The newest cities getting Charter/Spectrum’s gigabit service.

With the latest additions to the list of Charter Communications’ gigabit-capable cities last week, Spectrum’s gigabit internet service is now available to more than 27 million homes, more than half of its 41-state footprint.

The latest cities to receive gigabit upgrades include Charleston, S.C., Bowling Green, Ky., Cleveland and Toledo, Ohio, Erie, Pa., Orlando, Fla. Hartford, Conn., and Springfield, Mass.

Spectrum is calling the occasion “the summer of gig,” with the promise of another wave of newly upgraded cities by Labor Day.

In addition to the availability of gigabit service, which in reality offers speeds up to 940/35 Mbps, customers should see Standard speeds in many of these locations increased to 200/10 Mbps and the introduction of an improved Ultra speed tier of 400/20 Mbps. Some cities have not yet received a free upgrade to 200 Mbps service, but are expected to sometime over the summer.

Gigabit pricing varies, depending on market, with new Spectrum customers paying $104.99/month for the first year. If you already subscribe to Spectrum service, the rate is $114.99 for Spectrum TV customers and $124.99 a month for non-Spectrum TV customers. There is also a mandatory $199 installation fee which cannot be waived.

This company-supplied video celebrates the arrival of gigabit internet for more than four million additional Spectrum customers. (1:10)

Spending priorities: mergers & acquisitions, not upgrades.

Since 2012, two of the country’s largest phone companies spent enough money — $281.4 billion — to wire at least three-quarters of the  nation with fiber-to-the-home service and deliver vastly improved rural internet access to the rest of the country. Instead of doing that, AT&T and Verizon used the money to buy their competitors and content creators including AOL and Yahoo.

A 2017 Deloitte Consulting analysis estimates the United States will need between $130 and $150 billion in investment over the next 5–7 years to upgrade at least 75% of homes and businesses to fiber to the home service, with the remaining 25% serviced by technologies including 5G that are capable of delivering broadband speeds greater than the federal minimum standard of 25/3 Mbps.

AT&T could almost deliver the country a major broadband upgrade all by itself, having spent $138 billion on mergers and acquisitions in the past six years. Verizon could have easily handled the entire cost, but instead spent its $143.4 billion on business deals, including $130 billion to buy out former Verizon Wireless partner Vodafone. Among independent phone companies, things look equally bad. Frontier Communications is saddled with so much debt after acquiring former AT&T customers in Connecticut and Verizon customers in more than a dozen states, it has been forced to suspend its shareholder dividend and has been only able to make token investments in network upgrades for its mostly copper wire infrastructure in its original “legacy” service areas and a mixture of copper and fiber in acquired service areas. Both CenturyLink and Windstream have refocused many of their business activities on the commercial services marketplace, including the sale of hosting, business IT services, and cloud server networks.

More recently, both AT&T and Verizon have raced into content company acquisitions, buying up AOL, Yahoo, and Time Warner to offer their respective customers additional content. The phone companies are diversifying their business interests away from simply offering phone lines and internet access. At the same time, many of these acquisitions are depleting resources that could be spent on critical network upgrades.

The article in Light Reading claims the telecom industry’s traditional financial model of borrowing money to build networks and upgrade others is broken, because telecom companies now prefer to spend money acquiring other companies instead. Although AT&T has, in recent years, been more aggressive than Verizon in deploying fiber to home service, both companies have resisted committing large amounts of capital to a territory-wide fiber buildout, preferring to spend smaller sums to incrementally upgrade their networks in selected areas over the next decade. But the merger and acquisition teams at both companies are far less cautious, given the go ahead to pay handsomely for companies that often have little to do with providing telephone or internet service.

Light Reading reports AT&T’s debt climbed from $59 billion in 2010 to $126 billion at the end of 2017. Verizon’s debt increased from $45 billion to $114 billion. But those acquisitions have done little to attract new customers. Both companies’ operating cash flows have barely budged — $39 billion annually at AT&T (up from $35 billion) and Verizon’s actually declined from $33 billion in 2010 to $25 billion in 2017.

