Tag Archives: AT&T

‘Tis the Season (For Layoffs)

It’s going to be a rough holiday season for a lot of industry and tech workers, as communications and tech companies have announced layoffs. According to the hiring experts at Challenger, Gray, & Christmas, the layoffs announced in October were the largest in years. Employers have announced over 1 million job cuts through ten months of this year, already 44% higher than the job cuts for all of 2024.

Technology has the largest number of job cuts for the year, already at over 141,000. There are a number of different reasons for job cuts this year. In October, cost-cutting was the top reason for job cuts (50,437). AI was cited as the reason for 41,039 layoffs. Market and economic conditions were cited as the reason for 21,104 job cuts. The closing of stores and plants accounted for 16,739 cuts, and restructuring was the reason given for 7,588 job cuts.

Here are some of the cuts in the industry as reported by FierceNetworks:

AT&T didn’t announce any formal layoffs but it has still seen staff reduce by over 5,000 positions this year to reach 135,700. Many of the cuts are likely due to the new company policy of mandating that people return to the office five days per week.

Charter reduced staffing by 6,600 in 2024 to reach 94,500. The company recently announced it will be cutting 1,200 more jobs, plus it closed call centers in Ohio and Massachusetts.

Comcast seems poised to reduce staffing but hasn’t announced specific numbers. Rumors are that the company is getting ready to streamline operations.

T-Mobile originally said it was going to lay off the entire staff of 4,100 that came through the acquisition of UScellular. The company ultimately kept “more than half” of these employees.

Verizon actually increased staffing in 2025 and added 800 people this year. The company has been slashing staffing for many years. However, the company told investors when announcing third quarter earnings that it to intends reduce its costs. The Wall Street Journal reported, as I was publishing this blog, that the company plans to cut 15,000 people.  That’s before any impact from the upcoming acquisition of Frontier.

There are a lot of layoffs coming in other parts of the tech industry. Amazon laid off 14,000 people in October and says it will be cutting as many as 30,000 additional corporate jobs. Microsoft eliminated 9,000 positions recently, bringing it to 15,000 for the year. UPS has had the largest cuts with 48,000 jobs eliminated in 2025.

I’m Ready to Call It

I think we can now foresee the demise of traditional telephone service delivered over the PSTN (public switched telephone network). My best guess is the PSTN will ether be dead or dying by the end of 2030. This doesn’t mean the death of telephone voice service, but the end of the regulated service that has been offered by telephone companies. Any voice products that remain will be delivered using VoIP.

The death of the PSTN is being fostered by the FCC, which has made it much easier for telephone companies to tear down or decommission copper telephone networks. The FCC began the process by providing a two-year moratorium on notifications for taking down copper in July and followed that up more recently with a formal docket to make the rules permanent.

Eliminating copper lines is not the same as eliminating the PSTN. I expect the FCC will formally announce rules to end the PSTN soon. But even if the FCC doesn’t take specific action, I expect the big telcos to start dismantling the PSTN in pieces on their own.

The PSTN consists of a private network owned collectively by telephone companies. The PSTN is a series of regional networks that surround a large tandem switch that connects to the telcos and CLECs in the region. The connections between each voice provider and the tandem are called trunks. These are transport routes, many still using the old TDM technology based on T1s, to deliver the traffic. Local voice providers can also have direct trunks to other local voice providers in the area, to the largest long-distance carriers, or to the large cellular carriers.

The PSTN is also the mechanism used to route calls between a local voice provider and the many other carriers in the country. There is a complex set of routing tables that instruct tandem switches how to route calls to reach every registered telephone number in the system. The PSTN is also the starting point for routing other kinds of calls, like international long distance and 800 numbers.

This may sound too complex to break apart, but the biggest telcos have been talking about this for over twenty years. They do not want to be responsible for taking care of the local PSTN arrangements, which costs them money and causes a lot of maintenance. I remember sitting in meetings twenty years ago that discussed ways that the regional tandem switching network could be deactivated over time. There was a lot of investigation done on the topic ten years ago at the FCC, but that effort fizzled out somehow.

