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Charter, Comcast Start Competing in Each Other’s Territories… But Only For Big Business Accounts

Comcast and Charter Communications have begun to compete outside of their respective cable footprints, potentially competing directly head to head for your business, but only if you are a super-sized corporate client.

Comcast Business has targeted selling large Fortune 1000 companies internet service through contractual partnerships with Charter, Cox, and Cablevision/Altice USA for a few years now. The cable giant recently entered the Canadian market, at least for U.S.-based companies that have satellite offices north of the border. Comcast now directly competes with other cable operators selling enterprise-level broadband service, whether the customer is inside Comcast’s footprint or not, but will not offer a similar service to consumers looking for better options.

The cable industry’s longstanding de facto agreement not to compete head to head for customers will probably remain intact even as Charter this week unveils its own national broadband service called Spectrum Total Connect. It will be available across the country, offering customers up to 940 Mbps broadband service at a highly competitive price, but only if you are running a large business and have an account with Spectrum Business National Accounts, which provides connectivity for large business franchises, national retailers, and companies utilizing a large network of telecommuters scattered around the country. Consumers need not apply here either.

Charter has refused to say who it has partnered with to provide the service, but it is likely a reciprocal agreement with Comcast and other cable companies it already works with to provide enterprise-level service. The new service will be rolled out in the next several weeks.

Cable companies have been successful selling connectivity products to small and medium-sized businesses, but large national companies have traditionally relied on phone companies to provide them with total connectivity packages that can reach all of their locations. Until Comcast began selling service outside of its footprint, cable companies have had to turn down business opportunities outside of their respective service areas. But now Comcast and Charter can reach well beyond their local cable systems to satisfy the needs of corporate clients.

But neither company wants to end their comfortable fiefdoms in the residential marketplace by competing head to head for customers. Companies claim it would not be profitable to install redundant, competing networks, even though independent fiber to the home overbuilders have been doing so in several cities for years. It seems more likely cable operators are deeply concerned about threatening their traditional business model supplying services that face little competition. In the early years, that was cable television. Today it is broadband. Large swaths of the country remain underserved by telephone companies that have decided upgrading their deteriorating copper wire networks to supply residential fiber broadband service is not worth the investment, leaving most internet connectivity in the hands of a single local cable operator. Most cable companies have taken full advantage of this de facto monopoly by regularly raising prices despite the fact that the costs associated with providing internet service have been declining for years.

Cherry-picking lucrative commercial customers while leaving ordinary consumers mired in a monopoly is more evidence that the U.S. broadband marketplace is broken and under regulated. Competition is the best solution to raising speeds while reducing prices — competition regulators should insist on wherever possible.

Verizon Puts 5G Wireless Home Broadband Expansion on Hold Until Late 2020

Dunne

Verizon will hold off on expanding its millimeter wave 5G wireless home broadband service until at least the second half of 2020, citing equipment availability issues.

Ronan Dunne, executive vice president and group CEO of Verizon’s Consumer Division, told attendees at a Citi investor’s conference that Verizon’s initial introduction of Home 5G was just a market test, and until newer high-powered wireless routers arrive that will be capable of more robust reception of the very high frequencies the service works on, Verizon will not expand the service further.

Dunne called the next generation of 5G home receivers “key” to Verizon’s wireless home broadband strategy. Dunne said the new equipment will let consumers receive more distant and weaker 5G wireless signals, allowing Verizon to expand coverage of the service to more households. The current generation of 5G receivers were designed for use in smartphones, which hampers in-home reception quality.

Verizon initially promised to serve about one-quarter of the United States with its wireless home broadband service, eventually capable of supplying 500/200 Mbps and more to subscribers. But Verizon’s goal to reach over 30 million households will take the company as long as seven years to reach.

Dunne also warned Verizon is prioritizing 5G coverage in urban commercial areas instead of suburban, rural, and residential neighborhoods. Verizon’s core 5G network will target dense urban areas, including commercial shopping, business, and entertainment venues like concert halls and sports stadiums where the company measures the highest traffic demand it hopes to satisfy with 5G. Verizon’s home 5G broadband service piggybacks on Verizon’s 5G mobile network, which means it will only be available in neighborhoods where Verizon has deployed its network of small cells.

“It’s very much a mobility strategy, with a secondary product of Home [5G], rather than us changing our overarching mobility deployment to try to accelerate Home at the expense of the overall 130 million customer base,” Dunne explained.

Verizon hopes to offer customers 5G-capable mobile phones for as little as $600 in the coming year and getting widespread adoption of 5G by Verizon customers is a long-term goal for Dunne. He added that once 5G becomes more widely available, Verizon and other wireless companies will consider shutting down Wi-Fi hotspots in favor of 5G.

“In a world of 5G millimeter wave deployments, we don’t see the need for Wi-Fi in the future, because we have a more secure network environment,” Dunne said. “Our view is that when fully deployed there are substantial environments where public Wi-Fi will be eliminated in favor of millimeter wave.”

Sprint Admits Its Network Not Fit for Purpose, Struggles to Keep Up With Competitors

NEW YORK (Reuters) – Executives from Sprint Corp testified on Monday that the U.S. wireless carrier has struggled to improve its network, hindering its growth and underscoring the need to merge with larger rival T-Mobile US Inc.

U.S. state attorneys general, led by New York and California, are suing to stop the merger.

The states seek to prove in Manhattan federal court that the deal between the No. 3 and No. 4 wireless carriers would raise prices, particularly for users on prepaid plans. The state attorneys general, all Democrats, asked Judge Victor Marrero to order the companies to abandon the deal.

