simultaneously.  WarnerMedia is going back to the old windows for its 2022 movie lineup. 

On the conference call with media, Zaslav called Kilar “a fantastic talent,” but passed to Stankey on the call when asked about the Hulu founder’s future in the new company.     

Stankey said that Kilar remains the CEO of WarnerMedia, but that Zaslav “has got a lot of decisions to make on personnel and how things are structured moving forward during this transition period, as he works his way through it, I’m sure he’ll be talking with folks about where that’s going.” 

Not exactly a ringing endorsement.

Zaslav said that the new company will have a new name, coming in the next week or so, and that the idea is to fully integrate Discovery and WarnerMedia. Whether that means that the two companies’ respective streaming services will be combined as one, isn’t quite clear. Pricing also is going to be key. Currently, HBO Max is the most expensive DTC streaming service at about $15 per month and Discovery Plus is at about $4.99 ($6.99 for an ad-free version) per month. HBO Max is planning to launch an ad-supported version in June, which some reports say will be priced at about $9.99 monthly. How Zaslav melds and prices those two offerings is still a question, but most analysts believe that a $25 HBO Max/discovery plus service is hopefully not in the cards.

Juenger wrote that if the plan is to not offer the Discovery Plus and HBO Max products separately, then the price of one or both has to come down significantly, with no change in content. That, he said, would most likely lower the value of the companies’ current streaming plans. 

“For this new suite of streaming offerings to be more valuable than the current plans, one would have to believe that by sacrificing ARPU of one or both, there would be enough incremental additional subscribers to more than make up for that,” Juenger wrote. 

That could be hard because while some analysts (including Juenger) have noted how this deal will have a big impact on the linear channels, the real reason behind this is the failure for HBO Max to live up to expectations. While HBO Max has about 44.7 million subscribers, more than half of those are estimated to be linear HBO customers. Discovery, which launched its Discovery Plus streaming service in December, has about 15 million customers. While many of those are getting service for free through a promotion with wireless company Verizon, that is still strong growth with a lineup of reality shows that admittedly don’t have the same cachet as Game of Thrones or Mare of Easttown. Zaslav has said that Discovery makes more money per subscriber from streaming than from linear TV,  and that the average viewer watches Discovery Plus about three hours per day. Kilar said at the MoffettNathanson conference that HBO Max engagement is about two hours per day per active account. 

It’s not like AT&T didn’t have high hopes for content when it bought Time Warner in 2018, saying that it would combine the programmer's iconic HBO premium network and linear channels like TNT, CNN, TBS, Cartoon Network, TCM and others with its state-of-the-art telecom services. Chairman and CEO at the time Randall Stephenson was quick to talk about the 100 million-plus subscribers that AT&T had through its wireless services that would be able to access WarnerMedia content. Three years later, Stephenson retired and  Stankey, who had run WarnerMedia shortly after its purchase by the telephone giant, isn’t talking as much about engagement anymore. 

Also Read: AT&T and TPG: There Is No Why

One lesson phone companies seemingly have to learn year after year after year  is that the TV business is not the phone business. And a climate where Disney Plus, The Walt Disney Co. 's streaming content juggernaut, has more than 100 million subscribers but still took it on the chin for not growing fast enough, just shows that streaming, as it is currently modeled, requires an unprecedented level of scale and engagement. No one has been able to figure it out yet. Now, it’s going to be David Zaslav’s problem to solve.  

This story was updated to correct the pricing of the Discovery Plus streaming service.

Verizon said that two-thirds of customers who signed up for a free promotional deal for a bundle of Disney Plus, Hulu and ESPN Plus have retained their service, following the end of the one-year promo.

Verizon didn’t disclose how many of those customers kept the entire $12.99 bundle vs. those who downgraded to individual services. 

Verizon began offering the bundle free with unlimited 4G LTE and 5G wireless plans during the November 2019 launch of Disney Plus, and it proved one of the key drivers to the new SVOD’s fast subscriber growth. 

The wireless company is open to more promotional tie-ups, its CEO told investors this morning. 

“We’re not going to have a hundred different type of offerings, but you know Discovery Plus and Disney Plus, they are so-called Super A brands we want to work with. We will look for more of these [as we see subscribers] willing to upgrade and to migrate,” Hans Vestberg said. 

Verizon, meanwhile, also reported the loss of 72,000 Fios TV subscribers in the fourth quarter, reducing its pay TV base to below 4 million. The company reported just 51,000 lost pay TV customers in the fourth quarter of 2019. 

"On the Fios side, of course, we will continue with the video right now," Vestberg told investors. 

Verizon added 95,000 Fios Internet users, up from 35,000 in the year-ago quarter. 

Also, for the very first time, Verizon’s moribund media division experienced revenue growth for the first time since it purchased Yahoo in 2017. The unit, which includes Yahoo, AOL and—up until recently—HuffPost, generated $2.3 billion in the fourth quarter, up 11.4% year over year. 

Verizon took a $119 million charge in the fourth quarter related to the sale of Huffpost to BuzzFeed. 

Per FCC rules, Verizon has started warning Fios customers they may lose access to Hearst Television stations at month's end.

Verizon said Hearst is demanding "unreasonably large" increases in retransmission consent fees that may force Verizon to raise rates for its customers. 

“Affordable local news is vital and customers want quality at-home entertainment, especially during a pandemic, so Verizon is surprised that Hearst Television is demanding pay increases that might keep Fios customers from watching their channels," Verizon said in a statement. "We urge Hearst Television to get serious about reaching a fair agreement and hope they will not remove their channels while negotiations continue.”

Also Read: Retrans Season Starts With a Bang

The Hearst channels at issue include WBAL Baltimore (NBC), WGAL Harrisburg (NBC), WTAE Pittsburgh (ABC), WCVB Boston (ABC) and WMUR Manchester, N.H. (ABC).

The two companies have a complex relationship, given that Verizon and Hearst are elsewhere 50/50 partners in Complex Networks, a suite of online brands.

A Verizon spokesperson also said there could be potential issues with carriage of a couple of Gray Television stations, WWBT (NBC) and WUVP (CW) Richmond, Va., based on "[Gray's] actions with other companies," they said, without elaboration.

Also Read: Comcast Says it Reaches Hearst TV Retrans Deal

A Hearst TV spokesperson declined comment.  

"Over the last ten years, Gray has signed more than 1,000 retransmission consent agreements," said a Gray TV spokesperson, who added they could count on one had --"with fingers to spare"--the number of times Gray has not reached such agreements. "So, if Verizon is serious about reaching a deal [at] today’s marketplace rates for our top-rated stations in Richmond, a deal will get done," they said.

Verizon Communications settled a three-year-old lawsuit with New York City on Tuesday, agreeing to add 500,000 low-income households to its broadband footprint, Mayor Bill de Blasio said.

New York sued Verizon in 2017, claiming the telco reneged on a promise to extend its Fios fiber-optic broadband, TV and voice service to 100% of the city’s residents by 2014, part of the franchise agreement Verizon signed with the city in 2008.  

A 2015 audit conducted by the city showed that Verizon had fallen far short of that goal, and found the telco had failed to install the necessary equipment in several areas where it said the buildout was completed. In addition, the study claimed Verizon had failed to consistently document service requests and said that 40,000 requests for service were pending, some for a year or more. 

Verizon had denied those claims, countering that it had lived up to its commitments and that the dispute centered on semantics, basically the definition of a “passed home.” 

As part of the Nov. 24 settlement, Verizon agreed to extend its fiber broadband service to an additional 500,000 households within the New York City Housing Authority.

“Internet access is an economic right in New York City, no matter your ZIP code. Tech giants will not stand in our way to deliver high-quality broadband to New Yorkers – they must be a part of the solution,” Mayor de Blasio said in a press release. “COVID-19 has further exposed the inequalities in internet access while changing the way New Yorkers work, learn, and live. We will continue to hold any corporation that fails to deliver on its promise to New Yorkers accountable.” 

According to the Mayor’s Office, many of the neighborhoods that will be earmarked for the expansion include Community Districts that are hit hardest by the pandemic.

They include: 

According to the settlement, Verizon will make broadband connections available to a minimum of 125,000 additional households in these Community Districts. That means if a resident requests paid Fios service, Verizon is required to make it available within seven days. 

Verizon also will report quarterly on their progress, and the city will make the list of newly eligible households public. The settlement is subject to approval from the NYC Franchise and Review Commission and the Public Service Commission.

"We're grateful for the opportunity to bring Verizon Fios service to an additional 500,000 New York City consumers,” Verizon spokesman Rich Young said in a statement. “Currently about 2.5 million NYC homes and businesses benefit from all that Fios has to offer. This agreement builds upon Verizon's base, and will make this premier broadband service available to even more consumers." 

Gary Bolton has been named the new president of the Fiber Broadband Association (FBA).

FBA represents fiber optic network infrastructure vendors and providers, including Corning, Nokia, Google and Verizon FiOS.

Bolton, who had been VP of global marketing and government affairs at ADTRAN, will come aboard Nov. 2. He succeeds Lisa youngers, who is exiting for a private industry job.

“This is an exciting and challenging time for our members, the Association, and the industry as COVID-19 has laid bare the profound importance of connectivity for all of us," said FBA board chair Katie Espeseth. We’re lucky to have found a leader with Gary’s deep understanding of our industry who can take the helm at this important juncture.”

Bolton is no stranger to FBA, having chaired its audit and finance committees. 

Verizon Media on Tuesday said that it will be using Ampersand as the exclusive seller of Verizon Fios’ addressable TV inventory.

The move brings Ampersand’s addressable footprint to 42 million households representing more than 60% of the U.S.

Ampersand is owned by Comcast, Charter and Cox.