The impetus to dismantle the PSTN was always driven by money. The big long-distance carriers were paying huge amounts in access charges to get ‘access’ to the local networks of the many voice providers in the country. The FCC took an axe to many of those fees, and after the magnitude of spending on access decreased, I think the focus on finishing the process died.

The largest telcos like AT&T have always envisioned a much-simplified replacement for the PSTN. Twenty years ago, AT&T talked about a vision where it would replace hundreds of tandem switches nationwide with perhaps two for the whole country. Every carrier that used one of its tandems would be responsible for buying transport to reach one of the big new switches. We can’t ever get rid of the function of routing calls, but this vision would shift most of the cost of the PSTN function away from the big telcos onto each company that originates or terminates voice calls. Under the AT&T vision, the PSTN would be greatly simplified by greatly decreasing the number of locations where calls are exchanged.

There is nothing stopping the big telcos from doing this, other than having a method in place to make sure that calls continue to route. The big carriers are feeling emboldened by the current FCC to wash away old systems, and I think they are now ready to finally tackle this.

AT&T Raises Rates

AT&T announced it will raise broadband rates as of December 1 by $5 per month. This is the second year in a row that the company has raised rates by that amount. The fact that the company is raising rates in today’s environment is an interesting choice. I suspect the rate increase says several things about AT&T. The increase tells me that the company is meeting its fiber penetration goals and doesn’t think a rate increase will hurt its market share. It also speaks to a belief that customers perceive fiber as the superior technology that people are willing to pay for.

This will take AT&T fiber broadband prices to $69 for 300 Mbps, $80 for 500 Mbps, $95 for 1 Gbps, and $160 for 2 Gbps. Before the two rate increases, AT&T was priced noticeably lower than its cable competitors, but that is no longer the case.

The rate increase will apply to existing customers, although AT&T is not raising the rate for it’s low-income plan. In a move that always mystifies long-time customers, AT&T is still offering aggressively low rates for new customers while asking for more revenue from long-time customers. While writing this blog, I saw the AT&T website is offering introductory rates of 300 Mbps for $42 and 1 Gbps for $50. AT&T is also offering a low rate for its FWA cellular broadband of $47 per month.

AT&T is giving customers the typical story that the rate increases are needed to ensure that customers will receive a high level of service. But the company is not mentioning to its customers that it had a net income of $4.9 billion and free cash flow generated of $4.4 billion in the second quarter of this year.

This has to be good news for the big cable companies that compete against AT&T fiber. If the cable companies decide not to raise rates now, they can advertise against AT&T for doing so. However, this could also give cable companies the cover to raise rates again, and I’m sure this announcement is being discussed in cable Board rooms.

What I find most interesting about the rate increases is that the big cable companies have spent a lot of advertising dollars talking about lower rates. Cable companies are in a panic about losing customers to both fiber and FWA and have mostly fought back with lower introductory rates and special promotions.

Charter had a rate increase this year and raised broadband rates by $2 per month, starting with the July 2025 billing cycle. That’s the lowest rate increase from the company in years and follows a $3 rate increase in the summer of 2024. Charter has been pushing a two- or three-year price lock where rates are guaranteed without customers having to sign a contract.

Comcast has not been so cautious with rate increases and announced an across-the-board 5% rate increase for broadband at the end of 2024. It will be interesting to see what they will do this year. But Comcast has also been pushing low-rate deals, including a promotion in April that gave new customers a 5-year price lock.

These annual rate increases always prompt small ISPs to ask if they should raise rates. The majority of small ISPs do not raise rates every year. I know a number of cooperatives that typically only raise rates every three to five years. It’s ironic that, on the whole, these rate increases will mean that urban broadband rates will become significantly more expensive than rural rates, mostly due to urban rates getting increased every year. There are exceptions, and some rural companies have high rates, but most do not.

Broadband Shorts September 2025

The following topics are interesting, just too short of a topic for a full blog.

Criminal Damage to Undersea Fibers. Finland filed criminal charges against the top officers of an oil tanker in connection with damage done to undersea cables in December. The National Prosecution Authority in Helsinki indicted the captain and two first officers of the Eagle S, a Cook Islands-registered tanker that is suspected of being part of a shadow fleet of ships that transports Russian oil in violation of international sanctions. The officers are charged with aggravated criminal mischief for allegedly dragging the ship’s anchor for more than 56 miles across the Gulf of Finland on Christmas Day, cutting five electric and telecom cables and causing almost $70 million in damage. Press releases at the time assumed the damage was accidental.

