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Internet Only Customers: Average Usage: 395.7 GB; 1 TB+ “Power Users” Double in One Year

Phillip Dampier May 23, 2019 Consumer News, Data Caps, Online Video No Comments

Online video-driven broadband usage has reached an all-time high, increasing 27% in just one year, with internet-only customers now consuming an average of 395.7 GB — almost double the average 209.5 GB consumed by households that still have traditional cable television.

The OpenVault Broadband Industry Report, issued quarterly, reports that significant differences in usage between households with a traditional cable TV package and those that have cord-cut make it clear online video is driving much of the increased usage.

“Cord cutting behavior is impacting bundling and bandwidth consumption,” OpenVault explained. “Service providers rode a significant wave over the past ten years with triple and double-play bundling of services. There is evidence to suggest that wave has crested, as more consumers opt for internet-only packages.”

The results suggest the one effective tool providers still have to curtail heavy video streaming is mandatory data caps or consumption-based billing. An internet provider with a low data cap deters online video streaming, protecting traditional cable television revenue.

In the last year, the number of “power users” (those using 1 TB per month) doubled to 4.2% of all subscribers, with “power users of the future” (2+ TB of usage a month) more than doubling from 0.16% last year to 0.38% this year. “Power users” of 1 TB or more account for 6.5% of all internet-only households vs. 2.2% in homes still subscribing to a bundle of TV and internet service.

The clearest evidence of how data caps deter usage is found among “power users” that use 1 TB or more of data each month. With several large providers enforcing a 1 TB data allowance, OpenVault found dramatic differences in usage patterns between uncapped and capped customers. As customers become wary of exceeding their 1 TB cap, many “power users” ration usage out of fear of incurring overlimit fees, especially towards the end of a billing cycle.

Subscribers treat an assigned “data allowance” more like a hard data cap. OpenVault found that with flat-rate/unlimited plans, the percentage of power users is 32% greater than those with usage-based billing, and the percentage of subscribers using over 2 TB is 76% greater on unlimited plans where customers don’t have to fear using up their allowance.

Investors Seek Class Action Lawsuit Against AT&T for Lying About DirecTV Now

Phillip Dampier May 23, 2019 AT&T, DirecTV Now, Public Policy & Gov't No Comments

As AT&T bleeds satellite and streaming TV customers, a new class action case is planned on behalf of investors who feel ripped off after buying AT&T stock on assurances from top executives that the company was aggressively seeking a leadership role for its DirecTV Now streaming service.

According a complaint from the Schall Law Firm, AT&T made false and misleading statements to the market and caused some investors to lose more than $100,000 from the declining value of AT&T stock.

DirecTV Now entered the streaming business with a generous package of TV channels and a significantly lower price than some of its competitors. It also offered high value promotions including free equipment, and for some AT&T wireless customers, free service. By October 2018, DirecTV Now grew to a peak of 1.85 million customers.

But several weeks later, AT&T CEO Randall Stephenson announced the service was cutting back on promotions and planned to raise prices and cut back on the number of channels to boost profits.

“This resulted in existing customers leaving the service when their discount expired, and new customers avoiding the service altogether based on high prices,” the Schall Law Firm said in a press release. “Based on these facts, the company’s public statements were false and materially misleading. When the market learned the truth about AT&T, investors suffered damages.”

Publicly traded companies cannot lie or deceive investors in public statements about the company or its performance, according to securities laws. Shareholders are entitled to prompt and forthcoming disclosures about materially adverse events that could significantly impact on the performance of a company. AT&T has already lost over 500,000 TV customers in the first quarter of 2019. Stephenson this month told investors at a J.P. Morgan Conference he now expects more customer losses for the rest of 2019, including more than a half-million more anticipated cancellations during the second quarter of this year. Stephenson called it a “customer cleanup” that will purge “low value” subscribers.

Investors with significant losses were encouraged to reach out to the law firm before May 31, 2019.

RT and New York Times War Over 5G’s Possible Health Impacts

A war between RT, Russia’s external English language news channel and the New York Times over the health impact of 5G technology has given the telecom industry a new talking point: Claims that 5G signals are dangerous are nothing more than Russian fake news.

