The next standard for cable broadband is now due by 2020.

CableLabs is working on the next generation of broadband over existing Hybrid Fiber-Coax (HFC) networks, finally achieving identical upload and download speed and supporting more spectrum on existing cable lines, which could mean another leap in broadband speed.

DOCSIS 4.0 is still evolving, but according to Light Reading, the next upgrade will fully support Full Duplex DOCSIS, allowing customers to get the same upload speed as their download speed, and will fully implement Low Latency DOCSIS which could reduce traffic delays to under 1 ms. The new standard will also introduce Extended Spectrum DOCSIS, which will open up broadband traffic on frequencies up to 1.8 GHz — 600 Mhz more bandwidth than available today. That additional spectrum will allow for speed increases in excess of 1 Gbps, support IP video traffic, and backhaul for wireless applications like small cells. 

According to Light Reading, people familiar with the development of the cable broadband specification believe much of the work will be complete by the end of 2019, with the spectrum expansion specification expected before mid-2020. This would allow the introduction of DOCSIS 4.0 modems for purchase beginning in 2021.

Cable operators are largely taking a break on large investments this year, with few planning major infrastructure changes beyond some projects underway at Comcast and Altice-Cablevision’s ongoing replacement of its HFC network with fiber to the home service. In 2020, operators will make crucial decisions about their next upgrade commitments. Comcast and Altice will have the easiest time delivering symmetrical broadband because Comcast will support the “Node+0” design that eliminates amplifiers between the nearest node and the customer’s home. This will facilitate the introduction of symmetrical speeds. Altice is dropping the DOCSIS standard as it moves to fiber service, which already supports symmetrical speeds.

Other cable operators are not currently committed to removing amplifiers from their networks, supporting alternate designs like “Node+1,” “Node+2,” etc., which are similar to today’s cable system designs. Instead, they are hoping to leverage Extended Spectrum DOCSIS to boost their speeds. Most will likely offer significant speed bumps for uploading, but those speeds won’t match download speed. For example, Charter Spectrum or Cox might upgrade customers to 500/100 Mbps service, on the theory that 100 Mbps upload speed will still be a welcome change for customers, and not noticeably slower for most current applications, such as uploading videos or file storage in the cloud.

Industry trade association NCTA reports that Comcast, Charter, Cox, Mediacom, Midco, Rogers (Canada), Shaw Communications (Canada), Vodafone (Europe), Taiwan Broadband Communications, Telecom Argentina, Liberty Global (Europe/Latin America) are all implementing the industry’s 10G initiative, with lab trials already underway, and field trials beginning in 2020. DOCSIS 4.0 will ultimately be a part of that project.

CableLabs is already making plans for DOCSIS 4.1 (our name, not theirs), that will further extend DOCSIS spectrum up to 3 GHz — a massive upgrade in usable spectrum. Whether that will be technically plausible on aging cable systems last rebuilt in the 1990s isn’t known, and probably won’t be for two or more years. But if it proves technically feasible, DOCSIS 4.1 could be one of the last DOCSIS standards before cable systems consider abandoning HFC in favor of all-fiber networks.

CableLabs has proved itself to be adept at squeezing every bit of performance out of a network that was originally built with simple coaxial copper cable and designed to distribute analog TV signals. DOCSIS 4.1 would support speeds potentially as high as 25 Gbps downstream and 10 Gbps upstream. Customers would require new cable modems and cable systems would have to tighten standards to take aging infrastructure out of service more frequently. Upload traffic would likely be assigned spectrum below 1 GHz, with 1-3 GHz reserved for downloads. By then, television, phone, and internet services would likely all be a part of a single broadband pipe.

Cable systems have enjoyed enormous cost savings over the last 20 years deploying DOCSIS upgrades instead of scrapping their existing HFC networks in favor of all-fiber. Charter Spectrum admitted the cost to upgrade from DOCSIS 3.0 to DOCSIS 3.1 was just $9 per subscriber.

While giant cable company mergers unexpectedly took a breather in 2017, Fierce Cable predicts this year isn’t likely to be a repeat of last year.

“With polls showing Democrats poised to begin sweeping back into power with the 2018 midterm elections, look for cable operators to make hay on the current regulatory climate and start turning their rivals into that most precious of resources: scale,” writes Daniel Frankel.

With time for large cable operators to get easy approval of merger deals from deregulation-minded Republicans potentially running out, 2018 could bring dramatic consolidation in the cable industry, with Comcast a likely buyer and Charter Communications a potential seller… if the offer is good enough.