“Addressable TV and OTT advertising offer a unique and unparalleled opportunity to reach consumers in a targeted and meaningful way,” said Iván Markman, chief business officer, Verizon Media. “Together with Ampersand, we are extending advertiser reach and strengthening demand for publisher content. This relationship is another important milestone for Verizon Media’s roadmap to develop leading omnichannel capabilities for premium sources of demand.”

Verizon Media is also providing access to Verizon Fios TV addressable inventory through the Verizon Media DSP, which will be the only programmatic trading platform for Fios.

Ampersand has also selected Verizon Media’s DSP as its primary buying platform for CTV and OTT inventory.

The fastest growing pay TV service at the beginning of the last decade, Verizon Fios TV just experienced its worst customer quarter ever, losing 84,000 subscribers in Q1.

The IPTV platform now has less than 4.2 million users and is seeing—right along with the rest of the linear pay TV business—accelerated losses. Fios TV shed 222,000 users in 2019, and this most recent Q1 represented a quickening over the 53,000 users lost in the first quarter of 2019. 

Also read: Verizon’s Video Strategy: Everything You Need to Know About the Wireless Giant’s Tortured TV History

In its earnings release Friday, Verizon said the losses reflect “the ongoing shift from traditional linear video to over-the-top offerings.”

Verizon is currently promoting third-party services like the YouTube TV virtual MVPD platform, which the telecom offers Fios Internet users free for three months upon signup. Verizon is also offering Fios Internet signups a free year of Disney Plus. 

Notably, AT&T has stopped taking on new customers to its rival U-verse TV platform, which was launched back in the mid-aughts alongside Fios. 

Also read: Verizon Fios Giving Subscribers Free Premium Channels

Verizon reported the addition of 59,000 Fios Internet users, “as work-from-home, in-home schooling, and other related measures increased the demand for high-quality broadband offerings.”

Verizon also announced this week that it’s developing a kind of “tech in a box” solution to enable self-install of Verizon fiber internet, keeping technicians out of the home and socially distanced. 

Here’s a company video outlining how that works:

Verizon is offering a sort of "tech in a box" solution to signing up new Fios customers during the COVID-19 pandemic, when social distancing is the byword. 

The company said it is exploring new ways to get its service in the house while keeping its employees and those new customers safe.  

In some cases, a technician-less solution will be to give customers a box containing the necessary equipment, then having the tech run a "crushable" fiber line that can go through a window to connect to the equipment inside.

Verizon said the fiber cable is sufficiently pliable that it does not degrade the signal.

Getting that connection made will be through a remote support tool to talk the customer through self-installation, using an app to give the tech a live view so they can walk them through the process. 

Verizon said it will be making premium channels HBO, Cinemax and Starz available to subscribers, many of whom are staying at home to slow the spread of the Coronavirus.

All Fios TV customers will be able to watch HBO and Cinemax April 17-20 and Starz from April 17 to 23.

Also read: Verizon’s Video Strategy: Everything You Need to Know About the Wireless Giant’s Tortured TV History

They will also be able to watch free replaces of classic NBA games from NBA League Pass and select NHL games from NHL Center Ice.

Previously, Verizon had added more than 80 channels to its service, including both premium entertainment channels as well as resources that allow for online learning and study support for students.

As of April 1, Fios TV customers who don’t subscribe to select premium channels will get access to additional networks at no added cost, without having to sign up or sign on.

Those networks include Showtime and Epix.

Customers can also get 30 days of instruction exercise video from Gaiam TV Fit and Yoga.

In April, Verizon mobile and Fios customers will be able to experience up to 60 days of free access to valued education resources, tools and games at no cost, including:

> Quizlet: Students and teachers can get a Quizlet Plus account to study languages, science, math, history and more with engaging learning tools and flashcards.

> Bookful: Children can bring books to life with hundreds of augmented reality and 3D interactive education books and games to improve comprehension.

> Chegg: Students will have access to the new Chegg Study Pack with step-by-step textbook solutions, expert Q&A, practice tests, grammar and plagiarism checkers, and a step-by-step math solver.

> Epic!: Parents and children will get access to Epic’s 40,000-book digital library, trusted by more than one million teachers, and built for safety, discoverability and fun. 

Frontier Communications said Monday that it would invoke a 60-day grace period to pay its bond debt due March 16, a move that many believe could be the first steps in restructuring its debt, including a bankruptcy filing.

Frontier was scheduled to make a $320 million interest payment on its bond debt on March 15, a payment that many have speculated it cannot make. The company has been trying to restructure about $17.5 billion in outstanding debt, much of that incurred after it agreed to buy Verizon Communications’ Fios business in three states in 2015. That deal closed in 2016. 

In a statement on March 16, Frontier said it would take advantage of the 60-day grace period on its interest payment, adding that it continues to hold talks with bondholders as it works to “reach a comprehensive resolution.”

“We remain actively engaged in constructive discussions with our bondholders as the Company continues to evaluate its capital structure with an eye to reducing debt and interest expense,” Frontier continued in its statement. “...Importantly, we continue to provide quality service to our customers without interruption and work with our business partners as usual.”

In the meantime, Frontier stock continued to fall, dipping 20% (7 cents per share) to $27 cents each on March 16. The stock has been trading under $1 per share since Oct. 31.

In December Frontier hired former Dish Network executive Bernie Han as CEO. According to reports, Han has been working hard to restructure Frontier’s debt. Bloomberg reported that Frontier is negotiating terms of a debtor in possession loan that would allow it to continue operating through a bankruptcy filing. 

But just when that filing would come is up in the air. Frontier had been expected to file for Chapter 11 restructuring in March, possibly before the interest payment came due, but that hasn’t happened. According to Bloomberg, the company has another interest payment due April 1 (with a 30-day grace period) and one due April 15 (without a grace period). That could mean that the telecom company would file for protection around the middle of next month.

Video customer erosion at Verizon Communications continued in the fourth quarter as the company shed about 51,000 Fios TV customers in the period, but wireless customers surged by nearly 800,000, fueled in part by a promotion around The Walt Disney Co.’s Disney+ streaming service.

The Q4 Fios video losses were slightly larger than the 46,000 Fios TV customers it lost in the prior year. For the full year, Fios lost about 225,000 video subscribers, ahead of the 171,000 it lost in 2018. Fios Internet customers rose by 35,000 in the period, compared to a gain of 49,000 in the prior year. For the full year, Fios internet customers increased by 141,000, behind the 195,000 additions it had in 2018.

Related: Verizon Adds Bloomberg TV to Fios Lineup on East Coast 

Media segment revenue was flat for the period at about $2.1 billion.

In the wireless business, post-paid customer additions were about 790,000, well above average analysts’ estimates of about 525,000 additions. Many saw the surge as a direct result of the company’s decision to provide the Disney+ streaming service free for one year to its unlimited data wireless customers. Verizon started the promotion with the launch of Disney+ in November.

Related: Verizon Chief Says Disney Promotion a ‘Win-Win’ 

In a research note, Barclays media analyst Kannan Venkateshwar wrote that the Disney+ promotion likely had a greater effect on existing subscribers, but estimated it could have been responsible for between 200,000 and 250,000 new wireless customers in the quarter.

“While this is optically rather small relative to the 20 million Disney+ sub number, we do acknowledge that the sub tailwind was over only one month and it appears that the bundle has had a larger impact on existing account churn,” Venkateshwar wrote, adding that Verizon’s post-paid phone churn was much lower than its peers. “This would imply that the tailwind to Disney+ from Verizon came from existing VZ subs which could have contributed 3-4 million to Disney+ subs in the quarter overall.”

Verizon Communications saw its wireless customer base surge in Q4,  which many analysts believe was tied in part to its aggressive promotions toward the end of the year, including one involving The Walt Disney Co. 's streaming service Disney Plus.

Verizon added about 790,000 post-paid wireless phone net connections in Q4 (its highest Q4 gain in six years), finishing the year with about 90.5 million post-paid wireless connections. The quarterly gain was well above the prior year’s increase of about 650,000 connections, and well above average analysts’ estimates of  about 525,000 additions. Many saw the surge as a direct result of the company’s decision to provide the Disney Plus streaming service free for one year to its unlimited data wireless customers. Verizon started the promotion with the launch of Disney Plus in November.      

Some analysts estimated that the Disney+ app was downloaded about 24 million times in its first month. 

Related: Verizon Chief Says Disney Promotion a ‘Win-Win’ 

In a research note, Barclays media analyst Kannan Venkateshwar wrote that the Disney Plus promotion likely had a greater effect on existing subscribers, but estimated it could have been responsible for between 200,000 and 250,000 new wireless customers in the quarter.  

“While this is optically rather small relative to the 20 million Disney+ sub number, we do acknowledge that the sub tailwind was over only one month and it appears that the bundle has had a larger impact on existing account churn,” Venkateshwar wrote, adding that Verizon’s post-paid phone churn was much lower than its peers. “This would imply that the tailwind to Disney Plus from Verizon came from existing VZ subs which could have contributed 3-4 million to Disney+ subs in the quarter overall.”

Related: Verizon Adds Bloomberg TV to Fios Lineup on East Coast 

Also in the quarter, Verizon said it shed about 51,000 Fios video customers, slightly more than the 46,000 Fios TV subscribers it lost in the prior year. For the full year, Fios lost about 225,000 video subscribers, ahead of the 171,000 it lost in 2018. Fios Internet customers rose by 35,000 in the period,  compared to a gain of 49,000 in the prior year. For the full year, Fios internet customers increased by 141,000, behind the 195,000 additions it had in 2018. 

Media segment revenue was flat for the period at about $2.1 billion.

