Cable ONE today announced it has acquired family owned cable operator Fidelity Communications, in a $525.9 million cash deal.

Fidelity serves 134,000 residential and business customers in smaller communities in Arkansas, Louisiana, Missouri, Oklahoma, and Texas. Cable ONE showed interest in Fidelity because many of its small cable systems are not too far away from existing Cable ONE systems that also target smaller communities.

Fidelity systems typically sell broadband at speeds of 50 Mbps ($64.99) and 100 Mbps ($89.99).

Fidelity does not usage cap its customers, Cable ONE does.

Cable ONE has also been criticized for charging the highest price residential broadband service in the country.

Fidelity currently serves customers in:

Arkansas
Alexander
Bauxite
Beebe
Benton
Bryant
Cherokee Village
Hardy
Haskell
Hensley
Highland
Little Rock
Mabelvale
Mammoth Springs
Maumelle
North Little Rock
Pulaski
Shannon Hills

Louisiana
Erwinville
Glynn
Jarreau
Lakeland
Morganza
New Roads
Oscar
Rougon
Ventress

Missouri
Adrian
Buffalo
El Dorado Springs
Gerald
Harrisonville
Lebanon
Nevada
New Haven
Owensville
Rolla
Salem
Sullivan
Thayer
West Plains

Oklahoma
Lawton

Texas
Atlanta
Carthage
Hallsville
Jefferson
Marshall
Queen City

Discovery has announced an exclusive agreement with BBC’s Natural History Unit that will open up decades of natural history and wildlife programming for on-demand viewing on Discovery’s forthcoming subscription streaming platform, planned for a 2020 launch.

“This is our largest-ever content sales deal,” said Tony Hall, BBC director general. “Global subscribers are in for a real treat — the best content on a great new platform.”

The BBC Natural History Unit is the world’s largest producer of radio, television, and online content dealing exclusively with natural history and wildlife programming. Launched in 1957, the department produces around 100 hours of television and 50 hours of radio programs annually. Some of that programming comes from well-known naturist Sir David Attenborough, himself responsible for hundreds of hours of award-winning BBC nature documentaries.

A limited amount of programming produced by the unit is already available on other platforms, like Netflix, usually branded as BBC Earth. But only a limited catalog of content is on offer, typically licensed for streaming for one year. The new agreement between Discovery and BBC will make Discovery’s forthcoming subscription video service the exclusive streaming home of all BBC nature and wildlife programs, except in the United Kingdom, Ireland, and China. More importantly, Discovery can make the full BBC catalog of nature programming available for viewing.

Discovery’s plans for its subscription streaming platform have quickly evolved since first announced last year. The original plan was to offer a $5-8/mo service showcasing programming from over 30 networks already operated or owned by Discovery worldwide. The well-known cable network announced its plans for a streaming service after completing its $14.6 billion acquisition of Scripps Networks Interactive in 2017. The acquisition allows Discovery to blend its own nature and history programs with lifestyle content from Scripps’ networks like HGTV, Food Network, and DIY.

Now, Discovery is planning several different tiers of its streaming service, each offering subscribers a very deep catalog of non-expiring content. The BBC Natural History programming add-on is expected to cost under $5 a month. Other planned add-ons may feature a rich catalog of educational videos for do-it-yourself home projects, a video cooking school, and others to teach people sports like golf or tennis.

Discovery CEO David Zaslav sees the opportunity for Discovery to launch the “Peloton of food,” a reference to the stationary bike manufacturer that also sells exercise routine subscriptions to owners. In such a scenario, a celebrity chef like Bobby Flay could host hundreds of hours of cooking content, teaching subscribers how to cook everything from a turkey to a complete cajun-style meal.

Discovery has already put its wheels in motion, launching streaming services with sports programming including cycling and golf which may feature products such as the SkyTrak+.

Zaslav envisions the future of Discovery’s streaming service to be the Netflix of factual content programming. He noted most of the huge entertainment companies are clashing head to head by competing with scripted entertainment programming. Discovery will differentiate itself with documentaries, education, sports, and nature specials.