Mergers and Acquisitions (2011-2018)

AT&T

• 2012: AT&T buys $1.93 billion worth of spectrum from Qualcomm.
• 2013: AT&T buys Leap Wireless (Cricket) for $1.2 billion.
• 2014: AT&T pays $49 billion for the DirectTV, issuing $17.5 billion in debt in April.
• 2015: AT&T buys out assets from bankrupt Mexican wireless business of NII Holdings for around $1.875 billion.
• 2018: AT&T pays $207 million to acquire FiberTower.
• 2018: AT&T is cleared to merge with Time Warner in a deal valued at more than $84 billion.

Verizon

• 2011: Verizon acquires Terremark for $1.4 billion.
• 2014: Verizon buys out Vodafone’s 45 percent stake in Verizon Wireless, valued at $130 billion, with a mixture of stock and debt.
• 2015: Verizon buys AOL for a deal valued around $4.4 billion.
• 2017: Verizon acquires Yahoo Internet assets for $4.5 billion.
• 2017: Verizon buys spectrum holder Straight Path Communications for $3.1 billion roughly double rival AT&T’s offer, to build up 5G spectrum and footprint.

The more debt (and debt payments) that pile up at the two companies, the less money will be available to spend on fiber upgrades. In fact, there is evidence these companies are hoping to further cut costs in their core landline network operations. Some regulators have noticed. Verizon was forced to make a deal with New York regulators requiring the company to spend millions replacing failing copper-based facilities and upgrade them to fiber and remove or replace tens of thousands of deteriorated utility poles. Verizon faced similar action in Pennsylvania.

AT&T has spent millions lobbying the federal government to permanently decommission rural America’s landline network and replace it with a wireless alternative, while also working to replace the current regulated telephone network with deregulated alternatives like internet and Voice over IP phone service.

Wall Street analysts have occasionally questioned or at least expressed surprise over some of the phone companies’ odd acquisitions:

• Verizon acquired Terremark to beef up its cloud-based and server-hosting businesses. But shortly after acquiring the company, Verizon began replacing top management, sometimes repeatedly, and ultimately divested itself of its data center portfolio, including Terremark, just five years later. Find uk reseller hosting services at netnerd.com.
• AT&T bought DirecTV to help it reduce wholesale TV programming expenses for its U-verse TV subscribers. But DirecTV has lost more than one million satellite TV customers since AT&T acquired it in 2014, despite new marketing efforts to convince would-be U-verse TV customers to choose DirecTV instead.
• Verizon saw value in web brands that were major players more than 18 years ago but are mostly afterthoughts today. The company spent almost $9 billion to acquire Yahoo and AOL, and their low quality content portfolios, which rely heavily on clickbait headlines, advertiser-sponsored content, and articles designed to maximize mouse clicks to boost the number of ads you see.

“The telcos are trying to diversify into content when they should instead be focused on their core business — building networks and charging for value-added technology,” said Scott Raynovich, founder and principal analyst at Futuriom. “It’s clear they see content as part of the value-add but customers so far don’t seem to be reacting that way. It’s clear they are allergic to paying higher prices for bundled content.”

AT&T and Verizon’s customers are not clamoring for more content deals. When surveyed, most want better internet service at more affordable prices.

Sprint debuted its new $15/month Unlimited Kickstart plan on June 7th, and will stop taking new orders for it tomorrow evening, making it one of Sprint’s shortest-lived plans ever.

The plan, intended to steal customers from competitors, offers those bringing a qualified device (or buying one) the opportunity of paying just $15 a month for unlimited talk, texting, and data, with some caveats:

• Video streams are throttled to support up to 480p, music streams are limited to 500 kbps, and gaming streams don’t exceed 2 Mbps.
• Customers on this plan are subject to speed throttles, known at Sprint as “data deprioritization” when towers are congested, regardless of usage.
• Customers must enroll and maintain autopay.
• Requires customers to sign up for a new line, port an existing number, and either bring your own device or buy one from Sprint.

