Comcast and Time Warner Cable collectively picked up more than 1.5 million new customers in 2011, with most of the growth coming from dissatisfied DSL subscribers seeking better broadband speeds.
Leichtman Research Group, Inc. (LRG) found the eighteen largest cable and telephone providers in the US — representing about 93% of the market — acquired 3 million net additional high-speed Internet subscribers in 2011. Annual net broadband additions in 2011 were 88% of the total in 2010.
The top broadband providers now account for 78.6 million subscribers — with cable companies having over 44.3 million broadband subscribers, and telephone companies having over 34.3 million subscribers.
Stalled growth
Despite AT&T’s position as the second largest Internet Service Provider in the country, the company only picked up 117,000 new customers in 2011. In contrast, Time Warner Cable, with 6 million fewer customers, added almost a half-million new broadband subscriptions last year.
Frontier Communications, which made broadband a primary target for expansion, has not seen considerable growth either. The company only added just short of 38,000 new broadband customers last year, almost all getting DSL, often at speeds of 1-3Mbps.
Other key findings include:
The top cable companies netted 75% of the broadband additions in 2011;
The top cable companies added 2.3 million broadband subscribers in 2011 — 98% of the total net additions for the top cable companies in 2010;
The top telephone providers added 750,000 broadband subs in 2011 — 68% of the total net additions for the top telephone companies in 2010;
In the fourth quarter of 2011, cable and telephone providers added 765,000 broadband subscribers — with cable companies accounting for 82% of the broadband additions in the quarter.
Now serving 10.3 million
“Despite a high level of broadband penetration in the US, the top broadband providers added 88% as many subscribers in 2011 as in 2010,” said Bruce Leichtman, president and principal analyst for Leichtman Research Group, Inc. “At the end of 2011, the top broadband providers in the US cumulatively had over 78.6 million subscribers, an increase of nearly 25 million over the past five years.”
Americans are increasingly treating broadband as an essential “utility” service, as fundamental as electricity or clean water.
The majority of consumers who lack the service either consider it irrelevant in their lives (a factor that increases with the age of the surveyed respondent), cannot obtain service from their provider because of their location, or cannot afford the service.
Broadband Internet Provider
Subscribers at End of 4Q 2011
Net Adds in 2011
Cable Companies
Comcast
18,147,000
1,159,000
Time Warner^
10,344,000
491,000
Cox*
4,500,000
130,000
Charter
3,654,600
252,900
Cablevision
2,965,000
73,000
Suddenlink
951,400
65,100
Mediacom
851,000
13,000
Insight^
550,000
25,500
Cable ONE
451,082
25,680
Other Major Private Cable Companies**
1,925,000
55,000
Total Top Cable
44,339,082
2,290,180
Telephone Companies
AT&T
16,427,000
117,000
Verizon
8,670,000
278,000
CenturyLink
5,554,000
238,000
Frontier^^
1,735,000
37,833
Windstream
1,355,300
53,600
FairPoint
314,135
24,390
Cincinnati Bell
257,300
1,200
Total Top Telephone Companies
34,312,735
750,023
Total Broadband
78,651,817
3,040,203
Sources: The Companies and Leichtman Research Group, Inc.
* LRG estimate
** Includes LRG estimates for Bright House Networks, and RCN
^ Totals prior to Time Warner Cable’s acquisition of Insight completed on 2/29/2012
^^ LRG estimate does not include wireless subscribers
Company subscriber counts may not represent solely residential households
Totals reflect pro forma results from system sales and acquisitions
Top cable and telephone companies represent approximately 93% of all subscribers
[Stop the Cap! has written extensively about the pervasive influence some of the nation’s largest cable and phone companies have on telecommunications legislation in this country. On the state level, one group above all others is responsible for quietly getting company-ghost-written bills and resolutions into the hands of state lawmakers to introduce as their own.]
The American Legislative Exchange Council (ALEC) is the latest corporate response to campaign finance and lobbying reform — a Washington, D.C.-based “middle man” that brings lawmakers and corporate interests together while obfuscating the obvious conflict of interest to voters back home if they realized what was going on.