“The scripted movie packagers are big boats, and they’re banging into each other,” Zaslav said. “They’re fighting over who can be the widest and who can be the fastest. Right now, we have some great lanes.”

Zaslav admits Discovery’s earlier forays into streaming, including its participation in TV Everywhere — offering a limited number of shows for streaming to authenticated cable or satellite subscribers — has not been very successful. Contract restrictions often limited how long series can remain available for viewing, and the catalog of options was never particularly deep. With the new ad-free streaming platform, Discovery envisions releasing a massive menu of content, frequently updated with new shows from its own production unit and its partners. Most of Discovery’s own programming was produced for its cable networks, but nothing stops Discovery from creating content specifically for its streaming platform. Discovery’s new agreements should also allow it to keep content available indefinitely.

Discovery plans on spending hundreds of millions of dollars to develop and market its new services. It will face the challenge of convincing customers that subscribing to yet another streaming service is worthwhile. A 2018 survey from Magid Research found consumers were willing to spend up to $38 a month on a combination of streaming services like Netflix, Hulu, and Amazon Prime Video. Discovery hopes to launch its new platform in time to grab subscribers before new competitors from Disney, WarnerMedia, and Apple take hold and possibly tap out would be customers.

The deal with the BBC is part of a larger transaction between the two programmers over their European networks. The BBC is spending $225 million and assuming $90 million in debt to acquire Discovery’s share of several UKTV networks, including Alibi, Dave, Drama, Eden, Gold, W, and Yesterday. In turn, Discovery assumes full control of lifestyle channels Home, Good Food, and Really.

The road to 5G wireless home broadband is paved with good intentions and a lot of hype, but at least one Wall Street analyst hints Verizon’s millimeter wave 5G project may be a bad idea, unable to achieve a proper return on investment and potentially a worse performer than originally thought.

Craig Moffett, a key analyst at MoffettNathanson, has analyzed and commented on the telecommunications industry at least as far back as the 1990s. He slammed cable operators for overpriced upgrades in the 1990s, talked down AT&T’s U-verse project, and spent years telling the media and investors that Verizon FiOS — a fiber to the home project, was an expensive failure.

Moffett’s latest research examines Verizon’s six-month old 5G millimeter wave wireless network in Sacramento, Calif., which relies on a large number of small cells to provide a $50 wireless home broadband replacement. But after taking a closer look at the technology, its performance, and costs, Moffett has warned investors Verizon has a “steep climb” to convince Wall Street it can attract enough revenue from paying customers to justify the tens of billions in new spending required to roll out small cell technology across the country.

How does Moffett know this and can his views derail or alter Verizon’s long-term plans for millimeter wave 5G? The answer is clearly “maybe.”

In this series, we will look at how Wall Street’s view of the telecom industry is often focused on short term profits at the expense of long term growth and customer satisfaction.

The telecom industry analyst presents detailed analyses tracking industry developments, mergers and acquisitions, technology shifts, competition, regulation, expenses, and shifting consumer behavior into reports for investment banks, institutional investors, or in some cases individual investors looking for both hard numbers and perspective on what is going on in the industry.

The metrics analysts use to describe success or failure are typically different from what customers use, and many analysts don’t spend much time focused on technical trivia, public policy goals, and ways of overcoming problems for which there are no obvious market solutions, such as rural community broadband. Some analysts are particularly friendly and non-confrontational with executives, who know and recognize them by their first name, while others are more willing to challenge company press releases and policies and can eventually develop an adversarial relationship with at least some of the companies they cover. The analyst’s reputation for getting the correct analyses to clients means everything. Good research and advice does not come cheap, and subscription fees can be breathtakingly high. Many Wall Street analysts also make frequent appearances in the media, often on business cable news channels and newspapers.

Moffett is one of the most frequently-quoted telecom analysts, known for his favorable coverage of the cable industry and skepticism towards telephone companies attempting to reinvent themselves. He has advocated for the adoption of usage caps and usage-based billing to further monetize broadband, but has not been as aggressive as others, such as Jonathan Chaplin, a Wall Street analyst with New Street Research, who has frequently called on the cable industry to aggressively raise broadband prices to $90 a month or more. Moffett, in contrast, worried last year that Cable One, an operator specializing in serving small and medium sized cities, was pricing its service far too high, driving off potential customers.

