T-Mobile reported expansion of 406,000 fixed wireless access users in the second quarter, a 27% growth deceleration from the same April to June period of last year. 

The result didn't surprise the investment community, with the wireless company, dating back to its launch of FWA service in 2021, predicting that it will only have network capacity to support 7 million to 8 million 5G Home Internet subscribers through 2025. 

T-Mobile shares were up more than 3% as of this sentence typing.

Currently, T-Mobile’s FWA base stands at 5.587 million customers, which is well past the halfway point of its self-imposed ceiling. 

The rapid proliferation of low-priced fixed wireless access (FWA) services has been a thorn in the side of cable operators, the biggest of which, Comcast and Charter Communications, both lost record numbers of cable broadband customers in Q2.

Also read: Charter Follows Comcast With Worst-Ever Broadband Quarter, Loses 149,000 Subscribers in Q2

But T-Mobile seems to view the FWA business as merely a transition tool, a gateway into the fiber-based home internet business and more broadly, a convergent future of packaging mobile and wireline internet service, just like the rest of its cable and wireless competitors.

Last week, T-Mobile announced it had entered into a joint venture with global investment firm KKR to buy residential fiber infrastructure company Metronet.  This followed T-Mobile's investment of $950 million in April in another joint venture, this one with Swedish investment firm EQT, to buy 50% of fiber network provider Lumos.

The two investments will result in T-Mobile reaching around 10 million homes with fiber by 2030, T-Mobile said Wednesday.

Responding to a question about the company’s “convergence strategy” from analyst Craig Moffett, T-Mobile CEO Mike Sievert said he and his teammates are “not believers” in the phrase “convergence” per se, but he seems to like where the basic concept is headed. 

“That being said, convergence is real in that the customers that buy both buy them together, and we have bundles today,” he added. “Many of our 5.6 million broadband customers today purchase that in a bundle and realize discounts by doing so.”

Also read: Dumb in Dallas? AT&T Keeps Pushing a ‘Convergence’ Advantage It Simply Does Not Have

For his part, Moffett has been critical of AT&T's convergence strategy, noting that since the telecom only has fiber in 12% of U.S. homes, it can’t effectively market a combined offering. 

For the “mathematically inclined,” Moffett noted in a Wednesday morning investor note, 10 million homes passed translates only to around 6% of the U.S. 

“The situation for T-Mobile is worse still. And yet they are plowing ahead undaunted,” he wrote. “Like AT&T, T-Mobile has neither a wireline answer in the vast majority of the country nor a viable path to get one. If the world moves in the direction of convergence — or worse, if they, along with AT&T, help move it there themselves — then T-Mobile will lose everywhere they don’t have a wireline network. Right now, that’s 98% of the country. The muddled strategy around convergence is a pity, because T-Mobile is actually doing very well in mobile, thank you very much.”

T-Mobile reported a 3% year-over-year gain in Q2 total revenue to $19.772 billion.

“We’ve already made abundantly clear how much we dislike T-Mobile’s quixotic mission to cobble together what is destined to be a costly and, ultimately, a largely irrelevant wireline footprint,” Moffett added. “It’s a pity that it distracts from real momentum in their core mobility business, which yet again posted strong results.”

Here’s T-Mobile’s full Q2 earnings release. 

CTIA, which represents the wireless industry, has accused the cable industry of lobbying against the allocation of 5G spectrum to slow the advance of fixed wireless access broadband. 

In a blog post titled “Cable Is Trying to Use Spectrum Policy to Stop 5G Home Competition,” Nick Ludlum, senior VP and chief communications officer for CTIA, accused lobbyists for the cable industry of posting "disingenuous, or just flat-out inaccurate, statements about global spectrum allocations."

As originally reported by Light Reading, FWA operators including T-Mobile and Verizon Communications, are looking to acquire more spectrum in the lower 3-GHz band to, according to CTIA, “meet the surging demand” for 5G wireless data. 

The cable-backed group Spectrum For the Future, however, argues in its own blog posting that these wireless companies want to “pursue old-school approaches to spectrum licensing that will only reinforce the dominance of Chinese equipment from companies like Huawei.”

Sino fears serve as merely a disingenuous scapegoat for cable’s real fear, Ludlum said, which is competition from FWA. Since they emerged three years ago, 5G fixed wireless services from T-Mobile and Verizon have dominated customer additions for home broadband. 

In a separate graphic, CTIA also shows the growing 5G “spectrum deficit” — the amount of spectrum wireless carriers actually have now vs. what they need to service 5G demand, per the FCC. 

T-Mobile said it added 523,000 fixed wireless access customers in the first quarter, silencing speculation, at least for now, among some analysts that growth of that new residential broadband business is already being undermined by capacity constraints. 

T-Mobile, which added 338,000 FWA subs in Q1 last year, now has a base of 3.2 million FWA customers. 

Further, the wireless company said it is expanding coverage in its 5G network to reach an additional 25 million consumers and wants to reach a total of 300 million U.S. wireless customers by the end of 2023.

It also wants to increase its midband 5G spectrum from a current level of 150MHz to 200MHz by the New Year's Day. 

T-Mobile on Thursday additionally reiterated its commitment to providing enough capacity to support 8 million FWA subscriptions by 2025.

T-Mobile Home Internet slowed its roll just a bit sequentially late last year, adding 524,000 customers in the fourth quarter vs. 578,000 in Q3. Since the technology relies on excess network capacity beyond what is allocated for mobile customers, and is only available in places in T-Mobile's footprint where excess capacity actually exists, at least one equity analysts wondered if the slight slowdown was a sign that T-Mobile FWA was running out of room. 

Last week, the nation's other major FWA provider, Verizon, announced the addition of a quarterly record 393,000 fixed wireless customers in Q1, upping its base to 1.847 million users. 

So, in a span of about two years, low-priced FWA home internet has infiltrated 5 million American homes. 

Comcast, which saw its broadband expansion trickle to 5 million users in Q1, has noticed, based on its latest ad campaign. 

Fixed Wireless Access subscriber additions are expected to rise sharply in the next two years, according to MoffettNathanson senior analyst Craig Moffett, but then moderate in later years, as its rural base begins to saturate.

In a series of slides posted on its website, MoffettNathanson predicted that T-Mobile and Verizon will add 2 million and 1 million FWA customers, respectively, in 2022 and 2023, up from 546,000 and 173,000 in 2021. But that growth is expected to begin to trail off in 2024, to 1.3 million for T-Mobile and 700,000 for Verizon, falling further by 2025 to 500,000 additions for each company, according to Moffett. By 2026, Moffett predicts T-Mobile will add about 200,000 FWA subscribers and Verizon 400,000 FWA customers, according to the report. 

T-Mobile added 565,000 FWA customers in Q2 2022, soundly beating analysts’ estimates, and is expected to finish the year with more than 2 million fixed wireless customers. The company has said it expects to have between 7 million and 8 million FWA customers by 2025. 

Moffett’s predictions are slightly less aggressive than some analysts who have estimated that fixed wireless could add as many as 10 million additional subscribers by 2027, but they’re not that far off. According to his estimates, T-Mobile and Verizon would add a collective 9.6 million additional FWA customers by the end of 2026. 

Though FWA appears to be a viable alternative to cable broadband, Moffett and other analysts have warned, it has mainly been deployed in rural areas and attracted residential and business customers not targeted by wired service. For example, fixed wireless has been extremely popular with construction trailers and food trucks, business customers that aren’t able to receive wired service.

That appears to be backed up by an earlier MoffettNathanson report, which cited estimates from Boston-based market researcher Comlinkdata that 33% of T-Mobile’s broadband customers are in rural areas, representing just 6% of the company’s total homes passed. In addition, Comlinkdata estimated that 88% of T-Mobile’s FWA customers are coming from the 36% of its network that is underutilized.

Looking Beyond Rural Markets

At the Goldman Sachs Communacopia conference earlier this month, Verizon CEO Hans Vestberg said the company plans to expand the service beyond rural markets.

“[W]e’re going to open up new opportunities outside the suburban, out of rural as well, where it's even greater opportunities for us,” Vestberg said of FWA at the Goldman conference. “Our devices coming out on fixed wireless access will basically cover all the frequencies we have, all the way from millimeter wave, C-band and 4G low-band, which is going to make this product enormously great.” 

Cable operators have been keeping an eye on fixed-wireless competition, but have in the past dismissed the service as inferior to wired broadband. But as their own cable broadband subscriber growth has slowed considerably, they are at least giving some credit to the service. 

At the Bank of America Securities conference earlier in September, Charter Communications chief financial officer Jessica Fischer acknowledged that fixed wireless played a role, albeit small, in its Q2 subscriber declines. Later at the BofA conference, Comcast deputy chief financial officer Jason Armstrong said that although fixed wireless is seeing gains, he is most concerned about fiber competition. 

Also: Wireless Connectivity Will Determine Winners in Broadband, Streaming Race, Rutledge Says 

Even other telcos have joined in on the fixed-wireless bashing. Frontier Communications CEO Nick Jeffery said at the Communacopia conference that comparing fixed wireless to fiber was like “comparing a Ferrari to a horse.”

According to Moffett, telcos and cable service providers should worry more about fiber. Planned fiber to the home passings more than doubled in 2021 to 4.2 million from 1.9 million in 2020, and he predicts that they should nearly double again to 7.8 million passings by 2022. He added that planned fiber passings will rise to 9.4 million in 2023, 9 million in 2024 and 8.3 million in 2025. Most of those gains will come from projects from three carriers: AT&T, Lumen (with Apollo Global) and Frontier. Moffett estimates that AT&T will add 4,000 fiber passings in 2022, 3.75 million in 2023, 3.25 million in 2024 and 2.6 million in 2025. Lumen is expected to add 1 million, 2.4 million, 2.5 million and 2.5 million passings in the same time frame, while Frontier should add 1 million, 1.5 million, 1.6 million and 1.6 million, according to Moffett.

But those deployments are not without risks, mostly on the cost side, where labor and equipment expenditures are expected to rise, Moffett wrote. As providers build out in less populated areas the cost per home passed will also increase, as well as capital costs due to inflation and a “higher equity risk premium,” Moffett wrote. ■ 

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

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

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

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

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

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

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

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

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

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

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

Frontier Communications CEO Nick Jeffery said he believes his company's fiber-based networks will ultimately win the battle with cheaper fixed wireless offerings from competing telcos, adding that measuring the differences between the two technologies is like "comparing a Ferrari to a horse."

Fixed wireless access (FWA) has emerged as a viable broadband alternative, especially in rural markets where building fiber is costly. In Q2, T-Mobile said it added 565,000 FWA subscribers, beating analyst predictions soundly.

Also: Charter Says Fixed Wireless Was a Factor in Q2 Subscriber Declines 

Cable operators have criticized FWA service as an inferior technology, adding that while it may be an alternative to even slower copper-based digital subscriber line service from telcos, it hasn’t been a major factor in the overall broadband subscriber slowdown.  

Frontier embarked on its "Gigabit America" initiative — its plan to bring fiber to 10 million homes by 2025 — shortly after emerging from bankruptcy protection in 2021. So far, the company has extended the network to about 4.4 million homes and expects to build out 1.1 million to 1.2 million new locations this year. 

At the Goldman Sachs Communacopia + Technology conference Tuesday, Jeffery said that data usage among its customers is just too high — fiber customers average 1 Terabyte per month of data usage, with top tier subscribers consuming 2 Terabytes — for fixed wireless to make a dent.

Also: Fixed Wireless Could Add 10 million Subscribers By 2027, Analysts Say  

“If you had a choice between high-speed symmetrical fiber and FWA, you’d always choose fiber,” Jeffery said at the conference. “Which means FWA is probably picking up segments of younger people in shared homes that move, and they’re a very difficult segment to make money out of. And eventually those customers, once they settle into their homes, they will flip to fiber. I think FWA will grow, it will have some impact on our copper base, we’re watching it closely, but at the end of the day we’re really comparing a Ferrari to a horse.”

Jeffery was equally confident about Frontier’s position versus cable operators, who until recently, have dominated the broadband market. He added that Frontier has three sources of growth — movers, copper-to-fiber migration and winning share from cable. 

“It’s very, very clear that we are taking the majority of our customers from cable, no doubt about that,” he said. “It’s based on the underlying truth that fiber is a fundamentally better product than cable.”

Jeffery expects that momentum to continue as cable operators build out DOCSIS 4.0 networks. DOCSIS 4.0 is expected to deliver up to 10 Gigabit per second speeds over hybrid fiber-coax networks. The Frontier CEO said DOCSIS 4.0 is too expensive, will take years to fully deploy and still would be inferior to existing fiber networks.

“Frontier’s fiber network is 10-gig capable end-to-end today to the home,” Jeffery said.

Jeffery joined Frontier in 2020 after serving as CEO of European telecom giant Vodafone UK, which went through its own problems in the past. When he took the helm of Vodafone UK in 2016, Jeffery said the company had a terrible brand reputation, negative NPS scores and poor employee engagement. Five years later Vodafone UK is taking market share from every segment, has the highest NPS scores in its markets and has the highest employee engagement among its peers. 

“It’s winning left, right and center,” Jeffery said, adding he sees Frontier moving along the same path.

“If I map that across into Frontier’s early experience, we are already taking share against every competitor in every geography that we work, the brand is repairing, NPS is going up, internal engagement is accelerating,” Jeffery added. “All of those things are happening. It does take a number of years for those things to fully embed in the market, but when they do, customers will come to us because they want the best product, they want the best service. They want to be associated with a modern, fun, agile tech company and that’s what we’re setting out to build.” ■ 

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

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

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

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

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

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

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

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

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

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

The same day the company launched a major broadband initiative, Comcast executive VP, deputy chief financial officer and treasurer Jason Armstrong told an industry audience that while fixed wireless competition may be getting a lot of attention lately, the bigger threat to the cable business is coming from fiber broadband providers.

On Thursday, Comcast unveiled a multi-gig broadband strategy that will bring higher speeds and DOCSIS 4.0 capabilities to 50 million homes by the end of 2025. At the Bank of America Securities Media, Communications & Entertainment Conference, Armstrong said that the rollouts are further proof of Comcast’s broadband superiority.

Comcast’s broadband subscriber growth was flat in Q2, as the rest of the industry struggled with subscriber losses during the period. While there have been several factors attributed to the accelerated slowdown in cable broadband growth -- sluggish new home formation, minimal housing moves and the transition to a new federally subsidized program for low income families -- competition from both fixed wireless and fiber-based broadband providers have emerged as significant players. Fixed wireless access has gained momentum after T-Mobile reported adding 560,000 FWA customers in Q2 and yesterday Charter Communications CFO Jessica Fischer said while the technology hasn’t made a major dent in broadband growth, it is still a factor.

While Armstrong acknowledged fixed wireless, he saw fiber as a bigger threat. And he noted that during the period when fiber competition went from 0% to 40% of Comcast’s footprint, Comcast became the No. 1 broadband provider in America with 32 million customers, even adding 3 million subscribers during the pandemic.

“Dave [Watson, Comcast Cable CEO] and his team have had a terrific playbook against fiber,” Armstrong said. That will continue for the foreseeable future.”

But Armstrong was less concerned about fixed wireless, which he said is enjoying some popularity because of its low cost, but still falls short on speeds -- which average between 5 Megabits per second and 50 Mbps -- and reliability.

“Fixed wireless is newer. It’s new, it's national, a gross add equals a net add because there’s not any churn in the system, although there will be,” Armstrong said. “When you step back and say,  ‘longer term, how do we compete, how do we win?’ fiber is the real long-term competitor.

“Fixed wireless is clearly having its moment right now, but when you think about the product offering and the long term competitive  advantages, I think we feel great about our positioning,” he continued.

While he admitted that it is going to be more difficult to grow broadband subscribers in the current macro environment, Armstrong noted that Comcast has been down this road before. In 2017, the company’s largest competitor aggressively lowered its broadband prices, but Comcast held its ground, keeping its ARPU stable and subscriber growth rebounded the next year.