ALEC focuses on state laws its corporate members detest because, in many cases, they represent the only regulatory obstacles left after more than two decades of deregulatory fervor on the federal level. State lawmakers are ALEC’s targets — officeholders unaccustomed to a multi-million dollar influence operation. The group invites lawmakers to participate in policy sessions that equally balance corporate executives on one side with elected officials on the other. Consumers are not invited to participate.
ALEC’s telecom members have several agendas on the state level, mostly repealing:
Local franchising and oversight of cable television service;
Statewide oversight of the quality of service and measuring the reliability of phone and cable operators;
Consumer protection laws, including those that offer customers a third party contact for unresolved service problems;
Universal service requirements that insist all customers in a geographic region be permitted to receive service;
Funding support for public, educational, and government access television channels;
Rules governing the eventual termination of essential service for non/past due payments;
Local zoning requirements and licensing of outside work.
But ALEC is not always focused on deregulation or “smaller government.” In fact, many of its clients want new legislation that is designed to protect their position of incumbency or enhance profits. Cable and phone company-written bills that restrict or ban public broadband networks are introduced to lawmakers through ALEC-sponsored events. In several cases, model legislation that was developed by cable and phone companies was used as a template for nearly-identical bills introduced in several states without disclosing who actually authored the original bill.
ALEC specializes in secrecy, rarely granting interviews or talking about the corporations that pay tens of thousands of dollars to belong. Corporate members also enjoy full veto rights over any proposal or idea not to their liking, and aborted resolutions or legislative proposals are kept completely confidential. More often than not, however, legislators and corporate members come to an agreement on something, and the end product ends up in a central database of model bills and resolutions ready to be introduced in any of 50 state legislatures.
Many do, and often these proposed bills are remarkably similar, if not identical. That proved to be no coincidence. In July 2011, the Center for Media and Democracy was able to obtain a complete copy of ALEC’s master database of proposed legislation. The Center called it a stark example of “corporate collaboration reshaping our democracy, state by state.”
National Public Radio takes an inside look at the American Legislative Exchange Council and how it works to help major corporations influence and change state laws. (October 29, 2010) (8 minutes)
You must remain on this page to hear the clip, or you can download the clip and listen later.
ALEC’s Corporate Telecom Members
ALEC defends itself saying it does not directly lobby any legislator. That is, in fact true. But many of its corporate members clearly do. AT&T is one of ALEC’s most high profile members, serving as a “Private Enterprise Board” member, state corporate co-chair of Arkansas, California, Connecticut, Louisiana, Mississippi, and Texas (all AT&T service areas), a member of the Telecommunications and Information Technology Task force, and “Chairman” level sponsor of the 2011 ALEC Annual Conference (a privilege for those contributing $50,000).
AT&T’s lobbying is legendary, and is backed with enormous campaign contributions to legislators on the state and federal level.
CenturyLink (also including Qwest Communications), “Director” level sponsor of 2011 ALEC Annual Conference ($10,000 in 2010)
Cincinnati Bell
Comcast, State corporate co-chair of Georgia, Minnesota, Missouri and Utah and recipient of ALEC’s 2011 State Chair of the Year Award
Cox Communications, “Trustee” level sponsor of 2011 ALEC Annual Conference ($5,000 in 2010)
Time Warner Cable, State corporate co-chair of Ohio, “Director” level sponsor of 2011 ALEC Annual Conference ($10,000 in 2010)
Verizon Communications, Private Enterprise Board member and State corporate co-chair of Virginia and Wyoming
ALEC supporters among trade groups and astroturf/corporate-influenced “non profits”:
National Cable and Telecommunications Association, ALEC Telecommunications and Information Technology Task Force member
Free State Foundation (think tank promoting limited government and rule of law principles in telecommunications and information technology policy)
Heartland Institute, Exhibitor at ALEC’s 2011 Annual Conference, Telecommunications and Information Technology Task Force member, Education Task Force member, Commerce, Insurance and Economic Development Task Force, Financial Services Subcommittee member and Energy, Environment and Agriculture Task Force member
This model bill for increased cable competition strips most of the authority your community has over cable television operations and transfers it to under-funded or less aggressive state bodies. Although the bill claims to protect local oversight and community access stations, the statewide video franchise fee almost always destroys the funding model for public, educational, and government access channels.