Cable’s Hybrid Fiber/Coax vs. Telco’s Copper: Dueling Legacy Technologies Confront a Fiber and Wireless Future

Most of the nation’s cable television systems were built in the 1970s and 1980s and were primarily dependent on copper-based coaxial cable. By the 1990s, many cable operators embarked on system wide “rebuilds” to prepare for the era of digital cable television. It was during this decade that most cable systems moved beyond 50-70 analog TV channels and also began offering new services, including home phone, broadband, home security, and large on-demand video libraries. To support these new services and to increase the reliability of cable systems, operators began replacing some of the coaxial cable in their networks with more reliable fiber optics. Investments in these upgrades were significant, but to the cable industry not extravagant. A loud chorus from Wall Street disagreed, complaining cable systems were overspending on upgrades. Moffett, an analyst for Sanford Bernstein at the time, complained the cable industry collectively wasted $100 billion on network upgrades.

But like many Wall Street analysts who complain about almost any significant investment or spending, once a company has gone ahead and spent the money, analysts start looking at how those companies are monetizing those upgrades to recover the investment, boost revenue, and maximize shareholder value. Moffett flipped on a dime from being a critic of cable’s spending to commenting on how well the cable industry was now positioned to lead the telecom industry.

“Cable built a plant that was more expensive than they ever should have built,” Moffett told the New York Times in 2008. “But now that the cable companies have spent that money, their network is in place to deliver phone service more cheaply than any other alternative.”

The cable industry’s hybrid fiber-coax (HFC) systems upgraded in the 1990s are still partly in wide use today. Cable operators are using incremental technology upgrades to squeeze more performance out of these systems, notably by retiring space-hogging analog cable television in favor of digital. That analog to digital video conversion, along with regular updates to the cable broadband technical standard, known as DOCSIS, has allowed most cable operators to claim they do not need to upgrade to an all fiber network to support the services offered today, which includes hundreds of TV channels and gigabit speed downloads. Altice USA, which operates Cablevision in suburban New York City, is among a few operators claiming it was time to discard HFC technology in favor of fiber to the home (FTTH) service. Altice argues fiber further increases available bandwidth and is much more reliable, reducing costs. So far, other major operators like Comcast, Charter, and Cox are still taking a more incremental approach towards fiber, in part to keep costs down.

The upgrade spending that Wall Street complained about in the 1990s ultimately paid off handsomely for the cable industry. Moffett himself only occasionally criticizes cable operators these days, preferring to target most of his negative coverage on phone companies. In fact, in an interview in 2008, Moffett called effectively called phone companies obsolete.

“In 1996, as soon as you saw that the technology existed for a cable network with vastly higher capacity and vastly lower margin cost to be able to do voice calls over the same network, you would have said the end game is obvious: Cable will win and the telcos will go into bankruptcy. The only question is how long it will take,” Moffett said.

The phone companies, having no interest in voluntarily sacrificing themselves in bankruptcy court, have moved to meet the cable industry’s challenge by upgrading their own networks to compete, something Moffett is not a big fan of either. Back in 2008, he gave top marks to Qwest, the orphaned Baby Bell serving the sparsely populated Pacific Northwest that would later be bought by CenturyLink. Lacking its own mobile business, or a large amount of capital for upgrades, Moffett praised Qwest for making the right decision (according to him) in the cable vs. phone wars of the early 2000s: “do nothing.”

That advice was simply not acceptable to the top executives at two of the biggest phone companies in the country. Both rejected Moffett’s philosophy of living with the technology they had instead of putting investors through the agony of spending money to completely overhaul the existing copper wire phone network. For Moffett, that was throwing good money after bad, and it was too late to try.

“It is an obsolete technology,” Moffett said. “It’s not like horses lost share of the transportation market until they stabilized at 40 percent market share.”

