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Cable One Raking It In With Rate Hikes: 47% Margin Highest in the Cable Industry

Cable One, the Phoenix-based mid-sized cable operator serving some of the poorest communities in the country is charging some of the nation’s highest prices for broadband service, raking in an unprecedented 47% margin in the fourth quarter of 2017, the highest in the cable industry.

That growth has come courtesy of CEO Julie Laulis, who has doubled down on data caps — automatically enrolling customers in higher priced plans if they exceed data caps three times in any 12-month period, raised prices, and ended most new customer and customer retention promotions in favor of ‘take it or leave it‘ pricing, especially on broadband service. Laulis has also decided to devote most of Cable One’s marketing efforts on selling broadband service, while de-emphasizing cable television. As a result, customers dissatisfied with Cable One’s lineup are encouraged to leave quietly.

Because video programming is costly to provide and broadband is relatively cheap to offer, the more the company can extract from its internet customers, the higher the profits earned. In 2011, cable television represented 49.1% of Cable One’s $779 million in revenue, with residential and commercial broadband comprising 34%. Today, 57% of Cable One’s $960 million in revenue comes from selling internet service. Cable One not only de-emphasized its video business, it also raised prices on internet service to further enhance earnings.

New customers coming to Cable One can subscribe to an entry-level broadband plan of 100 Mbps with a 300 GB monthly data cap for $55 a month. There are no discounts or promotions on this plan. But Cable One also requires customers to lease ($10.50/mo.) or buy an added-cost cable modem, raising the price higher. To prevent customers from taking advantage of promotions on higher speed products, Cable One requires customers to disconnect from service for a full year before being considered a new customer once again.


Cable One has been able to raise prices and attach stingy usage caps to customers primarily because there are no good alternatives in the rural markets it prefers. One analyst said 77% of Cable One’s customers are in largely rural areas of Arizona, Idaho, Illinois, Missouri, Montana and Oklahoma. But prices are clearly getting too high for some, because the company lost more video and phone customers that it gained in new broadband subscriptions during the fourth quarter of 2017.

The fact Cable One broadband is now considered by many subscribers to be “too expensive” is also reflected by the extremely anemic broadband growth at Cable One. In 2017, the company added just 1.5% to its residential broadband customer base, despite very limited competition from phone companies.

MoffettNathanson’s Craig Moffett has complained all winter that Cable One is sacrificing broadband subscriber growth in favor of profits from price increases.

“[Cable One has] the most limited broadband competition of any publicly traded operator, and they have the lowest starting penetration,” Moffett told his investors. “Should they not be growing broadband the fastest of anyone? If price elasticity is greater than anyone thinks, how long is the runway, not just for Cable One, but for any operator choosing a strategy of price increases rather than unit growth?”

Cable One is also squeezing its newest customers at its latest acquisition – NewWave, which now features pricing very similar to Cable One. It recently started to turn over past due NewWave customers to collections after going 40 days past due. Previously, it was 90 days before account holders were threatened with cancellation and collections.

For now, NewWave’s introductory offer remains: 100 Mbps High-Speed Internet is $39 for the first three months before these rates kick in:

100Mbps 150Mbps 200Mpbs 200Mpbs 200Mpbs
Monthly Price* $55 $80 $105 $130 $155
Download Speed Up To 100 150 200 200 200
Upload Speed Up To 3 5 10 10 10
Best for # of Household Devices 5 8 10 10 10
Data Plan 300GB 600GB 900GB 1200GB 1500GB
Household Needs Download files/music
Power surfing
Occasional gaming
Mulitple surfers
Serious gaming
Mulitple devices & users
Serious gaming
Mulitple devices & users
Serious gaming
Mulitple devices & users
Home Wifi Included* Included* Included* Included* Included*
Streaming Video HD Video Multiple HD Video Multiple HD Video Multiple HD Video
iTunes Downloads of 45 minute show 15.6 seconds 10.8 seconds 7.8 seconds 7.8 seconds 7.8 seconds

*Plans & pricing for new customers. Rates do not include optional modem fees of $10.50 per month. Rates subject to change. Taxes and fees not included.


Altice USA: 90% of Our New Customers Want Broadband Speeds 100+ Mbps

Cablevision customers get very attractive promotions in the highly competitive northeastern United States, while Suddenlink customers in more rural areas pay more.