AT&T Class Action Lawsuits. Millions of AT&T customers are eligible to file claims in the $177 million legal settlement related to two data breaches. The first data breach happened in March 2024 and involved customer data, including date of birth and social security numbers. The second breach in July 2024 exposed calling and text records for nearly all AT&T cellular customers. Multiple lawsuits were filed against AT&T and were consolidated into a single settlement, with $149 million for the first breach and $28 million for the second.

Starlink Introduces Introductory Rates. Starlink has joined the ISP competitive fray and now offers introductory rates to attract new subscribers in rural areas where the company has excess capacity. In affected areas, the introductory rate for monthly broadband is cut from $120 to as low as $85. The company also introduced a new Lite plan for as low as $59 per month for customers with low broadband needs. The plan doesn’t guarantee broadband, and speeds might be deprioritized in times of heavy usage in the area. Starlink has also slashed the price of its receiver in some areas to as low as $89. The discounted rates are only guaranteed for a year, and if customers switch plans or have a service interruption, their rate reverts to the full rates.

Windstream Reunites with Uniti. A decade after the company split into two parts, Windstream and Uniti are reuniting into one company. The original split was unique in the industry and established Uniti as a Reit (Real Estate Investment Trust) that took ownership of the network and leased it back to the telco. The companies are being recombined since the company believes the value of the recombined business will be greater than the value of the two separate companies. The new company will retain the Uniti name and the UNIT stock symbol. The company will keep the Kinetic brand for Windstream fiber customers.

Wi-Fi 7 Adoption at 2%. Ookla reports that one year after introduction, WiFi 7 adoption is just under 2% in the U.S. Nobody expected instant adoption because ISPs need to update customer routers, and customers need to upgrade home devices to be able to use the 6 GHz spectrum being used for WiFi 7. Ookla reports that average speeds with WiFi 7 are almost 400 Mbps faster than the average speeds on Wi-Fi 6E devices and more than 600 Mbps faster than basic Wi-Fi 6. The big advantage of WiFi 7 is the multiple channels available with 6 GHz and the larger size of the channels, which together eliminate contention at a customer site of multiple devices trying to use a small number of channels.

FCC to Bar Chinese Testing Labs. The FCC has begun the process to withdraw the ability of three Chinese labs to certify devices for us in the U.S. The FCC has already withdrawn the testing capability of four other Chinese labs. Many people are not aware that the FCC approves broadband and wireless devices to make sure they meet the claimed specifications. This is particularly important for wireless devices since poorly designed devices can bleed into nearby spectrum bands. In recent years, as many as 75% of devices have been tested and certified in China.

AT&T Accelerating Copper Retirements. The FCC placed a two-year moratorium on notifications related to copper retirement in March and proposed changes to make this permanent. AT&T reacted quickly to the change in regulation and has begun the process of retiring copper in around 500 wire centers, or 10% of the AT&T telco exchanges.

Death of the Fourth Cellular Carrier

The press has been full of recent headlines saying that EchoStar is finished as the fourth facility-based cellular network. EchoStar announced that it is selling 50 MHz of low and midspan spectrum to AT&T for $23 billion, to close in mid-year 2026. The spectrum being sold includes a 20 MHz swath of 600 MHz and a 30 MHz chunk of 3.45 GHz.

Over the weekend, it was announced that EchoStar sold 50 MHz of its AWS-4 and H-block spectrum to Space X for $17 billion to use for Starlink’s direct-to-cell service that will launch with the next generation of satellites. Exchostar’s Boost cellular customers will get access to that new service when it’s launched.

As a reminder, the EchoStar merged with DISH Networks and started using the brand name EchoStar for the cellular business. DISH Networks was promoted by the FCC to become a new nationwide cell carrier when the FCC approved the merger of T-Mobile and Sprint. DISH raised billions of dollars and started down the path of building a nationwide cell network. In doing so, DISH chose the interesting path of using open RAN electronics, which it believed would be more flexible and cost less than the electronics used by the other big cell companies.

