Comcast on Wednesday said it will give its customers a six month reprieve on implementing its 1.2 TB data cap after state legislators in Massachusetts and Pennsylvania’s attorney general complained about the prospect of families paying more for internet access during a pandemic.

“As Pennsylvanians continue to navigate this pandemic, we know millions are relying on the internet for school and work more than ever. This is not the time to change the rules when it comes to internet data usage and increase costs,” said Pennsylvania Attorney General Josh Shapiro. “My office negotiated with Comcast to delay the implementation of these overage charges and waive any early termination fees for customers who opt out through December 2021. We also limited the impact of these changes on low-income households.”

The postponement applies to Comcast broadband customers in Connecticut, Delaware, Maryland, Maine, Massachusetts, New Hampshire, New Jersey, North Carolina, New York, Pennsylvania, Vermont, West Virginia, and the District of Columbia.

In addition to a delayed introduction of data caps, Comcast has also agreed to:

• not implement any data caps for low-income customers enrolled in Comcast’s Internet Essentials discount internet program for the rest of 2021;
• waive any early termination fees for customers planning to switch providers and signed a contract before November 2020;
• delay any overlimit fees until July, which will first be seen on customers’ August bills;
• more prominently disclose the fact Comcast has a data cap in its marketing materials.

Pennsylvania consumers concerned about how Comcast’s data threshold may affect them should file a complaint with the Office of Attorney General’s Bureau of Consumer Protection.

Comcast also reminded customers the data cap postponement announced today only applies to customers in the northeastern U.S. states noted above.

Shaw is western Canada’s dominant cable operator.

While American cable companies have cut back investing in their high-speed broadband services as competition languishes, a price and service war has erupted between western Canada’s biggest cable and phone companies, with consumers winning the benefits of increased investment and fierce competition.

Shaw Communications, the largest cable company west of Ontario, has just upped the ante with the introduction of 1,500/100 Mbps unlimited internet service for $127 (all prices in $US) a month. The new speed tier, known as Fibre+ Gig 1.5,  is delivered over Shaw’s existing DOCSIS 3.1 cable broadband network, and is already available in Winnipeg, Calgary, Edmonton, Vancouver, and Victoria, and is gradually expanding outwards to smaller cities, including Banff in Alberta, and Burnaby and Dawson’s Creek in British Columbia. Shaw also offers a traditional gigabit unlimited plan in most of its service area, offering 940/25 Mbps for $88/month. Both high-speed plans include a two-year contract.

“The hard work and investments we’ve made in building, upgrading and expanding our Fibre+ and Fast LTE networks and services — nearly $22.8 billion over the past seven years — allow us to deliver these ultrafast speeds to western Canadians over our existing infrastructure,” said Zoran Stakic, chief operating officer and chief technology officer. “These ongoing investments are the foundation to providing our customers service beyond one gigabit today and ultrafast speeds to more places in the future.”

“We know that there’s a growing segment of people — including heavy gamers, content creators and super streamers — who need access to ultrafast internet services, and that need has only increased during the pandemic as many of our customers manage the reality of having multiple people working from home and sharing bandwidth,” said Paul Deverell, president of Consumer, Shaw Communications. “With the launch of our Fibre+ Gig 1.5 product, we are delivering the speeds and capacity needed by today’s super users and data-heavy customers, while confirming Shaw’s position as the western Canadian leader in gigabit speed deployment.”

Telus is western Canada’s largest phone company.

Shaw’s increased investment is designed to fend off its chief competitor, Telus. In 2020, Shaw discovered a growing number of its broadband customers defecting in favor of Telus, the region’s telephone company. Telus is expanding its own high-speed offering, which relies on fiber to the home service. In some areas, Telus offers 940/940 Mbps service on a two-year contract for $76 a month and a 1,500/940 Mbps plan for $127 a month — which matches Shaw’s price but vastly exceeds Shaw in upload speed. To further sweeten the deal, Shaw gives its premium-speed internet customers discounts on Shaw Mobile services — including the exclusive rate of $25 per month on Unlimited Data wireless plans for Shaw Fibre+ Gig 1.5 and Fibre+ Gig internet subscribers.

Shaw claims its infrastructure has made it possible to offer gigabit service to at least one million more western Canadians than Telus. Telus has been gradually scrapping its legacy copper wire network in favor of fiber optics, but will likely take over a decade to complete the transition in significantly populated communities.

