Comcast-owned NBCUniversal today announced a 2020 launch of a new, advertiser-supported streaming service, relying on content libraries and distribution platforms from America’s NBCUniversal and Europe’s Sky.

In a press release about the new venture, NBCUniversal claims the service will reach over 90 million U.S. households and will include “some of the world’s most popular television and film franchises, including homegrown original programming as well as content from outside partners.”

The new service is a rare reminder that the cable industry’s “TV Everywhere” project — offering streamed and on-demand content to “authenticated pay television customers” is still alive and kicking. NBCUniversal plans to offer the service to consumers for free, as long as they can prove they have an active cable or satellite TV subscription. Comcast and Sky will be the first to debut the service to their combined 52 million subscribers, with other providers likely to offer the service sometime later. Cord cutters will be able to purchase a subscription to the service, and a paid, ad-free option will also be available.

TV Everywhere, the cable industry’s effort to make on-demand content available for little or no charge, as long as you are an “authenticated pay-TV customer.”

NBCUniversal also announced an executive shuffle to reposition itself for the streaming venture. With Comcast’s 2018 acquisition of Sky, Europe’s largest satellite television provider, the yet-to-be-named streaming venture will draw talent from both sides of the Atlantic. Programming is expected to rely heavily on both NBCUniversal-owned content and a growing library of original shows and movies produced by Sky. European audiences will see more American programming and Americans will have greater access to popular Sky content, particularly from the United Kingdom and Ireland.

The new streaming service represents an acknowledgment that traditional live, linear television is becoming less important as viewers increasingly shift towards on-demand viewing. NBCUniversal itself has recognized a trend away from live niche programming, and has closed down some of its lower-rated cable networks, including Cloo and Esquire. Original content on some lesser-known basic cable networks often amounts to little more than an hour or two a day, with the rest of the schedule populated with program length commercials or reruns of older network shows. Since NBCUniversal has a deep library of both original and older programming, it can offer viewers on-demand access to new shows and old favorites, attracting younger audiences.

“People are watching premium content more than ever, but they want more flexibility and value,” said NBCUniversal CEO Steve Burke. “NBCUniversal is perfectly positioned to offer a variety of choices, due to our deep relationships with advertisers and distribution partners, as well as our data-targeting capabilities. Advertising continues to be a major part of the entertainment ecosystem and we believe that a streaming service, with limited and personalized ads, will provide a great consumer experience.”

For now, Comcast/NBCUniversal will retain a 30% ownership in the Hulu venture.

Comcast internet customers have a new add-on option – xFi Advanced Security, an “artificial intelligence” security package designed to identify and block Wi-Fi intrusions and hack attacks on Internet of Things (IoT) equipment like lights, thermostats, smart meter apps, Wi-Fi equipped home appliances, security cameras, doorbells, voice enabled personal assistants, and garage door openers.

Comcast will sell the package for $5.99 a month (except for xFi Advantage customers, who get Advanced Security included at no additional cost), based on claims that hacker attacks on IoT devices are up 600% from 2016-2017.

xFi Advanced Security provides an added layer of protection for your entire network by preventing you from inadvertently accessing malicious sites, blocking remote access to smart devices from unknown or dangerous sources and monitoring activity in real time to detect when devices are behaving in unusual ways that could indicate a network threat.

Whenever a threat is detected, it’s automatically blocked and you are notified in xFi and given tips on how to resolve.

“As the digital world gets more complex, we wanted to make it simple and easy for our customers to protect their home networks. That’s why we developed xFi Advanced Security,” said Fraser Stirling, senior vice president of digital home, devices and AI for Comcast. “We want to give customers digital peace of mind for the devices they already own and the confidence to expand and evolve their connected homes knowing that every new camera, voice-assisted speaker or smart thermostat they add will be protected.”

Vermont residents want better internet service and protection for universal access to phone service, even if customers have to pay a surcharge on their bill to make sure the traditional landline is still available in 100% of the state.

In contrast, some residents complain, Vermont regulators want to make life easier for a telecom industry that wants to abandon universal service, fails to connect rural customers to the internet, and has left major cell phone signal gaps around the state.

In 2017, Vermont commissioned two surveys that asked 400 business and 418 residential customers about their telecommunications services. It was quickly clear from the results that most wanted some changes.