“You don’t chase disruption at the low end or the value conscious end of the base and disrupt the whole base by doing it,” Armstrong said. “...I think that’s the way you treat this.”

He also mentioned Comcast’s strong performance in wireless -- it added 317,000 Xfinity Mobile customers in Q2, its best Q2 ever -- and Business Services as growth drivers for the future.

“You add all this up and it tells you we have great growth runners in cable,” Armstrong said. "We absolutely have the ability to continue to grow that business.” ■ 

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

The NTIA Conundrum

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

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

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

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

The Real Problem

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

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

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

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

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

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

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

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

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

The Impact of The NTIA Decision

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

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

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

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

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

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

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

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

His core messages were that fixed wireless spectrum use:  

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

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

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

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

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

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

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

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

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

Reliable Metaphors

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

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

They don't.

Resolution

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

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

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

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

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

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

Summary

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

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

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

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

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

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

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

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

Post-Script

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Broadband Forecasts Lowered Again

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

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

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

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

Fixed Wireless Threat 

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

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

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

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

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

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

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

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

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

Blame Game

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

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

Going Mobile 

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

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

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

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

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

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

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

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

Analysts have been waiting for the other broadband shoe to drop for months after most cable companies missed broadband subscriber growth targets in Q1, and they got it Thursday after Comcast, the largest cable operator in the land, reported zero broadband additions for Q2, a bit earlier than expected. Now, as cable pundits consider dropping their growth estimates for cable’s cash cow yet again, the big question for at least one analyst is whether the drop-off is due to saturation or share loss.

Just what caused the largest cable operator in the country to have precisely 0 broadband customer growth will matter for the rest of the industry because cable can rebound from saturation, but share loss is another thing entirely.

Also: Broadband Slowdown Forces Some Analysts To Go Negative on Cable Sector  

In a research note Thursday, MoffettNathanson senior analyst Craig Moffett wrote that at the moment it appears that the overall broadband slowdown is a combination of encroaching saturation and sluggish new household formation instead of share loss. And, in his note, he stressed that the former is much better than the latter. 

“If the problem is saturation, then we should be slowing towards zero (or, more precisely, towards the rate of new household formation),” Moffett wrote. “If the problem is share loss, well, then let your imagination run wild. There’s no floor. And if the problem is saturation, then pricing power isn’t jeopardized. If the problem is share loss, broadband ARPU is at risk.”

Also: Most Eyes Should Be on Comcast Q2 Broadband Performance 

Comcast managed to grow broadband ARPU in Q2 by about 3.6%, not great but respectable, given that it lost 10,000 residential and gained 10,000 business high-speed data customers in the period. ▪️

The Waiting Is the Hardest Part

Most analysts have been waiting for this day ever since Comcast reported 262,000 broadband additions in Q1 -- a number that beat most estimates but was fueled by a large portion of customers on free plans that converted to paying plans. Absent those customers, Comcast would have added about 175,000 broadband customers in that period, well behind some estimates of 180,000 to 225,000 additions.  

Prior to Thursday, most analysts were expecting broadband additions to fall off considerably, a factor of seasonality -- Q2 is when students and snow birds cancel service for the summer -- and other macroeconomic trends. But many analysts expected losses to come from other cable operators -- consensus was for Comcast to add about 84,000 high-speed internet customers in the quarter -- not the largest one. Now, some are changing their minds.

Also: Has Cable Broadband Hit the Wall? 

“We expected Charter to post negative growth in consumer broadband in 2Q22 but had expected a slightly better result at Comcast largely because Comcast has more levers to pull with respect to its product set (Flex, Peacock, TV etc.) but despite all this, Comcast performance may not really be that different from Charter after all,” wrote Barclays Group media analyst Kannan Venkateshwar in a note to clients Thursday, adding that Comcast “seems to be seeing negative growth thus far in 3Q as well, although it expects some seasonal improvement in August and September.”

That will likely cause analysts across the board to shift their estimates for overall cable broadband subscriber growth downward. Charter is scheduled to report Q2 earnings tomorrow (July 29), so depending on those numbers, predictions may have to be rejiggered again. 

Also: Cable Broadband Slowdown to Continue in Q1 and Beyond, Analysts Say 

Movin’ On Up [Not]

Comcast tried to downplay the lack of broadband growth on a call with analysts, stressing that it has added about 800,000 high-speed internet customers in the last 12 months and 3 million in the last two years. But that included the pandemic, when most Americans needed high-speed connections to work, school and play from home and many were receiving government subsidies for service. As those requirements were lifted, some decided they didn’t need cable broadband, or perhaps found a lower cost alternative. 

Comcast’s flat growth comes a day after T-Mobile said it added 565,000 fixed wireless access customers in Q2, soundly beating even the most optimistic analyst estimates. Fixed Wireless Access (FWA) has been feared to be a major threat to cable wireline broadband,  but Comcast execs said FWA wasn’t a factor in Q2 results.

Comcast chairman and CEO Brian Roberts said during a conference call with analysts that although fixed wireless is a new competitor targeted mainly at price-conscious consumers, it has had “no discernible impact” on churn, but its early growth appeared to be another contributor to lower overall connect activity. Instead, Roberts blamed the flat growth on three factors -- a slowdown in housing moves (Q2 was 12% below 2019), the reversal of some pandemic trends -- the surge in lower income households getting broadband has waned -- and competition. 

Roberts vowed to turn around the broadband product, adding that Comcast is confident it can return to residential growth and is expanding its footprint, accelerating edge-outs, “playing offense when it comes to government subsidies,” aggressively competing for market share and increasing the value of the broadband product by bundling it with mobile service and its Flex offering. 

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

“We are in a unique environment with some headwinds,” Roberts said of the cable business. “But move activity should return to some level of normalcy, mobile substitution will eventually  stabilize and we believe fixed wireless has inherent performance and capacity limitations that sharply limit the number of people on a network using a given amount of spectrum, which should provide a natural cap on their overall industry penetration.”   

Other Than That… 

Despite the less than expected broadband performance, the rest of Comcast’s businesses appear to be doing well. Theme Parks cash flow nearly tripled in the period, its highest quarterly cash flow growth in that segment ever, movie studio revenue was up 33% driven by strong theatrical releases, wireless subscriber additions at 317,000 was the best Q2 ever for that segment. Even Sky, Comcast’s European satellite unit, saw cash flow rise 54% in the period. But for investors, that didn’t seem to make a difference.

“With full acknowledgement that the broadband debate isn’t just the most important debate right now, but in fact is the only debate right now, it is worth noting that everything else in Comcast’s report was very strong,” Moffett wrote, adding that the overall takeaway is “almost certainly going to be negative.

“Broadband subscriber growth is all that matters,” he continued. “And even if our ‘saturation rather than share loss’ thesis is correct, there is a risk that by the time the evidence of causality becomes a little clearer, competitive share losses to fiber actually will have begun to accelerate… even if the growth rate of FWA has by then abated.”

Moffett noted that although housing moves is a common excuse for the slowdown, Comcast was less dismissive of fixed wireless than it has been in the past, and seems to be committed to growing the footprint. 

“None of this is likely to shift sentiment, which, in the face of slower broadband growth, remains rather dour indeed,” Moffett wrote. ■ 

A day after AT&T shares tanked after reducing free cash flow guidance for the year, rival telco Verizon Communications watched its stock near its four-year low on Friday after telling investors it, too, won’t meet its earlier financial targets.

Verizon shares fell as low as $44.38 each, down 7% or $3.28 per share. The decline came after Verizon said in its Q2 earnings release that it would reduce full-year cash flow guidance from 2%-to-3% growth to a 1.5% decline, and earnings per share would be in the range of $5.10 to $5.25 per share instead of earlier targets of $5.40 to $5.55 per share. In addition, Verizon said wireless service revenue would grow 8.5% to 9% for the year, instead of 9% to 10%, while other service revenue should be down 1% to flat, below earlier targets of flat growth.

The guidance reduction comes after AT&T said on Thursday it would miss its previous full year free cash flow target, sending its stock down as much as 10% for the day. Shares closed July 21 down about 7%, and fell another 3% on Friday.

The missed guidance for Verizon compounded what was a disappointing quarter for the telco. Verizon added 268,000 broadband customers, 256,000 of which were fixed wireless subscribers. Fios additions at 36,000 for the period were below some analysts estimates of 45,000 additions. But the company also reported it lost 215,000 postpaid wireless customers in the period, more than four times some analysts estimates of a loss of 60,000 customers. In a research note Friday, Barclays Group media and telecom analyst Kannan Venkateshwar, who earlier in the day lowered his rating on AT&T to “equal weight” from “overweight” and reduced his price target on the stock to $20 per share, said Verizon’s wireless performance could potentially make the first half of 2022 its worst ever.

“More importantly, there isn’t an easy path to turning this around given the company’s market positioning as the highest priced provider in a saturated market with growing low-priced competition and increasingly challenged macro backdrop,” Venkateshwar wrote. “Not surprisingly, the company announced a lower priced entry tier recently but this may merely turn out to be a tool to offset elevated churn due to recent price increases across the entire base, the impact of which is likely to be seen in 3Q.” ■

With the second-quarter earnings season almost upon us, cable investors should prepare themselves for an even steeper falloff in broadband subscriber growth, according to Barclays Group media analyst Kannan Venkateshwar.

Comcast is expected to kick off the Q2 earnings season on July 28, followed by Charter Communications on July 29. But in a research report Thursday, Venkateshwar wrote that there is little hope that the months-long slowdown in broadband growth is nearing an end.

It’s been almost a full year since analysts began bracing for cable broadband additions to slow, and it seems like every quarter there is another call that the impact could be even greater than expected. Analysts have already modified their forecasts for the bigger operators, with some expecting full-year 2022 additions to be nearly one-third of those of the peak year of 2020. Now, with the added pressure of increased fiber buildouts by telcos like AT&T and Verizon Communications, aggressive pricing, the near disappearance of digital subscriber line customers — once a top feeding ground for cable broadband — and sluggish new household formation, that impact could be even worse.

On the telco side, Venkateshwar believes that fixed wireless offerings from Verizon and T-Mobile could have greater unit growth “than the entire cable industry” during the quarter. 

Charter Communications chief financial officer Jessica Fischer pointed to another potential pitfall for cable at the Credit Suisse Communications conference in June, telling the audience that about 60,000 to 70,000 broadband subscribers that had been part of the Federal Communications Commission’s Emergency Broadband Benefit program did not make the transition to the fed’s new broadband subsidy offering, the Affordable Connectivity Program. While Fischer said she believes broadband is a growth business and still expects Charter to add subscribers in Q2, it has caused analysts some pause. 

Venkateshwar, who had earlier predicted Charter would add about 100,000 broadband customers in Q2, now believes they will add none, adding that the gap between it and No 1 cable operator Comcast could be bigger than usual. 

In his note, Venkateshwar wrote that while Q2 is generally seasonal as students leave college and residents move to summer homes, “the slowdown being seen intra quarter goes beyond seasonality impacts.” 

“Charter talked down broadband sub growth for Q2 due to the impact of the rollover from old subsidy programs into new programs in late Q1, and the company’s consumer broadband net adds may tip into negative growth in the quarter,” Venkateshwar wrote. “This is difficult to explain without assuming continued structural impacts on gross adds due to competition as well as broader market saturation.”

The Barclays analyst expects Comcast to add about 74,000 broadband customers in the quarter (down from 354,000 last year), while Altice USA should lose about 20,000 high-speed internet subscribers in the period, compared to zero additions in the same period last year.

While telcos seem to have an advantage given their increased fiber deployment, Venkateshwar wrote that their efforts have been largely tactical, adding that there isn’t much visibility as to the long-term trends. And any big dropoff in cable broadband could lead operators to focus more heavily on wireless, which wouldn’t be good news for telcos. 

“Longer-term, it is tough to see how either industry ends up benefiting from the ongoing convergence in wireless/wireline offerings,” Venkateshwar wrote. “The end state of this process is likely to be potentially more M&A; however, with capital costs rising and a tougher regulatory environment, this may not be available as a solution for a while.” ▪️

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

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

Also: Equipment, Worker Shortage Could Delay Fiber Buildout 

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

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

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

David Zumwalt has been tapped as the new president and CEO of the Wireless Internet Service Providers Association (WISPA), the Washington, D.C., group representing fixed wireless ISPs.

Zumwalt, who succeeds Claude Aiken in the post, founded and served as chairman of radio frequency engineering services firm CNet and most recently served as chief operating officer of U.S. Virgin Islands ISP Broadband VI, which was bought by Liberty Latin America last year.

Aikin had joined WISPA in 2018 from the FCC, where he had been an adviser to chairman Tom Wheeler and commissioner and acting chairwoman Mignon Clyburn.

Zumwalt comes aboard effective June 1.

Also: WISPA Names Broadband Board Chair

“It is a crucial time in the industry, and his history of success in several different leadership roles will serve our members during this unprecedented time of broadband growth, government funding, and increased private investment,” WISPA board chair Todd Harpest said.

“Broadband service continues to transform communities and markets, and all Americans deserve high-quality broadband no matter where they may live or work,” Zumwalt said. “WISPA’s members are, and have long been, the front-line responders delivering Broadband Without Boundaries.” ▪️

The Federal Communications Commission said it has handed out flexible-use licenses to the winning bidders in its 3.45-GHz band spectrum auction, which closed in January.

The FCC issued 4,041 licenses to winning bidders, who ponied up more than $22 billion for the commercial wireless broadband spectrum. AT&T was the big winner with over $9 billion in licenses. Dish Network (bidding as Weminuche LLC) was second with $7.3 billion, followed by T-Mobile at $2.9 billion.

The spectrum can be used for either fixed or mobile service, with the exception of aeronautical mobile. Licenses are renewable with initial license periods of no more than 15 years. Winning bidders have benchmarks for building out service to a set percentage of users. For example, for service to internet of things [IoT] devices, service must be available within four years to 35% of the license area, and 65% within eight years. Missing that first benchmark reduces a license term by one year. Missing the second means automatic termination of the license and no chance to get it back.

“The licenses we are granting today represent a wider variety of providers, including small businesses [the FCC said that 13 of the 23 winning bidders qualified as small businesses, who got a $25 million bidding credit] and rural carriers, who will help deliver on the promise of 5G to every corner of the country,” FCC chair Jessica Rosenworcel said in a statement. “Building on the success of this auction, we are hard at work preparing for the 2.5 GHz auction starting in July.

Last March, the FCC voted to allocate the 3.45-3.55 GHz band for flexible use, complete the relocation of secondary non-federal commercial users, and sunset amateur use of a portion of the band. ■

With Comcast expected to kick off the Q1 earnings season Thursday morning, analysts are expecting the broadband slowdown to continue throughout the year, with operators anticipated to report high-speed internet customer additions at about half the rate of last year.

Comcast is scheduled to report Q1 earnings on April 28 at 8:30 a.m., and Evercore ISI Group media analyst Vijay Jayant sees the nation’s largest cable operator reporting broadband additions of about 200,000 customers, or less than half the 423,000 they added in the same period last year. Other analysts, like Wells Fargo Securities' Steven Cahall and J.P. Morgan’s Phil Cusick, are in the same ballpark. Cusick expects Comcast to add about 180,000 broadband customers while Cahall predicts it will be a bit higher at 224,000 additions.

And they expect the sluggishness to continue throughout the first half of this year. Jayant is keeping his predictions consistent -- he expects Comcast to add another 200,000 broadband customers in Q2 -- but others see the slowdown getting even slower. Cusick predicts Comcast will add 155,000 broadband subscribers in Q2 and Cahall is in for 135,000 additions. 

All three of the analysts predicted a slower first half, followed by a stronger second half of the year. For Comcast, Jayant was most consistent, estimating it would add 200,000 broadband customers in Q3, 225,000 in Q4, ending the year with 825,000 broadband additions, about 30% less than the 1.2 million it reported in 2021. 

