AT&T and Camden Property Trust have announced an agreement to offer broadband, television, and phone services over fiber to the premises technology beginning this fall, serving new high-end apartment homes owned by the developer in Atlanta, Austin, and Orlando.

AT&T’s suggestion it will build a competing fiber network that would rival Google appears to be, for now, limited to selected, luxury multi-dwelling units participating in a strategic marketing partnership that can guarantee enough customers to make the investment in fiber optics worthwhile.

AT&T’s Connected Communities Initiative is a special program offered to large single-family homebuilders, developers, real estate investment trusts, apartment owners, property management groups and large homeowners’ associations that can deliver AT&T a virtually captive customer base in return for better-than-average service and kickbacks in the form of lucrative commissions.

Camden’s Gaines Ranch in Austin, Tex.

With AT&T’s latest agreement, the new Camden-managed properties will receive the next generation of U-verse High Speed Internet, U-verse TV and U-verse Voice on an all-fiber network that will deliver a level of enhanced service unavailable to most U-verse customers. Most importantly, the fiber infrastructure will let AT&T to offer faster broadband to residents without limiting their television viewing.

Most AT&T U-verse customers receive service over a hybrid fiber-copper phone wire network using a more advanced form of DSL. Fiber from the nearest AT&T central office extends into each neighborhood, but existing copper phone wiring carries the service the last several blocks into individual customer homes. The presence of copper limits the available bandwidth, which has kept AT&T’s top U-verse speeds at around 24Mbps. The only way to increase speeds is to cut the amount of copper in the network. Eliminating it completely is even better.

AT&T has been reluctant to follow Verizon’s lead deploying an all-fiber network. The cost to wire each home with fiber was too prohibitive for AT&T, but providing fiber connectivity to large apartment buildings, condos, or other multi-dwelling units has met AT&T’s cost concerns, especially when the property owner signs over exclusive rights to the buildings’ existing telecommunications infrastructure.

AT&T’s program encourages the participation of property owners with a variety of paid commissions and other compensation, including:

Exclusive Marketing Agreements: Under an AT&T Exclusive Marketing Agreement, residents may still choose their communications and entertainment services provider, but the builder, developer or property owner agrees to exclusively promote AT&T services. In doing so, AT&T provides financial incentives in the form of commissions for property owners and multiple service options for residents. In most cases, renters may have the mistaken impression they can only get service from AT&T, and are informally discouraged from considering alternative providers.

Bulk Contracts: An AT&T Connected Communities bulk agreement offers greater earning potential. With a single, monthly recurring bulk bill for all contracted units, developers and HOAs get below-retail pricing, increased savings on equipment costs, and other rewarding financial incentives. In most cases, building owners include AT&T services either as part of the monthly rent or billed as a mandatory services surcharge. A resident can still sign up for satellite or cable television, but has zero incentive to do so because they would be effectively paying for service twice.

Exclusive Use of Wire:  Property owners grant AT&T exclusive use of the wiring, including coaxial cable, at the property. In addition, owners agree to promote AT&T products to residents. This deters would-be competitors from providing service at a property signed up with AT&T. A cable or satellite competitor would not have access to existing wiring and have to arrange an agreement with the property owner to provision a second cable inside the building. Neither the competing provider or the property owner would have any incentive to do this, regardless of the wishes of renters.

Large properties can also contract with AT&T to provision a site-wide Wi-Fi network for the benefit of residents both around the property and at amenities like clubhouses or poolside.

While such agreements can benefit residents with bulk pricing discounts beyond what they could have obtained from AT&T themselves, it also strongly deters other providers from delivering competitive services.

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Last fall, AT&T promoted its Connected Communities program with property developers, offering them commissions and other special deals if they sign exclusive marketing agreements with the phone company. In 2013, broadband speeds for certain U-verse Internet customers will be increasing, depending on the infrastructure available. (2 minutes)

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/Camden Online Communities 8-13.flv[/flv]

Camden Properties emphasizes the online services available to residents, particularly those that promote social interaction. In some cases, those services will now be powered by AT&T U-verse. (1 minute)

Big, Bigger, Biggest… Bigger Still

Comcast has plenty of available bandwidth to indefinitely expand its High Speed Internet services at speeds up to 3Gbps and believes it has won the legal right to grow its cable business as large as it likes.

Comcast executives admitted Wednesday they have more than enough network capacity to meet the demands of customers, both now and well into the future.

“With regard to usage and capacity, we feel the network is flexible and has plenty of opportunity to grow in capacity,” said Neil Smit, president and CEO of Comcast Cable Communications. Smit was responding to a Wall Street analyst asking about future capacity during a quarterly financial results conference call.