Many industry observers expected the first year of the Trump Administration to be a banner year for cable mergers, especially with the entry of Altice, a European cable conglomerate known for its willingness to overpay to acquire cable operators. Altice has since run into significant financial challenges and investor blowback, forcing the company to shelve acquisition plans for now and focus on debt reduction and developing a stronger business plan to operate its ailing cable and wireless properties in Europe. Altice USA, which owns Suddenlink and Cablevision, has not shelved its plans to upgrade many of its customers to fiber to the home service, but is also no longer seen as an immediate bidder for Charter, Cable One, or WideOpenWest.

Fierce Cable expects Comcast to respond to AT&T’s merger with Time Warner, Inc., assuming the deal successfully overcomes Department of Justice objections in court, and 21st Century Fox’s asset sales to Disney. Both transactions threaten to consolidate programming production and distribution around an even smaller group of media giants, which could challenge Comcast’s NBCUniversal unit as well as the cost of cable programming networks. Comcast has shied away from acquisitions after an embarrassing failure of its attempt to buy Time Warner Cable a few years ago.

If Comcast wants to build scale, it would naturally target an acquisition of Charter Communications, the second largest cable company in the country. The deal would give Comcast dominance over the New York and Los Angeles media markets and broadband service provision across most major American cities. Comcast could also seek a less controversial acquisition of Cox Communications, one of the few major independent cable companies left. But Comcast could also seek acquisitions in Hollywood to bolster its production capabilities.

Most other cable acquisition options would be considered scraps by the largest operators. Altice could be persuaded to prematurely exit the American market and sell Cablevision and Suddenlink if convinced it has no chance of building adequate scale to stand with Comcast and Charter. Beyond that are smaller rural and regional operators including Mediacom, Midco, WOW!, GTT, RCN, and many others that serve fewer than one million customers.

Company executives may be hoping the objections to the AT&T/Time Warner deal are an anomaly for the Trump Administration. But it’s clear that whatever smooth waters exist for upcoming mergers will get choppy as the midterm elections approach. Should Democrats win back the House and/or Senate, life will get considerably more difficult for future media consolidation deals.

French competition regulators have fined Altice for a second time this year for abusing European regulatory policies designed to protect competition in the marketplace.

The French Competition Authority imposed an $88.5 million fine for pursuing mergers and acquisitions without first getting permission from the regulator.

In 2014, Altice rushed into an effort to buy SFR, one of France’s major cellular and broadband providers. Although ultimately successful, the French regulator produced a lengthy dossier with evidence Altice executives allegedly engaged in illegal back door negotiations to complete a takeover of both SFR and Virgin Mobile with or without clearance from the agency that ensures French consumers benefit from competitive markets.

“The Group chose not to refute these practices and to accept the French Competition Authority’s settlement offer,” Altice said in a statement. “The Group chose to settle the matter in order to limit its financial exposure, given the level of penalties imposed for the type of procedural violation under the French Commercial Code.”

SFR customers apparently wished Altice never acquired the telecom provider, because the mass exodus from customer cancellations continued for yet another quarter, despite extremely low-priced customer retention promotions.

SFR’s cable and fiber broadband division lost 75,000 customers in the last three months, 193,000 over the year. Among DSL customers, 120,000 said goodbye to SFR during the last quarter, 432,000 for the year. SFR’s mobile service did even worse, down 88,000 customers in the last three months, 593,000 for the year.

To offset losses on that scale, Altice is relying on American cable customers to make up the difference. At least 41% of Altice’s global operating free cash flow now emanates from Cablevision and Suddenlink customers in the United States. Thanks to rate increases and other revenue enhancers, Cablevision customers kicked in 2.2% more revenue while Suddenlink customers provided 6.2% more to Altice’s revenue numbers. Suddenlink customers are already paying unprecedented cable bills, with a reported 46.4% profit margin, which ranks among the highest in the U.S. cable industry.

Seeing the enormous sums of money to be made running cable companies in the much-less competitive United States, Altice has been drawing up plans for a potential initial public offering to build a war chest to expand the Altice USA empire starting in 2017.

Among the most likely targets to be consolidated under the Altice umbrella: Cox Communications, Cable One, Mediacom and Midco. Some of those companies are privately held, so Altice founder Patrick Drahi would likely have to pay a substantial premium to snap up some of these mid-sized companies.

If the incoming Trump Administration opens the floodgates for a merger and acquisition free-for-all, Drahi might aim higher, looking at Charter Communications. An acquisition attempt of Comcast would be his most audacious move yet.

Those customers consolidated into the Altice family can look forward to higher bills and significant cutbacks in some customer support functions.

Altice plans to continue centralizing call center operations and demanding better performance from workers employed there. By minimizing customer contacts with call centers, costs are reduced. Making sure customer problems are addressed quickly is supposed to reduce customer losses from churn.

Rate increases and additional fine print also guarantee more revenue for Altice operations. In France, SFR has not shied away from imposing multiple rate increases throughout the year, even when customers are “locked in” with a promotional rate. SFR has been playing with how it charges France’s value-added tax (VAT), reducing it for some while adding new passed-thru charges for others. Many customers saw their bills increase by around 10% over the summer and are waiting to pay even more this fall.