Cahall estimated that Comcast would end 2022 with 836,000 broadband additions -- 216,000 in Q3, 261,000 in Q4 -- while Cusick predicted Comcast would add 256,000 in Q3 and 230,000 in Q4 for a year end tally of 821,000 additions. 

Charter Communications, which is scheduled to report Q1 earnings on April 29, led all cable operators during the pandemic with 2.2 million broadband additions in 2020, falling to 1.2 million total additions in 2021 and is expected to dip even more in 2022. For the quarter, Cahall is most optimistic, predicting 186,000 residential additions, followed by Cusick (180,000) and Jayant (175,000). For the full year, Jayant estimates that Charter will add 775,000 residential broadband customers (a 35% growth decline), while Cahall predicts 741,000 additions and Cusick 710,000 additions.  

Lower move rates seem to be having the biggest overall impact on Charter (and Comcast for that matter), according to the analysts. Cusick noted that because Q1 is usually a seasonally better quarter, it is possible that Charter outperforms his estimates, but added he expected lower household completion and move rates to weigh on results. Jayant said the same for Comcast, adding that the low move churn environment creates “fewer ‘jump ball’ opportunities for gross adds.” 

Altice USA, which began an aggressive acceleration of the buildout of its broadband network last year after reporting a 3,000-subscriber decline in high-speed internet customers for the full year, is expected to be flat or slightly down for Q1 and Q2 according to the analysts. The second half is expected to be better -- they predict Q3 additions to be between 10,000 and 16,0000, with Q4 even better at 10,000 to 22,000 more customers.

The slowdown in broadband additions has been widespread. Last week, telcos AT&T and Verizon reported 289,000 fiber additions and 294,000 broadband additions respectively. AT&T’s fiber net gain was erased by the loss of 307,000 U-verse and other advanced broadband subscribers and 17,000 digital subscriber line customers cut their ties to the company during the quarter. While wireline broadband performance was sluggish, telcos made up for it with big gains in fixed wireless -- Verizon added 194,000 FWA customers in the period, 2.5 times its additions in Q4 2021. T-Mobile said it added 338,000 fixed wireless customers in Q1, up from 224,000 additions in Q4 and 93,000 in Q1 2021.

Cahall sees the telcos, especially with fixed wireless, making an even bigger impact down the road. In a research note, Cahall wrote he expects cable broadband growth to slow to an average of 2.4% per year from 2020 to 2025 (down from 4.6% between 2017 and 2019), while fiber and fixed wireless is expected to average 12.3% and 19.6% annual growth, respectively, from 2020 to 2025. The result is that Cahall expects cable’s broadband market share to dip from 65% in 2020 to 63% in 2025, with fiber growing to 19% from 12% and fixed wireless to 11% from 5% in the same time frame.

“In short, the threat of fiber/fixed wireless is real, and its impact should only intensify as time advances,” Cahall wrote. ■

With the start of the first-quarter earnings season about 10 days away, J.P. Morgan media and telecom analyst Phil Cusick expects total broadband customer additions to continue to slow, but said a boost from some fixed wireless access providers will make what could have been a really bad quarter a little better.

Comcast is expected to kick off the 2022 earnings season on April 28,  when it reports Q1 results, followed by Charter Communications on April 29.  

In a research note, Cusick estimated total broadband additions of about 674,000 in Q1, a 32% decline from the prior year. But the analyst noted it could have been worse -- his Q1 estimates include 274,000 fixed wireless access (FWA) additions from T-Mobile. Without those FWA customers, total broadband additions would be down 56% in the period. 

Cusick blamed the overall broadband slowdown on sluggish cable growth, weak housing growth (moves are down 17% for the year, according to U.S. Postal Service data), and the loss of about 5 million consumers with access via the Keep Americans Connected COVID-19 program since 2020.  

Cable operators will continue to see sluggish broadband growth in Q1. Cusick estimates that total cable broadband additions will fall 51% to 445,000 in the period from 910,000 in Q1 2021. For the full year, he expects cable operators to add about 1.78 million broadband customers, down from 2.64 million additions in 2021.

Overall, Cusick expects total broadband additions of 2.94 million, a 4% decrease from 3.07 million additions in 2021. Fixed wireless is expected to add about 1.77 million new customers in 2022, down from 2.55 million in the prior year.

But Cusick still expects cable to attract about 66% of new broadband additions -- FWA is in second place with 39% -- mainly because in many areas, cable is the best choice for reliable high-speed connection.

Comcast and Charter are expected to add about 180,000 residential broadband subscribers each, compared to the 448,000 and 334,000 broadband customers, respectively, they added in Q1 2021. 

Analyst: No Sign of a Cable Slump

In his research note, Cusick explained that he hasn’t taken down his overall cable broadband estimates -- unlike some of his colleagues -- not because he believes cable MSOs will do better, but because he hasn’t seen any evidence they will do much worse. 

“Typical seasonality would be for 1Q to be stronger, and most cable commentary in 4Q was that the business improved through 4Q until omicron hit,” Cusick wrote “[W]ith no useful commentary from the companies, aside from consistently denying that FWA is impacting, we prefer to leave our estimates unchanged than reflexively lower the bar due to bullish FWA commentary from [T-Mobile and Verizon].”

Low housing moves and increased pricing will also most likely help boost cable margins, the analyst continued, adding that Charter repurchased about $3.7 billion of its shares during Q1, usually an indication of strong cash-flow growth despite slower subscriber additions. 

For other operators, Cusick sees flat broadband subscriber adds at Altice USA in Q1, and about 11,000 additions at Cable One.

On the telco side, Cusick predicted AT&T would lose about 10,000 broadband customers (15,000 IP additions offset by 25,000 digital subscriber line losses). Verizon Communications should add about 45,000 consumer wireline broadband subscribers (65,000 Fios Internet additions offset by 20,000 DSL losses), he said. Frontier Communications, which emerged from bankruptcy last year and has an aggressive fiber buildout strategy underway, should be well-positioned for growth, according to Cusick. The analyst predicted that Frontier will add 15,000 broadband customers in Q1 (46,000 fiber adds offset by 32,000 DSL losses).

Legacy video losses are expected to be about 1.5 million in Q1, down from 1.67 million in the prior year, but the improvement is more due to waning satellite TV losses. Cusick expects DirecTV/Dish to shed a collective 575,000 customers in Q1 (compared to losses of 750,000 in Q1 2021), while he predicts cable operators to lose 872,000 video subscribers, 5% worse than the prior year. 

Comcast’s video losses are expected to rise to 435,000 from 404,000 in the prior year, mainly because of a price increase that took effect in January. Charter’s video losses are expected to be slightly better in the quarter -- 150,000 compared to 156,000 in Q1 2021 -- reflecting slowing move activity. For the full year, legacy video losses are expected to be 5.3 million, better than the 5.8 million shed in 2021. 

Virtual multichannel video programming distributors (vMVPDs) such as Hulu Plus Live TV, YouTube TV and Sling TV are expected to add about 23,000 customers in Q1 (better than a loss of 92,000 subscribers in Q1 2021). For the year, vMVPDs should add about 1.4 million video customers, about even with the prior year. ▪️

 The spring conference season is upon us, a time of new beginnings, when nature and CEOs of major media companies show the world just what they have been hiding under their drab little husks for the past four months. For nature, the metamorphosis bursts forth in an explosion of color, new life and possibilities. For cable CEOs, it comes in a series of presentations and fireside chats with the investment community to prove their businesses aren’t going to die this year.

Investors have been lining up for cable’s funeral for decades. The industry’s death rattle supposedly began in the nineties with competitive threats from satellite TV and telcos. Now streaming video, direct-to-consumer offerings that bypass the traditional bundle and fixed wireless access service that is expected to steal away broadband customers are expected to deliver the fatal blow. But instead, every year cable survives. It weathered the satellite onslaught, the multiple attempts by AT&T to weasel its way into the video business, and by the looks of things, it is preparing itself to ride out the latest storms. 

I’m not saying cable, or any industry, is invulnerable. Taking even a cursory look at the industry is proof that the business is nothing like it was a decade ago. But unlike buggy whips and the Betamax, whenever the collective consciousness began to stray, cable operators have for the most part managed to figure out a way to make themselves attractive again to consumers. 

In the past century, cable pushed back video competition by introducing more channels, more choices and better pictures through digital and later HDTV offerings. Later, competitive wireline phone offerings, high-speed internet service and in the past few years, mobile service have helped the industry not only survive, but thrive. Now cable companies have twice as many broadband customers as video subscribers, and mobile service, once thought of as merely a retention tool, is becoming a real threat to traditional carriers. In the meantime, cable continues to invest in the business, build out fiber networks and reinvent itself.

Even though those moves are far from secret, operators continue to make the seasonal rounds, reminding investors that although they may not be the latest thing, they are what makes that latest thing work.

Investor Conference Rites of Spring

March is the traditional beginning of the spring conference season (I know spring doesn’t officially begin until March 20, but it was 74 degrees in New York this week, for gosh sake), with Morgan Stanley's Technology, Media & Telecom conference on March 7, and Deutsche Bank Securities hosting the next media get-together on March 14. There is expected to be a bit of a reprieve in April, followed by MoffettNathanson’s Media & Communications conference and J.P. Morgan’s Global Technology Media & Communications conference slated for May. Evercore ISI should wind down the spring season with its TMT event expected sometime in June, although others could be sprinkled in between. And then the fall season starts.   

Already, CEOs of the top three publicly held cable companies have hit the conference circuit and have had to reassure investors that: Yes, they still intend to add broadband subscribers; no, they haven’t given up on video quite yet; and yes, mobile service is on the path to becoming profitable.

Comcast chairman and CEO Brian Roberts kicked off the spring season with his March 7 appearance at the Morgan Stanley conference, He spent most of his time telling the investment community that while broadband growth is indeed slowing down, it has lots of runway ahead of it. He pointed to four areas where he sees Comcast can boost broadband growth: expanding its footprint; competing more aggressively; bundling with other products like wireless; and growing its business services reach.

Comcast has been expanding its reach to about 1 million more homes per year within its footprint through edge-out programs. This year, he expects that expansion to be even greater, given government initiatives to build out unserved and underserved rural areas. 

“Where it's been uneconomic previously, it will be economic in the future for us to extend our broadband,” Roberts said. “And we're going to compete aggressively to do that.”

Roberts also defended cable broadband against the latest competitive threat — fixed wireless access from the telcos — adding that at the moment it is an inferior product to high-speed data service from cable, reminding the audience again that cable has a history in pushing back competitive threats. 

“We don't take it for granted, but we've seen lower-price, lower-speed offerings before,” Roberts said. “And in the long run, I don't know how viable the [FWA] technology holds up.”

Altice USA CEO Dexter Goei, who has been dealing with a steep drop in his company’s stock price since it lost broadband subscribers in 2021, spent his time at the Morgan Stanley conference reiterating plans to accelerate its fiber network buildout, and hinting about faster speeds becoming available to a wider swath of customers. 

Altice‘s accelerated fiber rollout has been well-documented, and Goei said at Morgan Stanley that it is expected to make a big difference. 

Goei said Altice has been talking about fiber for three years, and the slowdown in deployment has been a combination of permitting and COVID-19 related delays and the company’s inability to “get its own ducks in a row.” But now with a restructured management and a clearer focus,  growth is expected to take hold in 2023.     

“The goal was to reinvigorate distribution, rebrand the company, address some customer service-related issues we were dealing with and make that a one-time investment,” Goei said, which “leads to a nice payback in 2023.”

Goei hinted at “multi-gig” speeds for its Optimum broadband service in the second quarter, stopping short of saying just how fast its offering would be. But the company has said publicly — back in May 2021 at the MoffettNathanson Media & Communications conference — that its goal was to offer 10 Gigabit per second broadband within 18 months.       

On the video side, Charter Communications chairman and CEO Tom Rutledge said there is “more damage to come” regarding continued customer losses, but all is not lost quite yet.

“There’s nothing about the old model that’s really changed, Rutledge said at the Morgan Stanley conference, adding that prices for traditional video service continue to rise, driven by ever-increasing sports rights fees. “There’s nothing to really constrain the cost of live sports in the linear business and that’s still the glue that holds it together. I see that business continuing to get more and more expensive for consumers.”

Eyeing a Mobile Future

Despite the shift toward streaming, Rutledge isn’t expecting the pay TV business to change that much over the next few years. But he echoed Roberts in saying that the mobile/broadband bundle will be the future. And he acknowledged that he often thinks of how cable could eventually aggregate and package streaming services for consumers. 

“The opportunity going forward is to start to reaggregate and use that aggregation to give a better, more cost-efficient consumer experience to more people,” Rutledge said. “We think about that every day and how that might happen. I don’t want to be overly Pollyannaish and say that is about to happen because the current model is still very much in force. I don’t see that disappearing in the next couple of years.”

But Rutledge said Charter is laying the groundwork for that day when it does come, making itself available on apps like Roku, where it is one of the most used applications. He added that nearly 12 million customers access Charter services (broadband-only as well as video) via an app instead of a set-top box.

“The upside is still yet to be realized,” Rutledge said. “The reaggregation is somewhat far away, but we’ve been thinking about how to build a platform that can be used by customers  in a more efficient way.” 

It’s a concept that has been well-documented in this column over the past year, and a place where, whether participants say it aloud or not, the industry is headed. But it is also an example of something that cable has been famous for, at least during the 30 years I’ve been covering it: No matter what gets thrown at it, this industry has managed to adapt. It sounds a lot easier than it is to do, and the landscape is littered with the carcasses of companies that underestimated the resilience of this business. This March and beyond, cable executives will get to remind investors of that fact once again. ■

While Comcast CEO Brian Roberts told investors Monday that the cable industry has little to worry about from emerging fixed wireless access (FWA) services, he may want to look again.

While Leitchman Research Group released figures Monday suggesting that the top seven cable operators controlled around 95% of the net home broadband additions in 2021, a closer look at LRG's data suggests the wireless giants made significant progress in reanimating their previously moribund home internet business. 

Last year, the telco industry added 148,000 high-speed internet users vs. just 39.5 million net adds in 2020. Factor out the still heavy losses of DSL customers, and subscribers using other older internet technologies, and the telco sector's growth numbers look much better. 

Telcos added a net of 1.8 million fiber customers in 2021, with AT&T (120,000 net broadband customers) returning to the black and Verizon also up over 2020 (+236,000 vs. +173,000).

Meanwhile, Leichtman's tally leaves out fixed wireless gains by T-Mobile (+546,000) and Verizon (+173,000). In all, the three top wireless companies -- T-Mobile, Verizon and AT&T -- added more than 1 million home internet customers in 2021, combining fiber with FWA.

Cable operators still controlled 70% of the U.S. home internet market last year and added 2.8 million net customers in 2021. However, that is significantly less than the 4,819,371 customers they added in the pandemic year of 2020.

“The top broadband providers added significantly fewer subscribers in 2021 than in 2020, but the net adds in 2021 were higher than in each year from 2016-2019," said Bruce Leichtman, president and principal analyst for LRG in a statement. ■

Comcast chairman and CEO Brian Roberts told an industry audience Monday (March 8) that despite slowdowns in broadband growth, he sees little threat to the business from new competitors like fixed wireless, adding that rural expansion, offering a competitive product and bundling with mobile should help subscriber additions continue to rise.

Speaking at the Morgan Stanley Technology, Media & Telecom Conference in San Francisco, Roberts said he sees four areas where the company can boost broadband growth: expanding its footprint, competing more aggressively, bundling with other products like wireless and growing its business services reach.

Comcast has been expanding its reach to about 1 million more homes per year within its footprint through edge-out programs. This year he expects that expansion to be even greater, given government initiatives to build out unserved and underserved rural areas. 

“Where it's been uneconomic previously, it will be economic in the future for us to extend our broadband,” Roberts said. “And we're going to compete aggressively to do that.”

Roberts didn’t seem too concerned with competitive technologies like fixed wireless, because he believes cable broadband is still a better quality product and aggressively priced. 

As far as fixed wireless, Roberts said only time will tell, but at the moment “it’s an inferior product” to cable broadband, likening it to digital subscriber line service from the telcos in the past. 