Vermont is a largely rural, small state that presents a difficult business case for many for-profit telecom companies. Verizon Communications sold its landline business in northern New England, including Vermont, to FairPoint Communications in 2007. FairPoint limped along for several years until it declared bankruptcy and was eventually acquired by Consolidated Communications, which still provides telephone service to most of the state.

Many rural areas are not furnished with anything close to the FCC’s definition of broadband (25/3 Mbps). DSL service at speeds hovering around 4 Mbps is still common, especially in areas relying on Verizon’s old copper wire infrastructure.

Comcast dominates cable service in the state, except for a portion of east-central Vermont, which is served by Charter Communications (Spectrum). Getting cable broadband service in rural Vermont remains challenging, as those areas usually fail the Return On Investment test. Still, 85% of respondents said they had internet service available in their home. Vermont’s Department of Public Service (DPS) estimates about 7% of homes in Vermont have no internet provider offering service, with a larger percentage served only by the incumbent phone company.

The majority of residents own cell phones, with Verizon (47.5%) and AT&T (31.8%) dominating market share. Sprint has 0.6% of the market; T-Mobile has a 1.2% share, both largely due to coverage issues. But even with Verizon and AT&T, 40% of respondents said cell phone companies cannot deliver a signal in their homes. As a result, many residents are hanging on to landline service, which is considered more reliable than cell service. Some 40% of those relying on cell phones said they would consider going back to a landline for various reasons.

With the FCC ready to cut support funding for rural landline service, residents were asked if the state should maintain funding to assure continued universal access to landline service. Among respondents, 87.8% thought it was either “very important” or “somewhat important.” The study also found 51% would accept a general statewide rate increase to cover those costs, while 29% preferred rate increases be targeted to rural ratepayers only. About 16% did not like either idea, and 4% liked both.

When asked whether residents would be interested in having a fiber connection in their home, 80% of respondents said “yes,” but 30% were unwilling to pay a higher bill to get it.

Ironically, the state’s most aggressive residential fiber buildouts are run by some of the smallest community-owned internet providers, rural electric or telecom co-ops, and small independent phone companies. What makes these smaller providers different is that they answer to their customers, not shareholders.

Comcast and Charter are the two largest cable companies in Vermont.

Recently, the DPS released a 100+ page final draft of its 2018 Vermont Telecommunications Plan, setting out a vision of where Vermont should be a decade from now, especially regarding rural broadband expansion, pole attachment issues, and cell tower/small cell zoning.

The report acknowledges the state’s own existing rural broadband expansion fund is woefully inadequate. In 2017, the Vermont Universal Service Fund paid out $220,000 to assist ISPs with building out networks to rural areas.

“The amount of money available to the fund pales in comparison to the amount of funding requests that the Department receives, which is generally in the millions of dollars,” the draft report states. “With approximately 20,000 unserved and underserved addresses in Vermont, the Connectivity Initiative cannot make a meaningful dent in the number of underserved locations.”

Much of the report focuses on ideas to lure incumbent providers into volunteering to expand their networks, either through deregulation, pole attachment reform, direct subsidies, or cost sharing arrangements that split the expenses of network extensions between providers, the state, and residents.

A significant weakness in the report covered the forthcoming challenge of upgrading a state like Vermont with 5G wireless service:

Small cell deployment has been attempted along rural routes with very limited success and the national efforts to expand small-cell, distributed-antenna systems, and 5G upgrades have focused on urban areas. The common refrain on 5G is that ‘it’s not coming to rural America.’ 5G should come to rural Vermont and the state should take efforts to improve its reach into rural areas.

A small cell attached to a light pole.

To accomplish this, the report only recommends streamlining the permitting process for new cell towers and small cells. The report says nothing about how the state can make a compelling case to convince providers to spend millions to deploy small cells in rural areas.

Where for-profit providers refuse to provide service, local communities and co-op phone or electric providers often step into the void. But Vermont prohibits municipalities from using tax dollars to fund telecommunications projects, which the law claims was designed to protect communities from investing in ‘unprofitable broadband networks.’