The majority of Cablevision and Suddenlink broadband customers want speeds of 100 Mbps or greater from the Altice-owned cable operators, and average monthly data usage by those customers is now reaching 200 GB per month.

Those statistics were part of a quarterly financial results presentation by Altice USA executives about how the company is doing in the United States.

Altice’s cable holdings include Cablevision, serving a generally affluent customer base in and around the New York City area where Verizon FiOS is its biggest competitor, and Suddenlink, which serves in less competitive markets where local economies are often challenged and phone company DSL still has a significant presence.

Regardless of whether customers receive broadband from Cablevision or Suddenlink, Altice USA CEO Dexter Goei made it clear consumers want faster internet service and are consuming exponentially more data than ever before.

Goei said Altice will continue to increase internet speeds over its existing hybrid fiber-coax network (HFC) even as it builds out its fiber to the home replacement network in some areas. At least 95% of Cablevision customers can now subscribe to 400 Mbps broadband on the company’s legacy HFC network. Around 72% of Suddenlink customers can get similar speeds today. Gigabit speed is available to 29% of Altice USA customers.

Goei said 90% of new Cablevision and Suddenlink customers now choose internet plans featuring 100 Mbps or faster broadband. The average data use of those customers “is now reaching about 200 GB” per month, Goei reported. For customers on HFC systems, Goei said the maximum speed Altice’s implementation of DOCSIS 3 can support is around 600 Mbps, depending on how many customers are sharing the connection. As customers transition to fiber service in the northeast, faster speeds are planned. In fact, Goei wants Cablevision to offer speeds even faster than Verizon FiOS, its chief competitor.

“In terms of the speed capabilities, we’ll have the ability to do higher speeds than the competition,” Goei said.

Altice USA’s fiber-to-the-home (FTTH) deployment is “well underway” in New York, New Jersey, and Connecticut, with plans to connect several hundred thousand customers to the new network starting later this year. Goei told investors Altice was accelerating the rollout this year with the hope of further reducing network and customer operation costs related to servicing the older coaxial network.

Cablevision and Suddenlink will gradually be rebranded as Altice, and the company has begun familiarizing customers with the new brand name in various ways, including the rollout of its new deluxe set-top box, called Altice One.

“This is our new entertainment platform with an all in one box, including TV, internet, Wi-Fi, integrated apps such as Netflix and a voice activated remote control,” said Goei. “The service includes an improved Wi-Fi experience […] as many TV boxes double up as Wi-Fi repeaters around the home. This is a key part of our strategy of enhancing the customer experience and we’ll have the capacity for ongoing upgrades and the addition of new apps as they become available.”

But that new platform comes at a cost. Currently, Cablevision customers can pay as much as $10 for each set-top box and $5 for a cable modem. Altice One is regularly priced at $25 a month — $10 more for a customer that has one television set-top box and cable modem. That makes Altice’s box among the most costly in the cable industry. The company is trying to hide the cost of its box by bundling it into promotions targeting price sensitive new customers.

In fact, the cost of service is increasingly becoming a factor, especially for Suddenlink customers. Over the last two years, Altice has been “harmonizing” Suddenlink’s rate plans, which used to be set based on the technical capabilities and performance of each cable system. Goei said Suddenlink comprised “five or six different customer bases” — each served by cable systems with different capabilities and rate plans. In the last two years, Suddenlink customers have been introduced to new rate plans, and some are paying considerably higher rates than before, especially for equipment and surcharges.

“All of that activity was probably more than we ever wanted to or anticipated as harmonizing all the different variables is not that easy,” Goei said. “And so we made a very concerted effort to not implement a usual or industry like price increase at the end of 2017, given all the various changes that happened over both customer bases as we harmonized them.” But Goei added the reprieve from rate hikes won’t last forever, promising a “rate event” strategy sometime this year, different from rate changes in past years.

Altice is emphasizing the progress it is making boosting internet speeds at its Cablevision and Suddenlink cable systems.

What Suddenlink and Cablevision charge for service is very dependent on what the competition is offering in Altice’s various markets. Goei paradoxically noted that some of the most attractive rates go to customers living in the most affluent areas of the New York Tri-State Area because of intense competition from Verizon FiOS. Prices have remained so low historically that, in Goei’s view, “it makes it very difficult for third parties to come into these markets” and compete with attractive offers that can match Cablevision. That also explains why Cablevision customers do not deal with data caps while Suddenlink customers often do.