Sprint Chief Marketing Officer Roger Solé testified that the company’s strategy for enticing customers from competitors included slashing prices.

But he said the promotion’s “early success faded away pretty soon” due to customers having a negative experience with Sprint’s network quality.

In an effort to show how competition lowered prices, the states presented evidence that when Sprint introduced an aggressive promotion in 2016 to offer phone plans comparable to those of Verizon, AT&T and T-Mobile, T-Mobile’s MetroPCS prepaid brand immediately lowered prices on its plans.

The evidence is central to the states’ argument that Sprint and T-Mobile as standalone companies force competition between carriers, providing the best deal for consumers.

Solé

Solé

Lawyers for the states also presented evidence suggesting Sprint wanted a deal so more money could be earned from each customer.

In WhatsApp messages from 2017 between Solé and Marcelo Claure, who was then CEO of Sprint, Solé suggested a merger with T-Mobile could raise Sprint’s average revenue per user by $5.

In his deposition before the trial, Solé said he was simply offering a thought that price increases could happen “very far down the road.”

The companies argue that the stronger T-Mobile that would result from the proposed $26.5 billion takeover would be better able to innovate and compete to reduce wireless prices. The case represents a break with the usual process of states coordinating with the federal government in reviewing mergers and generally coming to a joint conclusion.

The deal had been contemplated in 2014 during the Obama administration, but the Justice Department and Federal Communications Commission urged the companies to drop it, which they did.

The Trump administration signed off on it after the companies agreed to sell Sprint’s prepaid businesses, popular with people with poor credit, to satellite television company Dish Network Corp.

But setting up DISH as a wireless carrier is “patently insufficient to mitigate the merger’s competitive harm,” the states argued in a court filing.

Deutsche Telekom CEO Timotheus Höttges, whose company is the largest shareholder of T-Mobile, will testify on Tuesday.

Reporting by Diane Bartz and Sheila Dang; Additional reporting by Brendan Pierson; Editing by Daniel Wallis, Nick Zieminski and Dan Grebler

China Well Ahead of U.S. in Fiber Deployment; Lack of U.S. Competition Responsible for Lag

China is outpacing the U.S. in fiber broadband expansion. (Image: Broadband Now)

At least 86% of China now has access to fiber broadband connectivity after six years of aggressive fiber optic network expansion, putting the United States at a significant disadvantage.

Only 25% of the United States is served by fiber service, creating a giant digital divide that leaves most Americans without fiber high speed broadband. That is the finding of Broadband Now, which summarized the results of its investigation in an article published this week, blaming the country’s reliance on deregulated monopoly/duopoly telecom companies for much of the problem.

“While America continues to suffer from an immense digital divide, China’s government has made incredible progress building out a state-sponsored super network of fiber optic connections. This infrastructure will allow the country to take early advantage of some of the most impactful applications resulting from the fourth industrial revolution,” Broadband Now reports.

Chinese state policy has emphasized the importance of deploying modern telecommunications networks, including fiber-to-the-home and 5G wireless service. The Chinese central government is spending billions to build a core public broadband network, which providers can lease to offer service to their customers. U.S. providers rely on private investment that depends on a financial formula to determine if fiber upgrades will deliver a competitive advantage or a potential for robust profits.

Broadband Now notes that most U.S. providers face little significant competition — “a difficult proposition to justify installing robust fiber networks, especially in less populous areas of the U.S.”

The “return on investment” formula is also responsible for the lack of rural broadband access, a problem the Chinese government solved by directly subsidizing the construction of fiber networks across the country, deeming high speed connectivity a national priority. As a result, 96% of rural Chinese villages now have access to fast internet service.

Broadband Now advocates for more aggressive fiber broadband deployment in the United States, including policies that promote fiber expansion and reduce deployment costs. For example, Broadband Now believes that a national “dig once” policy that would require fiber optic conduit to be installed wherever roadway projects are undertaken could allow providers quick and inexpensive access to deploy fiber technology. The group estimates that nationwide fiber expansion costs could be reduced from $140 billion to $14 billion if dig once policies were the national standard.

Chinese fiber deployment has already laid a foundation for China to outpace the United States in the race to deploy 5G wireless networks. Fiber connections are required to power gigabit speed small cells integral to millimeter wave 5G services. With China well ahead of the U.S. in fiber deployment, the country is poised to rapidly expand 5G wireless service.

Hulu + Live TV Hiking Rates $10/Mo; Most Customers Will Pay $55 a Month for Live TV Streaming

Phillip Dampier November 18, 2019 Competition, Consumer News, Hulu, Online Video 1 Comment

Hulu + Live TV is celebrating its successful signup of over an estimated 2.7 million customers with a major rate increase the company says reflects the service’s true value in the marketplace.

Most customers will see their subscription price increase by $10 a month, from $45 to $55 a month.

“Today, we’re letting customers know that the monthly base price of Hulu + Live TV will increase to $54.99, beginning December 18,” the company wrote in a blog post. “The new price better reflects the substantial value of Hulu + Live TV and allows us to continue offering all of the popular live news, sports and entertainment programming included in the plan.”

Craig Moffett, a chief analyst at MoffettNathanson, told readers of his Cord Cutting Monitor quarterly newsletter that Hulu + Live TV, which combines Hulu’s on demand plan with a selection of about 60 streaming live TV networks, is likely America’s largest cable TV replacement service, topping Sling TV’s estimated 2.686 million customers.

Moffett also reported that cord cutting is becoming a more costly proposition.

“Eighteen months ago, the cheapest video packages for vMVPDs were clustered around $30 to $35 per month,” Moffett wrote. “Eighteen months later, most are in the $45 to $50 per month range, an increase of roughly 50%.”

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