These municipal broadband bills are always written to suggest community and private players must share a "level playing field." But bills like these always exempt the companies that actually wrote the bill, and micromanage and limit the business operations of the community provider.
Legislators: Bring the family to Mardi Gras World on us, sponsored by America's largest telecommunications companies.
WHYY Philadelphia’s ‘Fresh Air’ spent a half hour exploring who really writes the legislation introduced in state legislatures. When ALEC gets involved, The Nation reporter John Nichols thinks the agenda is clear: “All of those pieces of legislation and those resolutions really err toward a goal, and that goal is the advancement of an agenda that seems to be dictated at almost every turn by multinational corporations.” (July 21, 2011) (32 minutes)
You must remain on this page to hear the clip, or you can download the clip and listen later.
Unfortunately, state lawmakers are not always sophisticated enough to recognize a carefully crafted legislative agenda at work. National Public Radio found one excellent example — the 2010 Arizona immigration law that requires police to arrest anyone who cannot prove they entered the country legally when asked. America’s immigration problems remain a major topic on the agenda at some ALEC events, curious for a corporate-backed group until you realize one of ALEC’s members — the Corrections Corporation of America — America’s largest private prison operator, stood to earn millions providing incarceration services for what some estimated could be tens, if not hundreds of thousands of new prisoners being held on suspicion of immigration violations.
CCA was in the room when the model immigration legislation, eventually adopted by Arizona’s legislature, was written at an ALEC conference in 2009.
Bring the Kids, Stay for the Corporate Influence
Getting legislators to attend these seminars isn’t as hard as it might sound.
In January, we reported members of the North Carolina General Assembly, who showed their willingness to support telecom industry-written bills when it passed an anti-community broadband initiative in 2011, were wined and dined (along with their staff) by ALEC at the Mardi Gras World celebration in New Orleans. Rep. Marilyn Avila (R-Time Warner Cable), who introduced the aforementioned measure, brought her husband to Asheville to enjoy a special weekend as the featured guest speaker at a dinner sponsored by North Carolina’s state cable lobbying group:
The North Carolina Cable Telecommunications Association reported they not only picked up Marilyn’s food and bar bill ($290 for the Aug. 6-8 event), they also covered her husband Alex, too. Alex either ate and drank less than Marilyn, or chose cheaper items from the menu, because his food tab came to just $185.50. The cable lobby also picked up the Avila’s $471 hotel bill, and handed Alex another $99 in walking-around money to go and entertain himself during the weekend event. The total bill, effectively covered by the state’s cable subscribers: $1,045.50.
Rep. Avila with Marc Trathen, Time Warner Cable's top lobbyist (right) Photo by: Bob Sepe of Action Audits
ALEC makes it easy because it pays the way for lawmakers and families to attend their events through the award of “scholarships”:
The organization encourages state lawmakers to bring their families. Corporations sponsor golf tournaments on the side and throw parties at night, according to interviews and records obtained by NPR.
[…] Videos and photos from one recent ALEC conference show banquets, open bar parties and baseball games — all hosted by corporations. Tax records show the group spent $138,000 to keep legislators’ children entertained for the week.
But the legislators don’t have to declare these as corporate gifts.
Consider this: If a corporation hosts a party or baseball game and legislators attend, most states require the lawmakers to say where they went and who paid. In this case though, legislators can just say they went to ALEC’s conference. They don’t have to declare which corporations sponsored these events.
Reporter John Nichols told NPR ALEC’s focus on state politics is smart:
“We live at the local and state level. That’s where human beings come into contact more often than not,” he says. “We live today in a country where there’s a Washington obsession, particularly by the media but also by the political class. … And yet, in most areas, it’s not Washington that dictates the outlines, the parameters of our life. … And so if you come in at the state government level, you have a much greater ability to define how you’re going to operate.”