The draft proposal offers a mild recommendation to change the law to allow towns to bond for some capital expenditures on existing or starting networks:

Vermont could use a similar program to help start Communications Union Districts as well as allow towns to invest in existing networks of incumbent providers. Limitations on the authority to bond would need to be put in place. Such limitations should include focusing capital to underserved locations only, limiting the amount (or percentage) of tax payer dollars allowed to be collateralized, and setting technical requirements for the service.

Such restrictions often leave community broadband projects untenable and lacking a sufficient service area or customer base to cover construction and operating expenses. Instead, only the most difficult and costly-to-serve areas would be served. The current law also prevents local communities from making decisions on the local level to meet local needs.

At a public hearing last Tuesday in Montpelier, the report faced immediate criticism from a state legislator and some consumers for being vague and lacking measurable, attainable goals.

“This plan does not appear to move Vermont ahead in a way that enables it to compete effectively,” said state Sen. Mark MacDonald (D-Orange). “It doesn’t seem to be moving forward at the pace we’re capable of.”

Clay Purvis, director of telecommunications and connectivity for the DPS, defended the plan by alluding to how the state intends to establish a cooperative environment for internet service providers and help cut through red tape. But much of those efforts are focused on resolving controversial pole attachment fees and disputes, assuming there are providers fighting to place their competing infrastructure on those utility poles.

Montpelier resident Stephen Whitaker was profoundly underwhelmed by the report.

“There is no plan at all here,” Whitaker said at Tuesday’s public hearing. “There is some new background information from the 2014 version, but there’s no plan there. There is no objective to reach the statutory goals.”

Comzilla

Comcast is increasingly invading the territories of neighboring small cable operators, a rare move that could eventually trigger price wars and threaten the informal “gentlemen’s agreement” that has kept cable companies from directly competing with each other for decades.

In New Hampshire, residents of Laconia and Rochester will have a choice between incumbent Atlantic Broadband or newcomer Comcast. 

Comcast is already the dominant cable operator in the state, providing service in 104 communities. The cable company recently filed its draft franchise proposal with Laconia city officials to extend Comcast service into areas already serviced by Atlantic Broadband, an independent cable operator owned by Montréal based Cogeco.

“We believe Laconia offers attractive opportunities for Xfinity and Comcast business products in an area close to Comcast’s existing footprint and part of the same designated market area we already serve,” said Comcast regional spokesman Marc Goodman. “We offer internet speeds of up to two gigabytes per second and 100 gigabytes for businesses. We have an award-winning video platform with voice remote.”

It is the second time Comcast announced it would directly compete with Atlantic in New Hampshire. Comcast is already overbuilding Atlantic’s service area in Rochester and is scheduled to finish sometime next year.

In response, Atlantic has introduced very competitive service and pricing plans to fend off Comcast.

Atlantic Broadband is trying to lock in their customers with two-year rate guarantees and lower introductory prices.

Consumers are thrilled.

“After years of MetroCast’s dark ages of bad service, Atlantic Broadband bought them up, raised some internet speeds, and raised our bill even more,” said Charlie Saunders. “It is real easy to pay a $200 cable bill around here, so I am glad Comcast is giving us a choice.”

Atlantic Broadband, at least in public, seems unfazed about Comcast’s entry. Ed Merrill, Atlantic Broadband’s regional general manager for New Hampshire and Maine stressed his company’s innovations, such as bringing gigabit internet speed to the region and using TiVo set top boxes. 

“Our plans are based not on what other providers are doing, but by anticipating customer needs and preferences, then developing and delivering the kinds of products and services that will make customer lives better, whether they’re residential customers or business clients with customers of their own,” Merrill said in a statement.

Comcast Invasion: Communities Where Consumers Can Also Choose Comcast as Their Cable Company

• Dec. 2017: Rochester, N.H. (Atlantic Broadband vs. Comcast)
• May 2018: Waterford and New London, Conn. (Atlantic Broadband vs. Comcast)
• Summer 2018: Warwick Township, Warwick Borough, Ephratah Township, Ephratah Borough and Lititz, Penn. (Blue Ridge Communications vs. Comcast)
• Nov. 2018: Laconia, N.H. (Atlantic Broadband vs. Comcast)

Grove

Comcast said it is only responding to the public’s demand for more choice and better service, which explains why it is expanding into territories already served by another operator. But so far, Comcast has only chosen to expand in areas adjacent to its current territory, and only in places served by smaller, independent cable companies. In short, Comcast is in no hurry to run cable lines into areas served by Charter/Spectrum or Cox.