Smit noted that some of the biggest bandwidth users served by Comcast are businesses, and the cable operator was well-positioned to service them by extending fiber or deploying its Metro Ethernet product. Residential customers get increased bandwidth through neighborhood node splitting or DOCSIS 3 channel bonding that combines several channels together to increase speed and capacity.

Brian Roberts, CEO of Comcast Corporation, agreed with Smit, adding, “the more the consumer desires speed, the better that is for our company.”

Roberts noted DOCSIS 3.1 — the next generation of cable broadband — was “promising technology.”

“At the cable convention, we demonstrated 3Gbps” over Comcast’s existing cable infrastructure, said Roberts.

Smit

Comcast is easily the country’s largest cable operator, but many believe it is restrained from growing larger through mergers and acquisitions because of antitrust concerns. But thanks to a number of lawsuits initiated by Comcast, the company believes it can now grow as large as it likes.

Roberts admits the question of cable industry consolidation remains a gray area, particularly for Comcast. But he told investors he does not believe there are any remaining legal hurdles preventing Comcast from buying out other cable operators, despite earlier FCC rulemakings limiting the maximum size a cable company can grow through buyouts.

Comcast yesterday announced its last buyout — NBCUniversal — helped fuel a 29% increase in net income in the second quarter, thanks in part to strong results from film and television.

But many of Comcast’s largest gains came from its cable business.

Despite continued losses of video subscribers (159,000 in the second quarter), Comcast’s cable revenue increased 5.8% to $10.47 billion, and operating cash flow grew 5.7% to $4.3 billion. Comcast, which also owns several NBC broadcast affiliates, is playing for both sides of the retransmission consent wars. Its owned and operated television stations have demanded higher fees to be carried on cable systems, many owned by Comcast itself. The increased programming costs fuel subscriber rate increases, which also boost revenue.

Broadband is way up, although the company keeps losing video customers to cord-cutting.

Comcast’s broadband revenue has continued to grow dramatically. Customer additions for High Speed Internet access were up more than 20% in the quarter — the best second-quarter growth in five years — even as subscribers paid more for the service because of rate increases. Customer growth and price hikes delivered 8% growth in broadband revenue. In the last quarter alone, Comcast earned $2.6 billion from its broadband business.

Comcast is not spending a significant percentage of that revenue on enhanced broadband network upgrades. Instead, the company has increased investments to wire office parks and businesses to entice commercial customers, which account for a substantial amount of new customer growth. Comcast is also investing in research and development of new products and services, such as set-top boxes. The company also expects to pay 10% more in programming costs than it did a year earlier.

Year-to-date cable communications capital expenditures have increased 7.1% to $2.3 billion representing 11.3% of cable revenue. Comcast expects that for the full-year of 2013, cable capital expenditures will increase by about 10% over 2012.

Some other highlights from the quarter:

• In the last six months, Comcast completed broadband speed increases for 70 percent of its customers;
• High Speed Internet revenue was again the largest contributor to Comcast’s cable revenue growth;
• At the end of the quarter, 33% of Comcast’s residential high-speed customers take a higher speed tier above its primary service;
• Comcast has pushed Wi-Fi hard, installing more than four million wireless gateways and boosted Wi-Fi coverage to 250,000 hotspots through both cable partnerships and its home hotspot initiative;
• Comcast’s new X1 cloud-based set-top platform has been introduced to more than half of its national service area and will be available everywhere by the end of 2013. By the end of the year, Comcast also expects to push a firmware update to installed boxes to upgrade them to its new X2 platform;
• The average Comcast subscriber now pays the company $160 per month, up 7.4% from last year. Rate hikes, speed upgrades and growing programming packages account for the higher price;
• 77% of Comcast video customers took at least two products and among those, 42% took phone, broadband and television service.

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/Bloomberg Comcasts Cable and Media Units Grow 7-31-13.flv[/flv]

Bloomberg reports Comcast is still having trouble holding on to its video-only customers, but broadband customer growth continues to explode. Comcast also does well because it owns a number of cable networks and entertainment properties. Expect Comcast to continue evolving its products to bring them closer to the things people do online.  (3 minutes)

Prism is CenturyLink’s fiber to the neighborhood service, similar to AT&T U-verse.

Western Eagle County will be among the first areas in Colorado to get CenturyLink’s fiber-to-the-neighborhood service upgrade, dubbed Prism TV.

“Eagle County is joining the first 10 markets to get Prism TV,” said Abel Chavez, CenturyLink’s director of state and local government affairs.

The phone company plans to introduce the service gradually once franchise renewal agreements with the county are complete.

The upgrade is an important once for Eagle County, which will see improved service well before residents in larger Colorado cities like Denver.

“Since we already have a franchise here, this is an opportunity to do two things — upgrade it and test it in a rural market,” Chavez told the Eagle Valley Enterprise. “In this case, a small mountain community is going to have something that Denver doesn’t have yet and it’s all going in on our existing network. We’re not adding to our footprint.”

