In an effort to capture a major share of the $65 billion dollars becoming available for rural broadband expansion as part of the Biden Administration’s infrastructure funding program, the wireless industry’s top lobbying group is promoting the idea that 5G Fixed Wireless broadband is as future-proof as fiber to the home service.

Make no mistake, they are not being honest with you.

To back up their premise, the CTIA, the lobbying arm of the wireless industry, bought and paid for a report produced by Accenture that is designed to convince lawmakers and regulators that fixed wireless internet access is just as good or even better than fiber, suggesting the technology could potentially provide up to 43% of rural homes with high speed gigabit symmetrical service similar to what many fiber to the home providers offer.

Yet the same wireless industry trying to sell that idea successfully fought to water down standards in Biden’s infrastructure bill that originally required would-be funding recipients to provide customers with minimum speeds of 100/100 Mbps. Now providers can qualify by offering speeds as low as 100/20 Mbps. The CTIA report does not want to talk about that, preferring to claim providers could supply 1,000/1,000 Mbps service over traditional macro cell towers already in use today to subscribers as much as four miles away.

But look out for the fine print:

“Increased service was determined based on the potential economic feasibility of market entry. Estimates for market size, potential operating costs, and the capital investment to deploy were developed for target rural markets. The actual deployment feasibility will vary for individual FWA providers; new entrants will be influenced by the time and costs associated with factors such as market topography, construction, and permitting.”

In other words, if the required cell towers fail the same kinds of Return On Investment (ROI) formulas that have always left many rural communities behind, these 5G services will never happen either without huge concessions, subsidies, and policy changes that will further strip local control over cell tower placement and oversight. That is simply more the same failed reliance on providers to deliver service in places they never have and never will.

Ask any West Virginian about the quality of rural mobile service just to make and receive calls, and you will be told service is spotty outside of the largest communities.

T-Mobile, one of the country’s biggest advocates of fixed wireless, barely even serves West Virginia, which belies their claim that rural expansion is “one of its most promising growth opportunities.” If that growth did not materialize supplying voice, texting, and 4G LTE service in the state, it seems even less likely at materialize on spectrum that providers have always struggled with in mountainous states. To successfully reach most of West Virginia, T-Mobile would need an expensive network of traditional cell towers for which they have never believed there has been much of a business case to provide. Even then, it is inevitable that some would-be subscribers would still be without service, blocked by the terrain.

Chart also courtesy of Broadband World News.

What technology does not care about terrain? Fiber to the home service, which can deliver the same high speed performance to every customer without worrying about hills, mountains and valleys. It also has far more capacity than cell towers, which slow when congestion develops.

The report never actually promises gigabit speed service to all, but does emphasize fixed wireless is cheaper to deploy than fiber to the home service. But at least 20 years of broken and empty promises from the telecom industry to rural America should be enough to recognize that the transformational opportunity of this well-funded broadband stimulus program will allow providers to finally “do it right” with robust, infinitely upgradable fiber broadband technology that won’t slow down if a cell tower gets congested, can deliver the same speed to every subscriber, and delivers excellent customer satisfaction scores.

The wireless industry did not spend tens of millions of dollars trying to water down broadband speed requirements because they were confident fixed wireless could match fiber internet speeds. They know very well the kind of 5G networks they are envisioning for rural America cannot deliver guaranteed gigabits of speed once customers sign up in significant numbers to use it or the wireless industry deems an area unprofitable to serve. How many Americans will still be left behind with zero bars?

Wall Street analyst firm MoffettNathanson recently reviewed performance data from T-Mobile’s existing home broadband service and Starlink satellite internet — two technologies lobbyists point to as a solution for rural broadband dead zones. It found the median download speed for T-Mobile’s fixed wireless service is just 20Mbps. Starlink performed slightly better at 35Mbps. That is a long way away from 1,000 Mbps. Will these technologies threaten to be the dead-end DSL of the 21st century?

Speeds slow down on congested cell towers, and providers have implemented network management technologies that can selectively throttle speeds to all but their most preferred premium customers when they consider it necessary.

Wave7 Research also reported that T-Mobile is already concerned about network congestion on its existing fixed wireless service and that T-Mobile is moving “very cautiously with respect to network loading, in an attempt to limit the number of subscribers per cell, and even per cell sector.” That does not sound “future proof” to us if customer limits are already being enforced.

The wireless industry itself seems to hint at future capacity issues in a report that heavily emphasizes the need for the federal government to clear more spectrum that can eventually supply more wireless capacity.