Decreasingly a factor in the pay TV industry in recent years, Verizon has declared disruption on what’s left of its dominant hegemony. 

The No. U.S. wireless operator today announced a fundamental way in which it bundles its wireline Fios services, allowing customers to choose internet, TV and landline phone services a la carte, and ostensibly eliminating hidden fees and contracts in the process.

The so-called “Mix & Match” model lets consumers pick from three internet speeds: 100 Mbps for $40 a month; 300 Mbps for $60; and 1 Gbps for $80. No contracts are required. 

For video, customers can subscribe to Verizon’s virtual pay TV partner, YouTube TV, and get a month free of the $50-a-month service. 

In terms of Fios TV, Verizon is now offering a “test drive’ of its full 425+ channel bundle, allowing customers to pay $50 a month for two months, plus $12 a month per set-top. Once that two-month trial is over, Verizon said it will “recommend” what video package its customers should settle into permanently. 

One option is the “Your Fios TV” bundle, which includes around 125 channels for $50 a month (plus $12 per month per set-top). Subscribers, however, can choose the five cable networks they absolutely have to have. Local access to major broadcast networks are included in all bundles. 

For $70 a month, customers can get the “More Fios TV” bundle, which features around 300 channels, including regional sports networks, and waives the $12 charge for the first set-top. 

The Full Monty is the $90-a-month “The Most Fios TV” package, which is includes more than 425 channels, one set-top gratis and a $12 DVR service credit. 

“Customers have been loud and clear about their frustrations with cable, and we’ve listened. As a result, we’re transforming our approach to Internet and TV offers by giving customers more choices and more transparency,” says Frank Boulben, senior VP of consumer marketing and products at Verizon, in a statement. “Customers are tired of having to buy a bundle with services they don’t want to get the best rates, and then discover that those rates didn’t include extra fees and surcharges. We’re putting an end to the traditional bundle contract and putting customers in control.”

Beyond DVR service and set-top leasing fees, there’s no mention on Verizon’s new Mix & Match pricing grid about things like broadcast retrans or regional sports network fees. 

Consumer Reports put out a statement lauding Verizon for the strategy. 

“Finally, a major cable company has gotten the message,” said Jonathan Schwantes, senior policy counsel for Consumer Reports, seemingly unaware that Verizon is not a cable company. “Consumers are fed up with paying hundreds of dollars in extra fees each year that weren’t always clearly disclosed when they signed up for service. While the cost of internet and cable TV service is still expensive, Verizon customers can now pick a plan that suits their needs and budget without having to worry about getting hit with a bill loaded with hidden fees.”

Saying it wants to disrupt the cable industry, Verizon announced that it will be selling its Fios service a new way, offering subscribers more choices and eliminating contracts, hidden fees and forced bundling.

Verizon is promoting its new way of doing business as Mix & Match. Consumers start by picking an internet speed, with 100 Mbps, 300 Mbps and gigabit connections available for $39.99, $59.99 and $79.99 a month, respectively.

Then they can pick a video plan--including cutting the cord and using YouTube TV to get their TV channels. They can test drive all of Fios TV’s 425 channels for two months under a $50 a month test-drive plan.

After a two month test drive, Verizon will recommend a video package based on that consumer’s usage. The options are Your Fios TV, with 125 channel for $50 a month, More Fios TV, with 300 channels for $70 a month, or The Most Fios TV at $90 a month for 425 channels. YouTube TV has 70 channels for $49 a month. Customers opting for YouTube TV can get it as part of their Verizon bill, making paying for TV a bit simpler.

All packages include local broadcast stations.

Verizon can also help consumers pick a video plan based on a list of their five favorite channels.

Home phone is offered for $20 a month and tech support for the system is $15 a month.

“We really believe we are breaking the code of the cable industry with this new portfolio of offers,” said Frank Boulben, head of consumer marketing at Verizon.

With its new approach, Verizon is looking to bury cable’s triple play. “We recognize that times have changed and for most customers that wireless phone is the primary phone. And so we offer a home phone option. But that’s what it is, it’s an option. If you want it on top of your internet and TV you can have it. We are not forcing it on you” with discount-price bundles.

Boulben said the new system makes it easy for the consumer to figure out how much what they want will cost because of the elimination of discounts for buying two or three services. There are also no fees for broadcast channels or regional sports networks.

And he disagreed with the notion that eliminating contracts and discounts would increase churn.

“Fees are really a customer irritant. And that’s why the satisfaction levels of the cable industry are as low as they are,” he said.

Once customers have broadband, they can watch almost any streaming service they’d like. But if they want YouTube, it will be simpler for them.

Boulben declined to say if Verizon was looking to strike similar arrangements with other vMVPDs and streaming services.

“For now, we are offering YouTube TV. We are also offering Disney+. But stay tuned on what we are doing on the OTT front because it is a space that is moving rapidly,” he said.

“We believe Verizon's primary objectives are to retain video subs without conceding margin while putting its Internet marketing on the best possible footing with the full spectrum of customers,” said Peter Supino, analyst at Sanford C. Bernstein.

“With ‘custom’ video bundles, the marginal video customer gets what he/she wants (to not buy things that they won't watch), while Verizon optimizes its per subscriber video costs. This additional margin opportunity funds Verizon's elimination of video's infamous add-on service fees (but not set-top box rentals charges),” Supino said. 

The Parents Television Council, which has long called for a la carte as a way to give parents more control on video to the home, called Verizon’s announcement a “distinction without a difference,” and called on it to deliver "real" a la carte.

“Verizon’s announcement that it will drop the requirement for consumers to purchase full cable bundles in order to access TV and Internet service still doesn’t give consumers real choice in terms of programming," said PTC president Tim Winter. "While the company may be offering smaller bundles of network programming, Verizon is just the latest distributor to be fooling itself about what consumer choice really means. Unless and until consumers get to pick and choose – and pay for – the television networks they want to bring into their homes, what they’re proposing is only a distinction without a difference."

Verizon shares were down nearly 4% Tuesday after the telecom giant reported mixed Q4 results.

Verizon shares were priced at $52.97 each in early trading Tuesday, down 3.8% or $2.10 per share. The stock ticked up slightly later in the day, closing at $53.28 each, down 3.25%, on Jan. 29.

Revenue at Verizon’s wireless unit was flat but cash flow rose a strong 9.7% to $10.4 billion in the quarter. Its Fios Internet unit added 54,000 customers in the period, helping to drive overall Fios revenue up 2.5%. Customer losses at its Fios video segment increased to 46,000 from a 29,000 decline in the prior year, reflecting the growing trend of customers shifting to streaming video services. At year-end 2018, Verizon had 6.1 million Fios Internet connections and 4.5 million Fios Video connections.

Related: Kagan: Broadband-onliy households to reach 40.8M bu 2023

In a research note, Evercore ISI media analyst Vijay Jayant wrote that despite the pay TV miss -- he had estimated Fios TV would lose about 25,000 customers -- Verizon’s results were in line with expectations.

But he expected that the lower subscriber numbers would concern some investors and could affect the stock at least in the short term.

“Verizon shares have benefited from ‘safe haven’ status in a choppy market (especially given the uncertainty around AT&T),” Jayant wrote. “We don’t see results here that are likely to push street numbers higher, and believe lighter service revenue might concern investors.” 

Verizon Communications, in an effort to better focus on its 5G offerings, said it has created a new operating structure focused on three customer-facing areas: Consumer, Business and Verizon Media Group / Oath.

The changes will be effective Jan. 1, and Verizon said it expects to transition to financial reporting under the new structure during the second quarter of 2019.

“This new structure reflects a clear strategy that starts with Verizon customers,” Verizon CEO Hans Vestberg said in a statement. “We’re building on our network transformation efforts and the Intelligent Edge architecture to deliver new customer experiences and optimize the growth opportunities we see as leaders in the 5G era. We’re focused on how our technology can benefit customers’ lives and society at large.”

Verizon Consumer Group will include the consumer segment for both the company’s wireless and wireline businesses, including wireless wholesale and will be led by current Verizon Wireless EVP and president Ronan Dunne.

Verizon Business Group will include the wireless and wireline enterprise, small and medium business, and government businesses, as well as wireline wholesale and Verizon Connect, the company’s telematics business. It will be led by current EVP, wireless operations Tami Erwin.

According to Verizon, its Fios TV and Fios broadband services will be part of the products sold by the Consumer and Business Groups.

Verizon Media Group / Oath will include the company’s media, news, entertainment, gaming, commerce and other businesses and will be led by Oath CEO Guru Gowrappan.

Verizon’s Global Network & Technology organization, which will serve all company operations, will be led by Kyle Malady, currently chief network operations officer and chief technology officer.

There are no changes in leadership for company-wide staff functions.

“Our strategy is designed to elevate one of the most successful companies in the world to the greatest company in the world,” Vestberg said in a memo to employees Monday. “It’s a big leap and in order to realize this vision, it has to start with our customers. Today we begin this journey by reorienting our operating structure more towards our customers.”

The full memo to employees is below:

November 5, 2018

V Team,

By now you’ve all heard me say how excited I am about the future of our company. Today is no different.

In the past three months, I’ve been meeting and listening to you, our customers, and investors. What I heard was a pride, dedication and commitment to our customers, our organization and values. What’s also unmistakable is we can be even better, that we have a lot of potential just waiting to be unlocked.

Today, I want to share how we will organize our team to better take advantage of the opportunities ahead of us. I like to call it… Verizon 2.0, “Building tomorrow with the best of today. “

The structure will follow a clear strategy, one that includes:

Our strategy is designed to elevate one of the most successful companies in the world to the greatest company in the world. It’s a big leap and in order to realize this vision, it has to start with our customers. Today we begin this journey by reorienting our operating structure more towards our customers.