Also: T-Mobile, Verizon Fixed Wireless Subscriber Additions Could Double by 2023, Analyst Says 

“Today we can say, we don't feel much impact from that,” Roberts said of fixed wireless, adding that it reminds him of earlier days when telcos touted digital subscriber line service as a replacement for cable broadband. “We don't take it for granted, but we've seen lower-price, lower-speed offerings before, and in the long run I don't know how viable the technology holds up.”

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

Roberts believes that maintaining its leadership in offering the highest speeds and the best quality will continue to drive broadband growth for the industry. Comcast, he said, was the first company to offer 1.2 Gigabits per second high-speed internet service, and now it’s available throughout its entire footprint. And customers continue to want speed. He noted that two years ago, only 28% of Comcast’s broadband customers took 300 Megabits per second service. Today, 55% of its customers take that speed. 

Also: Verizon Recasts Jim Carrey as the Cable Guy for Super Bowl Fixed Wireless Ad 

“So, we've doubled the amount of our customers getting that speed in getting ready for any kind of potential competition,” Roberts said, adding that Comcast’s moves to deploy DOCSIS 4.0 technology, which promises speeds of up to 10 Gbps, show where it believes the path is leading. 

Adding to the potential growth runway is wireless, which Comcast has said in the past could be an attractive bundle with broadband. Xfinity Mobile has grown to 4 million lines since its 2017 launch, representing about 2 million customers. Comcast has about 32 million broadband customers — and a broadband subscription is needed for wireless service — so the growth runway is long. 

“So, we're just getting started and I hope that as we go forward, you'll see really a combined offering between our broadband and our wireless products,” Roberts said. 

Roberts also touted Comcast’s streaming service Peacock, which has about 24.5 million subscribers, putting it near the bottom of big-time streaming services like Disney Plus, HBO Max and Paramount Plus.  

Also: Comcast to Double Programming Spending to $3 billion 

While Peacock’s previous model had been more geared to revenue generated through advertising, a more hybrid subscription-ad revenue model appears to be the current path. 

“The take rate led us to say that the sweet spot, as we think of it as a business, will be to go with the dual revenue stream,” Roberts said. “That's no stranger to Comcast. That's what powered the company for 50 years.” ■

Telcos like T-Mobile and Verizon could double their fixed wireless subscriber additions in 2023, according to Wells Fargo Securities media analyst Steven Cahall, who predicts that as competition between cable and telco service providers to extend their broadband reach into more rural markets heats up, capital intensity will rise too.

T-Mobile and Verizon have made the most headway on the 5G fixed wireless front, adding about 300,000 locations combined in Q4 2021. As mid-band network coverage improves, 5G fixed wireless offerings from those two companies are expected to scale and Cahall expects their 2022 estimated net additions of 1 million to 1.5 million to double to 2 million to 3 million in 2023.

“While T-Mobile has successfully been winning share in urban and suburban areas to date, we think the rural area remains the most feasible for broader fixed wireless adoption, with excess network capacity and more favorable competitive dynamics,” Cahall wrote.

Also: Verizon Recasts Jim Carrey as the Cable Guy for Super Bowl Fixed Wireless Ad 

But reaching those rural areas will cost money, and both sides seem to be willing to pony up whatever is necessary.   

In his research note, Cahall wrote that T-Mobile, Verizon and AT&T have already boosted spending on fiber and fixed wireless this year -- he estimated telcos will spend about $9 billion to connect 8 million new subscribers to fiber in 2022 and will add 9 million to 10 million new premises per year. AT&T, he wrote, appears positioned to add about 3.5 million new fiber locations in 2022 (up from 2.6 million in 2021). 

Also: Verizon Expands Fios and 5G FWA Promo to Include the Disney Bundle 

For cable operators, capital intensity (capital expenditures as a percentage of sales), on the downward trend over the past few years as network buildout projects have been completed, will be on the way up beginning in 2022. Cahall estimates that Altice USA will see the biggest jump in capital intensity (from 12.8% in 2021 to 17.8% in 2022), followed by Charter (from 14.4% in 2021 to 16% in 2022) and Comcast (from 10.8% in 2021 to 11% in 2022).

Cable operators are expected to continue to deploy fiber, extending their reach deeper into rural markets. But Cahall added that they may have to tick up spending as telcos continue to encroach on the space and gain share, particularly through 5G fixed wireless broadband. 

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

“[W]e think connectivity markets have the makings of an arms race, so availability and speed improvements from cable/fiber/5G will lead to more higher-speed use cases (e.g. 8K video) that begets more connectivity competition that begets more capex,” Cahall wrote. “We thus think investors should not assume any capex holidays for Cable (as % of sales).”

Cahall sees fiber networks serving the heaviest broadband users -- those that work/school from home, are heavy streaming video users and/or gamers -- in rural markets. Lighter broadband users would gravitate to lower cost, lower speed fixed wireless offerings, he wrote.  

Also: Fixed and Dilated

Those lighter broadband users also tend to be older, tend to be more likely to subscribe to traditional pay TV and don't require ultra-high speeds for their data. Cahall pointed to Social Security Administration data that showed there are about 60 million U.S. residents over the age of 65, likely representing about 40 million homes that over-index on linear pay TV and under-index on heavy data download and upload requirements. 

“As fixed wireless technology improves, we think that base of lower data consumption homes will become ripe customers for 5G with a wireless phone plan bundle,” Cahall wrote. “These cohorts may not seem like the obvious ‘early adopter’ set, but if 5G is inferior to fiber and DOCSIS 4.0 then it's exactly the sort of homes telco's 5G proponents like Verizon and T-Mobile may target. This is yet another medium-term risk to cable net adds and earnings.”

While most of the industry is bracing for a slowdown in cable broadband subscriber additions, Cahall estimated that cable operators should see their high-speed data customer growth moderate from an average of 4.6% between 2017 and 2019 to 2.6% between 2020 and 2025. At the same time, he predicted fiber and wireless broadband customer growth would increase by 13.9% and 19% from 2020 to 2025. As a result, cable broadband market share should drop from 65% in 2020 to 63% in 2025, while fiber would grow from 12% to 21% and wireless would more than double from 5% to 11% in the same time period. 

“In short, the threat of fiber/fixed wireless is real, and its impact should only intensify as time advances,” Cahall wrote. ■

Sports Illustrated used to have a tongue-in-cheek feature in the magazine that offered some absurd factoid about the sports world under the headline This Week’s Sign That the Apocalypse is Upon Us, like how in 2016 if you were in Cleveland and asked your iPhone, “Which Way is Sadness?” Siri directed you to FirstEnergy Stadium, home of that city’s often-maligned NFL franchise, the Browns. But they had nothing on Wells Fargo media analyst Steven Cahall’s Nov. 1 report that stated this: The reason for the current slowdown in broadband subscriber growth could be that cable customers are too happy with their service provider.

Now I am not doubting the Wells Fargo report at all — it makes perfect sense. It’s just that in 30 years of covering this industry — 23 at Multichannel News — I never thought I would see the day that growth would slow because customers like their cable company too much. 

Broadband growth definitely slowed in Q3, with Comcast reporting 300,000 high-speed internet additions — in line with estimates — and Charter Communications adding about 265,000 customers, well below analysts’ predictions. While most expected broadband additions to taper off as the pandemic waned, for some the slowdown is happening faster than expected.   

Analysts have been trying to wrap their heads around the cause of the slowdown for days, after both Comcast and Charter reported that broadband subscriber additions slowed in Q3. For Comcast, the slowdown was almost exactly as expected: 300,000 additions, compared to estimates it would add between 295,000 and 305,000 high-speed internet customers. Charter was a bit of a surprise by coming in lower than expectations. Some estimates were for as high as 350,000 additional broadband customers in the period.

What has puzzled some analysts is this: Everyone expected growth to be lower than it was in pandemic-fueled 2020 because people are beginning to go back to work and school and  maybe don’t need as robust an internet connection at home. High penetration rates for broadband service — about 85% by some estimates — also was expected to be a factor for the simple reason that having fewer consumers without service probably means that fewer new customers will sign on. At the same time, cable companies are saying they see a lot of runway for growth ahead, and predict they will end 2021 with around the same growth rates as 2019.

But given the Q3 data for Comcast and Charter, that probably means Q4 growth will be even slower than Q3. Comcast added 1.4 million broadband customers in 2019, and to meet that goal will have to add about 292,000 high-speed internet customers Q4. Charter has said that now it may be a better idea to compare this year to 2018, when it added about 1.3 million internet customers, meaning in Q4 it will likely add about 251,000 broadband customers. 

In a research report last Friday, MoffettNathanson principal and senior analyst Craig Moffett wrote that much-slower Q3 growth is probably due to a series of factors, including 0% new housing growth and fewer moves.

“Broadband growth will inevitably slow as full penetration is achieved,” Moffett wrote. “And, yes, fiber expansion will mean more of Cable’s footprint will be overlapped by a competing service. That, too, will dampen broadband growth. But all that has been in everyone’s numbers for a very, very long time.”

Back to Campus, Back to Home Buying

But in a research note Monday, Cahall wrote that he believes there is more to the story. 

According to Cahall, new home sales are up 18% so far in 2021 compared to 2019 and up 7% in Q3 2021 vs. Q3 2019, while rental market reports show that segment is returning to pre-pandemic levels, as first-half 2021 applications were up 13% vs. the same period in 2020 and students are returning to college campuses.

“So what's happening?” Cahall asked. “Well, we think that customer churn is low because broadband customers are pretty happy, many having upgraded during the pandemic.”

In addition, Cahall wrote that while consumers are still moving, gross additions and deactiviations may be less because those customers might be staying with their current cable provider. But that elation is a two-way street.

“Cable's subs are happier, but the competition’s subs are happier too,” Cahall wrote, adding that low-income programs like the Emergency Broadband Benefit program may be contributing less. 

At the same time, telco high-speed internet additions are improving. Cahall wrote that in 2019, AT&T, Verizon Communications and Lumen Technologies lost about 417,000 broadband customers. This year he believes those three companies will add 240,000 high-speed internet customers or more. At the same time, cable broadband growth is rising at a less accelerated rate.

Cahall is not alone in his estimates that telco fiber builds could vault that sector ahead in the broadband wars. In October, Bernstein media analyst Peter Supino wrote that he believed telcos like AT&T, T-Mobile and Verizon could chip away at cable’s broadband lead. 

Cahall estimated Comcast’s and Charter’s combined broadband subscriber additions will drop from 2.81 million in 2019 to 2.66 million in 2021 (down by about 150,000), while 2022 combined growth will be more than 400,000 subscribers lower than 2019 figures. 

“Whether its fiber or lack of low-hanging fruit from DSL, we think Telco trends hurt Cable growth + valuation, and portend badly for potential ARPU implications,” Cahall wrote.

In his note, Cahall predicted that cable residential broadband growth would rise by about 2.1% annually between 2021 and 2025, from 76.2 million customers to 81.5 million customers, while telco broadband subscribers would climb at a 15.8% annual clip from 15.99 million in 2021 to 29.45 million by 2025. At the same time, legacy DSL subscribers would fall at about a 14% rate, from 16.4 million in 2021 to 8.7 million in 2025, according to Cahall.   

“Whether the recent headwinds are move churn or Telco something else, we think the overhang on sentiment is real and will persist,” Cahall wrote, adding that no matter how you slice it competition is coming in 2022. That competition will likely take the form of fiber rollouts by AT&T, Lumen and T-Mobile, which said recently it expects 500,000 5G broadband customers by the end of 2021. Verizon, which has given guidance for over $1 billion in fixed wireless revenue by 2024, which could translate into between 1 million and 2 million broadband customers.

“While it’s tough to know where, we think the fact that these 5G rollouts are guidance mean the Telcos have high conviction in some share gains,” Cahall continued.

Verizon lost 68,000 Fios TV customers in the third quarter, finishing the three-month period ending Sept. 30 with only 3.6 million remaining linear pay TV users. 

Meanwhile, Fios Internet net adds came in at 98,000 compared to 139,000 in Q3 of 2020, with the Fios Internet base now standing at 6.49 million customers. 

However, for those tracking the wireline telecom business, these are probably no longer the most important data points.

Verizon, for the first time, disclosed its fixed wireless metrics, revealing that it has 150,000 "fixed wireless access" (FWA) customers, having added 55,000 net adds in the third quarter alone. 

That may not seem like much, but FWA customers accounted for around 43% of total Verizon broadband net additions in Q3, which also factored in the loss of DSL users. 

Was this the biggest growth quarter ever for Verizon's three-year-old fixed-wireless business? The company didn't say. 

"Much of our long-term growth is in fixed wireless access and mobile edge compute," Verizon Chairman and CEO Hans Vestberg told Wall Street analysts. 

"We are on track to meet our fixed wireless access household coverage targets with an expected 15 million homes passed by the end of the year between 4G and 5G. To date, 5G Home is in 57 markets and the 4G LTE Home in over 200 markets across all 50 states," Vestberg added. 

Periodically, this "Mixed Signals" column includes interviews featuring some of the telecom industry’s more dynamic and change-making contributors. See, e.g., 1) Stanton Dodge, Esq.; 2) Matt Zinn, Esq.; 3) Doug Gaston, Esq.; and 4) Michael Fricklas, Esq. 

While listening to him speak about other issues recently during an industry business call, The Carmel Group’s principal, chairman and CSO Jimmy Schaeffler, inadvertently discovered a refreshing set of views about doing broadband in Middle America. The other side of that dialogue was OK-based AtLink Network Services’ CEO and principal, Samual Curtis, a decades-long innovator and leader within the U.S.’s fixed wireless and hybrid fiber wireless ranks. Here, below, he offers his thoughts and experiences for our “Mixed Signals” audience.

Q: 1

Mixed Signals: Tell us about the basics of your OK-based business, AtLink Services?

Samual Curtis: I like to parse AtLink’s description into the four categories below (See, https://www.atlinkservices.com).

Overall: AtLink is registered as a Limited Liability Company in Oklahoma, founded in 2005. Most importantly for your audience at Multichannel News, AtLink is the largest wireless internet service provider [in] Oklahoma. The Company offers fixed wireless broadband services, fiber broadband services, wholesale broadband services, telephone, plus voice and video VPN (i.e., Virtual Private Network), as well as related system installation services. AtLink is a CALEA-compliant service provider and a Trusted Third-Party Administrator, as mandated by the FCC for all broadband service providers. The Company serves approximately 12,000 residential and business accounts in rural Oklahoma. AtLink has successfully expanded its business through continuous innovation centered around its broad spectrum of broadband network solutions. In addition to receiving Phase II funding from the Connected America Fund (CAF), the company was also awarded several U.S. Department of Agriculture Broadband (USDA) Initiatives Program grants, aimed at providing internet service to unserved and under-served regions in Oklahoma for the next 25 years. 

Stemming from its broad in-house capabilities, our AtLink team is committed to providing the best and most cost-effective wireless internet services to our customers. The customers and markets AtLink targets are residential (77% of 2020 revenue) and business (23% 2020 revs) in rural Oklahoma. Overall, the Company maintains a base of approximately 12,000 active subscribing customers, and over 90% of revenue comes from recurring active customers. AtLink’s established customer base is a strong asset, one that contributes the most to its stability, and presents significant opportunities for revenue growth. 

Employee Base: AtLink employs 90 full-time and 2 part-time personnel, including me, as its active owner. The company’s team has a diverse professional background, depth of experience, and an unwavering commitment to excellent customer service. 

Facilities: To support ongoing uninterrupted operations, AtLink owns approximately 47 towers, network equipment, support vehicles, and cable and wire facilities, as well as other support accessories. AtLink operates through six internal profit centers: fixed wireless broadband services (81% of 2020 revenue), grant and other government funding (10%), wholesale broadband services (5%), installation (2%), and fiber broadband services (1%), as well as telephone services and tower rental (1%). Our facility comprises 17,800 square feet, and is utilized for office purposes (8,000 square feet) and warehouse purposes (9,800 square feet). The facility is leased from a third-party, at fair market rates. Early planning has meant that the company can accommodate significantly higher revenues without major facility improvements or capital equipment expenditures. 