DISH has been fighting for years to keep control of large swaths of spectrum. In addition to the spectrum being sold, the company holds 200 MHz, 700 MHz, and 1.7 GHz spectrum. The company had a hard time justifying all of the spectrum since as of May of this year, the company only had 1.25 million customers riding its own cellular network. The company was under investigation from the FCC for holding unneeded spectrum, but these sales should quiet that issues. EchoStar recently announced that it plans to launch a satellite constellation to compete for cellular service some of its AWS spectrum.

Echostar has been struggling financially, and recently averted a Chapter 11 filing when it was late in making a scheduled debt payment on July 1, but was able to do so before the 30-day grace period.  For those not familiar with the history of DISH Network, the largest stockholder is Charlie Ergen. He’s been adept over the years at finding ways to get out of threatening financial binds.

Echostar will continue to operate its other subsidiaries which include Dish TV, online platform Sling, and Hushes high-orbit satellite.

The timing of the spectrum sales is interesting because the company was finally making some headway in the cellular industry. When EchoStar announced its 2Q 2025 financial results, the big surprise was the continued growth of new cellular customers for the Boost Mobile brand. Echostar saw net growth of 212,000 customers for the quarter, up from 150,000 in the first quarter. This back-to-back growth is surprising since the company was losing customers a year earlier. Boost Mobile had 9 million customers when the company was first purchased, and had slipped to a low of 7.4 million customers.

As the headline says, this sale means the death of the EchoStar cellular network. The company discussed how it will try to sell off or scrap the assets.

The second quarter net growth for all of the major cellular carriers is as follows:Readers who haven’t seen a chart of cellular customer growth might be surprised to see how well Comcast and Charter are doing. It seems like both companies are putting a lot of emphasis on cellular growth to help offset the continued losses of broadband customers. The Verizon numbers might look dismal, but both Charter and Comcast largely ride the Verizon cellular networks with resold MVNO arrangements.

The sale of spectrum to AT&T is not good news for cable companies since AT&T said it would use the spectrum, in part, to expand its FWA home cellular business. AT&T was late to the game in launching FWA, and had 1 million customers at the end of the second quarter, compared to 5.1 million for Verizon and 7.3 million for T-Mobile.

AT&T’s Landline Alternative

AT&T announced at the end of 2024 that it plans to retire all copper networks by the end of 2029. The FCC noted in a recent filing that the use of traditional telephone service has decreased rapidly over time. At the peak in 2003, incumbent telcos had 181 landline telephone customers. By the middle of 2024 that had reduced to 18 million traditional landlines along with 64 million voice-over-IP voice customers.

The transition away from copper is going largely unnoticed in urban areas since customers typically have good alternatives to a landline. Surveys have shown that practically everybody has a cellphone, and in cities, except for dead zones in cellular coverage, the cellular network provides a good alternative to landlines.

However, there are still a lot of rural customers for whom a landline is the only reliable communications path to the world. AT&T was catching a lot of public grief when it started to tear down rural copper networks in areas where customers were told the only alternative was cellular service. Because of spotty or nonexistent rural cellular coverage, many rural residents never purchased an expensive cellphone. While a cellphone can be used to make voice calls, a cellphone is not an alternative for connecting medical devices, analog burglar alarms, and other technologies that had relied on the landline connection.

In 2024, AT&T conducted a test of a new technology it labeled as AT&T Phone – Advanced (AP-A). The service relies on an in-home cellular receiver that provides VoIP that can be plugged into existing telephone wiring to provide connections to existing telephone sets and devices connected to the customer’s copper.

The technology worked as planned, and the FCC approved the new technology as a landline replacement. The FCC’s initial approval only concerned a small test conducted of the device in Oklahoma. It’s not clear how widely AT&T is marketing this product, but the company touted the trial to the FCC as being a robust replacement product for rural landlines.

You might wonder about how the product replaces DSL, and it doesn’t. This product is for the rural home that wants to maintain only a landline. It’s worth noting that now that the FCC has labeled broadband as a service, not regulated under Title II, the FCC has no rules that require telcos to offer an alternative to eliminating DSL broadband. This was made explicitly clear in July when the FCC created a 2-year moratorium on having to notify the public about copper replacements.