Generous news coverage about 5G deployment has brought out fringe critics claiming wireless mobile technology causes brain cancer, infertility, autism, heart tumors and Alzheimer’s disease. In some cities in the western U.S., mysterious “Public Health Warning” signs have been placed on utility poles, showing the alleged locations of future 5G cell sites. No one has come forward to claim ownership of the signs, and they are not the work of local officials.

The Times instead blamed the Kremlin’s state-sponsored news outlet RT for stirring up opposition to 5G. Reporter William Broad claimed RT had largely ignored 5G until this year, when it suspiciously aired seven stories about its health risks:

RT’s assaults on 5G technology are rising in number and stridency as the American wireless industry begins to erect 5G systems. In March, Verizon said its service will soon reach 30 cities.

RT America aired its first program assailing 5G’s health impacts last May, its only one in 2018. Already this year, it has run seven. The most recent, on April 14, reported that children exposed to signals from 5G cellphone towers would suffer cancer, nosebleeds and learning disabilities.

[…] The network is now applying its playbook against 5G by selectively reporting the most sensational claims, and by giving a few marginal opponents of wireless technology a conspicuous new forum.

RT’s Rick Sanchez devoted a substantial amount of time on a recent show attempting to refute a New York Times article that claimed Russia was trying to interfere with America’s 5G expansion using fear-mongering. (19:32)

The “Balaclava EMF Shield” is designed to protect you from ambient radiofrequency energy.

One RT host, Rick Sanchez, devoted 20 minutes of a recent show critiquing the Times story and expressing disappointment over the caliber of its reporting. Sanchez suggested the New York Times report was virtually an advertisement for Verizon and narrowed in on an admission near the bottom of the piece that the phone company and the newspaper are now business partners:

Wireless high-speed communication could transform the news industry, sports, shopping, entertainment, transportation, health care, city management and many levels of government. In January, The Times announced a joint venture with Verizon to build a 5G journalism lab.

Sanchez also sought to tie the push for 5G as another example of corporate influence over Washington, noting FCC Chairman Ajit Pai was a former lawyer for Verizon. He also tied 5G into the assault on net neutrality, without explaining why. For its part, the Times suggests, with little evidence, that RT is running a propaganda campaign against 5G to slow down its deployment in the United States, allowing Russia to leap ahead:

Even as RT America has worked hard to damage 5G, the scientific establishment in Russia has embraced a contrary and questionable position: that the high frequencies of 5G communications are actually good for human health. It recommends their use for healing wounds, boosting the immune system and treating cancer. Millions of Russian patients are said to have undergone such high-frequency therapies.

Beauty clinics in Moscow use these high frequencies for skin regeneration, according to a scientific study. One company says the waves can remove wrinkles and fight hair loss.

The back-and-forth arguments have now attracted Washington’s attention, and some in Congress want to hold hearings about a reputed “disinformation campaign” run by Russia against 5G technology. Wireless carriers will welcome such hearings, allowing them to further argue for deregulation of cell placement rules and other zoning matters and claim the U.S. is falling behind in the global 5G race. It is also much easier to dismiss objections to 5G as Russian fake news than to finance a team of experts to counter those claims.

Lost in all of this is the original question about the risks of 5G technology. Much of the health an d safety opposition to wireless technology began long before the concept of 5G was unveiled. Some parents have opposed in-school Wi-Fi as medically harmful. Others fear traditional 3G or 4G radiofrequency energy, which some claim (without substantial evidence) causes cancer.

The health impacts of 5G have not been definitively proven, and it will be important to distinguish between different flavors of 5G to even consider the question. Millimeter wave 5G networks that depend on small cells those signs affixed to utility poles warn about operate at very high frequencies with very low power. No person will likely be within 10-15′ of a small cell because they will be erected on top of utility poles. They also emit a very short range signal unlikely to penetrate walls of buildings, much less your brain or vital organs. The other version of 5G will be placed on existing cell towers and will be no more harmful than 3G or 4G. If one fears radiofrequency energy, they are much more likely to get a large dose of it driving past (or living by) an AM, FM, or TV transmitter that operates at much higher power.