Success Drivers: Success in the industry is driven by access to technologically-advanced solutions, technical expertise, optimum capacity utilization, key vendor and customer relationships, tower coverage, strong customer service, and a good reputation. AtLink works hard to excel in each of these areas, and we believe strongly we are well-positioned, for growth and success. 

Q 2:

Mixed Signals: Which companies are your key vendors, on both the hardware and software sides? 

Samual Curtis: AtLink has strong vender relationships with American Tower, SBA Towers, Lumen, Telrad, Nokia, Ericsson, and Cambium.

Q 3:

Mixed Signals: What have been some of your greatest career and AtLink achievements?

Samual Curtis: AtLink has completed six USDA RUS Community Connect Grants. In each grant we have created a broadband community center and expanded broadband service to students in rural unserved areas of Oklahoma. I have witnessed the difference this has made in overall community relationships, student retention, and overall academic success. It is very satisfying, and very rewarding.

Q 4:

Mixed Signals: What have represented some of your greatest recent successes?

Samual Curtis: AtLink secured a large debt facility with Live Oak Bank necessary to upgrade our IEEE 802.11 AC network to LTE. AtLink successfully participated in the Connect America Fund Phase II reverse auction.

Q 5:

Mixed Signals: What have been some of your greatest challenges? 

Samual Curtis: The Rural Development Opportunity Fund (RDOF) reverse auction greatly influenced the realities surrounding Fiber-to-the Household (FTTH), and certainly as a cost-effective last mile technology. In my opinion, the temptation in the auction overpowered the requisite discipline in bidding, in that multiple Census Block Group (CBG), those CBGs went for a rate of support that we believe is unsustainable. Unfortunately, this RDOF auction result has miscommunicated the realities of feasibility that surrounds FTTH in rural America. It seems as though this auction might be shifting broadband monopoly powers from traditional carriers, to rural power cooperatives, which, incidentally, are intended to be non-profit.

Q 6:

Mixed Signals:  What are today’s major threats and weaknesses?

Samual Curtis: Today’s greatest threats are heavily subsidized power cooperatives, monopolizing their last mile by leveraging their existing electric power infrastructure. Today’s greatest weakness is that the WISP industry does not yet have the lobbying power to counteract the heavily subsidized power cooperative’s message, insisting that FTTH is the only viable last mile technology. It clearly is not!

Q 7:

Mixed Signals: What are tomorrow’s most worthy opportunities?

Samual Curtis: Tomorrow’s best opportunities are staying the better broadband providers, we hope always like AtLink, staying the course and filling the upcoming broadband gap. This will be further developed by the potential failures surrounding heavily subsidized and under-thought out and under-planned endeavors. I see a future where the incumbent telephone companies work closely with incumbent WISPs. Together, we jointly combat the heavily-subsidized new competition, noted above.

Q 8:

Mixed Signals: Are you still wedded to the idea of hybrid services, mostly as in fiber and fixed wireless?

Samual Curtis: AtLink see FTTH and the WISP infrastructure as tools in our broadband toolbelt. At the end of the day, we are primarily broadband service providers. Thus, we may use FTTH (or Fiber-to-the-Premises (FTTP)) or fixed wireless to extend that service. I see a future where the only remaining viable tools are FTTH and fixed wireless for broadband delivery.

Q 9:

Mixed Signals: What are your thoughts about satellites, in general? 

Samual Curtis: I believe that LEO satellites are potentially a good last resort broadband solution; however, I do not see LEO satellites as a viable competitor to FTTH or fixed wireless. Physics and gravity and economics are simply working against them…and will win.

Q 10:

Mixed Signals: What are your thoughts about Low Earth Orbit (LEO) satellites, like Starlink?

Samual Curtis: I love the innovation; however, I am concerned about the potential of polluting earth’s orbital planes with thousands of access points that only have a five-year workable life. I like the potential of using LEO satellites for disaster recovery, and redundancy for terrestrial services. If our tax dollars end up subsidizing terrestrial service, as well as satellite service, we are, in essence, competing with ourselves.

Q 11:

Mixed Signals: What about other, not-yet-ready-for-prime-time innovations?

Samual Curtis: I think the high frequency millimeter wave fixed wireless service is an interesting last mile solution, but the cost has to be significantly lower than FTTH to make it ready for prime time. I do not believe we are there today. I would imagine this technology would parallel free space optics.

Q 12:

Mixed Signals: How would you define the Sam Curtis vision of Middle America’s telecom future?

Samual Curtis: I see a future where companies like AtLink are able to sustain their business of boldly going where the larger carriers failed to serve. Middle America’s telecom future still belongs to the local small business. These small businesses have local ties to middle America and will ultimately respond to middle America’s needs with much more passion, relevance, precision, and attention than the large, multi-state carriers, that focus on shareholder needs.

Q 13:

Mixed Signals: Describe a typical day for Sam Curtis, CEO at AtLink Services.

Samual Curtis: I am fifty years old, so I am getting around with less urgency, but with more focus, than in my younger years. We live in an Information Age and we are all learning how to be more judicious in how we consume information. I have learned to not sweat the small stuff so much, as a I get older. So, I am able to rely more and more on my senior management, with the confidence that everything will work out if we focus on our customer needs and I listen to the needs of my people. I spend a lot of time and effort listening to the needs of my staff. I feel that it is my job to meet their needs and do what I can to help them succeed. So much of my day is consumed with staff meetings and Zoom calls.

Q 14:

Mixed Signals: How do you spend the majorities of your time?

Samual Curtis: As stated previously, since I see my role as meeting the needs of my staff, I spend the majority of my time meeting with staff. I try to meet with them on an individual basis as much as I can. YouTube has become my best friend, as I have found a tremendous library of technical curriculum, regulatory guidance, and industry-related news at my fingertips within YouTube. I really appreciate the Artificial Intelligence (AI) element of YouTube, as it learns my patterns and predicts what I need to learn. This is a wonderful tool. Of course, my retreat is my family, so I try to spend as much time as I can with them.

Q 15:

Mixed Signals: What, in terms of day-to-day activities, are your favorites?

Samual Curtis: Easy. Seeing my staff succeed.

Q 16:Q 17: 

Mixed Signals: What duties are not so pleasant?

Samual Curtis: Dismissing a staff member is the most unpleasant of my duties.

Q 17:

Mixed Signals: What duties are the most important?

Samual Curtis: After taking care of myself so I have what it takes for others, being a good husband and father first and foremost. Then listening to our customers. If we become mute to our customer needs, we are headed for failure.

Q 18:

Mixed Signals: What are the big controversies or issues ahead for you and AtLink? What trends?

Samual Curtis: Again, for emphasis, I am concerned with the results of the RDOF auction. I am of the opinion the support was underbid and the ripples of RDOF failure will propagate for years. I see trends in smaller providers combining or merging to meet the needs of tomorrow.

Q 19:

Mixed Signals: What has been the best event or occurrence in your professional life that has taught you or impressed a lesson on you? 

Samual Curtis: The best event of my professional life was winning the USDA RUS BIP ARRA loan grant in 2010. This event cemented AtLink as a utility. It ultimately taught me how to see a project through to its ultimate completion. As an engineer, I have been involved in multiple similar projects, but I had never had the opportunity to see every aspect of a project of that nature.

Q 20:

Mixed Signals: What has been the worst event or occurrence in your professional life that has taught you of impressed a lesson on you? 

Samual Curtis: Post RDOF, AtLink was, in some cases, the incumbent provider and losing a customer to FTTH was, by far, the worst event. It taught me that you can never rest. We have to stay aware of our customer’s satisfaction and always provide for their needs.

Q 21:

Mixed Signals: Who in your background impressed you professionally?

Samual Curtis: I have multiple instances of this. My partner and our board chairman, Kenneth Doughty, has taught me patience and focus. I have learned a tremendous amount of business sense from him. My friend, COO, and attorney, Pat Castleberry, has taught me how to resolve conflict with honor. My industry colleagues, Nathan Stooke, Jacob Larson, Matt Larson, Jeff Kohler, Jason Guzzo, and many more have taught me how to share wisdom and experience.

Q 22:

Mixed Signals: What would be the best advice you could offer an existing fixed wireless and hybrid fiber fixed wireless operator today? 

Samual Curtis: Invest in a senior management team that works. Cultivate relationships with other leaders in your industry and share your successes and failures. Be mindful of the pace of your growth and cash flow. I have seen growth bankrupt a company. Do not let your political views or your personal beliefs impact your business decisions. 

And, in all seriousness: thoroughly read The Wireless Internet Service Providers Association’s new fixed wireless study from The Carmel Group. It was written with both beginners and the most-advanced in mind. Through the years, it has helped me quite a lot, especially with policy and financial matters.

Q 23:

Mixed Signals: What would be the best advice you could offer a would-be/wannabe fixed wireless and hybrid fiber fixed wireless operator today?

Samual Curtis: Spend time installing the service. You need to understand the most mundane and fundamental aspects of the business. This is more important than acronyms and raising money.

Q 24:

Mixed Signals: Any final comments, suggestions, recommendations or otherwise, Samual?

Samual Curtis: Plain and simple: Onward and upward!

Florida startup SkyBoxe is seeking beta testers for its eponymous 4G LTE fixed wireless hub, which combines the functions of a 1-gig-capable router and modem, along with an Android TV-powered streaming device.

According to an email solicitation blasted Tuesday by startup co-founder Rob Shambro, SkyBoxe recently received network certifications from AT&T and T-Mobile. This comes after the announcement of FCC certification for the device almost a year ago. (That was the last time we checked in with SkyBoxe.)

“Right now, we’re negotiating with those two carriers to determine the right data plan to bundle SkyBoxe,” reads Shambro’s email, which invites recipients to sign up for the beta test on this page. 

“The 4G device is our proof of concept,” Shambro added, “and I’m pleased to say that its performance has far exceeded my expectations. It delivers TV and Internet beautifully as long as the carrier’s network performance is solid. We plan to start offering it for sale to our beta testers in the next few weeks.”

Participating in the beta test isn’t free, and Shambro didn’t immediately respond to are inquiries as to what SkyBoxe is currently priced at. 

Given that T-Mobile is offering 5G fixed home wireless internet, including its own hub, for $50 a month, SkyBoxe is going to have to come up with a provocative proposition.

The startup is seed funded to the tune of $497,000, according to its Crunchbase profile.

In this Mixed Signals post, The Carmel Group reveals details of an 18-month long study and resulting report, delving into the U.S. fixed wireless and hybrid fiber-wireless industry. 

We break this out into three bullet points covering three main areas: key findings, key growth drivers, and key challenges. For our readers, the “2021 Fixed Wireless and Hybrid Fiber-Wireless Report” by The Carmel Group can be accessed, for free, with the accurate entry and  inclusion of four important data points at www.carmelgroup.com. The first report by The Carmel Group, completed and published five years ago is also accessible on the home page of the same URL, and is called the “2017 BWA Report.”

The foundation of both the 2017 and the 2021 report, is two separate surveys in each cycle conducted by our company, one of the operator community and the other of the vendor group. Impressively, also indicating growth within the sector during the past five years, in the 2017 version 169 from a listed total of 555 operators responded. Whereas in the 2021 iteration, that operator number grew to 244/700. For vendors, the 2017 response number was 24/44; for 2021 it came to 55/200. For the operators, even measured against The Carmel Group’s estimate of 2,800 total U.S. operators, that 2021 response rate of 244 comes to almost 10%, which is far above the typical results for an “external survey” of an industry. Additionally, thirty 90-minute executive interviews were conducted by The Carmel Group, further cementing the ideas, analysis, and conclusions of both the project and the report.

Key 2021 Findings

• From the report’s “Executive Summary,” determinations were made that growth is there, and its continuation is predictable based upon a handful of important trends and competitive observations. The estimated list of U.S. network providers includes 2,800 operators. Nearly 13 million subscribers or a market share approaching 10% comprise the base that is expected by 2025. Core industry revenues are projected to reach nearly $11 billion in the next five years.

Key 2021 Growth Drivers

1) Fixed-Wireless and hybrid networks cost less: One good chart is worth 10 thousand words! Isn’t there a saying along those lines? The figure below captures the breadth of this message. Fixed wireless is a better value.

2) Consumer demand is robust: Subscriber growth is the dynamic here. It is robust. And more and more competitive, even in urban America. Just ask Starry.

3) Favorable Spectrum Trends: The U.S. industry is leading the way with better equipment to better utilize scarce spectrum resources, and the U.S. government and its lawyers and economists appear to be better and better tuned into this concept as well.

4) Tech is helping ISPs: A realization of the value of standardization has become an accepted part of U.S. broadband, and that certainly includes the fixed wireless and hybrid fiber-wireless subsectors. Spectrum efficiency techniques are assisting greater and greater bandwidths and speeds. And more and more vendors are making fixed wireless and hybrid fiber-wireless strong revenue units within their businesses. 

5) Growing capital and government support: Six sources of financial support are behind this clear trend, each is identified at length in the report itself.

Key Challenges

• The old adage has it, “know your friends well, your enemies better.” Thus, for those of the pay TV multichannel world, and those of the broadcast and rival broadband industries, having an idea of challenges faced by the opposition is important.

In that vein, The Carmel Group’s 2021 report identified five main challenges. That said, it should be noted that there are more difficulties the industry faces (as is true for any similar competitor), but this handful is deemed the biggest of the trees inside that forest. At least for now.

1. Competition: Competitive dynamics include ultra-entrenched and immensely powerful competitors, especially in the wired and broadcast realms. Competition from Low Earth Satellites (LEOs) is also raising new interest. (See, StarLink article: https://www.telecompetitor.com/space-x-notches-another-win-at-the-fcc-for-improved-starlink-satellite-broadband/)
2. Vertical content: A key element of the generic “Competition” listing immediately above, the U.S. fixed wireless industry will be looking to create accommodations and handicapping that ensures its consumers are treated fairly in the marketplace.
3. Spectrum challenges: Especially as long as unlicensed wireless spectrum dominates the domestic marketplace, operators will constantly be seeking out interference mitigation efforts and devices.
4. Government process: Education, education, education. Those are this fixed industry’s short-term and longer-term incentives. That means getting policymakers and funders to appreciate and act upon the opportunities, especially like those displayed in the “Comparative Economics” chart above (which is Figure 8, page 19, in the actual 2021 report).
5. Funding: See above. 

Jimmy Schaeffler is chairman and CSO of The Carmel Group, a streaming/broadband, broadcast and pay TV/video consultancy based in Carmel by the Sea, California. He writes about telecommunications, entertainment, and media.

Can T-Mobile and Verizon fixed 5G services chip away at the nearly 70% market share cable companies currently have for home wireline internet service in the U.S.?

If CNET’s review of T-Mobile Home Internet is any indicator, these wireless companies have a shot. Maybe. CNET's Michigan-based reviewer, Rick Broida, describes replacing his current Comcast home internet service, speed tier not disclosed, and replacing it with T-Mobile’s fixed home service.

For starters, Broida describes a huge price break: He paid $55 a month for the T-Mobile service, which could have been $50 if he signed up for autopay, while his Comcast service had set him back $106 a month. (Notably, the current nationally advertised price of the T-Mobile service is $60 a month.)

The writer describes a somewhat tortured self-setup process, during which a simple reset of the T-Mobile Home Internet gateway erased every device connection he’d already established, ultimately putting him on the phone with high-level tech-support staffers who were unable to resolve certain issues. 

Fortunately, connecting the gateway to his established home mesh WiFi network seemed to solve most of Broida’s connection issues, and he was able to use the service. So once he got all his devices connected to the internet, how did the performance match up? Unevenly.

T-Mobile offers the service in 5G where available—Broida himself wasn't sure if he is connecting through the new network standard or 4G LTE. 