While Canadian cable companies are pushing DOCSIS 3.1 to the limit, American cable companies have taken it easy this year, reducing estimated budgets for network investment, returning to data caps, and putting further upgrades to next generation DOCSIS 4.0 on hold for at least a year or two. With AT&T and Verizon distracted and focused on spending billions to build 5G wireless networks, both companies have stopped significant expansion of fiber-to-the-home service for residential customers, reducing competitive pressure on cable operators. This reduced competition allows cable companies an opportunity to raise rates on broadband customers, and Charter Spectrum has done exactly that, announcing a general $5/month increase on residential internet service to take effect by the start of 2021.

Frontier Communications is seeking to slow or block rural broadband funding for tens of thousands of rural Americans that live inside Frontier service areas but cannot subscribe to broadband service because the company does not offer it.

Frontier is currently embroiled in a controversy over its regulatory filings with the FCC that sought to block or delay public funding of competing broadband projects in its territories by claiming such funding might be unfair and redundant, since Frontier is already supplying (or will supply) service in those communities.

The FCC’s Rural Digital Opportunity Fund (RDOF) will eventually spend $20.4 billion on rural broadband expansion, but the Commission is bending over backwards to protect incumbent cable, phone, and wireless companies from possible competition that potentially could be funded with public money. The Commission has invited providers to cross check “census blocks” — small geographic areas it has identified as eligible for rural broadband funding and report back if any should be excluded from the first phase of the program.

Incumbent phone and cable companies can protect their service areas from interlopers by claiming broadband service already exists in areas designated for rural broadband funding. Since the FCC continues to depend on voluntary disclosures of service areas by cable and phone companies, there is no immediate consequence if those providers take a more favorable view of what constitutes “service,” even if it ultimately results in long, further delays in rural broadband coverage for tens of thousands of Americans.

In early April, Frontier filed a lengthy submission objecting to the inclusion of 16,987 census blocks where it claims it already provides suitable broadband service. The majority of RDOF funding — $16 billion of the available $20.4 billion will be spent in the first funding phase, and only on census blocks where no provider offers high speed internet. If Frontier gets the FCC to block potential new entrants from qualifying for Phase One funding, it could spare the company from facing competition and leave a lot of homes with no internet service for years.

Immediate concerns were raised with the FCC regarding Frontier’s filing, including independent research that suggested Frontier was not being entirely honest about providing broadband at speeds at or exceeding 25 Mbps.

NTCA-The Rural Broadband Association:

Simply put, as the Wireless Internet Service Providers Association and the National Rural Electric Cooperative Association noted, “it is difficult to believe that Frontier was able to provide voice and 25/3 Mbps service in each of these 16,000 census blocks in just eight months.” Such incredulity is compounded by the fact that Frontier operated under the specter of a looming bankruptcy during this period, making it difficult to envision deployment to such a large number of locations within just several months’ time after years with little meaningful progress. Indeed, as WISPA and NRECA correctly point out, Frontier just four months ago alerted the Commission to the likelihood that it would be unable to meet its interim deployment milestones to which it was beholden pursuant to broadband commitments made in 2015. Moreover, Frontier’s financial disclosures, again as WIPSA and NRECA reference, showed an operator losing subscribers and working with a financial structure that would appear to have severely limited its ability to invest capital in broadband deployment.

The Institute for Local Self-Reliance also shared its concerns with the FCC, reminding the agency of Frontier’s lengthy track record of misrepresenting its service performance:

Frontier’s record in recent years offers numerous warning flags that the Commission should consider before accepting its nearly 17,000 challenges. The company has been the subject of numerous official complaints and investigations in the states in which it operates and has settled investigations in several states after extremely lengthy records were compiled showing its inability to regularly provide basic services. Consider this nonexhaustive list in just recent years:

California
CPUC investigating Frontier outages after transfer from Verizon in 2016 (2020)
Connecticut
AG and Dept. of Consumer Protection investigating Frontier for bad quality and billing (2019)
Florida
AG sent letter to Frontier after hearing complaints after transfer from Verizon (2016) and collected complaints (2016)
Ohio
PUC filed complaint that Frontier didn’t maintain service quality (2019)
Minnesota
PUC organized public hearings (2018) and settled with Commerce Department (2019)
Commerce launched a second investigation into billing and customer service (2019)
New York
PSC requested review after complaints of poor quality and outages (2019)
Nevada
Cited by AG’s Bureau of Consumer protection for misrepresenting speeds and service quality (2019)
North Carolina
AG issued civil investigative demand (2019)
Pennsylvania
AG Bureau of Consumer Protection settled with Frontier after investigation into poor quality and speeds (2020)
Utah
PSC investigated telephone outages (2019)
West Virginia
Settlement with AG for misrepresenting speeds (2015)
PSC ordered independent audit after complaints of poor quality and outages (2018)

The Commission faces a crisis of credibility on matters of broadband and telecommunications data collection, with two significant scandals in just the past 6 months.