Rural DSL has rarely been an adequate product due to the fact that customers are typically too far from the DSL hub to get any appreciable speed. But AT&T does have a rural DSL replacement in places where the company has enabled rural cell sites to provide FWA cellular home broadband. As of the second quarter of this year, AT&T has installed over 1 million customers on the FWA product. The FWA product is only effective within a few miles of cell sites that have been FWA-enabled.

It looks like AT&T will be able to expand its FWA footprint after the announcement that the company purchased a pile of spectrum from Echostar. Analysts are already speculating that the primary benefit of the new spectrum is to greatly expand the FWA broadband product.

Monopsony in the Wireless Labor Market

NATE, the Communications Contractors Association, recently sponsored a report by the Brattle Group titled Market Failure in the Wireless Communications Infrastructure Service Industry. The report describes how the three national mobile networks (AT&T, T-Mobile, and Verizon) dominate the labor market for wireless contractors in a way that is undermining the development and retention of the workforce for this critical infrastructure.

The Brattle report calls the situation a monopsony. That is an economic term for a market where a buyer, or a small universe of buyers, has significant market power over vendors who serve the industry. Brattle believes the term applies since the three big cellular carriers collectively control 97% of the cellular market. The contractor market that sells labor to the carriers is comprised of numerous small companies.

The Brattle report describes how the three carriers collectively harm the contractor industry. The three carriers dictate the prices they are willing to pay for service. Contractors complain that the prices offered don’t account for local issues like labor rates, terrain, and weather. 80% of the contractors that responded to a Brattle survey say that prices offered by the carriers don’t cover their costs. The rates don’t cover costs like warehousing of materials, third-party compliance, or training costs for technicians.

The report also shows some interesting graphs that show that the carriers are slow to pay, further adding to the cost of working with them. They have charts that contrast the carriers and show that Verizon pays 75% of invoices within 30 days, while T-Mobile only pays 17%, and AT&T pays 15%. AT&T doesn’t pay more than 45% of its invoices for more than 60 days. Slow payments put a lot of pressure on contractors that must meet payrolls.

The behavior of the carriers is having a big impact on the contractor industry. 54% have downsized during the past three years. A lot of contractors have exited the market and are looking for work outside the cellular market. Attrition of knowledgeable technicians is killing institutional knowledge. The contractors fear that they won’t be able to respond to emergencies or support any effort in a few years to deploy 6G networks.

The Brattle report does not accuse the three big carriers of collusion but says that the desire of each to drive down operating costs is having the same impact as if they were colluding. The report warns that the industry is seeing a noticeable decline in institutional capacity. It takes time and on-the-job experience to train tower climbers – this is not a position that can be quickly ramped up. They warn that loss of experienced tower climbers is not only a concern for the industry but is a national security concern.

The report makes an interesting comparison to another monopsony industry, the companies that build airplanes. The airline industry has learned that it is most efficient if it pays enough to keep experienced workers, because that significantly reduces the time needed to build a new airplane.

The report believes that corrective action is needed. Brattle doesn’t know the best way to fix the problem, which could be done through policy, regulation, or the carriers deciding to change their practices.

This situation is a big contrast to the fiber construction industry because there are hundreds of companies building fiber, which creates significant competition to find a contractor for a project. However, there is a danger after the big spending on grants is completed that the number of companies building new fiber networks will shrink to be similar to the wireless industry.

Big Company Culture

AT&T CEO John Stankey wrote a lengthy memo to all company managers as a follow-up to a company-wide employee survey. AT&T is in the midst of an internal transformation. At the beginning of the year, AT&T mandated that all employees report to the office five days per week. The company is also pursuing an aggressive plan to reduce the number of work locations for white-collar workers to a smaller number of key hubs.

The memo included some blunt messages for employees. One of the key messages is the end of the concept of company loyalty. This is extraordinary for a corporation that historically put employees first. AT&T historically took pride from always promoting from within and that a lineman might someday become the CEO. The memo bluntly points out that “Some of you may have started your tour with this company expecting an ’employment deal’ rooted in loyalty . . . We have consciously shifted away from some of these elements.”