Conversely, in Suddenlink service areas where less capable competitors exist, prices can be higher and service is considered less affordable. As a result, financial analysts have noted Suddenlink’s broadband growth has been anemic since Altice bought the company, presumably because would-be customers cannot afford the service or have chosen a more economic package sold by the phone company, even if it less capable.

Goei promised Altice would be more “nimble” in the future about targeting pricing in different service areas, taking current conditions on the ground into account when setting rates.

In more general terms, Altice is dealing with the same challenges most cable operators are facing these days. Cord-cutting continues to result in reduced numbers of video subscribers. The company also recently endured a multi-week programming dispute with Starz that cost the company video subscribers in the Cablevision service area. The dispute eventually ended with a new multi-year affiliation agreement that allows Altice systems to carry Starz and Starz Encore networks, on-demand services, and online access for several years.

But Altice clearly sees broadband as its key product going forward, which is why the company is upgrading its Cablevision and Suddenlink systems to support faster internet speeds.

N.Y. Governor Reneges on 100% Broadband Promise, Offers Satellite to 72k New Yorkers Instead

Gov. Andrew Cuomo announcing rural broadband initiatives in New York.

It was called “Broadband for All” — New York Governor Andrew Cuomo’s commitment to bring high-speed internet service to every New York State resident. But it now appears the governor will break that promise and leave more than 72,000 rural New York residents with satellite-delivered internet that does not come close to meeting the broadband speed standard and is infamous for customer frustration, slow speeds, and low data caps.

Ensuring High-Speed Internet Access for Every New Yorker

In today’s world, internet connectivity is no longer a luxury—it is a necessity. Broadband is as vital a resource as running water and electricity to New York’s communities and is absolutely critical to the future of our economy, education, and safety.

In 2015, Governor Cuomo made the largest and most ambitious state broadband investment in the nation, $500 million, to achieve statewide broadband access by 2018. 

The New NY Broadband Program sets as its goal access to speeds of 100 Mbps for all New Yorkers, with 25 Mbps acceptable in the most remote and rural areas. The cost must not exceed $60 and there is a general prohibition of data caps. This goal exceeds requirements of the FCC’s Connect America Fund program and requires that projects be completed on a more accelerated timeline.

Today, the governor announced the state grant winners to split $209.7 million in the third and final round of awards to offer 122,285 additional homes, businesses, and institutions broadband internet service.

“These latest awards through Round III of the New NY Broadband Program will close the final gap and bring high-speed broadband to all New Yorkers in every corner of the state,” the governor’s office claimed.

Except it won’t.

Tucked in among the grant award winners is a $14,889,249 grant to Hughes Network Systems, LLC, targeting 72,163 rural New Yorkers, more than half of the total number of customers to be reached in the third round. Hughes operates the HughesNet satellite internet service, a technology derisively known as “satellite fraudband” for routinely failing to meet its advertised speed claims. It’s also known as “last resort internet” because it is slow, expensive, and heavily data capped.

Complaints about HughesNet are common on websites like Consumer Affairs:

“Extreme false advertising. Over the first 30 days with HughesNet Gen5, I averaged 3 Mbps download when advertised 25 Mbps. I canceled when they couldn’t answer why I used 20 GB of data in less than 24 hours. I am a 55 year old average internet user. No streaming. No music. No videos (YouTube). DO NOT GET THIS SERVICE EVEN IF NO OTHERS ARE AVAILABLE.” — Dennis, Tazewell, Tenn. (1/25/2018)

HughesNet claims high speed internet in our region. Clearly not available here, 3 service calls, with exchange of equipment, 50 calls – recorded leaves us no choice, we demand that this contract be null/void without stealing $399 cancellation. A despicable Company, uninformed customer service, average speeds with a video; upload speed 0.62 Mbps, the download speed is 1.28 Mbps. Help!!!” — Jeffrey, Kerhonkson, NY (1/21/2018)

“Promised speeds of no less than 25 Mbps. Actual speed received was 5-9 Mbps. Unable to stream anything. Computer programs did not operate and did not update as required. We have cancelled HughesNet at great cost to us. Worst internet service ever.” — Jennifer, Hartsville, SC (1/12/2018)

Pat (last name withheld) lives 1.3 miles from the nearest Charter Communications customer in Niagara County, near Niagara Falls and is very disappointed with recent developments. Charter has quoted an installation fee of $50,000 to extend their cable service and Verizon has refused to provide DSL service, leaving Pat resorting to using an AT&T mobile data plan, which is expensive and gets throttled after using more than ~22 GB a month.