Cablevision and Suddenlink customers are getting similar treatment as they discover new and unusual service charges and fees, including general rate hikes of about 3.4% that take effect in December.

The most significant change is that Cablevision no longer provides credits for disconnecting customers. Regardless of when you drop Cablevision service, Altice will not give you any service credits for disconnecting before the end of your billing cycle.

Manasquan, N.J. resident Bonnie McGee discovered Cablevision’s quietly imposed change that took effect in October.

“No matter what now, I am paying for 25 days when I am not getting any service from them,” McGee told New Jersey’s Press on Your Side. Her final bill was $183.

Under the previous owners, billing stopped the day a customer disconnected service and turned in their equipment. Under Altice, customers will continue to be billed for service, even if they cannot access it because they turned in their set-top boxes and cable modem, under the end of the billing cycle.

Cablevision officials call this change a benefit to their customers.

“Optimum services remain available to you for the full billing period and there are no partial credits or refunds of monthly charges already billed,” according to the fine print on Optimum bills.

“Like many entertainment and telecommunications providers, our services are available on a monthly basis, and customers have access to all of our high-quality products and services until the end of their monthly service period,” a spokesperson told the newspaper.

While that may sound good to the bean counters at Altice, it has infuriated customers, and the change may be permanently harming Cablevision’s name, leaving many departing customers even more unhappy with the service they canceled.

“Why would I even think about going back to Optimum for anything?” one asked. “I will never go back,” said another.

Some Midco customers in Fargo, N.D. will be able to buy gigabit broadband from the cable operator in a field trial scheduled to start in March.

Midco (formerly Midcontinent Communications) is moving forward on plans to offer gigabit speeds to all 330,000 of its customers in more than 300 communities in Minnesota, North and South Dakota, and Wisconsin by the end of 2017. Launching field trials is the first step for the cable operator to get experience delivering 1,000Mbps service using the newest cable broadband standard – DOCSIS 3.1.

“Speed matters to our customers, and we have made it a priority to reshape our network to deliver the fastest, most reliable Internet service possible,” Jon Pederson, chief technology officer of Midco said in a statement. “Cisco shares our vision for a fully scalable, efficient network that will take us into the future and manage the bandwidth demands of our increasingly connected lives.”

“Midco has been full speed ahead with its plans to deliver a DOCSIS 3.1-ready network,” added Kelly Ahuja from Cisco. “Through our collaboration, Midco customers will be among the first in the country to enjoy the fastest Internet connection available, unleashing a host of new experiences that can help make their lives better.”

Although Cisco will power the gigabit platform, the company has yet to announce what DOCSIS 3.1 modem(s) it intends to supply customers.

After Midco gets initial results from its trial in Fargo, it will roll out a pilot program for gigabit service to customers in Sioux Falls, S.D. before the end of this year.

No pricing details have been announced.

Bright House Networks’ long standing relationship with Time Warner Cable — which negotiated programming deals on behalf of the smaller cable operator with operations in the south — may come to an end with an approval of a merger between Comcast and Time Warner. That could make Bright House a prime candidate for a takeover.

Charter Communications is likely to seek consolation prizes now that Comcast has outbid the smaller cable company for Time Warner Cable. Liberty Media’s John Malone and Charter’s CEO Tom Rutledge are meeting with advisers and board members to discuss where Charter will go next to grow its operations.

Malone and Rutledge believe the cable industry must consolidate to better position it against competition from online video, phone companies, and satellite television. Malone would like to see the United States served by just a few cable operators, and feels acquisitions are the best way to accomplish his vision.

Charter is almost certain to buy at least some of the three million Time Warner Cable customers Comcast intends to cast-off if it wins regulator approval of its buyout deal. But Team Charter has assembled enough financing to go much farther than that.

Among the most likely targets, according to CRT Capital Group and Raymond James Financial are family held Cox Communications, the third largest cable operator in the country with more than four million customers, Bright House Networks, the tenth largest operator with just over two million customers, and Suddenlink Communications and its 1.4 million subscribers.

Cox, like Cablevision, has been closely controlled by its founding family for years, so rumors of sales of one or both have never come to fruition. But with the merger announcement of Comcast and Time Warner Cable, Wall Street pressure to consolidate is growing by the day. There is talk that if Comcast succeeds in its buyout effort, even satellite providers like DirecTV and DISH are likely to seek a merger. Even Cablevision, which serves suburban New York City may finally feel enough pressure to sell.

A Cox spokesperson this week continued to insist the company is not for sale, but money often has a way of changing minds, if there is enough of it on the table.

Other small regional operators also likely to be approached about selling include: MidContinent, Mediacom, and Cable ONE.