We will transform and begin operating under this structure in January 2019.

Customer-facing Operating Groups including:

• Consumer, led by Ronan Dunne
• Business, led by Tami Erwin
• Media/Oath, led by Guru Gowrappan

A Global Network and Technology Organization led by Kyle Malady

Corporate staff functions including:

• Finance, led by Matt Ellis
• Strategy & New Business Development, led by Rima Qureshi
• Marketing, led by Diego Scotti
• Public Policy, Legal & Security, led by Craig Silliman
• CAO, led by Marc Reed

This is a big change that you will likely have questions about. Think about it for the next few hours and join me for a webcast today at 2:00 PM ET. The team and I will address your questions.

We have a lot to be proud of at Verizon. Our network leadership, our dedication to serving our customers, and our talented V Team are all strengths we must preserve as we begin this new era.

It’s my privilege to lead this team, guided by a shared purpose: Deliver the promise of the digital world by enabling people, businesses and society to innovate and drive positive change.

Thank you all for your support during this transition period. As always, the team – V Team – will make the difference.

Hans V

Feeling some pain from cord-cutting and general video competition, Verizon Communications lost 22,000 Fios video subs in Q1, widened from a loss of 13,000 video subs in the year-ago quarter.  

Verizon also added 66,000 Fios internet subs, up from 35,000 gains a year earlier.  

With DSL losses factored in, Verizon added 7,000 broadband subs in Q1, versus a loss of 305,000 subs a year earlier.  

Verizon also shed 14,000 Fios digital voice customers in Q1, widened from a loss of 8,000 in the year-ago period.  

Verizon ended Q1 with 4.59 million Fios video connections, 5.91 million Fios internet connections, and 3.89 million Fios digital voice connections.  

Overall Fios-related Q1 revenues rose 2.1%, to $2.95 billion, driven in part to increased demand for faster broadband service tiers. Total wireline operating revenues dropped 1.6%, to $7.55 billion.  

Wireless connections rose 2%, to 116.18 million, despite a 6.7% drop in retail prepaid subs.  

Verizon Fios has launched a new TV tier tailored for small- and mid-sized business customers that features a lineup of more than 45 channels, with a focus on news and business-focused channels.

That tier, called Current TV, includes CNN, Fox News, MSNBC and HLN, along with major local broadcast TV networks.

That tier starts at $40 per month with no contract, or $25 per month for one year and $30 per month in year two when those customers sign up for a two-year contract. Pricing on Current TV improved when TV is bundled with other Verizon services.

Current TV complements several other pay TV tiers for business customers, including Local TV (15-plus channels, starting at $25 per month under the no-contract price), as well as pricier packages that include lineups as large as 375 channels (145-plus in HD).

It was a mixed bag for Verizon Fios in Q3, as its pay TV business remained under siege even as the telco continued to tack on Fios internet customers.

Verizon lost 18,000 Fios TV subs in Q3, versus 36,000 additions in the year-ago quarter. Verizon, which has lost 46,000 Fios TV subs through the first three quarters of 2017, ended the period with 4.64 million subs in the category.

Fios video results “were pressured due to the ongoing shift from traditional linear video to over-the-top offerings, as well as competitive promotional activity,” Matthew Ellis, Verizon’s EVP and CFO, said Thursday on the company’s Q3 earnings call.

Verizon, which recently revamped its free, ad-based go90 streaming service, is looking to key in on the OTT trend with its own internet-delivered skinny TV package. That effort didn’t come up on the call, but Bloomberg reported this week that the product is delayed, and isn’t expected to launch until Q1 2017 or later.

RELATED: Verizon’s OTT TV Service Delayed to Spring 2018: Report

Ellis later reiterated Verizon’s view that “traditional linear TV bundle is not long-term sustainable and you saw our reaction to that when we launched some of the different plans that we launched at that point in time.

“We are not surprised by what we are seeing around the TV,” he added. “But I would tell you what is important, when you move to over-the-top for your video entertainment, the quality of that broadband connection becomes more important than ever and if you want a quality broadband connection Fios and fiber to the home connection is the best option out there.”

Verizon also added 66,000 Fios internet subs in Q3, down from 90,000 adds a year earlier, giving it a grand total of 5.8 million subs. With DSL losses of 76,000 factored in, Verizon lost 10,000 net high-speed internet customers in Q3, and a total of 6.97 million broadband connections.

Verizon also added 11,000 Fios digital voice subs in Q3, ending the period with 3.92 million.

With all categories tied in, Verizon ended Q3 with 14.37 million total Fios connections, up from 14.14 million a year earlier. Fios revenues grew 4.8%, to $2.94 million.

Verizon didn’t have much new to say about its 5G fixed wireless trials, with Ellis noting that they are “going very well” and that the plan remains to launch a fixed wireless broadband offering during the course of 2018.

RELATED: Verizon Exec: ‘Meaningful’ 5G Deployments to Start in 2018

However, Ellis did say that Verizon plans to elaborate further on that trial activity later during the current quarter.

Verizon Communications is flirting with 1-Gig consumer broadband service with the debut of Fios Gigabit Connection, a new optimized offering that delivers up to 940 Mbps down and 880 Mbps up starting at $69.99 a month.

The debut of the near-1-Gig offering from Fios follows the mid-January introduction of Fios Instant Internet, a symmetrical 750 Mbps service that was initially available to about 7 million homes and businesses.

RELATED: Verizon Fios Launching Symmetrical 750-Meg Broadband

Verizon noted that the network performance of Instant Internet exceeded 750 Mbps, and has since “fine-tuned the service with new firmware and diagnostic tools” to ratchet up speeds further. . Existing customers on Fios Instant Internet service will automatically receive Fios Gigabit Connection and also see their bills lowered (Verizon initially sold that 750 Meg offering for $149.99 a month as a standalone, and $169.99 a month as part of a triple-play bundle).

The new offering starts at $69.99 a month as a standalone, or as part of a triple-play bundle that starts at $79.99 a month, when ordered online.

Verizon said Fios Gigabit Connection is available to more than 8 million homes in parts of the New York, New Jersey, Philadelphia, Richmond, Va., Hampton Roads, Va., Boston, Providence and Washington, D.C. areas.

Verizon is launching the faster tier as it sees competitors such as Comcast and RCN deploy DOCSIS 3.1-based services that deliver up to 1 Gbps in the downstream, but paired with much slower upstream speeds. The cable industry is pursuing a Full Duplex annex to D3.1 that will enable symmetrical multi-gigabit speeds.

 Verizon added 35,000 Fios Internet subs in Q1 2017, extending that total to 5.68 million. 

The city of New York filed a lawsuit in state Supreme Court in New York County on Monday, claiming that telecom behemoth Verizon Communications failed to live up to its promise to make its fiber-based Fios TV service available to all Gotham residents.

News of the suit was first reported by The Wall Street Journal.

The city has been at odds with Verizon since 2015 regarding the telco’s buildout of its Fios fiber optic pay TV, broadband and telephone service. According to the franchise agreement Verizon signed with the city in 2008, the telecom company pledged to have Fios available to 100% of the City’s 8.5 million residents by 2014.

But the city’s own audit of that promise found the telco fell way short of that goal. In June 2015, Mayor Bill De Blasio, Counsel to the Mayor Maya Wiley and Department of Information Technology and Telecommunications Commissioner Anne Roest announced an audit report that found blocks in the city that Verizon had marked as completed in the fiber buildout had not installed the necessary equipment and service and that Verizon had failed to consistently document service requests. In addition, the audit said about 40,000 requests for service were pending, many for 12 months or longer.

"Verizon must face the consequences for breaking the trust of 8.5 million New Yorkers,” Mayor De Blasio said in a statement. “Verizon promised that every household in the city would have access to its fiber-optic FiOS service by 2014. It's 2017 and we're done waiting. No corporation -- no matter how large or powerful -- can break a promise to New Yorkers and get away with it."

Verizon has disputed the City’s position, and claims it has lived up to its agreement completely. The telecom company said it already provides service to about 2.2 million city residents, has proposed investing another $1 billion in fiber in New York City over the next four years, and has committed to expanding Fios availability to another 1 million homes and thousands of small businesses.

“At a time when communities across the country are seeking and encouraging broadband investments like these, the City is inexplicably turning its back on this investment and its residents by pursuing foolish litigation that will harm jobs, business growth and technology competition throughout all five boroughs,” Verizon said in a statement. "The De Blasio administration is disingenuously attempting to rewrite the terms of an agreement made with its predecessor and is acting in its own political self-interests that are completely at odds with what’s best for New Yorkers. We plan to vigorously fight the city’s allegations.”

According to a letter sent to Mayor de Blasio on March 10, Verizon EVP of public policy and general counsel Craig Silliman argued that the city is playing a game of semantics.

In the letter, Silliman wrote that when the franchise deal was reached with a previous mayoral administration, the parties had agreed to change the definition of a passed home.

“In negotiating the agreement, both parties understood and agreed that Verizon would generally place its fiber-optic network along the same routes as has been used for its copper network, and would use similar strategies for accessing individual buildings,” Silliman wrote. “The obligation to ‘pass’ all buildings in the city was based on and consistent with that approach. This is confirmed by the fact that the parties advertently and intentionally omitted language found in the City’s agreements with cable providers that specified that a household is passed when functioning system facilities have been installed in the street fronting the building in which the household is located. The very argument you are now making is this contradicted by both parties understanding of passed households at the time the agreement was executed.”

In New York, Verizon must obtain permission from building owners to bring its fiber network into the building, which the company claims is the reason its penetration is higher in single-family suburban homes in the outer boroughs.   

