Tag Archives: Charter

California Competition Study

The Public Advocates Office, which is part of the California Public Service Commission, undertook a a deep analysis of broadband pricing in the state, correlated with the level of competition. The study was conducted from August through October of 2025.

The study looked at four large markets in the state: San Mateo, Oakland, Los Angeles, and San Diego. By choosing these markets, the study encompasses the four largest ISPs in the state – AT&T, Comcast, Charter, and Cox. The study gathered information on available broadband plans by location, advertised speed tiers, and promotional prices. The study also overlaid household incomes from the Census across the data it gathered to explore if household income played a role in prices offered by the big ISPs. The markets are interesting because they not only vary by ISP, but each market has some neighborhoods where the only gigabit provider is the cable company, and other neighborhoods where there is also one or more fiber competitor.

The overall conclusion of the study won’t surprise anybody who follows the big ISPs – broadband prices vary by the level of competition. In aggregate, the study showed that the price for broadband in competitive neighborhoods across the four markets was around $51 per month, while prices in non-competitive markets were $15 to $40 higher per month for comparable services.

The study resulted in three major conclusions:

Gigabit Fiber Drives Lower Broadband Prices. The study demonstrated that price competition only kicked in for neighborhoods where there are multiple ISPs offering gigabit broadband. That means a cable company and at least one fiber provider. The study showed that when there is competition for gigabit broadband, the competition extends downward to slower speeds offered by the big ISPs.

The study demonstrates something that is probably obvious, in that pricing is trimmed even further when there are more than two gigabit providers in a neighborhood.

Sub-Gigabit Providers Do Not Reliably Constrain Price. This is an interesting finding. It says that when the only competition to a cable company is an FWA cellular provider or a fixed wireless ISP, the cable company does not engage in significant price competition to keep customers. The study showed that, in fact, some of the neighborhoods with this kind of competition see the highest prices from the big ISPs.

This doesn’t mean that cable companies never compete hard against 100 Mbps providers, but this finding makes a lot of sense. Customers are attracted to the low prices of the FWA providers, and both T-Mobile and Verizon have price options as low as $35 per month. Cable companies, at least in these four large markets, are not willing to drop prices to compete with those prices.

Income is Not a Primary Driver of Prices. This is a bit of a surprise, because there were previous studies that suggested that pricing was lower in neighborhoods with the highest household incomes. That may have been true five years ago, but the data now suggests that prices offered by the big ISPs are mostly related to the level of competition.

The study made some other interesting observations. One observation is that in competitive neighborhoods, promotional prices can vary by household, and somebody might be paying a significantly higher or lower price than their immediate neighbors.

The study is worth reading for anybody interested in how big ISPs compete. The study has a lot of detail about how big ISPs stratify addresses and pricing offers based on the presence of other gigabit providers, while not caring much about ISPs that compete with slower products.

Charter to Offer Wireless Backup

Charter plans to leverage one of its competitive advantages and offer wireless backup to residential broadband customers. This service would mean an automatic rollover to cellular data any time Charter’s normal broadband connection goes down.

Charter started to offer this service to businesses during the pandemic in 2020. Charter charges businesses $20 per month for the service. Charter provides business customers using the service with a cellular modem that includes a SIM card. The modem includes up to eight hours of battery backup, meaning that it will kick in when customers lose power – and benefits customers who have backup power for their computers. Customers get unlimited usage while using the cellular network.

The cellular backup doesn’t provide a full-replacement backup. Speeds are going to be a lot slower than the broadband provided by Charter’s HFC network. Functions like static IP will likely not be connected through the wireless connection. The service will only work for customers who can receive a good cell signal from Charter. Charter has begun using some of its own cellular frequencies in parts of some markets, but Charter’s cell service is mostly provided using the Verizon network. I happen to be a Charter broadband customer, but I also live in a total dead zone for Verizon cellular, so this backup service wouldn’t work for me.