Phone Company Fiber Optic Upgrades = ‘Shareholder Value Destruction’

Large phone companies saw the same writing on the wall about landline telephone service Moffett did back in the 1990s. Their emerging wireless mobile businesses were cannibalizing in-home landlines and the introduction of the cable industry’s “digital phone” Voice over IP product, often bundled with a range of calling features and a nationwide long distance plan, quickly began eroding the revenue phone companies earned from per-call charges, calling features like Caller ID, and long distance revenue.

AT&T and Verizon had a problem. Telephone networks were designed and built to handle voice-grade phone calls, not broadband or television. Repurposing the traditional landline to support a popular package of phone, internet, and television service was complex and costly. DSL had already emerged as the phone company’s best effort to compete with cable broadband over the traditional copper phone wire network. Phone companies experimented with competing television service, sending one channel at a time down a customer’s phone line. When a customer changed channels, one streaming channel stopped and another began. It did not always prove to be very reliable or dependable, because performance degraded significantly the farther the customer lived from the phone company’s switching office. Something better was needed, and it was going to cost billions.

The 1992 Cable Act, which guaranteed competing video providers could offer popular cable networks on fair and competitive terms, was crucial to laying the groundwork for a reimagined local phone company. Telephone company executives began approaching state and local officials with proposals to replace existing phone networks with newer fiber technology that could support voice and video, giving local cable monopolies long-awaited competition. The sticking point was money. Some large phone companies sought regulator approval to raise telephone rates to create a fiber fund that would be used to cover some of the costs of scrapping copper wire networks and replace them with fiber optics. The cable industry understood the threat and immediately launched a fierce lobbying campaign to block attempts to bill captive phone ratepayers for the cost of fiber upgrades. The phone companies were largely unsuccessful winning approval to cross-subsidize their fiber future, but some companies did make deals with state regulators to approve rate increases with the promise the extra revenue would fund future fiber upgrades.

Critics contend AT&T and Verizon’s wireless mobile networks ended up the biggest beneficiaries of the revenue raked in from rate increases, with some accusing companies like Verizon of shifting money away from landline service to help pay for the construction of their growing wireless businesses. With billions spent on cell tower construction and network buildout costs, there was not much money left for fiber to the home upgrades. The cost to wire each home for fiber was also a concern, as were regulatory requirements surrounding universal service, which meant phone companies might have to serve any customer seeking service, while cable companies were allowed to skip serving rural America altogether.

It would take until 2004 for phone companies to begin major upgrades. At the same time, deregulation was once again stirring up the marketplace, triggering a gradual re-consolidation of the old Bell System, coalescing primarily around AT&T (SBC, Ameritech, BellSouth, and Pacific Telesis) and Verizon (Bell Atlantic, NYNEX, independent telephone company GTE, and former long distance carrier MCI). Both AT&T and Verizon were exploring fiber upgrades.

AT&T U-verse vs. Verizon FiOS – Wall Street Not Impressed Either Way

Project Lightspeed was developed by SBC in 2004 and later renamed AT&T U-verse in time for its commercial launch in 2006. AT&T chose a fiber to the neighborhood approach, leaving intact existing copper phone wiring already in place in neighborhoods and homes. U-verse was capable (at the time) of delivering just over 20 Mbps internet service while customers also watched TV,  and/or made a phone call. The advantage of U-verse was that it was cheaper to deploy across AT&T’s more sprawling local telephone territories than fiber all the way to each customer’s home.

Verizon, which serves a number of densely populated cities in the northeast and mid-Atlantic region, believed a fiber to the home upgrade would future proof their network and deliver better, more reliable service than U-verse. Verizon FiOS launched in September 2005 and completely did away with existing copper phone wiring in favor of optical cable. Verizon argued that although it was more expensive, a complete fiber upgrade would cost the company less over time, and was essentially infinitely upgradable as customer needs changed. Verizon also argued that with scale, the cost of wiring each home or business would fall, making the technology more cost-effective. Verizon launched its FiOS business with great fanfare among customers, some who bought homes specifically because they were located in a FiOS service area.