Silliman continued that Verizon has spent about $3.7 billion to install thousands of miles of fiber in the city, passes all households in the area and can provide service within seven to 14 days of receiving a request.  

Verizon said Fios TV subs can now use the Fios Mobile app to watch live TV and on-demand content, and access DVR recordings without eating into their data plans if they also get mobile phone service from the carrier.

Verizon recently joined rivals by adding an unlimited mobile data option, but said the new data plan exempt capability brings more value to mobile tiers that are outfitted with monthly data plans.

The Fios Mobile App currently provides access to 140-plus live TV channels for viewing outside the home.

AT&T currently zero-rates DirecTV Now traffic that travels AT&T’s mobile network.

The FCC, under new chairman Ajit Pai, recently tossed out the Wireless Bureau's advisory that AT&T’s zero-rated policy for DirecTV Now likely violates the FCC’s Open Internet order.

Verizon is demonstrating the next-gen, IP-powered version of its Fios TV platform at this week’s Mobile World Congress confab in Barcelona, Spain, reports Light Reading’s Mari Silbey. 

Verizon isn’t offering any official comment on the platform or its current plans to launch it, but people involved with the company’s new Exponent business unit is showing off some of the goods across the pond.

[Image source: Light Reading, used with permission.]

Per the report, the new IP-based video platform and user experience will succeed its current hybrid QAM/IP approach and will eventually underpin the baseline Fios TV service and support other multiscreen devices as well as IoT apps, a strategy that is very similar to the one Comcast is using with X1. The new interface is also being made to support voice navigation, integrate OTT services and bake in other personalization capabilities.

The new platform will also implement a revised gateway/client architecture that relies on smaller devices, including a wireless client that is “about the size of a deck of cards,” Silbey reports.

Verizon hasn’t confirmed deployment timing, but an exec at the show told LR that it’s in beta trials with an expectation that it could be launched by the end of Q1.

But the demo represents the progress Verizon has made with its next-gen IPTV system, which has tied to the company’s acquisition of the OnCue assets acquired from Intel Media in 2014. At the time, people familiar with Verizon’s strategic interest in OnCue said that an important goal was to secure more control of its hardware and software products and technology roadmap that would eventually power a next-gen IP video platform that would put it into better competitive positioning with Comcast’s X1 platform.

RELATED: With Intel Media, Verizon Paves Path To Set-Top Independence

Variety reported earlier that Verizon was developing its next-gen platform under the code-name “Mallard” that was initially expected to launch last year. That followed earlier word from LR that a new IP client box from Verizon has passed through the FCC.

To help high-speed subs ward off hackers and cyber-sleuths, Verizon Communications has launched Digital Security Pro, a service that costs $10 per month that combines services from LifeLock and McAfee.

The service, offered to Fios Internet other Verizon high-speed customers, aims to protect a customer’s online identify, shield them from malware and viruses along with access to a set of parental control tools.  Among that group, Verizon said McAfee’s security component lets customers manage and monitor devices from a centralized location.

Verizon is also offering additional adult and child subscriptions to LifeLock.

"We created Digital Security Pro so customers can spend less time worrying, and more time enjoying, what technology and the Internet have to offer," Susan Retta, vice president of consumer marketing at Verizon, said in a statement. "Digital Security Pro unifies virus protection, ID monitoring, and device management in one product giving customers the management tools needed to face online threats."

Verizon’s new symmetrical 750 Mbps broadband tier, called Fios Instant Internet, has been launched to parts of Boston and Norfolk, Va.

Introduced earlier this month, the new offering, which replaces a 500-Meg service as telco’s high-end tier, has also debuted in New York City/Northern New Jersey, Philadelphia, and Richmond.

RELATED: Verizon Fios Launching Symmetrical 750-Meg Broadband

Verizon is selling the 750-meg service  $149.99 a month as a standalone, and as part of a triple-play bundle that starts at $169.99 per month.

Verizon, which launched Fios service in Boston, where it competes with Comcast and RCN Corp., in December 2016. Verizon ended 2016 with 5.7 million Fios Internet connections and 4.7 million Fios video connections.

RELATED: Verizon Boots Up Fios Service in Boston

Though 1-Gig represents the speed bar for an increasing number of ISPs, Verizon's next step up the broadband speed ladder will be 750 Mbps as the telco introduces a new symmetrical tier, called Fios Instant Internet, to about 7 million homes and businesses starting Saturday (Jan. 14).

Verizon Fios, which has been offering a high-end offering that tops out at 500 Mbps up and down, said it will initially debut the new 750-meg tier in New York City/Northern New Jersey, Philadelphia, and Richmond, with more markets to follow later in the year. Fios Instant Internet will be launched in Boston and Norfolk later in Q1, the telco said.

RELATED: Verizon Boots Up Fios Service in Boston

Per the announcement, Verizon will sell the new tier for $149.99 a month as a standalone, and $169.99 a month as part of a triple-play bundle with TV and home phone service. Notably, the standalone pricing undercuts Verizon’s current pricing on a 300 Mbps service ($170) and the telco’s 500-Meg offering (about $270), Ars Technica notes, though Verizon told the publication that it plans to adjust pricing on those tiers.

Verizon has so far avoided taking the plunge on a 1-Gig service that pairs up with the kind of speeds being advertised by providers such as Google Fiber, or from cable competitors, such as Comcast and RCN, that have begun to roll out DOCSIS 3.1-based services that deliver burst up to 1-Gig in the downstream direction (a “Full Duplex” extension of D3.1 that's in the works is targeting symmetrical multi-gig speeds). Altice USA, which tangles with Fios in the former Cablevision Systems markets, recently launched a 300 Mbps DOCSIS-based tier in its Optimum footprint, and is pushing ahead with an ambitious FTTP upgrade plan.

RELATED: Comcast Sets DOCSIS 3.1 Expansion, Launches 1-Gig in Detroit

A Verizon spokesperson noted that the new 750-meg Fios Instant Internet service “frequently performs well into the 900 Mbps range.”

Verizon has not announced when it might deploy a 1-Gig service for Fios, but the company is certainly thinking about a faster future for its fiber networks. On Wednesday, the company announced a successful interop lab trial for NG-PON2, an emerging FTTP technology that supports multi-gigabit speeds.

RELATED: Verizon Touts Progress on Next-Gen FTTP

“No Internet service provider has come close to offering upload and download speeds like these at such a massive scale as Fios Instant Internet," Ken Dixon, president of Verizon's consumer landline business, said in a statement. "Ever since we decided to build the nation's largest 100 percent fiber-to-the-home network 14 years ago, we've been saying that it is a future-proof technology. The future is now here with Fios Instant Internet."

Verizon said it has begun to offer a triple-play of broadband, TV and voice services powered by its fiber-fueled Fios platform in Boston about eight months after it announced the $300 million, six-year network investment plan.

RELATED: Verizon Fios Coming to Boston

Early on, Fios service are available in parts of Dorchester, Roslindale and West Roxbury. Verizon hasset up a web sitethat lets area residents find out when service will be offered in their individual neighborhoods as the telco moves on its “street-by-street, week-by-week” rollouts there.

Verizon, which competes in  Boston with Comcast and RCN, also plans to deploy Fios Roxbury's Dudley Square Innovation District before year's end. By then, more than 25,000 addresses in Boston will be able to order Fios.

Similar in some ways to Google Fiber’s “rally” process, Verizon and the city have been asking consumers to “vote” in order to bump them up higher on the priority list as the Fios expands across the city. For the buildout, Verizon has divided the city into four groups – A, B, C and D – with each group sub-divided into smaller Fiber Zones. 

Verizon has placed more than 160 miles of fiber throughout Boston since the April announcement, the company said.

The company’s triple play bundle, with symmetrical 150 Mbps broadband service, Custom TV service, and voice, starts at $79.99 per month for the first year.

Verizon said it will also donate $100,000 to the Boston Public Library in support of a new Wi-Fi Hotspot Lending program, a two-year pilot effort that will focus on making 100 hotspots available to library patrons. 

Next-gen 5G technologies and standards are still in the development phase, but Verizon is already looking to deliver high-speed broadband speeds over wireless connections next year.

“We see the stars aligning very quickly when it comes to the 5G future,” Lowell McAdam, Verizon’s CEO, said Tuesday on the company’s Q2 earnings call, noting that the FCC has completed its radio specs, opening the door to testing of technical components.

Verizon’s work around 5G and millimeter wave spectrum is “preparing us for a fixed commercial wireless fiber launch in 2017,” he said, noting that the FCC’s recent approval of Verizon’s lease agreement with XO Communications provides a “clear spectrum path for 5G deployment.”

Update: Fran Shammo, Verizon's EVP and CFO, clarified later that Verizon views "2017 as a development year for 5G," but allowed that the FCC ruling allowing the use of leases "could accelerate" that timing. "But...to get to a commercial launch and actually start to generate revenue, I think that will come in either very late 2017 or early 2018," he said, noting that Verizon is not including any of that in its current financial guidance. .

“I think of 5G, initially as, in effect, wireless fiber,” McAdam said. “With wireless fiber, the so-called last mile can be a virtual connection dramatically changing our cost structure." 

He noted later that about half the costs of deploying Fios is in the home, with the drop being the most expensive outside the home. Verizon isn’t providing hard numbers yet on 5G deployment, but McAdam noted the home routers cost the same but don’t need the ONT (optical network terminal) and that Verizon can add 5G “for very little incremental cost” as it densifies 4G networks with small cells.

“We expect there to be a significant cost reduction” with 5G, McAdam said.

Verizon has been testing 5G in Dallas (with Ericsson and Nokia) and in New Jersey and Virginia and has been seeing speeds above 1 Gbps at over 500 yards or less – more than enough capacity for up to six Ultra HD TV signal, six virtual reality units, and numerous tablets and other mobile devices.