A Multichannel News article on the subject suggests Comcast’s real interest is reaching lucrative commercial/business customers just out of reach of their existing service areas. 

“I can tell you that our primary focus is on business service expansion where from time-to-time we explore new opportunities, based on a case-by-case analysis, to bring our state-of-the-art products and services to more businesses,” Bob Grove, vice president of communications for Comcast told the trade magazine. “Some of our existing customers in the contiguous footprint and shared DMA have operations in this area, which is why it made sense for us to expand our commercial network here. We’re also exploring limited residential opportunities, but that’s in the very preliminary stages as well.”

“My heart and wallet skipped a beat,” Lennart Swenson, Jr., told The Laconia Daily Sun. “When we had Comcast, at our last home, they provided superior service and more options for less money than Atlantic Broadband. Comcast was also easier to contact and provided quicker service than has been our experience with Atlantic.”

Some customers also complain Atlantic lures people with temporary teaser rates that exponentially increase after introductory pricing expires. Others report it is difficult to get a representative on the phone.

Competition is “tiresome” for the cable industry

Comcast’s growing interest in expanding service into already-cabled areas means the company will have to convince customers to switch cable providers, something that runs contrary to traditional cable industry economics, where companies carefully avoid direct competition with each other.

“When I started in this business, we all helped each other,” former Buford Media CEO Ben Hooks told Multichannel News. Buford retired in 2018 after a 50-year career in the cable industry. “You don’t see that, especially with Comcast. As far as they’re concerned, there’s them and there’s the rest of the industry.”

Hooks remembers the 1970s and 1980s when cable companies did attempt to expand into each other’s territory.

“In most cases overbuilds were a disaster,” Hooks said. “Neither party won very much, both were fighting for the same customer, cutting prices and neither company was doing well. It was just a tiresome battle.”

But as costs plummet to less than $500 per home to extend fiber to the home service, and the costs to provide internet service continue to fall, cable companies like Comcast can afford the risk of upsetting smaller operators. 

“A company today like Comcast has so much more margin/size over a small company that if they want to expand into an adjacent territory, it is no contest,” Hooks told the trade publication. “Now, if they were to take on Charter, the competition would be a greater challenge. While Comcast still has the advantage, Charter is large enough that it would be ugly.”

Comcast’s Cyber Monday promotions failed to include in its advertised prices up to $31.25 in monthly surcharges.

Comcast will use two mandatory surcharges to hike cable TV customers’ rates on Jan. 1, including those on promotional or fixed contract pricing, while also raising the optional modem rental fee to a record $13 a month — a new industry high.

• Broadcast TV Surcharge (varies per market) will increase to $10.00 a month.
• Regional Sports Network Fee (varies per market) will increase to $8.25 a month.
• Most customers will see an increase of about $3.75 a month for cable television.
• The modem rental fee, shown on the bill as “Internet/Voice Equipment Rental” will increase $2, to $13 a month.

Cord Cutters News first reported the rate increases. Ars Technica noted Comcast raised the broadcast TV fee from $6.50 to $8 and the sports fee from $4.50 to $6.50 about one year ago, making these two mandatory surcharges a lucrative source for extra revenue. Comcast does not waive these fees (or future increases) for its cable TV customers, even those on new customer promotions. The company boosted modem rental fees $1 a month in 2017. Now it wants an extra $2, but customers can easily avoid that fee by buying their own cable modem, which will quickly pay for itself.

Comcast typically raises rates in different cities over the course of a year, so only some customers will experience the rate increase on Jan. 1, but by the end of 2019, all Comcast customers will see a higher bill.

The use of surcharges to implement hidden rate increases is controversial. Comcast and other cable companies can and do advertise their services without including increasingly steep surcharges and fees, which can dramatically raise the bill far beyond what companies advertise.

A typical Comcast customer offered a 2018 Cyber Monday bundle of television and internet, advertised for as little as $49.99 a month, would pay an additional $31.25 a month in surcharges, not including an additional outlet service fee if a customer wants to watch on one more than television set.