Charter’s announcement said that Charter would be offering this to residential customers on similar terms as for businesses. We don’t know yet if this also means $20 per month. This service will be of interest to those who are badly disadvantaged by broadband outages. This makes great sense for a retail store, for example, which might lose the ability to accept credit cards during a broadband outage. It seems likely that a business might benefit from the service even for one or two Charter outages per year.

I have to wonder who this will benefit in the residential market? I lose Charter broadband from time to time, and I always switch my computer to use data from my cellphone. The change takes a few minutes to restore broadband. What goes dark during a Charter outage is the TV and any other devices in our house that rely on broadband. While we have a ton of WiFi devices in the house, none of them are critical. For example, we don’t have smoke detectors or doorbell cameras that rely on WiFi. I imagine folks who rely on WiFi for such devices might be interested in the wireless backup service. Like most homes, I don’t have a backup generator for power outages, so this service wouldn’t give me any real benefit during a power outage.

The product does raise an interesting question. I live in a city where the vast majority of homes use either Charter or AT&T for home broadband. I have to think that any time that one of these ISPs has a broadband network crash, a lot of people switch to a cellular network. It’s hard to think that those networks don’t get super busy and slow down during broadband outages. The Charter service will drive even more people to the Verizon cellular network. Perhaps the cellular networks are more robust than I imagine, but it has to be burden when the cellular networks are suddenly inundated by a lot of normal home and business broadband customers using cellular data.

Competing Against the Bundle

For many years, competing against the bundle referred to anybody who tried to compete against a cable company that offered the triple-play of broadband, cable TV, and telephone. I conducted market surveys for years, and it was not unusual to find 60% to 70% of cable company subscribers who were buying the bundle.

The triple-play bundle was a powerful marketing tool when a majority of homes were interested in buying all three products, since subscribers could buy all three products in a bundle that cost less than buying them individually. The power of the bundle came from the high cost of breaking the bundle, which made it a challenge for customers to consider alternative broadband providers. However, over time, telephone subscriptions have dropped from 95% to under 20%, and cable TV subscribership has dropped by over half, and is still diving.

While some version of the triple-play bundle still exists, competitors now face two new bundles that are proving to be effective in the market. Both bundles include cellphones as part of the package. FWA sales have been phenomenal. In the third quarter, the three major FWA carriers had almost 14.3 million FWA customers and added over 1 million net new customers, the highest quarterly gain yet.

The three FWA cellular broadband providers have been phenomenally successful in selling home broadband delivered using cellular spectrum. The main selling point is the lower price of FWA broadband, which is priced lower than cable company and fiber broadband. The base price for AT&T is $65; for T-Mobile, it’s $55 – 65, and for Verizon, it’s $60 to $70.

But the base FWA price is not the story, at least for T-Mobile and Verizon. Both companies reduce the broadband price by $15 for bundling with a cellphone plan. Both also offer discounts for customers who use autopay billing. The bundle reduces the price for broadband for both T-Mobile and Verizon FWA to $35 to $45 per month, which explains why the product is selling so well.

The other cellular bundle comes from the biggest cable companies, with Comcast and Charter leading the way. Both cable companies have been aggressively selling cellphone service to existing broadband customers. The primary motivation for the cellphone bundle is to reduce churn by keeping broadband customers from leaving for a competitor.

Charter sells several cellular options. The base cellular package is $20 per month, which includes 1 GB of data, with extra data at $5 per GB. The $30 plan comes with 30 GB of data. The $40 plan comes with 50 GB of data. Comcast also sells by the gigabyte. $15 per month buys 1 GB; $30 per month buys 3 GB, and $60 per month buys 10 GB. But a better option for large data users is the unlimited plans. The $40 Unlimited plan comes with 30 GB of data. Unlimited Plus for $50 comes with 100 GB of data.  All of these plans are often advertised as specials for even less. Charter recently made an offer that a home that will buy and keep for cellphone plans can have free broadband for as long as they keep the phones.