Resources:
ALEC Exposed: Access a database of more than 800 corporate ghost-written bills and resolutions intended to become state law in all 50 states. Sponsored by the Center for Media and Democracy.
ALEC’s Database Revealed: A more general indictment of ALEC and its coordinated agenda to allow corporate influence to hold an increasing role in public policy.
Phillip DampierMarch 13, 2012Comcast/Xfinity, Competition, Consumer NewsComments Off on Comcast Tries to Sell Customer Phone Service While He Reports a Service Outage
Rick Munarriz has a bone to pick with Comcast after discovering his cable television and broadband service was out of commission. It was the fourth prolonged outage in four weeks. But the Comcast customer of more than a dozen years was surprised when he called the cable company and they immediately tried to sell him Comcast’s “digital phone” service:
[…] An otherwise cordial representative tells me that he’s looking into my account. I could save some serious money if I switch my landline to Comcast’s XFINITY Voice offering.
“If I did that, how would I be reporting this outage?” I asked.
“Don’t you have a smartphone?” he responds, not realizing that he has just killed his own sales pitch.
Who needs a landline when you have a wireless phone? Who needs a Comcast triple play — especially when I’m already dealing with two outs?
Although not losing customers as fast as traditional landline phone companies, cable-delivered phone service is no longer growing as fast as it once did. Most companies picking up “digital phone” customers are winning them these days from product bundling, with aggressively priced triple-play packages of phone, Internet, and cable service. Many of these packages include the phone line for less than $10 a month more than a double-play package of Internet and cable-TV.
SNL Kagan collects statistics from cable operators who pitch phone service and documents the highest growth in cable-provided phone service came during 2004-2009. Now that growth has slowed. Customers who were willing cut their landline phone off in favor of a cell phone don’t need wired phone service from the cable company either.
It seems Comcast is willing to admit the same, even when pitching its own phone product.
Netflix continues to step up its attacks on providers who implement Internet Overcharging schemes on their wired broadband customers.
That concern is understandable as Netflix increasingly transitions to broadband streaming instead of mailing DVD’s to customers.
Getting in the way are five of the nation’s seven largest broadband providers, all imposing limits on customers just as they discover they might be able to do without cable television.
Netflix’s streamed HD shows now consume around 2GB per hour, according to Netflix general counsel David Hyman. That can eat through usage allowances quickly. Hyman penned an op-ed in the Wall Street Journal last year blasting the practices of usage caps and consumption billing.
Hyman
“Wireline bandwidth is an almost unlimited resource due to advances in Internet architecture,” Hyman wrote. “The marginal cost of providing an extra gigabyte of data—enough to deliver one episode of 30 Rock from Netflix—is less than one cent, and falling.”
That doesn’t seem to matter much to Comcast, CenturyLink, Charter Communications, and Cox. All four providers have introduced hard usage limits on customers — a usage cap. Exceeding it gives any of those providers the right to cut off your broadband service. AT&T, always one to see a financial angle, charges for excess use of their DSL and U-verse service — $10 for every 50GB. Time Warner Cable recently announced its own experimental “optional” usage pricing package for very light users who consume fewer than 5GB per month. It will slap overlimit fees on those participating customers who break through the 5GB ceiling at a rate of $1/GB, an enormous markup.
Providers with strict caps usually argue they come as a result of their own network’s capacity problems. Cable operators who do not consistently manage their network traffic can experience traffic clogs by overselling service without upgrading capacity to sustain user demand. But providers like Comcast, Cox, and Charter resolved those capacity problems with upgrades to DOCSIS 3 technology, which offer operators an exponentially bigger pipeline for Internet traffic.
Although Comcast promised to regularly review and adjust usage caps since implementing them four years ago, the nation’s largest cable operator has thus far seen no need to raise them.
“We feel that that is an extraordinarily large amount of data,” says Comcast’s Charlie Davis. “That limit is there to make sure we provide a great online experience for every single paying customer.”
Wall Street bankers have closely monitored the industry’s early results from Internet Overcharging, and have been encouraged, so long as operators implement it carefully.