Frontier’s claimed DSL speeds compared with actual average speeds (Courtesy: Smith Bagley, Inc.)

One company, Smith Bagley, Inc., went even further, building a spreadsheet of several disputed census blocks in an independent investigation. The company called Frontier repeatedly, posing as potential new broadband customers to test Frontier’s claims it supplied 25/3 Mbps service in several rural census blocks in New Mexico and Arizona. It found no instance where Frontier was ready to sell 25 Mbps service to any of the locations requested.

“Frontier either does not offer broadband service, or offers service at below 25/3 Mbps, in every one of the 1,300 census blocks it challenged in Arizona and New Mexico,” Smith Bagely noted in its letter to the FCC, citing another third party broadband availability database.

In a haughty response to the FCC dated May 26, Frontier waved off the criticism, claiming it was based on “a scattershot challenge to one-off census blocks, ad hominem attacks, and irrelevant sources.”

But the company also made a crucial admission about the broadband speeds it claims to offer that is worthy of a closer look:

“Frontier does not claim it serves every location in each census block at 25/3 Mbps. Under the Commission’s rules, carriers report the fastest speed available for sale in that census block, even if it is only available in one or a handful of locations.”

In other words, if Frontier found in its own internal testing, unverified by an independent third party, that it managed to provide 25 Mbps to even one out of hundreds of households, it can ignore the rest of the area’s much slower DSL speeds and petition the FCC to exclude funding for a new, more capable service provider. In fact, it need not disclose the abysmal speeds other homes might be enduring from Frontier and declare that census block to be adequately served by broadband and unworthy of additional funding, at least during Phase One.

Frontier also suddenly announced on May 23 it was now open to RDOF Phase One funding in its contested census blocks, which appeared to be a significant concession. But the company also noted the FCC’s established rules are the rules, regardless of what Frontier thinks:

“But to the extent the Commission decides to maintain its decision to include partially served census blocks in RDOF Phase II, SBI, Frontier, and any other company will be able to bid on those locations after mapping is complete and Phase II is implemented.”

Rosenworcel

The end impact of that could be a concession without any meaningful change.

Frontier also asked the FCC to dismiss concerned public interest groups and consumer complaints about its service because they are anecdotal. Besides, Frontier argued, companies seeking to enter Frontier-served areas can always apply for Phase Two funding, which will only be a small fraction of the funding available in Phase One. Because Phase Two is designed to help providers pay for improving existing service, sizeable portions of that funding will likely be awarded to companies like Frontier.

That the FCC plans to spend billions on broadband improvements based on flawed broadband availability data and imprecise census block criteria has infuriated Democratic FCC Commissioner Jessica Rosenworcel.

“Time and again this agency has acknowledged the grave limitations of the data we collect to assess broadband deployment. If a service provider claims that they serve a single customer in a census block, our existing data practices assume that there is service throughout the census block. This is not right. It means the claim in this report that there are only 21 million people in the United States without broadband is fundamentally flawed. Consider that another recent analysis concluded that as many as 162 million people across the country do not use internet service at broadband speeds,” Rosenworcel said in 2019. “Adding insult to injury, the same flawed data we rely on here is used to populate FCC broadband maps. For those keeping track, one cabinet official has described those maps as ‘fake news’ and one Senator has suggested they be shredded and thrown into a lake.”

This year, her Democratic colleague Commissioner Geoffrey Starks added his own concerns.

“I have zero tolerance for continuing to spend precious universal service funds based on bad data,” Starks said. “There is bipartisan—and nearly universal—agreement that our existing broadband deployment data contains fundamental flaws. And yet today’s order presses ahead with funding decisions based on mapping data that doesn’t reflect reality.”

Charter Communications has set the stage for a Wall Street-pleasing boost in average revenue per user (ARPU) with a major broadband rate hike planned for this fall.

The rate of U.S. broadband subscriber growth slowed significantly in the second quarter of 2019, as the marketplace for internet access remains saturated and current customers are largely staying with the provider they know.

A MoffettNathanson report to investors shared by Light Reading reported subscriber growth is down from 3% during the first three months of 2019 to 2.8% over the late spring and early summer. In total, cable and phone companies added 438,000 new broadband customers in the second quarter, a significant drop from the 570,000 they added at the same time last year.