MoffettNathanson’s Craig Moffett seems convinced any fixed wireless or satellite provider is going to be more  capacity and performance-limited than wired alternatives like fiber to the home service. In Moffett’s view, these wireless technologies are best suited to extremely rural areas where fiber or cable deployment is simply untenable, even with the much larger amount of subsidy funding soon to be made available.

The biggest benefit of the Biden infrastructure program is that it actually does allow the country to “build back better” instead of offering the usual incremental upgrades delivering “good enough for you” internet access that has left millions stuck with slow speed DSL or low capacity rationed satellite internet. Now that funds are finally becoming available, why divert them to a technology that “may” one day provide unguaranteed gigabit service when fiber to the home technology is available today that can meet and exceed those speeds comfortably and has sufficient capacity to serve rural America’s needs for decades to come.

Just five years after buying DirecTV for $49 billion, AT&T is looking to sell the satellite TV service after losing over 10 million customers because of repeated price hikes, network blackouts, and the ongoing shift to streaming online video.

The Wall Street Journal reported Friday that AT&T was in talks with private equity firms, potentially including Apollo Global Management and Platinum Equity about the possibility of acquiring DirecTV and taking the service private.

Regardless of who buys the service, AT&T might lose $30 billion on the five-year-old venture, buying high and selling low at a price that could drop below $20 billion. AT&T is rapidly losing its television customers. More than six million people have dropped TV packages from AT&T’s U-verse TV and satellite provider DirecTV in the last two years. Craig Moffett, an analyst with MoffettNathanson, told the New York Post even at a rumored discount sale price of $20 billion, AT&T may have “overvalued” the “albatross.”

Moffett is skeptical buyers will close a deal, considering AT&T’s remaining 17.7 million television customers are still in the mood to cancel, with an “astounding” 18% of customers leaving each year.

But even with the customer losses, DirecTV moves a lot of money through its operations, making it at least look attractive on certain buyers’ books. DirecTV’s cash flow helped AT&T’s own unimpressive earnings, adding $22 billion to AT&T’s balance sheet since buying the satellite company. A buyout by a private equity firm could further slowly drain DirecTV by saddling it with debt, secured in part by its still healthy cash flow. A buyer could also attract investors by borrowing even more to pay out handsome dividend bonuses. That could leave DirecTV hopelessly hobbled in debt, leaving DirecTV in an “inevitable” position of having to merge with its chief competitor, Dish Network, or face eventual bankruptcy. If that were to happen, rural Americans could face a satellite TV monopoly as their only choice for live video entertainment.

DirecTV customers report innovation at the satellite service seems to have disappeared since AT&T took over. Very little has changed with the service in the past few years, except for AT&T raising prices and getting stingier with promotions. Many rural DirecTV customers still depend on satellite television because of a lack of over the air reception or broadband service. For these customers, saving money on television service means having to bounce back and forth between Dish Network and DirecTV, trying to keep a discounted promotion active on their account. If the two satellite services eventually merge, that will cease.

After AT&T acquired Time Warner (Entertainment), insiders report many of AT&T’s legacy businesses, including DirecTV and U-verse, have become afterthoughts. AT&T’s bigger priorities now lie with its new 5G wireless service and HBO Max, its new online video service. But the company’s most profitable businesses continue to be cell phone service and selling wired broadband internet access, which together now earns the company over $180 billion annually.

With record-breaking unemployment and an economy in tatters, consumers are abandoning high-priced mobile plans and switching to lower priced cable operator mobile plans.

Comcast, Charter/Spectrum, and Altice USA saw dramatic customer gains of 547,000 new customers in the first quarter of 2020, primarily at the expense of AT&T, Verizon, T-Mobile, and Sprint, according to Wall Street analyst firm MoffettNathanson. The four largest wireless carriers saw a collective 1.3% drop in subscribers, which counts as the worst performance the traditional wireless sector has seen since 2014. But their loss was the cable industry’s gain, with three cable operators achieving a 130% increase in new mobile customers during the first quarter of the year. The three cable companies now have a combined 3.7 million wireless customers.

Comcast and Charter contract with Verizon Wireless for 4G LTE and 5G service, while Altice USA provides its mobile customers with access to Sprint’s network. The cable operators keep costs down by favoring Wi-Fi connections wherever possible.