As with the cable industry’s rebuilding (and spending) wave of the 1990s, many on Wall Street were unhappy with both AT&T and Verizon. Moffett’s calculations were based on the premise that projects like this have 15 years not only to pay back investors in full, but also generate shareholder value from increased revenue. If the costs are not covered in full and then some, it is deemed a failure and value destructive. What customers want is only a tiny part of the means test Wall Street analysts use to determine if a project is good news or bad news:

Good News

• The provider successfully raises prices and accelerates payoff of outstanding debt.
• A project attracts new customers and prompts current customers to upgrade, generating more revenue.
• An upgrade can be expensed in a way that results in extra tax savings.
• Customer churn drops, as a more satisfied customer remains a customer.
• An upgrade offers new revenue opportunities not available before.

Bad News

• A project causes a surprise increase in capital expenses, especially if those costs are higher than anticipated.
• An upgrade results in increased competition, or worse, a price war that forces providers to cut prices.
• The project cannot be paid off within ~15 years. Short term results matter. Long term results only matter to future investors.
• An upgrade forces competitors to also undertake upgrades.
• A provider is forced to choose between share buybacks and dividend payouts and spending money on upgrades and chooses the latter. Shareholders matter more.

Moffett’s 2008 calculations argued that Verizon would lose $769 on each FiOS customer signing up for service. AT&T U-verse would come close to breaking even, but not generate much in the way of profit for AT&T. After determining that, he was a frequent and vocal critic of upgrade efforts, particularly in the case of FiOS. Verizon argued his calculations were wrong and that the company was pleased with the progress of its fiber buildout. But Moffett claimed vindication when Verizon shelved future FiOS expansion in 2010, leaving many cities with only a smattering of fiber service — often in a handful of wealthy suburbs and nowhere else.

Verizon clearly changed direction in 2010, but probably not because of Moffett and other critics. Verizon’s CEO at the time came from Verizon Wireless, and his executive team was focused predominantly on the phone company’s wireless unit, which was earning Verizon plenty of revenue. Verizon so valued its wireless business, in 2014 it bought out its partner Vodafone’s 45% interest in Verizon Wireless in a transaction valued at approximately $130 billion. That kind of money would have wired a considerable amount of the United States with fiber to the home service.

Paradox: 2008 – Don’t you dare spend that kind of money / 2013 – That was money well spent

Wall Street analysts, like many investors, like to focus on the short-term picture of the companies they cover. What appears to be really bad news today may not be so bad tomorrow, and as a result their advice often changes with time.

For example, Mr. Moffett spit nails over the cable industry’s “waste” of $100 billion on system rebuilds in the 1990s, but by the late 2000s he was a veritable cable stock promoter. Moffett told the New York Times it was clear cable was emerging on top in the telecom space and its competitors, including satellite and telephone companies, were dead companies walking. Cable’s success would likely not have come without the investments Moffett and other Wall Street analysts howled about.

Among the phone companies, AT&T initially won more respect from investors for not overspending on its U-verse project, which was less costly than FiOS, but also less capable. U-verse avoided the cost of ripping out copper cable from backyards and the sides of homes, but also had limits on broadband speed and the number of concurrent TV channels a customer could watch. As HDTV took hold, those limits became more clear, especially to customers. As a result, U-verse customer satisfaction was not that high. In contrast, Verizon FiOS consistently achieved top position in customer ratings year after year because it delivered more than customers expected and was ready-made for easy expansion and upgrades.

“There was a raging debate a couple of years ago about who got it right, AT&T or Verizon,” Blair Levin, then an analyst with Stifel, Nicolaus & Company, told the Times in 2008. “Initially the investment community thought it was AT&T, but increasingly Verizon got their begrudging respect.”

Even Moffett’s views on FiOS ‘evolved’ over time. In 2013, he sent a research note to his clients admitting his views were more positive about FiOS than before.