The cellular bundles have been selling well. Consider the national net change in customers for the first two quarters this year for the largest cellular companies:There are a lot of quotes from executives of fiber overbuilders saying that they are not concerned about cable company cellular or FWA. But there is no doubt that these bundles are attracting a lot of customers. These are the two bundles to keep an eye on.

 

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.

Charter Sued Over ACP Losses

In recent years, it seems that when there is a sudden drop in the stock price for a publicly traded company, a class action suit will soon follow. In the broadband industry, Charter was recently sued after its stock dropped $70.25 per share on July 25, from a price the day before of $380 per share.

The stock price dropped after Charter announced its earnings results on July 24 for the second quarter of 2025. The class action suit blames the sudden stock price drop on Charter’s misleading statements about the impact of the end of the ACP program. That program provided a $30 subsidy for home broadband for qualifying low-income households. Charter was the most aggressive ISP in the ACP program and had enrolled around 5 million households. When Charter discussed its second quarter results, the company said that it lost 117,000 broadband customers for the quarter, and that 50,000 of  those losses were the residual impact of the end of ACP.

Charter explained that the 50,000 customers it lost were due to households unable to afford monthly payments – something that it believes would not have occurred if ACP were still in place. These weren’t ACP customers, since that plan ended a year earlier, but the customers were similar to those who had been enrolled in ACP.

I did a little digging to look deeper at the facts. I was curious how Charter’s customer losses compared to those of other publicly traded cable companies. The following chart shows the customer performance for each company since the end of 2023.All of the big cable companies are losing customers – something that is a constant headline for the industry. Analysts pin most of these losses on fierce competition from FWA cellular carriers and fiber overbuilders, both of which have been adding customers at a rapid pace over the last two years. The chart shows that Charter has done a better job of minimizing customer losses than all of the other publicly traded cable companies. Over 18 months, Charter lost 2.2% of its 4Q23 customers, a lower percentage drop than the other companies.

The loss of ACP customers wasn’t the only bad news in the Charter earnings release. Charter announced earnings per share of $9.18, up from $8.49 per share a year earlier. But according to stock analysts, the earnings were lower than the expected earnings of over $10 per share. Possibly due to the expectations of higher expected earnings, Charter stock had climbed to a high price of $427.25 on May 16, 2025.

The Charter stock price drop also can’t be blamed on the overall market, because on July 25, the S&P 500, the Nasdaq Composite, and the Dow Jones Industrial Average all rose to near all-time highs for each index.

I am the last person you’d ever ask for stock advice, and big market swings like this are a mystery to me. But still, when looking at the facts, it’s hard to think that a company with 30 million broadband customers would be dinged by an 18% stock price drop due to losing only 50,000 low-income customers. However, that is certainly possible, and I guess a jury will have to eventually figure it out.

When is Network Damage Terrorism?

On July 1, Charter issued a press release that labeled damage to its fiber lines in Van Nuys, California, as domestic terrorism. The company said that thirteen fibers, that included 2,600 individual fibers, were cut. The cuts knocked out critical infrastructure such as emergency services, a U.S. military base, 911 centers, fire and police departments, financial institutions, court buildings, healthcare facilities and hospitals, educational institutions, and cell towers. The cuts affected more than 50,000 residential customers and more than 500 business customers for up to 30 hours.

On July 15, the company issued a second press release talking about a series of fiber cuts in Missouri. Charter, where it experienced 148 outages in the first half of the year, doubling the number of fiber cuts from the previous year.

This is the first time I remember an ISP labeling fiber cuts as domestic terrorism. But there have been clear cases of damage to communications systems that can be chalked up to terrorism. One incident that came to mind was a bomb detonated on Christmas Day in 2020 outside of an AT&T switching center. Electric companies have seen deliberate attacks on infrastructure, such as two substations attacked in Moore County, NC in 2022.