“This was a scam from Jump Street,” Pat said. “Phase 3 has 70,000 out of 120,000 homes getting satellite internet, a technology that was already available. It also gives $70 million to Verizon who declined funds in first place. Five years and $675 million later and still no internet for my kids.”

“This is a huge disappointment for us,” Pat added. “We were counting on this happening. Told numerous times it would. Now we have to debate moving, we can’t continue not having internet. My oldest son just graduated high school never having internet at home.”

“I have written and spoke with New York Broadband Program Office and it was clear to me from the beginning they didn’t understand the problems they faced, namely infrastructure costs,” said Pat. “They didn’t want to hear it. They wrongly assumed that telecoms would bid and everyone would have internet. I knew when announcements were delayed that the bids for last mile didn’t come in. Tragic really. I think they made a mistake accepting that money from the FCC. Satellite was never on the table until that happened.”

Stop the Cap! readers have told us satellite internet is the worst possible option for internet access, and many have reported better results relying on their mobile phone’s data plan. But New York’s solution for more than 70,000 of its rural citizens — many that believed the governor’s commitment of 100% coverage — is to saddle them with satellite internet access starting at $49.99 a month for a paltry 10 GB of usage per month. The top plan on offer costs $99.99 a month and is capped at 50 GB a month before a speed throttle kicks in and reduces speeds to dial-up levels. A 24-month contract is required with a very steep early cancellation penalty.

Another surprising winner is Verizon Communications, a company that originally refused to participate in rural broadband expansion efforts. Verizon will accept more than $70 million to expand its broadband service to 15,515 homes, businesses, and institutions in the Capital Region, central New York, the North Country, and Southern Tier. At press time, it is not known if Verizon will bring FiOS or DSL to these customers.

Because New York State relied on private companies to bid to cover unserved residents, it seems clear HughesNet is the default choice for those New Yorkers stranded without a telecom company bidder. Although that will allow Gov. Cuomo to claim his program reaches 99.99% of New Yorkers, the rural broadband problem remains unresolved for those who were depending the most on New York to help bring broadband to rural farms, homes in the smallest communities, and those simply unlucky enough to live in small neighborhoods deemed unprofitable to serve.

AT&T Scam of the Week: Advocating for Fake Net Neutrality

After spending millions to kill net neutrality, AT&T today called on Congress to pass a new national law protecting AT&T’s idea of a free and open internet by regulating internet websites like Facebook, Google, and Amazon.

Full page newspaper ads taken out in several nationally known newspapers proclaimed AT&T CEO Randall Stephenson’s support for the first “Internet Bill of Rights,” conceived by some of the same lawyers and lobbyists AT&T paid to destroy the FCC’s net neutrality rules put into effect during the Obama Administration.

“Congressional action is needed to establish an ‘Internet Bill of Rights’ that applies to all internet companies and guarantees neutrality, transparency, openness, non-discrimination and privacy protection for all internet users,” Stephenson wrote in the ad.

AT&T’s proposal would attempt to include content regulation of websites under the guise of fairness, claiming that while internet service providers are expected to treat all content fairly, large websites like Google and Facebook currently do not. Critics of AT&T’s proposal call that a distraction that has nothing to do with ISPs seeking the right to establish paid internet fast lanes and favoring partnered websites with exemptions from data caps or speed throttles.

AT&T doesn’t inform readers of its own complicity in the “confusion” over net neutrality policies that have faced constant legal and political challenges from AT&T and other telecom companies. The telecom industry has furiously lobbied Congress and regulators to keep net neutrality from taking effect. Once it did, AT&T took the FCC to court to overturn the rules.

AT&T wants their own law for their own version of net neutrality.