McAdam said Verizon’s now in the process of moving that work into the field, where it can start to cover 200-home developments. It will also look at some rural environments.

Further out, Verizon will be pursuing mobile use cases for 5G that support “massive” scale for the Internet of Things and low latency services and apps, he said.

McAdam also offered updates on Verizon’s work with cities such as Boston, where it’s moving ahead with “one fiber strategy” initiative for wireless and Fios-based services. Verizon, he said, is in similar talks with other cities, including San Francisco.

“No longer are discussions solely about local franchise rights, but how to make forward-looking cities more productive and effective,” he said, adding that Verizon’s XO deal, which includes 40 metro fiber rings in major cities, is key to this strategy.

And while the recent work stoppage impacted Verizon’s Fios results in Q2, the rate of growth is expected to “return to a normal run rate in the third quarter,” Fran Shammo, Verizon’s EVP and CFO, said.

Q3 “will be a more positive quarter for us,” Shammo said, also predicting that Fios growth will be “back in stride by the fourth quarter.”

Verizon execs also added color to the company’s proposed $4.83 billion acquisition of Yahoo’s operating business, holding that it will help Verizon scale up and become a bigger player in mobile media.

Verizon sees “tremendous opportunity in the digital video marketplace” with that deal, McAdam said. “Content  creators and advertisers are hungry for alternatives as the market expands for both in-home and mobile consumption…Verizon intends to be a significant player in this space." 

He said there are opportunities in areas such as sports, where Verizon can stream games not just on Fios but also over AOL and Yahoo properties as well as via go90. “We view this as a waterfall of content  moving down through our different properties.”

McAdam said Verizon’s not yet to put a hard figure on the synergies it expects to generate from the Yahoo deal. “They're meaningful; let me put it that way." 

Verizon has rolled out a new version of its authenticated Fios Mobile app that allows video subs to search for TV shows and movies with their voice.

The updated app, spotted by ZatzNotFunny, was launched May 11 for Verizon's Fios mobile app for Android and iOS devices. The new app also provides a “More Like This” TV and movies recommendation feature, refreshed keyword search and integrated Rotten Tomatoes ratings.

Verizon has yet to integrate voice search for its Fios TV remote control – something that Comcast now offers with X1 – but the telco is working on a next-gen video platform called “Mallard” that will use some of the OnCue technology Verizon acquired from Intel Media in 2014, according to Variety.  People familiar with Verizon’s original interest in OnCue said soon after the acquisition that a key strategic goal is to secure more control of the hardware and software products and tech roadmap that will underpin a next-gen IP video platform – something along the lines of what Comcast has accomplished with X1.

Verizon hasn’t commented on plans for the Mallard project, but Variety said the current plan is to start testing this summer and deploy it to one market by Q3 or Q4. Last month, Light Reading made note of a new IP client box for Verizon Fios making its way through the FCC.

As the pay TV industry as a whole continues to weather the cord-cutting threat to its business, Dish Network could be readying what some analysts have been calling for all along — the eventual shift of its traditional satellite-TV customers to cheaper and more easily managed over-the-top offerings.

Dish had its fourth consecutive quarter of net subscriber losses in Q1, shedding about 23,000 total customers.

But because Dish lumps its Sling TV over-the-top service results in with satellite figures, the losses on the traditional side were much heavier. Depending on the analyst, those losses were between 158,000 and 165,000 in the first quarter.

Even at the smaller number, it would be the worst first quarter ever for Dish on the subscriber front — on the heels of its worst third quarter ever and its worst Q4 since 2010.

BLEEDING OR SHIFTING?

The losses could be intentional, according to Morgan Stanley media analyst Ben Swinburne. In a recent research report, he noted that the company could be slowly migrating its traditional base of direct broadcast satellite subscribers to its potentially more profitable Sling TV over-the-top platform.

Moving traditional subscribers to a new platform isn’t unprecedented: AT&T seems to be shifting its U-verse TV telco subscribers to its DirecTV satellite platform, and even Verizon Communications has hinted that its go90 mobile platform, rather than Fios TV, is the future.

Such a move would not be without risk, though. A shift from satellite to Sling TV would help lower costs and would appear to target higher-end customers, but Sling TV has a significantly higher churn rate than Dish Network.

In a note to clients, Swinburne estimated that subscriber-acquisition costs (SAC), or the amount of money Dish invests to attract a customer, is expected to fall from $875 per gross satellite customer addition in 2015 to about $840 per customer this year, in part because of lower advertising costs.

But the larger and more sustainable reason, Swinburne said, is a dramatic shift in capitalized SAC — mainly equipment costs — to $125 per gross satellite addition in the first quarter, mainly from recycling returned set-top boxes instead of buying new ones. It was the lowest level of capitalized SAC Dish has reported since it started leasing boxes to customers in 2009.

In a research note, MoffettNathanson principal and senior analyst Craig Moffett said blended SAC for both services was about $648 in the first quarter, down from $727 in the fourth quarter.

The managed shift to Sling TV also appears to be reducing programming costs. Swinburne estimated that programming costs rose 2% to 3% in the quarter for Dish.

“We also believe Dish will be able to moderate any growth in customer service and retention spend as it shrinks its satellite sub base and pivots towards the lighter-touch Sling business,” Swinburne wrote.

But the churn rate for Sling is nearly three times that for a traditional customer — 4.3% vs. 1.6% for traditional satellite TV.

Gross subscriber additions, an important metric for satellite-TV companies, were about 496,000 in the first quarter (less the Sling TV estimates), Moffett estimated, representing a 10.5% decline year-over-year.

“Either the core business is rapidly losing its appeal to consumers or Dish is actively pushing consumers to its online Sling alternative,” Moffett wrote.

He added that it is unlikely Dish would push its customers to Sling, but if they did, they would have huge hurdles to overcome. While there will be invariable comparisons to Netflix’s transition from mail-order DVDs to streaming media, there are two key differences: Dish’s business is much larger and its fixed-cost infrastructure — the billions of dollars of satellites currently orbiting the Earth — is enormous.

“All that means is that the transition will be much, much harder than Netflix’s,” Moffett wrote.

TOUGH TRANSITION

Swinburne doesn’t think it will be easy, either. Making Sling TV more attractive — Dish said it was trying to entice The Walt Disney Co.’s ESPN to join its recently launched multistream service — would likely result in a price increase to at least $30 per month from its current $20 per month. At that price point, Sling TV and a broadband connection will cost about the same as the traditional triple play, which would make it a harder sell to cost-conscious consumers.

Still, the analyst said that Dish shouldn’t be underestimated.

“Two years ago, Disney-Dish birthed Sling and the product was roundly dismissed by media companies as niche to the consumer and benign to the bundle, but many now are demanding to be distributed on Sling,” Swinburne wrote. “Two years from now, perhaps Dish will be dictating content cost terms on Sling, not the other way around?”

Verizon Fios sub growth slowed again on a year-over-year basis in Q1.

The telco, which recently closed the sale of wireline assets in California, Texas and Florida to Frontier Communications,  said it added 36,000 Fios video subs in Q1, down from 90,000 adds in the year-ago quarter, and added 98,000 Fios Internet customers, down from 133,000 adds.

Verizon ended the quarter with 5.86 million Fios video subs, and 7.13 million Fios Internet subs. That equated to a Fios video penetration of 35.2% (down slightly from 36% a year ago), and Fios Internet penetration of 41.9% (versus 41.5%) in the year-ago period.

With DSL factored in, Verizon also shed 10,000 total broadband connections in the quarter, versus a net gain of 41,000 a year ago. Verizon ended the quarter with 9.21 million total broadband connections.

Verizon said about 78% of Fios Internet subs took tiers of 50 Mbps or more, and that 38% of Fios video sales in Q1 were for its slimmed-down Custom TV offering, which was recently revised into two different types of packages, including one with ESPN.

Verizon also added 46,000 Fios residential digital voice connections in the period, down from 59,000 in the year-ago period. It ended the period with 4.8 million Fios voice connections.

Verizon, which has embarked on a plan to expanding Fios into the Boston area, pulled in $3.52 billion in Fios revenues in Q1, up from $3.35 billion in the year-ago period.

On the wireless end, Verizon added 640,000 retail postpaid subs, ending the period with 112.6 million retail connections, a 3.7% increase, and 107.2 million retail postpaid connections, a 4.4% rise. Wireless revenues were $22 billion in Q1, down 1.5% as more subs selected unsubsidized device payment plans.

On a consolidated basis, Verizon posted earnings of $1.06 per share in Q1 2016, up from $1.02 per share in Q1 2015. Total operating revenues in Q1 reached $32.2 billion, up 0.6% year-on-year.

Verizon’s fiber-based Fios platform will finally extend into Boston following a commitment by the telco to invest more than $300 million over the next six years.

Verizon, which tangles with Comcast and RCN in Boston, said construction of the FTTP network will be completed on a neighborhood-by-neighborhood basis, starting this year in Dorchester, West Roxbury and the Dudley Square neighborhood of Roxbury, and follow with Hyde Park, Mattapan, and other areas of Roxbury and Jamaica Plain.

Verizon said Boston has also “agreed to provide an expedited permitting process to encourage this build.”

Sharing some similarities with Google Fiber’s “rally” process and use of “Fiberhoods,” , Verizon and Boston are also asking consumers to “vote” in order to bump them up higher on the priority list as the Fios expands across the city. Under that plan, Boston has been divided into four groups (A,B,C, and D), with each group divided into “Fiber Zones.”

Notably, the site dedicated to that process notes that there must be a “minimum level of interest in order to bring Fios” to specific Fiber Zones. Groups A and B will be targeted during the first couple years of the build, followed by C and D. Voting for Group A continues through July 3, 2016, while voting on Group B is set to close on September 4, 2016. 