Charter’s announcement raises an interesting question about how to distinguish terrorism from normal damage to telecom infrastructure. There are a lot of incidents of damage to networks. ISPs reported over 5,700 incidents of infrastructure damage in the second half of 2024. A joint report issued by NCTA, CTIA, USTelecom, NTCA, and WIA detailed these incidents. That report says that 1,915 of the 5,700 incidents were cable cuts. A lot of these cuts were accidental or can be chalked up to those who dig without properly locating existing buried facilities. However, the report categorizes eighteen incidents as deliberate sabotage, and there may have been other incidents that should have been categorized the same way.

Charter admits that it’s using the domestic terrorism language to try to get the attention of legislators and law enforcement. There are 28 states today that have created a specific felony for deliberately damaging telecom infrastructure, and Charter would like to see that in more states. The company would also like to see law enforcement prosecute more cases. Charter would also like to see federal legislation address the issue.

Charter got the attention it was seeking. I’ve now seen articles throughout the industry asking if deliberate fiber cuts are domestic terrorism. The FBI opined that the cuts in Van Nuys were more than vandalism, and any industry person can understand that somebody didn’t accidentally cut thirteen different fibers.

After thinking about it, my definition of terrorism is when somebody destroys telecom infrastructure with the specific goal of knocking a lot of people out of service, particularly if the damage is done in a way that takes time to fix. A lot of damage to infrastructure is malicious, but is done for other purposes. For example, a lot of the incidents detailed in the report mentioned earlier were copper thefts. That is clearly criminal activity, but it’s difficult to classify as terrorism. Is it terrorism when somebody shoots at cables hanging on wires? Probably not, and this is just malicious vandalism.

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.

Broadband Trajectories

For most the dozen years I’ve been writing this blog, the biggest cable companies accounted for almost all of the growth in broadband customers. Quarter after quarter, and year after year, the big cable companies were the source of almost all new net broadband customers.

This started to shift a few years ago when FWA cellular home broadband from T-Mobile, Verizon, and more recently, AT&T entered the scene. For the last couple of years, almost all of the net broadband growth in the country came from the FWA technology and these three carriers.

It’s clear that we’re now entering a new stage the industry where cable broadband losses are accelerating, where FWA growth hasn’t slowed, and where the big telcos are growing again because of their expansion of fiber.

Consider the following statistics that show the net change in broadband customers over the last year, and for the latest quarter, for the largest cable companies, largest telcos, and FWA carriers. There are a few big companies missing from this comparison like Cox, Mediacom, and Windstream, since those companies are privately held and don’t publicly report customer counts.

These numbers show that telcos other than Lumen are growing again. The numbers for telcos don’t tell the whole story because net customer changes in the table include both DSL losses and fiber gains. For example, during the last year, AT&T added over 1 million customers to fiber.

These trajectories don’t bode well for the big cable companies. There were a lot of predictions made last year that FWA growth would slow down, and that doesn’t seem to be the case yet in 2025. The telcos are all picking up steam in terms of adding fiber customers. It’s going to be interesting over the coming years to see how the biggest cable companies fare in battling everybody else. Charter has decided to fight the trend through the merger with Cox. We’ll have to wait and see what the rest have in mind.

The Year of Huge Mergers?

Is this finally going to be the year when the largest ISPs gobble up everybody else of size? There was big news in the industry on Friday when Charter announced it is merging with Cox Communications. Cox has over 6.5 million customers and the combined business will be the largest ISP that covers over 70 million passings, exceeding Comcast’s 64 million passings.

The announced value of the merger is $34.5 billion. Cox is a privately held company, and the owners of Cox will receive:

  • $4 billion in cash
  • $6 billion in convertible preferred equity that holds a 6.875% coupon. These shares can be exchanged for Charter common stock.
  • Approximately 33.6 million units of Charter’s existing partnership, with an implied value of $11.9 billion, which can also be exchanged for Charter common stock.
  • Charter will absorb Cox’s $12 billion in debt.
  • If all of the convertible equity were converted to common stock, the current Cox owners would own 23% of Charter common stock.