“FiOS will sustain subscriber growth longer than either we or Verizon had projected, and that FiOS will ultimately achieve higher penetration rates than either we or Verizon had originally targeted,” Moffett’s team wrote. “Verizon’s FiOS is overwhelmingly the largest and most important FTTH network in the U.S. For comparison, Verizon’s FiOS covers 14% of American homes; Google’s fledgling fiber network, at least based on the three markets that have been disclosed up to now . . . will cover less than ½% to 1% when it is eventually completed.”

Moffett himself predicted in 2008 his views would evolve over time, as would his clients. Those invested in Verizon during FiOS’ buildout years would suffer somewhat from the costs to deploy the fiber optic network. But those who bought shares around 2010 or after consider those expenses “sunk costs” at this point — already spent and dealt with on the balance sheet. The economics change from ‘who is going to pay for all this’ to ‘how is the company going to use this new asset to best monetize its business.’

To be sure, Moffett still frequently recoils when a company reports it is planning on significant and costly upgrades, like Verizon’s millimeter wave 5G network. He is more tolerant of gradual upgrades, like those undertaken by Charter Spectrum to retire analog cable television and upgrade its systems to DOCSIS 3.1 technology, allowing it to sell faster internet speeds.

Moffett and other analysts can present a problem for for-profit, investor-owned companies that are about to launch a disruptive product or service. Verizon’s 5G project is now facing new scrutiny, perhaps as a backlash against the excessive hype these wireless networks are enjoying in the media. The costs to deploy small cell wireless technology across the country will be staggering, and it is not a stretch to suggest some on Wall Street will champion efforts to consolidate costs by building a shared network, recommending a tough return on investment formula to determine where small cell technology will be deployed, or calling for higher prices on services. Companies like Verizon will have to be prepared to defend their business case for 5G, perhaps stronger than they did defending FiOS more than a decade ago.

We’ll explore Moffett’s latest findings about the performance of Verizon’s millimeter wave 5G wireless home broadband replacement in part two.

Craig Moffett was a featured guest on C-SPAN’s ‘The Communicators’ at the 2013 Cable Show, discussing cable’s inherent advantages over telephone companies and the emergence of video cord-cutting as a result of too many rate hikes on customers. (24:39)

Comcast today announced the launch of Xfinity Flex, a $5/month service targeting Comcast’s internet-only customers with a streaming set-top box capable of accessing Comcast-approved apps including Netflix, Amazon Prime Video, HBO, and other services.

Subscribers must have a Comcast-supplied internet connection, no video package, and an xFi Gateway (a cable modem/router combination that costs between $10-13 a month to lease). After the new service becomes available nationwide next week, those enrolling will receive a small set-top box comparable to a Roku capable of streaming 4K HDR video. Comcast also supplies its own voice remote, and bundles access to Comcast’s apps that manage in-home Wi-Fi, mobile, security, and automation services for easy access.

“Xfinity Flex will deepen our relationship with a certain segment of our Internet customers and provide them with real value,” said Matt Strauss, executive vice president of Xfinity Services for Comcast Cable. “For just five dollars a month, we can offer these customers an affordable, flexible, and differentiated platform that includes thousands of free movies and shows for online streaming, an integrated guide for accessing their favorite apps and connected home devices, and the ease of navigating and managing all of it with our voice remote.”

A closer look at the device and the fine print suggests customers may want to carefully evaluate whether Flex offers good value for money. Instead of buying a traditional streaming set-top box like Roku, customers can only lease the Flex box for $5 a month… indefinitely. Comcast is not including any programming with the box, just hardware to access streaming content already available, often for free, on other streaming or desktop platforms. Flex’s search function is supposed to make it easier to find programming across a wide number of services, but you will have to subscribe to each service independently.

Comcast also warns that using Flex will count against your monthly data cap.

Comcast has also carefully designed the box to protect the cable company from any competitive threats. Competing streaming services like DirecTV Now, Sling TV, YouTube TV, Hulu Live, and other services are intentionally blocked, another example of life without net neutrality. The only available path to cable TV programming using Flex is to visit the ‘easy upgrade’ app that will sign you up for Comcast’s X1 cable TV service, presumably the one you cord-cut before you signed up for Flex.