For the most part, the service seemed to work: “After more than a week of business as usual--working online during the day, streaming video at night, FaceTime calls to parents and so on--I've encountered scarcely a blip in connectivity,” he wrote. 

But connection speeds, as gauged by Speedtest, varied wildly. 

“Early in my testing, I recorded download/upload speeds as high as 145Mbps/80Mbps,” Broida said. “In subsequent days they dropped as low as 15Mbps/8Mbps. This was despite the gateway's little touchscreen display showing four or five bars and the app reporting 'very good' or 'excellent' connection quality.”

There were few other issues—notably, the gateway seemed fussy in terms of placement, working best when positioned on the second floor where it, perhaps, connected to some distant 5G tower (again, Broida wasn't sure).

In the end, however, the reviewer declared that he’s keeping the T-Mobile service. "There’s no contract, so I can always go back to Comcast if things don't work out. And even if it's not perfect 100% of the time, well, neither is Comcast--and imperfection is a lot more tolerable when you're paying less than half what you were before.”

For their part, cable companies probably still aren’t too concerned about this competitive threat. For starters, that price differential—really, half?—doesn’t seem like it holds water on a national scale. The price of high-speed cable internet has been creeping up. But $106 a month seems like a pretty high quote. Comcast advertises its 400 Mbps service at $65 a month—a price that undoubtedly inflates with taxes and if you lease a modem, but not to the $106-a-month level.

And again, the current advertised price for T-Mobile Home Internet is $60, not $50.

Then there’s the issue of whether T-Mobile’s network could handle home internet usage on a mass scale. Speaking Monday at the virtual Deutsche Bank Media, Internet & Telecom Conference, Charter Communications CFO Christopher Winfrey said that the average Spectrum Internet customer is using 700 megabytes of data per month. 

“The average wireless customers uses only 10 gigs a month,” Winfrey said. “The difference in utilization rates is significant. I don’t think that current wireless networks are designed to handle that kind of traffic.” 

The telco threat to push fixed wireless broadband service deeper into less populated markets has sent shivers down the collective spines of cable investors for years. Now with 5G being deployed in various forms by T-Mobile and Verizon, that threat seems more imminent, but according to an influential analyst, operators needn’t worry much, at least in the medium term. 

In a research note Thursday, Bernstein media analyst Peter Supino did a deeper dive into two separate efforts by T-Mobile and Verizon to supplant inferior digital subscriber line service with their respective iterations of 5G. His conclusion: cable operators shouldn’t sweat it out. 

According to Supino, T-Mobile is expected to attract about 3.4 million subscribers to its fixed wireless offerings by 2025, while Verizon , which is taking a different technological approach, should have about 1.3 million fixed wireless customers in their fifth year. Neither effort seems a major threat to cable’s 70% market share of nationwide broadband customers. 

According to MoffettNathanson, in Q3 2020 there were about 114 million broadband subscribers in the U.S., with 78 million coming from cable. Telcos accounted for 34 million broadband customers, so an additional 4.7 million 5G customers isn’t going to move the bar any.   

“While we do see T-Mobile and Verizon gaining fixed wireless broadband subscribers on the margin, neither poses a threat to the future of cable in the medium term,” Supino wrote. “Instead, while we see attractive incremental economics for the telcos where they have material excess capacity, we view both initiatives as constrained by spectrum capacity and/or the physical limitations of available spectrum.”

Those constraints are key. Both T-Mobile and Verizon were expected to sidestep the huge fixed costs of deploying 5G fixed wireless by utilizing spare capacity where it exists. For T-Mobile, that means using its low-band spectrum, which is mainly available in extremely rural areas where there aren’t a lot of homes. Verizon’s excess capacity lies in its MMS spectrum, which is strong on bandwidth, but weak in propagation. According to Supino that means it will work best where the telco already has fiber and small cells -- usually urban areas and high-traffic areas like stadiums and airports.

“Because the service is more competitive with cable, increased competition is a risk, but in most markets, this will resolve in a market dynamic similar to Altice/Verizon FiOS in the North East of the US,” Supino wrote. “Both Altice and Verizon have managed to grow ARPU, despite the greater level of switching between providers.”

T-Mobile has been its usual aggressive self in talking up its 5G service, essentially telling cable providers they had better get ready for a whuppin’ once their service goes live. 

In its Q3 earnings call, T-Mobile CEO Mike Sievert said that the telco was “serious about home broadband.”

“We're coming soon with home broadband,” Sievert said on the call. “We're serious about home broadband. It's going to be an important way that we grow this business and make money, and you have to have the full suite of services to really be able to serve customers there.”

Verizon CEO Hans Vestberg said back in April 2019 that its millimeter wave rollout lived up to performance expectations, but noted that it isn’t “coverage spectrum,” adding that the company will continue deploying the technology as long as it is “economically feasible.” That admission came shortly after MoffettNathanson principal and senior analyst Craig Moffett, in a research note detailing Verizon’s Sacramento, California millimeter wave rollout, where the analyst found some serious shortcomings to the technology. 

In his note, Moffett said that while the tech leaves something to be desired, the success or failure of the rollout would come down to economics. 

“At the end of the day, what matters isn’t whether Verizon can make its fixed wireless broadband network work -- of course, they can -- it’s whether they can earn a passable return on their investment doing so,” Moffett wrote in the March 2019 report. 

By Q4 2020, after spending an estimated $40 billion on wireless licenses in the federal C-band auction, Moffett noted it could be a blow to its balance sheet, but that the company desperately needed spectrum. 

In his January note to clients, Moffett wrote that while there remains constraints on growth -- gross and net customer additions were weak in Q4 -- there is some hope.

“Armed with the C-Band spectrum presumably acquired in the auction, Verizon will at last have a path to a sustainable network,” Moffett wrote. “Yes, T-Mobile is still better positioned for 5G, in our view, but Verizon’s early commitment to millimeter wave (Ultra Wideband) has the potential to differentiate their service in urban America, particularly for high value business travelers.” 

Moffett went on to add that he believes the wireless business may be in line for a reordering, with T-Mobile and Verizon “increasingly advantaged,” while AT&T,  because of its industry-leading debt, is “increasingly challenged.” 

While the jury is still out, there have been some early stumbles in the space. Vivint, which initially planned to roll out a fixed wireless service to more than a dozen markets in 2015, its first year, closed its doors in 2020. Starry, a startup that had planned to offer fixed wireless broadband to about 24 markets by the end of 2019, is only in about five markets today.  Even Verizon, despite its claims of millimeter wave’s performance -- it was launched in 2018 amid much hoopla -- hit the pause button last year as it awaited new hardware from Qualcomm and a new self-install process for customers during the pandemic. Last month it said it would increase the number of its 5G millimeter wave sites from 14,000 to 30,000 by the end of the year. But given the small footprint of each 5G cell site -- about 700 feet -- those 30,000 small cells wouldn’t cover an area as large as Delaware, according to a twitter posting by LightShed Partners telecom analyst Walt Piecyk. 

In the meantime, cable is expanding its wireline broadband footprint at a steady pace. At the beginning of the month Charter said it would invest $5 billion over the next few years to bring broadband to an additional 1 million homes.  That’s in addition to the nearly 1 million additional homes it added last year via edge-out programs. Comcast has been doing the same thing at about the same pace.    Smaller operators, like Atlantic Broadband, WOW and Altice USA all have their own smaller scale edge-out plans, and have had success in expanding their broadband reach. 

So suffice it to say that fixed wireless 5G may in fact one day take over the planet. But it won’t be soon.

T-Mobile’s goal of biting into the cable industry’s 70% market share for U.S. fixed home internet service has become a little more in reach with the launch of wireless 4G/LTE home internet service in 130 additional cities. 

The $50-a-month, self-installed service is now infiltrating urban centers in New York, Michigan, Minnesota, North Dakota, South Dakota, Pennsylvania, West Virginia and Wisconsin. Specific cities in the expansion include Detroit, Cleveland, Minneapolis-Saint Paul, Pittsburgh and Sioux Falls. 

Also read: T-Mobile’s TVision: It’s the Video Multitool that Wireless Rivals AT&T and Verizon Lack (Review)

The self-proclaimed Un-carrier said that followings merger with Sprint, it will be able to reach half of U.S. households with fixed wireless 5G service within six years.

T-Mobile just re-launched the video service compliment to its fixed wireless service, which it calls TVision. 

Speaking to investors last week during T-Mobile’s third-quarter earnings call, CEO Mike Sievert said TVision is a “big piece of what it’s all about.

“We're coming soon with home broadband,” he added. “We're serious about home broadband. It's going to be an important way that we grow this business and make money, and you have to have the full suite of services to really be able to serve customers there.”

Startup Skyboxe said it has received FCC certification for a new fixed wireless device that would replace the cable modem, WiFi router and pay TV set-top in the home, all in one small box. 

The company is targeting a fall launch for its initial product, the Skyboxe Hub 4G, which would provide a 4G/LTE access point, an 802.11ac WiFi router, an ATSC 1.0 tuner for local broadcast channels, and Android TV-based connected device, with pre-loaded apps including Sling TV. 

The data sheet for the Skyboxe Hub 4G said it's capable of delivering download speeds exceeding 1 Gbps, although most LTE networks currently don’t support that. The device includes an Ethernet port that connects at 100 Mbps, which is plenty of broadband to drive most home-based internet applications. 

Skyboxe is currently taking “no obligation” signups on this landing page. It isn't disclosing pricing yet, either, but the company does say that in addition to the cost for the device, users will pay a "data servicing" charge. 

While currently focused on legacy 4G/LTE wireless network standards, Skyboxe said it’s “paving the way” for a fixed 5G wireless play down the road. Currently, cable companies are closing in on control of 70% of the U.S. fixed broadband market. But the major wireless carriers, as part of their 5G push, will soon try to convince consumers that they don’t need to pay both wireline and wireless broadband bills. 

"With our FCC ID in hand, we can now enter into trials with our wireless carrier partners and accelerate certifications with them as a 'BYOD' (bring your own device) that consumers will be able to purchase in the coming months,” said Jeff Allen, CEO of Skyboxe, in a statement. “With Skyboxe, businesses and consumers will be able to combine their fixed and mobile data plans together to lower their total costs.”

San Jose-based Skyboxe is backed by Applied Digital Research Corp., a crowdfunded startup based in Sarasota, Florida. The Skyboxe leadership team includes CEO Jeff Allen, a former Brightcove and IBM video cloud executive; COO Rob Shambro, a veteran tech entrepreneur; and marketing chief Bill Smith, formerly with TiVo. 

About 76% of global wireless bandwidth will be used for video delivery by 2025, according to the new annual Ericsson Mobility Report. The monthly use of 164 exabytes (equivalent to a billion gigabytes) compares to video's current level of 63% (33 EB) and reflects greater use of Fixed Wireless Access (FWA) and the continuing expansion of 5G technology, the report says. Ericsson's forecast expects 2.8 billion global 5G subscriptions by the end of 2025, compared to 190 million at the end of this year.

Ericsson's report acknowledges that it has "slightly decreased our 5G subscriptions forecast for 2020 and 2021 in North America," compared to previous estimates, although it offers no reasons other than "LTE will remain the dominant mobile access technology" for the next few years and "is projected to peak in 2022." Ericsson predicts that "5G subscription uptake is expected to be significantly faster than that of LTE" after its 2009 debut.

Video traffic in mobile networks will grow by around 30% annually during the next five years, Ericsson says, driven "by the increase of embedded video in many online applications, growth of video-on-demand (VOD) streaming services ... and viewing time per subscriber." It also cites "the evolution towards higher screen resolutions on smart devices" and "the increasing penetration of video-capable smart devices."

The growing impact of wireless video becomes even more significant when compared to the forecasts of exactly 10 years ago this month, when Cisco's Video Network Index for the year 2020 predicted that video would consume 79% of internet traffic -- almost entirely using wireline facilities.

The primary drivers for video traffic growth include the growing role of video in online content such as news, advertising and social media as well as video streaming and sharing services, according to Ericsson's analysis. It also cites:

• Changing user behavior

• Increased segment penetration, not just early adopters

• Evolving devices with larger screens and higher resolutions

• Increased network performance through evolved 4G deployments

• Emerging immersive media formats and applications, such as high definition and ultra HD, 360-degree video, augmented and virtual reality

The report also cites that decades-old visionary goal: "video being consumed anywhere, any time" (although it overlooked the "any device" trope).

Ericsson expects that video streaming via wireless networks will rely on higher resolution quality than the current 480p format.

"With smartphones and networks improving constantly, streaming in HD (720p) and Full HD (1080p) is becoming more common," the report says. "More immersive media formats and applications are expected to become a significant factor contributing to mobile data traffic growth, as 5G networks will provide the performance needed for a good user experience. For example, watching a streamed e-sports event in multi-view would consume about 7GB per hour, while a high-quality AR/VR stream with a media (bit) rate of 25Mbps would consume as much as 12GB per hour."

This year's forecast slightly ups the outlook that Ericsson predicted a year ago, when it expected 5G to account for 55% of North American mobile subscriptions by 2024.

Related: Ericsson Predicts Billion-plus Sub Boom in 5G

COVID-19 Impact

Ericsson's report begins with an examination of the role of networks and digital infrastructure during the COVID-19 pandemic, described by Fredrik Jejdling, Ericsson's executive VP and head of business area networks. He cites the impact of novel coronavirus starting early this year, including lockdown restrictions and new work-from-home "digital behaviors."

The report explains that, "in markets with limited penetration of fixed residential networks, the mobile data demand increase was especially high" and that in some markets "service providers made temporary changes to data plans [such as]... unlimited data for a certain period of time." The report also cites, "up to 90% increase in Voice over Wi-Fi (VoWiFi) calls for some service providers" and an "increase of 20% to 70% in voice due to more and longer calls. Data traffic increased due to more bidirectional and streaming services."

Expanded Role for Fixed Wireless Access

FWA connections are forecast to reach nearly 160 million by end of 2025 – totaling about 25% percent of global mobile network data traffic. At the end of 2019, global FWA data traffic was estimated to have been around 15% of the global total. It is now projected to grow nearly 8 fold to reach 53 exabytes in 2025, representing 25% of the global total mobile network data traffic.

"FWA delivered over 4G or 5G is an increasingly cost-efficient alternative for providing broadband," says the report, citing factors that are driving the FWA market, including growing demand for digital services and government-sponsored programs and subsidies in some countries.

Within the last several calendar quarters, the U.S. fixed wireless community has been extensively researched, written about, and analyzed. That resulted in a ground-breaking 23-page study, titled the “Broadband Wireless Access Report” (“2017 BWA Report”).

Fixed Wireless Graphic

As depicted in the accompanying graphic, the infrastructure basics of the U.S. fixed wireless industry usually involve the following:

• Delivery via a trunk, or “backhaul,” of content, typically in the form of a satellite, fixed wireless, and/or fiber optic pipe;
• Termination of that backhaul at a tower or other elevated point;
• Further distribution of that content from the tower to another tower, further away (also known as point-to-point distribution of content);
• And/or further distribution of that content from the final tower to the actual user/subscriber (also known as point-to-multipoint);
• Installation of consumer premises equipment (CPE) at the user end-point, e.g., a home or business;
• Such CPE typically involves an outside antenna, plus wiring from outside to inside, and an inside modem to distribute the signal in a wired or wireless fashion within the dwelling and/or office building; and
• Finally, a central office monitoring point for storage and management of those signals and content.

Relevant Data Points

The Carmel Group research offers some fascinating data, most of it remaining relevant, and some highlights bullet-pointed below. As the comparative graphic below suggests, the essence of the fixed wireless message today is that in many instances it can deploy more cheaply than competitors, and with more than ample quality and bandwidth. Those rivals include cable, fiber, satellite, and mobile/cellular. The proprietary data points listed below are grouped first for operators; and second for fixed wireless vendors.

Two huge underlying surveys of several hundred WISPA operators, and several dozen manufacturer vendors reveal data points that include the following.