Stankey also stressed that the company culture is shifting to put customers and change first. He said it is important for employees to know what they can expect from the company, and that employees deserve the proper tools to succeed – a clear career path, a functional office environment, and good IT systems – and said the company is working hard to provide these.

But the memo warns that employees who aren’t aligned with the company’s focus should look elsewhere. For example, the memo says, “ if a self-directed, virtual, or hybrid work schedule is essential for you to manage your career aspirations and life challenges, you will have a difficult time aligning your priorities with those of the company and the culture we aim to establish. . . If the requirements dictated by this dynamic do not align to your personal desires, you have every right to find a career opportunity that is suitable to your aspirations and needs.”

You can read the entire internal email at the bottom of this article from Business Insider. It’s worth reading because it says a whole lot more than the few things I’ve cited in this blog.

It’s quite an extraordinary memo because it harkens back to a time when most large American corporations were like this, always putting the needs of the company above the needs of employees. But in the 60s and 70s, AT&T was the antithesis of the typical large corporation. AT&T had a compact with employees that they would have a job as long as they worked hard and made sure that customers were happy. When I worked at pre-divestiture AT&T, it was not unusual to be working with employees with twenty or thirty years at the company. But what was most extraordinary at the company was the degree to which most employees were extremely loyal to the company.

What I find most interesting about this shift at AT&T is that the company is running counter to trends in the workforce. Millennial and Gen-Z employees are, as a whole, more interested in work/life balance than in being a cog in a large company. A significant percentage of employees today will take less pay to be able to work from home at least a few days per week. Younger employees feel like they can develop peer relationships through electronic tools rather than by sitting in live meetings.

Will AT&T and other corporations with company-first policies be able to attract new employees over the coming decades, or will the company have to eventually adapt to the realities of the workforce? It’s not hard to imagine that the word is already getting out on social media that AT&T isn’t a place anybody wants to work. Even when AT&T finds new employees, will they stay? By telling employees that the company is not loyal to them, AT&T can’t expect employees to be loyal to the company, its goals, or its culture.

This new AT&T culture is starkly different than the culture at most smaller ISPs. I work with a lot of ISPs that value employees and keep them onboard through retirement. I’ve always thought this is the reason that small companies do so well when competing against the giant ISPs – customers can see the difference in the way the company values its employees and customers.

A Converged Carrier Market?

T-Mobile made financial news recently when a KeyBanc Capital Markets analyst downgraded the long-term outlook for T-Mobile stock and said the company is “underweight”. Press coverage quoted the analyst saying, “We think [T-Mobile] is fiber deficient in a converged/bundled world”.

We’ve been headed towards the industry that is dominated by a handful of converged telecom providers, and the comments from this analyst show that day is probably here. The analyst’s comments come from comparing T-Mobile with the other giant converged companies that offer broadband and wireless, specifically AT&T, Verizon, Comcast, and Charter/Cox.

It’s curious why the analyst dinged T-Mobile because the company is profitable and successful. In the latest financial report for the second quarter of 2025, the company reported $17.4 billion in customer revenues, up 6% year-over-year. Net income was $3.2 billion, the highest-ever for the company and up 10% year-over-year. Net cash from operations was $7 billion, up 27% year-over-year. Adjusted free cash flow was $4.6 billion, up 4% year-over-year.

T-Mobile was criticized because the analyst believes that the most successful big companies will be those that lock up customers with a bundle of broadband and wireless. That seems to mean that the companies with the most gigabit passings will be the ultimate winners in the market. T-Mobile is expected to have about 15 million fiber passings by 2030. That pales behind the 50 million passings expected by Verizon by 2020 or the 60 million planned by AT&T by 2023. Charter passes 57 million homes today and will be adding 7 million homes when it closes on the merger with Cox. Comcast says it will have 62.5 million passings by 2023. T-Mobile will clearly have the smallest fiber footprint.

How are the other big four converged companies doing with bundling? Comcast had 8.5 million cellular customers at the end of 2Q 2025 compared to 31.4 million broadband households. Charter had 10.9 million cellular customers compared to 29.9 million broadband households. AT&T reported for 2Q 2025 that 40% of its fiber customers are buying cellular. I can’t find where Verizon highlights the percentage of homes that buy cellular and broadband.