CenturyLink’s service area includes towns in the western half of the county, Eagle and Gypsum. Comcast is the dominant cable provider in Colorado and has the largest market share of customers in the eastern half of the county.

CenturyLink primarily markets Prism as a television service, although it also supports 25Mbps broadband, depending on line quality.

Much like AT&T U-verse, Prism provides a fiber broadband connection to a box positioned in the neighborhood. From that box, the customer’s current copper telephone line is used to bring an enhanced version of DSL inside the home that divides bandwidth for Internet access, telephone, and cable television service.

A typical triple-play, new customer Prism package in Las Vegas runs around $115 a month, price-locked for 24 months. The whole house DVR and HD channels add another $10-15 a month after the first three months.

Included in the package:

• 10Mbps broadband
• CenturyLink Home Phone with Unlimited Nationwide Calling
• Prism TV (120 channels)
• Free installation, first set-top box included ($8.99/mo each additional box), DVR with up to four concurrent recordings

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/CenturyLink Prism Demo Summer 2013.flv[/flv]

CenturyLink produced this demonstration video of Prism TV’s capabilities. CenturyLink does not seem to emphasize improved broadband service as part of the Prism experience in its marketing. (2 minutes)

AT&T has continued its efforts towards wireless industry consolidation with today’s announcement it has acquired Iowa-based Long Lines Wireless (formerly Cellular One of Iowa) for an undisclosed amount.

“We concluded that Long Lines could best serve our customers by focusing our attention and investing our resources in providing new features for our non-wireless services including voice, broadband services, and cable TV, and in expanding our fiber optic network to reach more communities and customers,” said Long Lines CEO Brent Olson.

The rural telecom company has served Siouxland since 1941 and today provides wireless, landline service, cable television and broadband to residents in Iowa, Minnesota, Nebraska, and South Dakota.

Customers have not suffered doing business with a small independent provider like Long Lines. The company operates a fiber optic network providing business customers up to 40Gbps broadband and residential customers up to 100Mbps Internet service. Those services are not available from the much larger telephone companies that also serve these states, including AT&T, Frontier, and CenturyLink.

Despite the availability of infrastructure that can rival any large city, Long Lines concluded it could simply not succeed in its wireless business.

“Regional wireless providers have limited access to the latest smartphones and other devices, and it has become increasingly difficult to for Long Lines Wireless to meet the digital mobile needs of our customers,” Olson said.

The sale to AT&T means Long Lines wireless customers will eventually be a part of AT&T’s wireless network, with access to its 4G network and a wider selection of phones.

Long Lines intends to invest its resources in providing new features for non-wireless services including voice, broadband services, and cable TV, and in expanding its fiber optic network to reach more communities and customers.

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/KCAU Sioux City Long Lines Sold to ATT 7-25-13.mp4[/flv]

KCAU in Sioux City reports on the sale of Long Lines Wireless to AT&T Mobility. (1 minute)

EastLink customers in Nova Scotia are getting three things from their local cable company: slightly faster Internet speeds, a higher bill, and insulted.

EastLink has mailed letters to subscribers in certain parts of Atlantic Canada notifying customers they are now getting speed boosts on the company’s lower speed tiers.

Basic Internet customers subscribing to 1.5Mbps service will now see 5Mbps, while those at 5Mbps are getting upgraded to 10Mbps service.

EastLink said the upgrades target its budget-minded customers who are also getting pelted with competing mailers from Bell Aliant, which sells fiber service in the region. But the speed upgrades don’t come for free. In a move EastLink denies is tied to the broadband speed improvements, the company is also notifying customers of its annual general rate increase.

Atlantic Canada enjoys some of the fastest Internet service in the country, often without any usage caps. EastLink offers, in addition to its budget Internet tiers, service at 20, 40 and 80Mbps. Their primary competitor is Bell Aliant, which operates its FibreOp broadband at speeds of 50, 80, and 175Mbps.

“Our customers have told us that they want and need faster internet service,” Isabelle Robinson, media relations with Bell Aliant said about the company’s higher Internet speeds. “Things like file sharing, uploading, video streaming have really become commonplace. The demand for both speed and bandwidth has been exploding.”

Nonsense, responds Jordan Turner, EastLink’s public relations coordinator. He said subscribers often have no comprehension about the broadband speeds they get now, and certainly don’t need anything faster than what EastLink now provides.

“Frankly, that is plenty of speed and all the speed customers need,” Turner told Halifax NewsNet. “When you read what they suggest people are going to do with the Internet, you can already do that with our standard Internet offering. It’s not like, because you have faster Internet, you’re going to watch a three-hour movie in half an hour.”