Operators

• One quarter of fixed wireless operators deliver services in areas that “pass” (or access) more than 10,000 homes.
• Half of operators see year-over-year subscriber growth rates of 10%-20%.
• There are more than 2,100 fixed wireless operators in the U.S. today.
• There are approximately six million U.S. fixed wireless users today.
• Estimates of fixed wireless industry revenues approach $4 billion for year-end 2019.
• The fixed wireless subscriber base is growing; meanwhile, the bases of other users, including broadcast and pay TV, are declining.
• Most WISPA operators remain relatively small. Today’s average system size is between 1,000 and 2,000. One half of all respondents have less than 1,000 subs.
• Fixed wireless churn rates are low. More than half are at less than 0.5%; slightly less than three quarters of all operators display less than 1% annual churn.
• Three quarters of all respondents declared Average Revenue Per Unit (ARPU) of greater than $50 for residential users, and rising at a solid rate. Commercial, governmental and institutional users report typical monthly ARPU of greater than $500.
• Residential Subscriber Acquisition Costs (SAC) are above $51/month and rising for three quarters of the fixed wireless WISPs reporting.
• Almost six out of ten of all new subscribers are truly new subscribers, whereas almost four out of ten are subscribers coming from another broadband provider.
• By year-end 2021, more than twenty percent of survey respondents expect to have a subscriber base of between 3,501 and 6,000 users.
• Nearly nine out of ten WISPs use unlicensed spectrum at access points, while slightly more than one out of ten in the same sub-category use licensed.
• Most respondents saw great future potential in the areas of 1) business/enterprise, governmental and institutional customer growth, 2) building redundant back-up fixed wireless systems, and 3) creating “hybrid networks,” i.e., typically adding fiber, but often even cable and satellite side-businesses.
• Operators expect the greatest future growth to come in the areas of 1) equipment capability, and 2) spectrum improvements.
• The four top challenges WISPs reported were 1) lack of spectrum, 2) noise and interference, 3) excessive governmental regulations, and 4) increased operating costs.
• The top three competitive advantages surveyed, in order, were 1) network technical capability, 2) local presence, and 3) customer service. 

Vendors

• Half of all vendors, on average, are seeing three-year sales growth rates of between 16% and 45%.
• Approximately 80% vendors describe their WISP industry products as hardware-related, while three out ten list software-related (acknowledging a handful who manufacture and deliver both).
• Three quarters of all vendors look to provide technology improvements that deliver more value/unit, and two-thirds list both improvements in speeds/throughput and reliability. Six out of ten feel delivering more quality is important.
• More than ninety percent of fixed wireless vendors state that email is the most important form of customer support. Roughly sixty percent also utilize/prioritize 1) online community forums, 2) 24/7 phone customer service representatives (CSRs), and 3) social media.
• The top four fixed wireless vendor competitive advantages reported were 1) customer value for the payment, 2) customer service, 3) network technical reliability, and 4) network speed/capacity/throughput.
• More than half of the fixed wireless vendors estimated their own future three-year growth at between 30% and 100%.
• More cable operators are buying fixed wireless systems; and see, discussion below of and with D. Giles, new GM of the fixed wireless and multiple cable system operator (MSO), Midco).
• This creation of new “hybrid networks” lines up with the title of this column/blog, “Mixed Signals.” The author has felt for decades that the merging of operators like cable and satellite, or fiber and cellular/mobile (and many other combinations), has often been the preferable way of delivering telecom content to all users.

Key Fixed Wireless Industry Participants

As part of this column, three prominent members of the dominant trade group for the U.S. wireless industry were consulted for their wisdom, experience, and insight. This included Wireless Internet Service Providers’ Association (WISPA) board members Jeff Kohler, co-founder and chief development officer of the Englewood, CO-based operator, Rise Broadband; Mark Radabaugh, CEO of the Luckey, OH-based operator, Amplex; and Dave Giles, General Manager for Fixed Wireless of the Sioux Falls, SD-based operator, Midco.

Recent Key Challenges and Opportunities

All three WISPA board members honed in on spectrum, when asked their opinion of top current challenges. Relatedly, several trends were also highlighted, and worth grappling with, they said.

Spectrum, Economics, Etc.

Note was made by Midco’s Giles of the challenge faced by WISPA’s mostly rural and often small operators of communicating spectrum needs to legislators, especially vis-à-vis competition from bigger telecom providers. The cable-fixed wireless company GM also spoke pro-actively of his board’s efforts to “shop the idea of a spectrum inventory” as a way to better manage spectrum resources, including unused spectrum. He offered the idea of spectrum sharing of C-Band, as an example. As yet another example, Giles suggested that Ku-Band spectrum is not especially good for use by mobile providers, yet “great for wireless.”

Rise’s Kohler stated that his company sees “the ability to offer faster speeds.” Using millimeter wave spectrum and technology is proving to offer up to gigabit speeds,” he added. “It is early stage, but it is being proven.” Yet, that said, a strongly felt message of Kohler’s for years has been balancing that potential against what speed consumers think they need, relative to what is actually needed in their average day-to-day usage. Pointing to a recent technology study by a company called Preseem, Kohler used an example of the average fixed wireless subscriber using just over four Megabits Per Second (Mbps), suggesting instead that delivery of speed in the range of twenty megabits down and five megabits up is more than sufficient for the average user, and that “consumers need to be educated that they don’t need anything close to a gigabit of speed down, consumers do not need to buy the hype cable and fiber providers are selling.” Put another way, Kohler believes that “companies are artificially driving up the ARPU, by convincing consumers they need something that they don’t.”

For his part, Amplex’s Mark Radabaugh was perhaps more pithy, instead focusing directly on the hype around the new 5G technology and its effect on content delivery. He noted that a huge mobile industry focus on 5G comes years after fixed wireless providers began offering similar bandwidth capabilities. “Fixed wireless hybrid providers have been providing alternatives to telco and cable models, using high-speed wireless broadband, and doing that for years,” he adds.

Beyond spectrum and regulatory concerns, Giles noted the challenge of changing economics as most WISPs get bigger. “Adding staff, financing…every layer of growth adds complexity,” he commented, “the challenge is understanding the technology.”

Giles also tried to dispel a myth he sees of WISP newbees, who get the idea that fixed wireless is simply a matter of “buying a radio and consumer premises equipment, and plugging them in.” Reality for Giles suggests every WISP operator needs to understand at least 1) the competition, 2) the bandwidth, and 3) the environment. He concludes, “If you use the right technologies, your opportunities are awesome. But the bottom line is that many decisions can have a huge impact, so it’s a really good place for the strategic mind.”

Trends

Fixed wireless networks becoming “Hybrid Networks” is a clear trend. That is to say, fiber has already been deployed, or is being looked at, by a large number of fixed wireless operators. These operators realize that fiber is more and more a superior pipe, usually dependent upon installation costs and the number of users accessed. The trend of fixed wireless operators also becoming cable operators (or vice versa), has begun. Moreover, many fixed wireless operators mix in a side business of DISH and DirecTV satellite TV installation, with strong doses of revenue-sharing to make it work for all participants.

Midco’s Giles highlighted the trend of more consumers using more bandwidth, on more devices, in more places, and during more hours of the day. Giles notes, “Today the average consumer has four to five devices, ranging from laptops to ipads to cells to thermostats to security to more and more of everything. That demand is far from peaking.” 

Another trend highlighted by Rise’s Kohler involves education. As noted above, he is intent on making subscribers wiser, by getting them to understand and accept that not every pipe into the home needs to deliver a gigabit of speed in order to serve that subscriber’s needs. Kohler added Long Term Evolution (LTE) technology to his list of new tech examples that offer huge opportunities to new and established WISPs and
hybrid operators.

Like Giles, Kohler further opines about the importance of good strategy and management techniques. “In the absence of a great deal more spectrum, Rise finds that expertise in managing tower-to-the-home and tower-to-the-business is becoming critical. We find network deployment skills can overcome the constant need for and contention over spectrum.”

And even though he notes that most consumers don’t need the speed that is being pitched them, for those that do, Kohler points out technology improvements that offer affordable bandwidth in the range of 200 Mbps of speed. Changes such as “getting infrastructure closer to the customer, and microcells are making these a reality,” he notes.

A recent Telecompetitor article highlights hybrid operator Redzone’s capabilities over those of Fiber To The Household (FTTH) operators, in more parts of rural Maine. From significant study, the author has found Redzone to be something of a model wireless Internet service provider, or WISP. This is due to a great combination of factors, including being on the favorable side of
many of the data points studied and highlighted above.

Several of the trends noted above were also described as opportunities.

Jimmy Schaeffler is the chair and CSO of The Carmel Group, a broadband, broadcast, and pay TV/video consultancy. He has spent nearly five decades producing, studying, writing, researching and analyzing, and working with every type of player in the space. If you are looking to expand or better understand the industry, feel free to reach out to him atjimmy@carmelgroup.com, or go online towww.carmelgroup.com.

Fixed wireless broadband providers (WISPs) across the country need more spectrum to meet consumer demand, grow their businesses and deliver high-speed broadband to unserved and underserved rural communities. Many WISPs are using the 900-Megahertz, 2.4-Gigahertz, 3.65-GHz and 5-GHz bands that are available to them at full capacity, and are therefore looking to sharing in the C-band (3.7 GHz to 4.2 GHz) to help alleviate constraints so that more broadband can be delivered to underserved Americans.

The Federal Communications Commission is currently examining ways to more efficiently use that 500-MHz slice of spectrum, which is primarily occupied by the satellite industry. WISPs believe sharing must be part of that solution — and hope the commission agrees.

Our industry association, WISPA — of which I am a member and a former board of directors member — was instrumental in proposing that the FCC consider an innovative way to advance sharing in the C-band, urging the agency to open up the long-underutilized band for better use than its current rules allow.

WISPA advocates clearing 200 MHz of C-band spectrum for 5G and other mobile services via a public auction administered by the FCC. And, for the remaining 300 MHz, WISPA urges coordinated sharing between satellite earth stations and WISPs, the latter of which would gain access to needed spectrum to deliver services to unserved and underserved rural Americans. The FCC is considering this plan and others, and a decision on the plan for the future of the C-band is expected by the end of the year.

Making the Case for Sharing

In order to make coordinated sharing a reality, WISPA members have actively engaged policymakers, helping them hear what the advent of C-band sharing would mean for their small businesses and the rural communities they serve. In September, WISPA sent a letter signed by more than 200 companies and individuals, calling for Congress’s support of the plan. Amplifying this message, WISPA also organized its ISP members to reach out to the FCC, filing letters from 36 individual WISPs on the need to open up new capacity in the C-band.

Razzolink, a small provider in rural California, illustrates the industry’s concerns. In its letter to the FCC, Razzolink said fixed wireless operations have used up the available 5-GHz spectrum, and that other unlicensed uses in the 2.4 GHz and 900 MHz bands render them unsuitable for broadband deployment. Though new Citizens Broadband Radio Service (CRBS) spectrum (3.5 GHz) will soon provide some limited relief in the form of up to 80 MHz of shared spectrum and another 70 MHz of licensed spectrum, the plan for the CBRS band does not do enough to promote rural broadband.

In particular, because the size of the CBRS license area is far greater than the area Razzolink intends to serve, the company notes it is highly unlikely that it will be able to make a business case to acquire any licensed spectrum. Shared C-band spectrum could solve this problem. Its absence, though, will greatly limit the company’s ability to deliver essential bandwidth to its rural customers.

My company, All Points Broadband — a hybrid fiber-wireless ISP serving rural and suburban areas of Kentucky, Maryland and Virginia — also needs access to additional spectrum to meet consumer demand. Coordinated, shared access to the C-band would dramatically increase our ability to deliver broadband to underserved communities. We presently operate in the adjacent 3.65 GHz band, and the same equipment we have already deployed can quickly be adapted for use in the C-band. With this additional spectrum, our customers — and consumers residing in or working near our service area — will be able to access higher-speed broadband services that rival the speeds their urban counterparts often receive.

The importance of making more spectrum available to bridge the digital divide cannot be overstated. Fixed wireless ISPs are using private, at-risk capital to address one of America’s most pressing public-policy challenges: delivering broadband service in areas that legacy telecom providers have ignored. We need access to additional spectrum to continue this work, and the C-band presents the FCC with a unique opportunity to attract additional private capital to bridge the digital divide.

A Balanced Approach

Sharing the C-band between satellite service and fixed wireless broadband service can safely happen and represents the best and fastest way to bring broadband to underserved Americans. WISPA’s proposal is also balanced: mobile providers would get access to additional spectrum to support urban 5G buildouts; the U.S. Treasury would get billions from an FCC auction; and small rural providers would get access to new spectrum, bringing high-capacity broadband to underserved rural communities.

As members of Congress and the FCC have repeatedly recognized, bridging the digital divide is a national imperative. By allocating a meaningful portion of the C-band for coordinated sharing, the FCC can attract more private capital and support thousands of small and medium-sized businesses in their mission to connect rural America. What policy outcome is more important than that?

Jimmy Carr is the CEO of All Points Broadband, a hybrid fiber-wireless internet service provider he founded to bring utility grade broadband to underserved markets, and chairman of the Wireless Internet Service Providers Association’s Government Affairs Committee.

As he once again looks to disrupt the telecom business, this time with a fixed wireless play, former Aereo chief executive Chet Kanojia has a new CFO.

His new Boston-based technology company, Starry, has just poached Gregg Bien from Assurant Wireless. Bien, who has also worked for AT&T and Disney, will lead the financial future of a startup which has raised more than $250 million to date.

“Starry is in a period of explosive growth,” Kanojia said, in a statement. “We have more than doubled our headcount in the last year and have expanded our network footprint coverage to pass more than 1.5 million households. Bringing Gregg in at this juncture will be critical to maintaining this pace of growth and maintaining the financial discipline that has enabled this success. Gregg is a proven financial leader who understands how to drive success in this industry. We’re thrilled to welcome him to Starry.”

Launching in beta back in 2016, Starry was the first company to commercially deploy pre-standard 5G, point-to-multipoint fixed wireless technology to deliver gigabit-capable broadband to the home.

In addition to Boston, Los Angeles, Washington, DC, New York City and Denver, Starry will also expand its service to 17 additional markets over the next year including: Chicago, Cleveland, Houston, Dallas, Seattle, Detroit, Atlanta, Indianapolis, San Francisco, Philadelphia, Miami, Memphis, Phoenix, Minneapolis, Manchester, NH, Portland, OR, and Sioux Falls, SD.

Verizon on Wednesday confirmed that it will launch its fixed in-home 5G wireless service later this year using either free YouTube TV or an Apple TV4K as a promotional enticement.

The No. 1 U.S. wireless carrier also confirmed that it will launch in a fifth city, Indianapolis. Verizon earlier said that would launch the service in Houston, Los Angeles and Sacramento later this year.

Related: Verizon Picks Ericsson for Pre-Standard 5G Rollout

Users who sign up for the service will be able to choose between a free subscription—for a limited but unspecified time—to Google’s YouTube TV, which delivers more than 60 live channels for $40 a month, or the Apple TV4K, a streaming device that retails for a base price of $179.

It wasn’t in the announcement that Verizon sent out late Tuesday, but Bloomberg reported that Verizon 5G subscribers will also have access to live NFL and NBA games through the wireless company’s Oath media unit.

As for the decision to expand the rollout of the service to Indianapolis, Tami Erwin, executive VP of wireless operations for Verizon, said the city has been a “strong partner” in laying the groundwork for Verizon’s fixed 5G launch.

“We trialed 5G during the Indianapolis 500 in May 2017, and now we’re bringing next generation home broadband connectivity to residents,” Erwin said. “By becoming an early leader in 5G, Indianapolis will have a head start in seeing what this technology can do, using it to build an innovative city of the future.”

Verizon still has yet to announce pricing for its upcoming 5G service. 

In late 2017, after two years of research, analysis and writing, The Carmel Group published the first in-depth report about what we term the Broadband Wireless Access, or “BWA,” industry. Many traditionalists still call it the fixed wireless industry. The full 23-page “2017 BWA Report” is available for download here.