AT&T’s campaign comes with some urgency as the company works to block states from enacting their own net neutrality laws to replace the rules abandoned by the Republican majority controlling the FCC. Despite assurances from FCC chairman Ajit Pai that the Commission would sue to pre-empt any state law that would re-establish net neutrality, AT&T and other large cable and phone companies prefer the regulatory certainty available from the quick passage of a federal law that would establish AT&T’s definition of net neutrality indefinitely. AT&T is also trying to rush passage with support from Republican congressional majorities and President Trump before the midterm elections threaten a Democratic takeover of the House, Senate, or both.

AT&T attempted to assuage customers of its good intentions by claiming it doesn’t block websites.

“We don’t censor online content. And we don’t throttle, discriminate, or degrade network performance based on content, period,” AT&T wrote (emphasis ours). But that claim opens the door to important loopholes:

  1. Speed throttles, data caps, and zero rating do not impact network performance. They impact your ability to equally access internet content, something AT&T does not promise here.
  2. AT&T only claims it won’t interfere with websites based on their content, but that was never the premise ISPs have used to demand additional payments from content creators. It isn’t the content ISPs are concerned with — it is the traffic those websites generate and, in the eyes of many net neutrality supporters, whether those websites compete with an ISPs own offerings. AT&T could have said it doesn’t throttle, discriminate, or degrade websites, period. But it didn’t.

AT&T alarmingly suggests that without predictable rules, next generation applications like virtual reality, telemedicine, and the Internet of Things will be threatened. Except that is not the message AT&T gives shareholders, arguing AT&T has robust capacity both now and into the future for next generation applications. AT&T has long promoted how lucrative it expects the Internet of Things marketplace will be.

Allowing the telecom industry to write its own “Internet Bill of Rights” met with harsh criticism from the consumer groups AT&T claims it wants to enlist in its efforts.

“Zero real net neutrality supporters are fooled by this,” wrote Fight for the Future executive director Evan Greer. “We had an Internet Bill of Rights. It was called Title II and AT&T’s army of lobbyists did everything in their power to burn it down.”

“AT&T’s hypocrisy knows no bounds,” said Free Press policy director Matt Wood. “Its phony bill of rights argument makes no sense based on the law, the policies, or the politics in play. AT&T’s head fake towards one-size-fits-all rules for all websites and content providers should fool no one. As soon as AT&T wants to stop lobbying against net neutrality, broadband privacy, and the other rights it has worked to kill at the Trump FCC and in this Congress, maybe people will stop laughing at desperate tactics like this. For now, all we can do is point out the company’s audacity in pretending that this hyper-partisan Congress can step in to fill the void of the net neutrality repeal by writing a new law tailor-made for AT&T.”

Verizon and Samsung Partner Up to Provide 5G Services, Starting in Sacramento

Verizon Communications has selected Samsung Electronics as a major supplier of the wireless company’s forthcoming 5G wireless service, launching first in Sacramento, Calif., in the second half of this year.

Samsung will be a major vendor supplying Verizon and its customers in Sacramento with 5G equipment, including wireless modems and routers. In 11 other cities where Verizon is testing 5G service, Ericsson AB, another 5G network vendor, has supplied much of the equipment. Samsung is currently a small player in the 5G networking business, but hopes to ramp up its business and cross-promote its smartphones and tablets with future 5G users.

Verizon’s wireless customers in Sacramento will be the first to receive invitations to switch their home broadband accounts away from AT&T, Frontier, Wave Broadband and Comcast — the four largest incumbent providers in the greater Sacramento area. Verizon claims its 5G service can support speeds up to 1Gbps. Verizon has been testing 5G service in 11 U.S. cities, but has kept pricing details to itself. The issue of data caps has been repeatedly raised and most industry analysts predict Verizon will usage cap its 5G service at around 200GB a month. Whether the company plans to offer an unlimited use plan is unknown.

Kim Young-ky, president of Samsung’s networks business, told the Wall Street Journal that 5G is a reality and it will be much more than just an upgrade from 4G service.

“The average U.S. consumer uses about five gigabytes of mobile data a month,” said Kim. But after 5G becomes more ubiquitous in the next few years, he believes consumers will eventually use closer to 100GB monthly on new services such as virtual or augmented reality programs—or even from driverless cars, the newspaper added.

Kim expects the first 5G capable smartphones won’t appear until sometime in 2019, leaving 5G primarily as a wireless home broadband replacement during its initial rollout.

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