Charter announced some interesting benefits of the merger:

  • The combined companies will rebrand at the corporate level as Cox Communications within a year after closing. The company will keep the Spectrum brand name.
  • Charter expects to realize about $500 million per year in savings upon consolidation. That likely means layoffs.
  • Cox broadband prices are higher than Charter’s, so Cox customers will have the opportunity to lower rates.
  • The merger will bring Cox customer service back to U.S. call centers from overseas.
  • The merger expands the opportunity to grow Charter’s cellular service.
  • Advertisers will reach a larger customer base.
  • There is more opportunity to leverage the benefits of AI.

Starting in 2022, Cox announced a major emphasis on converting its coaxial networks to 10-gigabit fiber. The company has built fiber in markets like Phoenix, Mesa, Hampton Roads, and other markets. As a privately-held company, Cox never talked about numbers, so we don’t know the extent of its fiber conversions.

The FCC also approved the merger of Verizon and Frontier on Friday, and the number of potential ISP acquisition targets is quickly shrinking. After this transaction, the only remaining ISP merger targets with more than 1 million broadband customers are Altice (4.2 million), Lumen (2.5 million), Mediacom (1.4 million), and Cable One (1 million). The only other ISP that is probably close to a million is GFiber. Earlier this year, there were rumors that Charter was looking at Altice.

The merger announcement comes at a time when Charter has announced losses of 496,000 broadband customers over the last year. All of the big cable companies are losing customers, and its likely that Cox has been doing so as well. It will be interesting to see how Wall Street reacts to the merger. Charter stock quickly rose 4% after the merger as announced but ended up only 1% higher for the day.

New Radio over Coax

Charter, Rogers Communications, and CableLabs have collaborated on a new technology they are calling new radio over coax (NRoC). The immediate goal of the new technology is to use a cable company’s coaxial network to transmit 5G signals. In Charter’s case, the company wants to use new bandwidth to take advantage of Charter’s CBRS spectrum.

The technology to make this happen relies on opening up new spectrum inside the HFC (Hybrid fiber coaxial) network at frequencies higher than 1.8 GHz, which is the current bandwidth needed to implement DOCSIS 4.0. Much in the same way that DSL transmits broadband at a higher frequency on telephone copper, NRoC will transmit at a higher frequency that won’t interfere with the current network transmissions of video and broadband.

There are numerous potential uses for a cable company by opening a new data path on an HFC network. Charter wants to turn neighborhood HFC nodes into small cell sites using CBRS spectrum. Charter purchased a substantial amount of CBRS spectrum in 2020 and has already deployed several hundred CBRS transmitters in neighborhoods in North Carolina, Georgia, and Alabama. Charters wants to use its own CBRS spectrum to provide cellular relief in neighborhoods with high cellular demand and to reduce the MVNO cellular minutes it buys from Verizon.

Charter says that NRoC can transform the cost of small cell deployment. The company already has huge numbers of existing neighborhood nodes where the network transitions from fiber to coaxial cable. This technology would enable Charter to add a new small cell site at any node for a significantly lower cost than adding a traditional small cell site. Deploying NRoC radios takes advantage of existing networks and don’t require new backhaul or fiber construction.

Having a second data path across the whole network opens up a lot of other possibilities.

  • The extra bandwidth might be a good place to house AI software used to maximize the performance of the network.
  • The extra bandwidth could be used for new products, such as supporting communications with IoT sensors.
  • An intriguing possibility would be to use the extra bandwidth as a way to distribute earthbound traffic from direct-to-satellite cellular communications.

Charter hasn’t disclosed any details about the CableLabs development, but it’s not hard to envision dozens of market uses for a second data path for networks that are already routed into every neighborhood in urban and suburban markets.