Yet, the lack of industry interest in the story and data behind the “2017 BWA Report” appears to say a lot about yesterday’s and today’s multichannel industry.

What BWA Means
For those unaware, BWA means the delivery of broadband Internet, via a tower and wireless spectrum, to small radio antennas mounted on the sides of buildings. The outside antenna connects to a router inside the structure. The router then distributes the signal to devices and monitors inside the home or business.

For the cord-cutting generation, BWA is Nirvana, because it delivers Netflix, Apple TV, Amazon and YouTube for a tiny fraction of the cost of a cable TV, telco, fiber or satellite package. BWA also delivers quality Voice Over Internet Protocol (VOIP) telephone services. Traditional TV packages are not far off, we believe.

For the operator, it means delivering much of what people – especially younger generations – really want from video, at a tiny fraction of the cost and payback period.

Related: Fixed Wireless Pay TV: Understanding the New DNA

For cable, telco, fiber and satellite, BWA can also mean a chance to meld with and become a hybrid video delivery service, with obvious advantages. Indeed, this melding highlights the meaning behind the name of this blog, “Mixed Signals” (meaning, increasingly, silos break down and each industry combines with – and invests in – the others).

A First Call
On March 19 I received one of the first of its kind: a call from a Detroit-based investment firm that was interested in purchasing a BWA operator of several thousand subscribers, with decent multiples and very respectable cash flow, the partner said. The guy said to me, “This business seems almost too good to be true.”

His core questions centered around items such as the research and study behind the data points, the validity of the methodology, the competition and concerns about the future.

He was also concerned about how cable and telco will react, especially as new 5G technology and the BWA industry grow out. He worried further about a possible dearth of future unlicensed spectrum.

Why Not More?
What has occurred to me weekly since the “2017 BWA Report” came out five months ago -- and what triggered this article -- is something I saw quite a bit when I left Paul Kagan Associates in 1995 to start a rival telecom research operation (but mine focused in the beginning just on the newly emerging Direct Broadcast Satellite industry). That phenomenon was the real lack of serious interest by cable, other related industries and investors in a new technology and new business that challenges the old.

Today, because of the comparison of a handful of important technological and political concerns to those of DBS back in the early 1990s, the BWA industry is on the verge of a similar breakout. (Note that I’m not yet predicting the growth that DBS saw, reaching close to 30 million subscribers in a 20-year time frame, but the BWA industry is projected to nearly double to over eight million subscribers in five year’s time.) BWA is also on the verge of competing mightily with cable.

Yet, despite that promise, there is still very little interest from both within and outside the BWA industry in what the real BWA story is.

Know Your Friends Well
Some say the reason for this dearth of response is a lack of curiosity.

That may be true at a certain level, but I believe that the more important reason is one of fear.

Incumbents are often afraid to address the idea of a future involving a large loss of market share – as was cable with DBS in the 1990s, and cable is today with other technologies, including BWA. In response, they do little or not enough to address that future. I’ll never forget the first time I heard the adage “Know your friends well, your enemies better.”

Interestingly enough, the two companies that have purchased the answers and the data behind the BWA survey data we did are both based overseas. They both mentioned a unique opportunity to invest in and take advantage of a new U.S. (and global) telecom opportunity, involving new spectrum gains, new technology, new equipment and new investors.

Thus, I must again ask the U.S. contingent (and others of the foreign ilk), yet this time in a more complete version: Suffer, Curiosity? Suffer, Fear? Suffer, Knowledge? Suffer, Advantage?

Like DBS, there’s a real chance here not only to benefit financially, but also to improve the quality of life for millions of Americans and other global citizens.

Jimmy Schaeffler is chair and CSO of The Carmel Group, a streaming/broadband, broadcast and pay TV/video consultancy based in Carmel-by-the-Sea, Calif.

Starry, the wireless broadband startup, and chipmaker Marvell have teamed on a tech partnership that aims to accelerate the deployment of 5G-based fixed wireless services.

Under the plan, Starry will combine its pre-standard 5G system focused on millimeter wave spectrum and smart antenna tech with Marvell’s 802.11ax chips.

The collaboration, they said, will focus in two areas – a “blueprint”/reference design for Starry’s millimeter wave, point-to-multipoint fixed broadband transceivers (the last mile in Starry’s infrastructure) that integrate Marvell’s 802.11ax chipsets; and a cloud-based internet and WiFi network monitoring platform that will tie into every node of the network and check performance of base stations and receivers as well as in-home WiFi hubs.

Starry and Marvell expect both to become available in mid-2018. Elements of that handiwork will be on display at Marvell’s suite at this week’s CES in Las Vegas.

They hold that the partnership will broaden the technology ecosystem with near-term implications while pivoting away from pre-standard 5G tech that is being developed in “silos.”

It also helps Starry tighten its ties to WiFi, as the companies note that the bulk of the world’s mobile cellular internet traffic is served via WiFi from fixed networks.

The partnership takes hold the week after Starry launched a symmetrical 200 Mbps service in Los Angeles, and Washington, D.C., (initially in beta form), that follow a commercial deployment already underway in Boston. Starry is selling the data cap-free service for $50-per month.

RELATED: Starry Launches 200-Meg Wireless Broadband Service in L.A., Washington, D.C.

They claim that the arrangement will lower the cost of entry into the market.

“When we started Starry, our goal from the beginning was to drive down the cost of deploying broadband, from the cost of equipment to speed of deployment. And we have been successful at achieving both,” Chet Kanojia, Starry’s CEO and co-founder said in a statement. “The barrier to entry in the market today – whether domestic or global – is cost. That’s why you see so few people willing to challenge incumbent monopolies. We saw 5G as an opportunity for a new ecosystem of access technologies and products to emerge – but felt that it could only happen if the barrier to entry was low.”

In an interview last week, Kanojia said that Starry and its high speed/no data cap approach has been particularly appealing to cord-cutters and cord-nevers.

Median consumption of the service is 450 GB per month in the early going, with to top 20% of Starry subscribers consuming between 600 GB to 1.6 terabytes of data per month.

More insight into Starry’s market learnings in the early going will be featured in the Platforms section of the January 15 issues of Multichannel News and Broadcasting & Cable.

Arris has introduced two broadband gateway devices that are tailored for PON and fixed wireless broadband service deployments.

The NVG578 is a PON gateway supports today’s GPON technologies and is designed also to work with next-gen XGS-PON and NG-PON2 platforms that are targeting speeds of up to 10 Gbps.

The wireless end of the NVG578 enables options for 802.11ac and 802.11ax in dual-band and tri-band configurations, as well as optional support for IoT radios, Arris said, noting that the device is also optimized for IPTV.

The second product, the NVG558, is a fixed wireless broadband gateway capable of supporting voice, video and data services via an integration of 4G LTE, 3.5GHz CBRS as well as future 5G-based services.

RELATED: Federated Wireless Targets ‘Third Model’ for Mobile

Both products also support Arris HomeAssure, a platform that’s designed to extend WiFi coverage and simplify the experience.

The models will be ready for customer trials in Q1 2018, with general availability to follow in the first half of next year.

Arris announced both products as the company heads up a conference call this morning to offer more details tied to Arris’s recent acquisition of the Ruckus Wireless and ICX Switch businesses from Broadcom.

RELATED: Ruckus Deal to Contribute $675M to Arris Sales in 2018: Analyst

Following a string of trials, Verizon said it will launch 5G-based residential broadband services in as many as five markets in 2018.

First up will be Sacramento, Calif., which will get the service – a fixed wireless offering -- in the second half of 2018. Verizon will provide details (such as pricing and speed options) and additional launch markets at a later date.

Verizon estimates that the markets covered by its first wave of deployments will cover about 30 million homes. That will enable Verizon to raise the level of competition with cable operators and other broadband service providers. 

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

Verizon has been testing “pre-commercial” gigabit broadband service this year using millimeter wave spectrum in 11 markets, including Ann Arbor, Mich.; Atlanta, Bernardsville, N.J.; Brockton, Mass.; Dallas; Denver; Houston; Miami; Sacramento; Seattle; and Washington, D.C.

RELATED: Verizon Gets Fix on 5G Trials

Verizon, which has teamed up with vendors such as Ericsson, Intel, Qualcomm and Samsung, has been using those trials to see how the technology perform in a range of urban and suburban areas that have different densities with respect to buildings and foliage.

Verizon stressed that the 5G commercial launch won’t have a material impact on Verizon’s capex plans for 2018, as its capital spending program will be “consistent with the past several years.”

Though fixed-wireless broadband is the first commercial application for 5G, the technology will also support mobile services, Internet of Things deployments, as well as services that require low-latency, such as self-driving cars.

“This is a landmark announcement for customers and investors who have been waiting for the 5G future to become a reality,” Hans Vestberg, Verizon’s president of global networks and chief technology officer, said in a statement. “We appreciate our strong ecosystem partners for their passion and technological support in helping us drive forward with 5G industry standards, for both fixed and mobile applications. The targeted initial launches we are announcing today will provide a strong framework for accelerating 5G’s future deployment on the global standards.”

Pay TV operators and equipment vendors are facing remarkable new changes, as TV consumers increasingly become “cord cutters” and migrate away from cable and satellite providers toward cellular/mobile and fixed-wireless providers. Understanding the latter two pay TV competitors thus becomes ever more critical to managing today’s cable and satellite TV landscapes.

Some very interesting data points have emerged within the last year by way of two 80-question surveys -- one of operators and one of vendors making up the fixed wireless or Broadband Wireless Access (BWA) sector.

The two surveys were conducted in late 2016 and well 2017 by my research firm, The Carmel Group, drawing from hundreds of members of the dominant U.S fixed wireless/BWA trade group the Wireless Internet Services Providers’ Association (WISPA), which was among nearly 20 investors that sponsored the findings. (The investors’ viewpoints had no effect on the surveys’ outcome.)

The study found that 169 out of 555 WISPA member respondents answered the operator questions, whereas more than 20 of WISPA’s 44 equipment vendors responded to their specific vendor survey questions. Both response rates are more than double the typical response rates for “external” and “independent” surveys done nationally by outside third parties.

Residential Consumer Broadband Comparative Economics
This section of the study compares five key Pay TV benchmarks, including capex per subscriber relative to BWA, speed, upgrade costs, broadband ARPU; and payback period.

Most telling perhaps is the payback period. In the case of cable, that timeframe is estimated at 38 months, or more than three years. Higher still is that of fiber, at 60 months or five years. Mobile/cellular payback is estimated to arrive after almost two years, while satellite and BWA best that metric by coming in at one year and 11.5 months, respectively.

However, for purposes of the relative analysis, the estimated average $250 million cost of launching a satellite was not included in the 12-month satellite return on investment (ROI) time frame. The surveys and the report confirm that the fixed wireless/BWA is the most cost-effective infrastructure for broadband and video today.

At the same time, typical and maximum delivery speeds are improving to the point where fixed wireless/BWA speeds are topping out at 100 Megabits per second (Mbps). Some can provide more than 1 Gigabit per second (Gbps) to fixed wireless/BWA end users.

Survey Questions
The surveys also asked about expectations; vendor equipment and improvements; licensed versus unlicensed and “lightly licensed” spectrum; monthly churn; ARPU; and revenue. Additional questions about ancillary services, challenges, opportunities, access and transmission points were also included.

One particularly interesting question was, “What Kinds of Licensed and Unlicensed Point-To-Point Frequencies Each Operator Is Using And What Percentage Each Represents?”

The results said 5.72-5.85 Gigahertz (AKA: U-NII-3) was used by nearly 40% of the respondents. Next, with 25%, was 5.25-5.72 Gigahertz (AKA: U-NII-2), and then, with 20% usage, was 5.15-5.25 Gigahertz (AKA: U-NII-1). A number of spectrums being considered that will be opened up in the years ahead, some point-to-point and some point-to-multipoint, in licensed, unlicensed and shared spectrums, might significantly affect this.

The Citizens Band Radio Spectrum (CBRS) deployment is one of these. Among “opportunities” in the BWA ecosystem, the surveys respondents cited “new spectrum developments” as the most promising.

Seven Growth Drivers
The two surveys also identified growth drivers that are expected to help propel the industry forward:

• As noted above, Fixed Wireless/BWA costs less.
• Spectrum trends favor fixed wireless/broadband.
• Video is fueling overall growth in demand for broadband.
• Standards-based technologies give BWA providers more choices.
• Capital availability and governmental support are growing,
• New entrants are validating the business model.
• And new market and service opportunities are creating new opportunities.

Subscriber and Revenue Growth
The study also highlights the remarkable growth that is expected in terms of both subscribers and revenue. In light of expected declines during the same timeframe among satellite and cable operators, the rather conservative estimates show that today’s BWA industry is the fastest growing sector in all of broadband.

BWA Challenges
The BWA operators also identified several key challenges they foresee. These include: (1) competition from other broadband distributors; (2) yet-to-fully-develop access to financial funding markets; (3) inadequate and uneven governmental support in the areas of spectrum allocation and financial incentives; and (4) the BWA industry’s relatively small size, lack of scale and consolidation, which in turn affects the BWA industry’s ability to educate investors, legislators, regulators, media and the general public.

Other Survey Data
The full report is available free-of-charge at The Carmel Group’s website by going to www.carmelgroup.com (click on the title, “2017 Broadband Wireless Access (BWA)/Fixed Wireless Report”). The actual sets of questions asked of both the Vendors and the Operators are also available for download (via the link titled “2017 BWA Survey”).

An old adage has it, “Know Your Friends Well, Your Enemies Better.” Whether today’s cable and satellite operators list fixed wireless/BWA as a friend or foe, and whether today’s pay TV and broadband providers combine different infrastructures to achieve their distribution ends, it is high time to learn more about BWA providers in the U.S. and around the world. Indeed, the Philippines reports a system of more than 1 million users, and significant deployments of fixed wireless technology are seen today in Russia, Brazil, Italy, Canada and Australia.

Jimmy Schaeffler is chairman and CSO of The Carmel Group, a streaming/broadband, broadcast and pay TV/video consultancy based in Carmel by the Sea, Calif.

Starry, the fixed-wireless broadband startup helmed by former Aereo founder Chet Kanojia, said it has hired former Google exec Kristen Morrissey Thiede to senior vice president of business development and corporate strategy.

Thiede will lead the business development and corporate strategy for Starry as it looks to build and expand its fixed wireless broadband network nationally and globally, and will also head up developing partnerships and alliances aimed at spurring growth. 

Thiede most recently served as an advisor at Metamorphic Ventures, a New York City-based venture capital firm and, before that, spent 14 years at Google, leading business development and content licensing for Google Fiber and early stage efforts such as Google.org's Crisis response team to Haiti, Chile, and Pakistan, and the launch of AdSense for Content and distribution efforts globally.

"We are thrilled to welcome Kristen to Starry, where her skills and experience will have a positive impact on day one," Kanojia said in a statement. "Kristen knows firsthand the challenges in building a broadband network and her experience and success with Google Fiber is a tremendous asset as we build out Starry Internet here in the U.S. and abroad. Our millimeter wave technology offers unlimited opportunities for growth, and we're excited for Kristen to help lead our expansion efforts."

"I've always been driven to take on big challenges," Thiede said, in a statement. "The Starry team is led by world class engineers developing some of the most innovative connectivity  technologies in the market today. Starry's development of an active phased array for millimeter waves is a game-changer that has the potential to solve connectivity challenges around the world. I'm excited to be a part of a passionate team of technologists willing to push big ideas and innovative technology forward."

Thiede holds a BA in political science from the University of the South. She was also identified as a Woman to Watch in 2015 by Multichannel News. 

Starry is developing a fixed-wireless broadband service that will rely on millimeter wave technology, a platform that, it claims, can deliver speeds of up to 1 Gbps. The company, which has also introduced the Starry Station, a $349.99 WiFi-capable hub that features a 3.8-inch touchscreen. Starry expects to launch a beta of its Internet service in Boston this summer, and will add more cities to the mix throughout the year.