Unlimited Kickstart gives Sprint a chance to report a big boost in new customer signups during its next quarterly report to Wall Street. But the company claims the plan also allows customers of other carriers the opportunity of sampling Sprint’s upgraded network, or return to Sprint as an ex-customer to see how the network has improved. There are no contracts, and the offer also extends to other family members — each line up to four will cost just $15/month.

Sprint will attempt to upsell customers to its Unlimited Freedom plan, which offers more features at a higher price.

“At Sprint, we’ve worked incredibly hard to improve our network,” the company claimed in a press release. “In fact, Sprint’s national average download speed increased 34.5 percent year-over-year, more than any other national carrier. Plus, we’ve increased our investment to make our coverage, reliability and speed even better as Sprint prepares to launch the first mobile 5G network in the U.S. in the first half of 2019.”

The company claims interest in the offer is extremely heavy, but the press release announcing it also mentioned an expiration date for enrollees of Friday night (June 15) at 11:59pm EDT, which means time is running out. Customers have to sign up for the offer online, which isn’t particularly intuitive. A Live Chat button is located on the web page which may offer some help to those trying to enroll. If you own a qualified phone already, or acquire a new one, you will need to acquire a Sprint SIM card to activate the plan no later than June 22, 2018.

Comcast has quietly dropped its internet congestion management system, designed to slow down its heaviest users, claiming it has gone unused for more than a year and was no longer needed.

Originally spotted by readers of DSL Reports, the announcement referenced the system that replaced Comcast’s speed throttle that intentionally degraded peer-to-peer network traffic after Comcast claimed it was unfairly impacting its other customers:

As reflected in a June 11, 2018 update to our XFINITY Internet Broadband Disclosures, the congestion management system that was initially deployed in 2008 has been deactivated. As our network technologies and usage of the network continue to evolve, we reserve the right to implement a new congestion management system if necessary in the performance of reasonable network management and in order to maintain a good broadband Internet access service experience for our customers, and will provide updates here as well as other locations if a new system is implemented.

Comcast’s “protocol-agnostic” network management technology, designed by Sandvine and introduced in 2008, measured customer traffic and singled out heavy users for speed reductions when Comcast’s network was saturated with traffic. Customers were unaware if they were deemed heavy users or if their traffic was targeted for temporary speed reductions. Comcast relied on the technology, along with the introduction of a 250 GB nationwide data cap, to control network traffic and stall the need for expensive node-split upgrades.

Comcast claims the introduction of DOCSIS 3.0 (starting in late 2008) and DOCSIS 3.1 (2017) gradually eliminated the need to maintain the congestion management system, because channel bonding vastly expanded available internet bandwidth. What remains in place in most Comcast service areas is Comcast’s controversial 1 TB usage cap. The company initially claimed its data caps were part of a network traffic management strategy, but more recently the company claims it collects more from heavy users to compensate for its broadband investments.

AT&T quietly changed their home internet plans this week, dramatically boosting speeds for some of their lower-priced offerings in areas served by fiber, while boosting gigabit pricing by $10 a month in some instances.

Last week, AT&T was selling 5, 50, 100, and 1000 Mbps plans in AT&T Fiber areas. This week, customers can choose 5, 100, 300, or 1000 Mbps. Existing customers will likely have to switch plans to get the speed upgrades.

Prices shown reflect a bundled discount in the Chicago area. Prices vary in different service areas and are higher for broadband-only service. Basic 5 Mbps pricing can range from $30-60 a month depending on area and available discounts.

If you are a new AT&T customer, the company is offering a $50 Reward Card rebate (expires 7/31/2018) and a free Smart Wi-Fi Extender (new or existing customers switching to gigabit service only) (expires 6/28/2018). Here are some other important terms and conditions to be aware of:

• There is a 1 TB data cap on all plans except Gigabit Internet 1,000, which is unlimited. But you can avoid the cap for $30 extra a month (not worth it) or by maintaining a bundle of TV and internet service on a combined bill.
• All internet offers require a 12 month agreement ($180 pro-rated early termination fee applies).
• Prices reflect bundled service combining internet with at least one other AT&T product (TV/AT&T Phone/Wireless).