So this year, the stock market doesn’t seem to be valuing the converged carriers evenly. As I wrote this blog, T-Mobile stock was up 19% for the year. Comcast stock is down 11% for the year and Charter is down 22%. Verizon stock is up 6% and AT&T is up 20%. There is a story behind all of the stock price changes, and it mostly involves changes in customers and earnings, not in the percentage of convergence.

One thing is clear. These five companies dominate the telecommunications space. The five companies have most of the cellular customers in the country, and T-Mobile will be adding customers from the USCellular purchase. The five companies had over 98 million broadband customers at the end of the second quarter of 2025, and Charter will be adding 6-7 million more customers if the merger with Cox is approved. The five companies account for almost all of the national net growth of broadband customers.

The KeyBank analyst was looking at the long-term trajectory of T-Mobile compared to the other giant companies. The analysis statement seems to assume that FWA growth will eventually top out and decline in competition with the other big carriers. But for now, in the second quarter, T-Mobile had the biggest growth in both cellular and broadband customers. It’s obvious that T-Mobile has something today that customers value. My crystal ball is not clear enough to be able to predict that T-Mobile is going to stop growing any time soon, and it seems too early to predict that T-Mobile won’t be in the same category as the other four converged companies.

A Peek at the New BEAD

The State of Tennessee released a side-by-side comparison of the new Benefit of the Bargain round of BEAD applications compared to its initial round of BEAD applications conducted before the revised BEAD rules.

The side-by-side comparison (file:///C:/A/Articles/Tennessee-BEAD-Comparison.pdf) is interesting and shows some big differences between the two grant rounds:

  • Tennessee received 541 applications in the new Benefit of the Bargain round compared to 298 applications in the original round of BEAD.
  • The low-orbit satellite companies Starlink and Kuiper bid throughout the state. Starlink didn’t submit any applications in the first round but bid almost everywhere in the new BEAD round. Kuiper bid for most of the state in both BEAD rounds. Satellite is clearly going to win a significant amount of grant funding since there were 68 of 173 serving areas that got proposals from one or both satellite providers and no other technology. The satellite companies surprisingly don’t seem to be fazed by bidding in Appalachia.
  • There were surprisingly few proposals for fixed wireless technology, with proposals only made in 12 of the 173 study areas included in the new round of BEAD. Part of the reason for this might be the mountainous and hilly nature of much of Tennessee, but there are plenty of areas in the central and western parts of the state where wireless will work well.
  • Comcast switched technology from the first to the second round. In the first round, the company proposed to build fiber, and in the new round it mostly changed to traditional hybrid fiber/coaxial networks – apparently to be able to bid at a lower cost. This makes me wonder if it’s really cheaper to build copper coaxial cables than fiber or if Comcast is just willing to take less funding.
  • There has always been a big question of whether big ISPs would show up for BEAD. There are three big companies in the new round of BEAD – AT&T, Comcast, and Windstream. The industry has always wondered if AT&T would join BEAD.
  • There are a number of smaller ISPs asking for funding to build fiber that includes cooperatives and municipalities.
  • There are four service areas that had no proposals. The state will have to talk an ISP into serving these areas before they can close out their BEAD grants.

It’s impossible to make any definitive cost comparisons between applicants because the new BEAD rules allow ISPs to request to serve areas smaller than the serving areas suggested by the state. There are also roughly 7,000 fewer passings on the newest BEAD map than were included in the initial BEAD grants. But in general, the comparison shows:

  • Most companies proposing to build fiber bid less the second time, but some of this could be due to fewer eligible passings and not just to a sharpening of the pencil.
  • Fiber ISPs across the country are wondering how much lower other technologies will bid in BEAD. There is only a single company asking to build wireless in the state, and their proposed grant awards are roughly one-third the cost of those asking for fiber in the same study areas. But without knowing more details, that ratio might not mean anything for other states.
  • However, satellite bids are incredibly low, most at 10% or less than proposals to build fiber. There is a map showing the eligible passings by study area, and I eyeball the satellite bids to be in the range of $400- $600 per passing. Kuiper is generally significantly lower than Starlink. These low bids are going to worry ISPs everywhere.