KOIN-TV in Portland, Ore. reported the sudden appearance of ‘Public Health Hazard’ signs warning of the risks of 5G. But are the signs for real? (2:31)

DoJ Staffers Recommend Blocking the T-Mobile/Sprint Merger

Staffers working for the antitrust division of the Department of Justice have recommended the agency sue to block the merger of T-Mobile and Sprint, arguing it will reduce competition and raise prices for consumers.

Two sources familiar with the matter told CNBC staffers have been skeptical of the merger and recommended blocking it on antitrust grounds. But the final decision will rest with President Donald Trump’s political appointees, notably Makan Delrahim, who heads the antitrust division. Delrahim can agree, modify, or reject the staffers’ recommendations.

The disclosure hammered Sprint shares earlier this morning in pre-market trading. Wall Street analysts are likely experiencing significant headaches trying to predict where the deal will ultimately end up. Earlier this week, the FCC’s Republican majority signaled they were prepared to approve the merger, based on concessions including the spinoff of prepaid Boost Mobile, which resells Sprint service.

A final decision from the Justice Department is likely to be announced in June.

Maine Considers New Law Forcing Cable Companies to Sell TV Channels A-La-Carte

Charter Spectrum serves a significant part of the state of Maine.

The Maine state government is reviewing a measure that would require all cable operators in the state to offer customers the chance to buy individual cable channels instead of being forced into a large and costly package of dozens, if not hundreds of unwanted TV channels.

“The senior citizens in my area want to watch the Boston Red Sox,” says Rep. Jeffrey Evangelos, an independent from Friendship. “The package that Spectrum is offering in Maine that includes the Red Sox costs about a hundred bucks. These people are making $800 bucks a month on Social Security. They’re bemoaning to me at the doors, you know, ‘I can’t afford television anymore Jeff.’ And they grew up in an era when television was free.”

Maine Public Radio reports Evangelos’ solution is an insertion of a single sentence into the state franchising law:

A cable system operator shall offer subscribers the option of purchasing access to cable channels, or programs on cable channels, individually.

The proposed change won support from a state legislative committee, but scorn from cable industry lobbyists that claim the proposed measure violates federal law.

Chris Hodgdon, a Comcast lobbyist, pointed to the specific statute forbidding states from telling cable operators how to conduct business: “No state shall regulate the products, rates, services of a cable provider.”

Charter Spectrum’s regional lobbyist Melinda Kinney warned any such law would likely face immediate court challenges. Kinney complained the measure was unfair because it targets cable operators while excluding satellite and streaming providers. But consumer advocates argue that the law could actually help the cable industry as cord-cutting becomes a national phenomenon. Subscribers agree.

“I’d sign back up for cable TV in a minute if I could pick my own channels and pay a reasonable price,” said Jack Winters, 71, a former Comcast customer near Brunswick. “Comcast makes you take all or nothing so I took nothing. I miss not getting Fox News Channel, Turner Classic Movies, and Hallmark, but my bank account doesn’t.”

Sen. Angus King, the independent senator from Maine, has done his part to investigate whether such a state law would violate federal deregulation measures. He took the proposal to the FCC.

Patrick Webre, chief of the FCC’s Consumer and Governmental Affairs Bureau responded that no state has passed such a law before, so he couldn’t say much:

“In your letter you asked whether a state mandate that a cable operator provide a-la-carte services would be pre-empted by federal law. This poses a question of first impression, and we could not locate any specific Commission rules that addresses your exact issue. Thus we are not in a position to express an opinion on the question you raise.”

Under the Trump Administration, however, the Republican majority controlling the FCC would likely oppose the measure because it would introduce new regulations on the industry, something that has historically been anathema to Chairman Ajit Pai and Commissioner Michael O’Rielly. Republican Commissioner Brendan Carr, formerly a lawyer for Wiley Rein, which represents the interests of several large telecom companies, would likely also oppose the measure.

The bill now moves to the full Legislature on a tri-partisan vote of 8-2 and will be debated first in the House.

A proposed new law would require cable operators in Maine to sell individual cable channels to customers. (4:08)

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