The number of new household formations continues to decline in the United States, presumably because younger Americans saddled with student loan debt are having a tougher time buying property or justifying high rent payments. Providers also believe the ongoing shift away from copper telco DSL service to cable broadband has slowed to a trickle, with those still loyal to DSL not concerned about internet speed, are happy with lower cost service, or do not have any other option. Craig Moffett, chief analyst for MoffettNathanson believes much of the growth in cable broadband at this point is coming from customers switching from services like AT&T U-verse, which still offers top speeds of under 30 Mbps in some areas. Other phone companies still relying on fiber-to-the-neighborhood service are likely also seeing customer departures triggered by recent discontinuation of video service. In most areas, cable operators are still the largest beneficiaries of provider changes. Phone companies relying on DSL continue to report broadband subscriber losses. Last year during the second quarter, phone companies lost 127,000 subscribers (a 1.1% decline). This summer, they lost 172,000 subscribers (a 1.3% decline).

With slowing cable broadband growth, companies are still under pressure to report positive quarterly results to shareholders. Without a significant number of new customers, Moffett believes operators will raise broadband prices to deliver higher revenue, especially in light of ongoing video cord-cutting. Moffett points to Charter Communications’ Spectrum in particular. Spectrum has one of the cable industry’s lowest ARPU numbers, because it does not impose cable modem rental fees or usage caps. That may explain the company’s plans to hike general internet pricing 6% starting in October, soon collecting $69.99 for Standard 100 (or 200 Mbps) service and $75.99 a month for customers bundling Standard Internet with Wi-Fi.

“The broadband increases alone would suggest significant upside to Charter ARPU estimates,” Moffett said. He also noted Charter’s plan to dramatically increase video pricing also “underscores their recent pivot towards ‘letting’ video customers leave if they want, and repricing those who remain for profitability.”

That means customers outraged by Spectrum’s cable TV rate hikes will not get much sympathy from customer retention agents. Moffett believes customers will be invited to cancel cable television service, because Charter does not make as much profit on the service as it used to, and customers will probably still keep their Spectrum internet service, which is enormously profitable for the cable operator. Customers will also pay an even higher price for standalone internet service once they stop bundling television service, increasing Charter’s profits even more.

Ironically, the more Spectrum customers drop cable TV packages, the more profit Charter can report to shareholders. Those keeping cable television won’t hurt Charter’s bottom line either. Customers that readily agree to pay more with each cable TV rate hike are statistically the least likely to complain or cancel.

Cable One has the highest average revenue per customer of any publicly traded cable company in the United States, with the average customer paying Cable One $70.80 a month, mostly for internet access.

The company’s first quarter earnings growth of 5.5% reflect the company’s recent price increases and regime of low-allowance data caps, which have pushed 10 percent of its customers to pay an extra $40 a month to bring back unlimited access. Others are upgrading to costlier, faster tiers with more generous usage allowances.

“During the first quarter, we saw roughly 50% of our new customers choose our 200 Mbps or higher speed service and nearly 10% of our new customers opted to purchase our unlimited data plan,” said Julia Laulis, Cable One CEO.

Laulis

Cable One’s 200 Mbps plan (with a 600 GB data cap) costs $65 a month after promotions expire. A DOCSIS 3.0 modem lease fee of $10.50 applies. A $2.75 monthly internet service surcharge may apply. If a customer wants unlimited access to avoid overlimit fees, there is an additional charge of $40 a month (a 5 TB cap applies to the “unlimited plan”). Customers choosing a 200 Mbps broadband-only package with unlimited data will pay up to $118.25 a month.

Cable One’s broadband customers are concerned about staying within the data caps to avoid overlimit fees. While Comcast and Charter Spectrum customers consume over 300-400 GB of data per month (Comcast has a 1 TB cap, Spectrum only sells unlimited service), Cable One customers use an average of 290 GB, with usage growing at a 30-35% annual rate. Many Cable One customers have little choice either. Laulis noted that Cable One’s DSL competition is not very relevant when customers want to watch streaming video. Speeds are often so slow, customers do not have a good experience streaming HD video over DSL.

Cable One is also shedding its video customers in record numbers, with just 305,000 of its cable TV customers left. More than 29,000 departed year over year, and that number continues to rise as consumers rebel against the company’s high prices and unwillingness to negotiate.

MoffettNathanson warned that Cable One’s high pricing may eventually price itself out of broadband growth, as consumers elect to sign up with telephone companies instead. But many of its service areas are still served by low-speed DSL, and despite Cable One’s high cost, the company added 10,600 new internet customers in the last quarter.

In addition to raising prices, the company also plans to spend between $9-11 million to change its name from Cable One to Sparklight over the next two years.