Credit Suisse in a 2011 report to its investor clients suggested the key for successful usage-based pricing is to introduce it slowly and keep “sticker shock to a minimum in the early days” to reduce backlash by consumers and lawmakers.
Once established, the sky is the limit.
Netflix itself is also battling an Internet Overcharging scheme it faces — double-dipping by cable operators like Comcast. In addition to the fees Comcast collects from customers for its broadband service, the cable operator also wants to be paid directly by Netflix to allow the movie service’s traffic on its network.
That’s an Internet toll booth, charges Netflix and consumer groups. It’s also uncompetitive, says Hyman.
This month Comcast unveiled its own movie and TV show streaming service — Xfinity Streampix — from which, unsurprisingly, the cable company has not sought extra traffic payments from itself.
Opposed to Internet Overcharging
Three providers which don’t cap customers don’t see a reason to try.
“We don’t want customers to think about byte caps so that’s not on our horizon,” Blackley said. “We literally don’t want consumers to think about how they’re consuming high-speed services. It’s a pretty powerful drug and we want people to use more and more of it.”
California’s Sonic.net Inc., goes even further. Its CEO, Dane Jasper, believes the Federal Communications Commission needs to be more assertive about protecting America’s broadband revolution and the customers that depend on the service.
The fact different operators can take radically different positions on the subject, despite running similar networks, suggests technical necessity is not the reason providers are implementing usage restrictions and extra fees on customers.
As Hyman writes:
Bandwidth caps with fees piled on top are a lousy way to manage traffic. All of the costs of supplying residential broadband are for supporting peak usage. Bandwidth consumed off-peak is completely free. If Internet service providers really wanted to manage traffic efficiently, they would limit speeds at peak times. If their goal is instead to increase revenues or lessen competition, getting consumers to pay per gigabyte is an excellent strategy.
Consumer access to unlimited bandwidth is good for society. It fosters innovation, drives commerce, and advances political and social discourse. Given that bandwidth is cheap and plentiful and will only grow more so with time, there is no good reason for bandwidth caps and fees to take root.
Consumers and regulators need to take heed of what is happening and avoid winding up like the proverbial frog in a pot of boiling water. It’s time to jump before it’s too late.
Consumers and community leaders across Georgia can now rest a little easier knowing AT&T’s plans to throw up roadblocks against community broadband have gone awry. SB313, a custom-written corporate welfare bill designed to protect cable and phone companies from competition, has reportedly been turned into a “study bill” — a graceful way to kill bad legislation without hurting too many feelings.
It wasn’t just the fact incumbent phone and cable companies wanted to stop community broadband projects from wiring communities they’ve ignored for years. It wasn’t even the absurdity of the bill defining Georgia’s “broadband” speeds at just 200kbps (later ‘generously’ amended and increased to 758kbps). This bill died because of consumer and community outrage — local officials working hand in hand with woefully under-served Georgians asking their elected officials why they seemed to care more about AT&T’s interests than those of the people who elected them to office.
According to the National Broadband Map, Georgia ranks 20th in the nation for broadband access. According to the forward of a report by Rich Calhoun, Program Director of the Georgia Technology Initiative, “As I traveled through the state to talk with leaders in municipalities, counties and community anchor institutions, I found that many places throughout Georgia indicated that they did not have access to affordable or sufficient broadband services. Telecommunications firms who have made significant investments in Georgia indicated that in some areas of the state the return on investment would not qualify for further investment at the present time.”
As Stop the Cap! exposed to our readers, AT&T isn’t interested in serving the broadband needs of rural Georgia and doesn’t want anyone else serving them either.
But the real victory goes to readers who picked up the phone or sent e-mail letting Georgia legislators know you were watching them and paying attention to this obvious corporate welfare bill. You made it more expensive for lawmakers to vote with AT&T, despite their campaign contributions, than to vote for -your- interests. The next election is never too far away.
Why We Fight: These are the minimum speeds needed by some of Georgia's most important institutions. While state lawmakers have 100Mbps access in Atlanta, some are content to define 758kbps "broadband" as just fine for the rest of the state.