In an FAQ about the fiber project, Verizon said it expects to start building the network in Boston this summer, and launch services in select areas by "early 2017." 

"We estimate the build throughout the city will take 5-6 years, as we complete one area and expand to others. This is a big project, but Fiber Zones allow for more rapid deployment," the telco said. 

In addition to Fios residential services and “advanced business services,” Verizon said it has also committed to improving its 4G LTE network and a pledge to “usher in 5G.”

To assist on the mobile side, Boston will also take friction out of Verizon’s ability to attach wireless equipment to city street lights and utility poles.

The city also announced, as a next step, that it will begin the cable television licensing process that will help Verizon to launch Fios TV service in Boston.

Verizon and Boston will also work together on a way to bring new tech and services to low-income residents, kicked off by a $100,000 “Digital Equity” contribution to Boston that will be used for a new mobile hotspot lending program at the Boston Public Library. Also factored in is a “Smart Cities” trial focused on addressing traffic safety and congestion along the Massachusetts Avenue Vision Zero Priority Corridor. 

“Boston is moving faster than our current infrastructure can support, and a modern fiber-optic communications platform will make us a next-level city,” Boston Mayor Martin J. Walsh said in a statement. “Additionally, it is a priority to ensure that every resident has expanded access to broadband and increasing competition is critical to reaching that goal. I thank Verizon for their investment in Boston and for partnering with the city to provide the foundation for future technology growth.”

“This transformation isn’t just about advanced new fiber-optic technology – it’s about the innovative services this platform will allow people to create and use, today and in the future,” added Verizon Wireline Network president Bob Mudge. “We are delivering the promise of the digital world to families, schools and medical facilities, businesses and entrepreneurs, while strengthening our neighborhoods and communities. We are a proud partner in building toward a brighter, shared future.”

WASHINGTON — Two unions representing Verizon Communications workers along the East Coast have set a Wednesday (April 13) deadline to strike against the company.

Among the 39,000 Communications Workers of America and International Brotherhood of Electrical Workers-represented employees from Massachusetts to Virginia affected would be workers on the telco’s Fios TV video service, as well as telephone and broadband services.

“Even though Verizon made $39 billion in profits over the last three years — and $1.8 billion a month in profits over the first three months of 2016 — the company wants to gut job security protections, contract out more work, offshore jobs to Mexico, the Philippines and other locations and require technicians to work away from home for as long as two months without seeing their families,” the unions said in announcing the deadline. “Verizon is also refusing to negotiate any improvements in wages, benefits or working conditions for Verizon Wireless retail workers, who formed a union in 2014.”

The unions’ contracts expired in August 2015, and they said it is now time to take a stand after offering “hundreds of millions of dollars in cost savings” and still not getting the basic job security they are seeking.

The unions said Verizon is:

• “Offshoring and contracting out even more customer service work to Mexico, the Philippines and other locations.”

• “Cutting job security for all workers.”

•  "Requiring technicians to work away from home for as long as two months, without seeing their families. For anyone trying to balance work and family life, this is impossible.”

• “Refusing to negotiate improvements to wages, benefits and working conditions for Verizon Wireless workers, who formed a union with CWA in 2014.”

• “Freezing pensions at 30 years of service and forcing retirees to pay extremely high health-care costs.”

• “Slashing benefits for workers injured on the job.”

"For years, Verizon has been cutting vital staff — it has nearly 40% fewer workers now than a decade ago,” the unions added.

“Verizon has failed to hire the personnel necessary to properly roll out Fios, the high-speed broadband service that is still unavailable to many of its customers,” the unions said. “In cities like Philadelphia and New York, Verizon has failed to meet the buildout obligations under their citywide cable-franchise agreements.”

Verizon was talking tough in its response, too. The telco countered that it remains committed to a deal, but said the unions would “rather make strike threats than constructively engage at the bargaining table.”

Verizon said it could continue to serve its customers whether of not the unions struck and that it has been preparing for that possibility for more than a year, training nonunion workers to do “virtually every job function handled by our represented workforce.”

Verizon said it has offered:

• “A 6.5% wage increase over the term of the contract.”

• “Access to quality and affordable healthcare benefits.”

• “Competitive retirement benefits, including a 401 (k) with a company match.”

But Verizon also said it is looking to modernize “legacy contracts” that date back decades as it seeks “greater flexibility to manage and utilize its workforce to gain operating efficiencies and better customer experiences.”

As with other telcos, Verizon is transitioning from legacy copper networks to fiber and Internet-protocol delivery.

“Legacy constraints that may have made sense in the Ma Bell era of phone booths and Princess phones don’t make sense in today’s digital world with high-speed connectivity and dynamic customer demands,” Marc Reed, Verizon’s chief administrative officer, said in response to the strike threat. “Union leaders need to realize that there are real issues that will need to be addressed with or without a strike.

“Our goal is to continue providing good jobs with competitive wages and benefits and make the wireline business more successful now and in the future. Union leadership needs to be realistic and work with us to help make that happen,” Reed said.

But if not, said Bob Mudge, president of Verizon’s wireline network operations, "If a strike takes place, whether it’s one day, two weeks or longer, we are ready.”

Verizon has launched new TV spots that tout Fios’s “100% fiber optic network” while taking a few jabs at its cable competition.

“Fios is not cable. We’re wired differently,” the ad proclaims. “We are a 100% fiber-optic network…and fiber-optic networks move at the speed of light.”

The ad then talks up some of the awards that Fios has racked up, including the top ratings for Internet speed from PC Magazine, and J.D. Power customer service ratings. It later brings up Fios’s symmetrical broadband capabilities, something that the cable industry is looking to match with a proposed “Full Duplex” capability for DOCSIS 3.1, a new multi-gigabit platform for HFC networks. 

Watch the ad below:

Verizon’s all-fiber claims in the new ad might grab the attention of rival Cablevision Systems, which has previously filed lawsuits challenging ads from the telco that claim that Fios uses 100% fiber optics, because the service, for example, relies on coax (via MoCA) for distribution in the customer’s home.

But Verizon claims its new ads highlight the difference between Fios and cable offerings.

“The new TV spots are intended to do one thing: make it clear to cable customers that there is a difference between Fios and cable,” Tami Erwin, Verizon’s senior vice president and group president, consumer and mass business sales and service, said in a statement. “Our Fios network is based on superior fiber optic technology, which means only our customers enjoy upload speeds as fast as download speeds at a better price than cable can offer. On top of that, our Fios network has been recognized by the leading customer satisfaction surveys year after year. That’s something we’re very proud of.”

Frontier Communications said executive chairman Maggie Wilderotter will step down in April after more than a decade at the telecom company, succeeded by Pamela Reeve, a telecom veteran and long-time board member.

Wilderotter joined Frontier in 2004. The move is not unexpected -- in March she relinquished the CEO title to Dan McCarthy. Reeve joined the Frontier's Board in 2010 and currently serves as Lead Director. During her 15 years at Lightbridge Inc., a mobile business software and technology solutions provider, Reeve held executive positions including president and chief executive officer. She currently serves as a director on the boards of Sonus Networks, Inc. and American Tower Corporation, where she is also lead director.

"Pam's strong leadership skills, extensive background in telecommunications and technology, as well as her tenure on Frontier's board, make her the right choice to serve as Frontier's new Chairman," Wilderotter, known in cable circles for past stints at Wink Communications and Microsoft, said in a statement. "With our transformative Verizon acquisition solidly on track, the board is comfortable moving forward as planned with an independent chairman of the board in 2016."

Frontier agreed to buy Verizon FiOS systems in California, Florida and Texas in February for $10.5 billion. That deal is expected to close in the first half of this year.

Cox Communications’s residential 1-Gig march continued this week with the debut of the MSO’s “G1GABLAST” service in parts of Northern Virginia,  where the operator tangles with Verizon FiOS, a fiber-fed platform that currently tops out at 500 Mbps.

Cox billed the launch as the first gigabit service in the DC Metro area (Comcast has not yet made Gigabit Pro, its residential 2 Gbps FTTP offering, available in the Washington, D.C. area) .  Early on, Cox is offering 1-Gig residential broadband to residents at Timber Ridge at Discovery Square in Fairfax County.

Cox recently expanded G1GABLAST to parts of Providence, the service’s initial entry into the Rhode Island market, and has it deployed it to portions of Phoenix; Las Vegas; Omaha; San Diego; Orange County; Baton Rouge; Hampton Roads, Va.; Northwest Arkansas; Wichita; Tulsa and Oklahoma City.

In Northern Virginia, Cox is selling G1GABLAST for $99.99 per month when bundled with other Cox services.

Cox currently offers 1-Gig using fiber-to-the-premises technology, and has plans to deliver gigabit speeds using DOCSIS 3.1, cable’s next-gen IP platform for HFC networks as Cox fulfills its plan to begin market-wide deployment of 1-Gig broadband by the end of 2016.

 “We are excited to deliver the choice of gigabit speeds to our customers,” said Cox Communications president Pat Esser said in a statement. “Coupled with our 2,400 employees throughout Cox Virginia and more than 24,000 nationwide, our latest investments and the deployment of the fastest speeds available are powering economic growth and development for businesses and residents of the communities we serve.”

“Cox has invested $1.33 billion in our network in Virginia in the last ten years to meet the growing demands of our customers,” added Cox Virginia SVP and regional manager J.D. Myers II. “We are committed to keeping our residential and businesses customers in Northern Virginia connected to the things they care about most, today and in the years to come."     

Google Fiber said it is exploring an expansion into three markets – Oklahoma City, Okla.; and Jacksonville and Tampa, Fla.