The service is also designed to protect other cable companies from competition from Comcast. Only Comcast internet customers can purchase Flex service, so it is not available to customers of Charter Spectrum, Cox, Altice, or other cable operators.

The $5 subscription fee is also misleading, because you will also have to rent Comcast’s own xFi Gateway, which costs between $10-13 a month, instead of using your own cable modem. That suddenly makes Flex a $15 a month service that essentially just gives you access to a walled garden of the services Comcast approves of for around $180 a year (including the Gateway).

Comcast probably won’t attract a big audience for Flex because of all the restrictions it comes with.

Consider buying a streaming set-top box outright instead of living with Comcast’s restrictions and mandatory gateway fees. Shoppers can find basic Roku devices for purchase under $30, with more capable 4K-compatible devices starting at around $40.

Charter Spectrum denies it offers better deals to customers served by fiber-fast internet competitors than those stuck with the phone company’s slow speed DSL as their only alternative:

Spectrum doesn’t set rates based on one area or the other, or based on what’s available to customers in specific locations, company spokesman Michael Pedelty said.

“We don’t make decisions based on that,” he said.

But Stop the Cap! has repeatedly found that with respect to promotional pricing, offered to entice customers to switch, that is not true.

“It is easy for any customer checking Spectrum’s new customer rates to test this for themselves,” said Stop the Cap!’s Phillip Dampier. “We did (again), and confirmed your street address and the providers that compete for your business make all the difference whether you are going to get a good deal or not.”

That is important because when providers won’t budge on regular prices, your only alternative is to switch. Some customers repeatedly bounce between providers to get a better deal. The savings can be dramatic. A customer with 400 Mbps internet-only service that remains with Spectrum for three years on a good three-year promotion will save more than $3,000 over customers that are offered only a one year promotion from Spectrum because their only other choice was DSL from the phone company.

At Stop the Cap! headquarters in Rochester, N.Y., there is only one choice for broadband service — Charter Spectrum. Frontier Communications, the incumbent phone company, still only offers 3 Mbps DSL at this location, despite it being less than one mile from the Rochester city line. Spectrum does not see low-speed DSL as a competitive threat, because entering our address as a new customer brought forth this blasé offer for internet-only service, good for 12 months:

Across the street from us, the competitive situation is a little different. Neighbors have a choice of three providers — Charter Spectrum, Frontier DSL, or Greenlight’s fiber to the home network. Greenlight changes everything for Spectrum, as this new customer offer across the street illustrates:

Where Google Fiber offers service (or offered, in the case of Louisville, Ky.) in addition to high-speed internet from the phone company, Spectrum’s promotions are even better:

In short, any claim that Spectrum does not target different promotional pricing offers based on the competitive landscape on the ground is provably false. The evidence is right here.

Now let us consider how the cost of no competition will empty your wallet:

• Non-Competitive Pricing – 400 Mbps service with Wi-Fi: $74.99/month for 12 months; $95.99/month for next 24 months ($90.99 internet, $5 Wi-Fi)
• One Competitor Pricing – 400 Mbps service with Wi-Fi: $44.99/month for 24 months; $95.99/month for next 12 months ($90.99 internet, $5 Wi-Fi)
• Two Competitor Pricing – 400 Mbps service with Wi-Fi: $29.99/month for 36 months

Assuming you remained a customer for 36 months, paying regular prices after two of these promotions expired, here is what you would pay in full based on the latest rate card and advertised pricing (mostly the additional $5/mo Wi-Fi fee after a promo expires):

• Non-Competitor Pricing: $4,103.52¹
• One Competitor Pricing: $2,231.64² which delivers a savings of $1,871.88 over three years because of presence of one serious competitor.
• Two Competitor Pricing: $1,079.64³ which delivers a savings of $3,023.88 over three years because of the presence of Google Fiber and one other serious competitor.

¹$74.99 x 12 = $899.88; $95.99 x 24 = $3203.64
²$44.99 x 24 = $1079.76; $95.99 x 12 = $1151.88
³$29.99 x 36 = $1079.64