Two factors are driving the growth of cable industry mobile plans:

1. Price: Altice USA sells its mobile service at just $20/mo per line. Comcast and Charter both sell unlimited data, talk and text plans for $45 a month per line and a “By the Gig” plan option that includes 1 GB of data bundled with unlimited calls and texting for a flat $14/per gig at Charter and $15/1 GB or $30/3 GB or $60/10 GB at Comcast. With unemployment numbers high and consumers worried about the future of the job market, economizing expenses matters.
2. Network: Comcast and Charter both rely on Verizon Wireless, recognized as one of the strongest wireless performers in terms of coverage and signal quality. Customers can switch to a cheaper cable company mobile plan without sacrificing network coverage.

MoffettNathanson’s Craig Moffett noted that the COVID-19 pandemic closed most wireless retail stores, and there was a wide belief that wireless industry sales would be anemic at best during the spring as people stayed home. Instead, the cable industry heavily marketed its wireless plans and expanded the number of pre-owned devices qualified for “Bring Your Own Device” switching, allowing customers to swap SIM cards instead of being forced to buy new devices.

“Given the levels of economic hardship that have accompanied the lockdowns, one can reasonably imagine that these kinds of hyper-aggressive pricing plans won’t have much trouble breaking through to capture market share,” Moffett said in a research note.

Moffett predicts the second quarter will show an even greater number of customers dropping traditional mobile plans in favor of plans provided by their local cable company. Some customers report saving over $100 a month by switching.

One potential downside: customers must subscribe to other products sold by their cable provider to get the best price on wireless service. Comcast’s Xfinity Mobile applies a $20 per line monthly charge if the customer does not maintain at least one of the following: Xfinity TV, Internet or Voice service. Spectrum customers that cancel internet service with the cable company will pay an additional $20 monthly charge per line, have Spectrum Wi-Fi speeds limited to 5 Mbps, and are not allowed to add any additional mobile lines.

The death of DSL?

If your local phone company does not offer fiber-to-the-home service, it risks seeing its market share as a broadband competitor drop to zero, according to new research from Wall Street analyst firm MoffettNathanson.

As the cable industry prepares to deploy DOCSIS 4.0, capable of much faster upload speeds in the gigabits and downloads as fast as 10 Gbps, the future of telephone companies that have under-invested in their networks for years is dire. The research firm’s “Equilibrium Forecast” sees DSL’s market share in areas where cable broadband is available dropping to zero. Phone companies that have invested in fiber half-measures, including fiber to the neighborhood, IP-DSLAM, and VDSL technology that traditionally delivers internet speed between 25-75 Mbps are not far behind. Only true fiber-to-the-home service stands a chance at protecting phone company broadband market share.

“DSL [and] mid-tier [fiber/copper combinations are both] obsolete,” researchers said in a private note to investors. “Broadband is increasingly a two-horse race between cable and telco fiber-to-the-home service, where it exists.”

The COVID-19 pandemic has only increased problems at the nation’s legacy phone companies, as customer losses accelerate in favor of cable company delivered internet. In the first quarter of 2020, cable company broadband sign-ups increased 122% compared to the same quarter last year, while phone companies said goodbye to at least 65,000 subscribers. Last year during the first quarter, telcos managed to add 20,000 customers.

Leichtman Research Group reports that most customers are looking for stable and reliably fast internet service, and phone company DSL delivers neither. Having a speedy and dependable connection has become crucial as tens of millions of Americans work from home to avoid contracting the illness. Sharing that internet connection with kids staying home from school quickly caused a spike in upgrade orders.

“The increased level of usage was enough to convince many customers that they needed higher speeds to handle the number of simultaneous users in their home,” MoffettNathanon wrote.

Many phone companies lacking fiber were unable to deliver on upgrades, and customers that could went shopping for alternatives. At the same time, large DSL providers like Frontier Communications and Windstream have become mired in bankruptcy and have been losing residential customers for years. MoffettNathanson told its investor subscribers it was time to declare DSL effectively dead as a competing technology, with fiber service variants like U-verse and other flavors of VDSL near-dead.

“As with legacy DSL, it is increasingly clear that this segment is simply not competitive anymore. Equilibrium market share in this cohort, if one looks out far enough, is 100/0.”

MoffettNathanson expects cable operators will achieve an 85% market share for broadband service in markets where their chief competitor is a phone company yet to provide fiber-to-the-home service. If phone companies do not embark on immediate fiber upgrades, the damage to their market share could be permanent, especially after DOCSIS 4 arrives, according to the researchers, because the newest cable broadband platform may be able to erase fiber’s speed advantage.

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%.”