“Now we start our joint planning process, when we work side-by-side with local leaders to create detailed studies of each metro area,”  Jill Szuchmacher, director, Google Fiber Expansion, said in this blog post. “Constructing a brand-new fiber network is a big job—the more we learn about a city, the smoother our construction efforts will be. We’ll study factors that may impact construction, like local infrastructure and housing density.”

Google Fiber, she added, will decide whether to move ahead after it wraps up the vetting process in those areas.

If Google Fiber does push forward, it will compete in Oklahoma City with Cox Communications and AT&T; in Jacksonville with Comcast (Jacksonville is a site for the MSO's 2-Gig Gigabit Pro FTTP service) and AT&T, where the telco has deployed GigaPower; and in Tampa with Bright House Networks and Verizon FiOS (Verizon is selling that FiOS property to Frontier Communications).

Those explorations follow similar explorations Google Fiber has underway in Irvine and San Diego and San Jose, Calif.; Portland; and Louisville, Ky., setting up potential additional competition for Cox, AT&T and Time Warner Cable, depending on the market.

Google Fiber has also  committed to launch service in San Antonio, Texas, building on deployments in Kansas City; Provo, Utah; and Austin, Texas, and buildouts underway in Salt Lake City; Nashville, Tenn.; Atlanta; Charlotte; and Raleigh-Durham.

Google Fiber has not released subscriber counts for its gigabit broadband and pay TV services, but Bernstein Research estimated recently that it has between 100,000 to 120,000 paid subs, and that its network currently passes about 427,000 homes and 96,000 business locations.

“We have increased conviction that Google’s main motivation to deploy Google Fiber is its belief that it has a better-than-good chance to build a profitable local-access competitor,” Carlos Kirjner, a senior analyst with the firm, noted in that study, which included fresh data from recent door-to-door surveys in some Google Fiber markets.

Independent producer Entertainment Studios has reached a carriage deal with Verizon’ FiOS TV for its Justice Central.TV network, a 24-hour channel devoted to legal-based news and entertainment programing.   

“Justice Central.TV represents a successful, and underserved genre,” said Verizon vice president of content strategy and acquisition Terry Denson in a statement. “Our customers now have the perfect destination for a wide variety of the best court shows available to them around the clock from the largest producer of television court programming.”

The network is the seventh Entertainment Studios channel to be carried by FiOS. The others are Cars.TV,Comedy.TV, ES.TV, MyDestination.TV, Pets.TV and Recipe.TV.

“Since we launched the network in December, 2012, Justice Central.TV has consistently delivered double digit growth in all key day parts,” said Entertainment Studios chairman, CEO and founder Byron Allen in a statement. “I am very proud of our expanding relationship with Verizon FiOS and highly confident their subscribers will enjoy the network.”

Among the shows FiOS customers will gain access to as part of the carriage deal include:

·       Justice with Judge Mablean – Featuring the former Divorce Court judge.

·       America’s Court with Judge Ross –Judge Ross shows litigants how they can responsibly deal with their disputes and understand the consequences of their actions.

·       Justice For All with Judge Cristina Perez – Featuring the three-time Emmy Award winner Cristina Perez.

·       Supreme Justice with Judge Karen – Twice elected as a county court judge in Miami, Judge Karen Mills-Francis is known for her feisty, full-of-life personality and passionate advocacy for families and children.

·       We the People with Gloria Allred – Noted  civil rights lawyer Allred takes up the gavel in this explosive court show.

·       The Verdict with Judge Hatchett – Featuring two-time Emmy-nominated host Judge Glenda Hatchett, who presided over her own syndicated show Judge Hatchett for 14 years. Judge Hatchett won a 2003 Prism Award for Best Unscripted Non-Fiction Series or Special for Television.

A court told Cablevision Systems that it had to temporarily pull ads that called  Verizon a liar, but the cable operator says it’s still free to make other “substantiated anti-FiOS statements.”

The temporary order, Cablevision said in a release issued Wednesday, “only applies statements that specifically call Verizon FiOS ‘liars,’ tells ‘lies’ or the like,” and that it can continue to take jabs at FiOS in other ways by pointing out, for example, that FiOS doesn’t have a public WiFi network of its own and that the MSO’s own WiFi network offers a faster experience than cellular.

“Verizon is mistaken. Cablevision is absolutely permitted to tell the truth to consumers about FiOS’ inferiority, so we are going to continue doing that anywhere and everywhere we can,” the MSO said in a statement.

Cablevision also seems poised to direct its competitive advertising fire in several other areas, by pointing out that the FiOS Quantum router costs $200 while a comparable Optimum router, offered to all cable modem subs,  is free, and that its network DVR (marketed as the "Multi-Room DVR") has the advantage in that it can record up to 15 shows at once (the top-of-the-line FiOS Quantum TV set-up can record up to 12). Cablevision then goes on to say FiOS is “inferior” because its customers have to pay extra for weekend installs, while Cablevision provides this penalty-free. And FiOS doesn’t carry News 12.

So, if anything, this should help FiOS’s advertising and marketing group prepare for the sort of new ads it can expect to see from its pay TV and broadband rival.  

In response to Cablevision’s latest, Verizon said the operator should check the legal scoreboard. ”An even higher authority -- the federal court -- has spoken. End of story,” a Verizon spokesman said. 

Verizon Communications said the U.S. District Court in Islip, New York, issued a temporary restraining order this week that orders Cablevision Systems to temporarily pull certain “anti-FiOS advertising” while also affirming Verizon’s WiFi-related speed claims. 

Cablevision followed with a statement noting that the judge did not rule that the MSO must pull all anti-FiOS ads, but that the temporary injunction is limited to ads asserting that Verizon is a “liar,” or tells “lies.”

"The law, like our economic system, encourages spirited competition," the judge said, according to a transcript. "But when a competitor exceeds the bounds of decency by falsely impugning the integrity of a competitor, it runs afoul of the law. Such extraordinary conduct warrants the extraordinary relief of a temporary restraining order.”

Verizon said the temporary restraining order, issued Monday (August 10) and released Tuesday (August 11) afternoon, ties into Cablevision ads that have targeted elements related to telco’s fiber-optic network, FiOS speeds, and the capabilities of its DVR products.  Verizon said the same court on Friday (August 7) also sustained the telco’s “Fastest Available WiFi claim,” which was at the center of a lawsuit that Cablevision filed against Verizon in January in the federal court for the Eastern district of New York. Cablevision, which recently launched a WiFi-only phone service called Freewheel, argued that Verizon’s claims were false, deceptive and designed to mislead consumers, and that Verizon’s in-home routers were not faster than Cablevision’s Optimum Smart Routers.

In June, Cablevision, the MSO with the most competitive exposure to Verizon FiOS, dropped the WiFi lawsuit so it could combine it with the case filed in the Islip court involving the TV ads that were targeting FiOS, according to Reuters. At the time, the MSO told Reuters that it was "merely in the process of being transferred to the same court that is already hearing our prior false advertising lawsuit against Verizon.”

Cablevision said Tuesday that the judge ruled that it could continue to “advertise that the Optimum WiFi network is a better data network than Verizon’s service, and that the Optimum WiFi network offers a faster experience than cellular.” 

Cablevision also said in a statement that it will keep up the fight, noting it “will challenge Verizon’s claims, not only through the legal system but also in the court of public opinion.”

Verizon, meanwhile, cheered the decision. “Cablevision’s obfuscation of the truth is nothing but a campaign to keep accurate and factual information away from consumers,” Susan Retta, Verizon’s VP of consumer marketing, said in a statement. 

CBS Sports Network, apparently one of the few sports channels that doesn’t object to being placed on a tier, has agreed to a deal with Verizon Communications’ FiOS TV for inclusion in its somewhat controversial Custom TV service.

CBS Sports Network, which doesn’t have the same carriage requirements as larger sports channels like ESPN and Fox Sports 1, which have objected to the service, will be available on Custom TV’s Sports Channel Pack beginning on May 1.

FiOS launched Custom TV on April 17, touting the service as offering consumers more choice in the channels they do and don’t want to watch. For $54.99 per month, customers get access to 35 base channels – including AMC, CNN, HGTV and Food Network – and can select two of seven genre packages including: Kids, Pop Culture, Lifestyle, Entertainment, News & Info, Sports and Sports Plus.

The deal comes the same day that ESPN filed suit in state Supreme Court in New York against Verizon, claiming Custom TV breached its carriage agreement. While no details were released to the public yet, typically channels like ESPN are required to be carried on the most widely distributed package and are generally prohibited from being placed on a tier. Networks like CBS Sports Network, usually don’t have such requirements. For example, in the New York area CBS Sports Network is available on the Sports Entertainment Package for Comcast customers, the Sports & Entertainment Pak for Cablevision customers and the Preferred TV package for Time Warner Cable customers.

The 24-hour sports network televises nearly 600 live events and over 3,000 hours of live programming, including college football and basketball and professional sports.

“While consumer choice is at the heart of our Custom TV product, when customers make their choices we want them to have the best experience and the most robust package possible,” Verizon vice president, content acquisition and strategy Terry Denson said in a statement. “The addition of CBS Sports Network does just that, with a whole suite of programming that will satisfy a sports-lover’s craving for games, features and analysis.”

In addition to being available on Custom TV, CBS Sports Network will continue to be available to subscribers in Verizon’s FiOS Extreme HD package.

“We are pleased to make CBS Sports Network a part of the new FiOS Custom TV lineup,” said CBS president of television networks distribution Ray Hopkins in a statement. “We are confident that our expanding lineup of premier live programming will be a favorite among Verizon’s sports fans and that this new option will help continue grow our distribution.”