We also applaud the Institute for Local Self-Reliance. Their Community Broadband Networks project was able to educate, coordinate, and rally local governments who may not have been aware their broadband future was about to be indefinitely held ransom by AT&T and Comcast.
We never underestimate AT&T’s power and money. But they continue to underestimate us and the communities they are supposed to be serving.
Common sense prevailed in Georgia. South Carolina may be a different story. Their own anti-broadband measure is still alive and kicking. We’ll be holding additional “calls to action” on this bad bill shortly.
Stay involved in the fight. The better broadband you protect may be your own.
Be Sure to Read Part One: Astroturf Overload — Broadband for America = One Giant Industry Front Group for an important introduction to what this super-sized industry front group is all about. Members of Broadband for America Red: A company or group actively engaging in anti-consumer lobbying, opposes Net Neutrality, supports Internet Overcharging, belongs to […]
Astroturf: One of the underhanded tactics increasingly being used by telecom companies is “Astroturf lobbying” – creating front groups that try to mimic true grassroots, but that are all about corporate money, not citizen power. Astroturf lobbying is hardly a new approach. Senator Lloyd Bentsen is credited with coining the term in the 1980s to […]
Hong Kong remains bullish on broadband. Despite the economic downturn, City Telecom continues to invest millions in constructing one of Hong Kong’s largest fiber optic broadband networks, providing fiber to the home connections to residents. City Telecom’s HK Broadband service relies on an all-fiber optic network, and has been dubbed “the Verizon FiOS of Hong […]
BendBroadband, a small provider serving central Oregon, breathlessly announced the imminent launch of new higher speed broadband service for its customers after completing an upgrade to DOCSIS 3. Along with the launch announcement came a new logo of a sprinting dog the company attaches its new tagline to: “We’re the local dog. We better be […]
Stop the Cap! reader Rick has been educating me about some of the new-found aggression by Shaw Communications, one of western Canada’s largest telecommunications companies, in expanding its business reach across Canada. Woe to those who get in the way. Novus Entertainment is already familiar with this story. As Stop the Cap! reported previously, Shaw […]
The Canadian Radio-television Telecommunications Commission, the Canadian equivalent of the Federal Communications Commission in Washington, may be forced to consider American broadband policy before defining Net Neutrality and its role in Canadian broadband, according to an article published today in The Globe & Mail. [FCC Chairman Julius Genachowski’s] proposal – to codify and enforce some […]
In March 2000, two cable magnates sat down for the cable industry equivalent of My Dinner With Andre. Fine wine, beautiful table linens, an exquisite meal, and a Monopoly board with pieces swapped back and forth representing hundreds of thousands of Canadian consumers. Ted Rogers and Jim Shaw drew a line on the western Ontario […]
Just like FairPoint Communications, the Towering Inferno of phone companies haunting New England, Frontier Communications is making a whole lot of promises to state regulators and consumers, if they’ll only support the deal to transfer ownership of phone service from Verizon to them. This time, Frontier is issuing a self-serving press release touting their investment […]
I see it took all of five minutes for George Ou and his friends at Digital Society to be swayed by the tunnel vision myopia of last week’s latest effort to justify Internet Overcharging schemes. Until recently, I’ve always rationalized my distain for smaller usage caps by ignoring the fact that I’m being subsidized by […]
In 2007, we took our first major trip away from western New York in 20 years and spent two weeks an hour away from Calgary, Alberta. After two weeks in Kananaskis Country, Banff, Calgary, and other spots all over southern Alberta, we came away with the Good, the Bad, and the Ugly: The Good Alberta […]
A federal appeals court in Washington has struck down, for a second time, a rulemaking by the Federal Communications Commission to limit the size of the nation’s largest cable operators to 30% of the nation’s pay television marketplace, calling the rule “arbitrary and capricious.” The 30% rule, designed to keep no single company from controlling […]
Less than half of Americans surveyed by PC Magazine report they are very satisfied with the broadband speed delivered by their Internet service provider. PC Magazine released a comprehensive study this month on speed, provider satisfaction, and consumer opinions about the state of broadband in their community. The publisher sampled more than 17,000 participants, checking […]