Tag Archives: Charter

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.

RDOF Defaults

The Benton Institute for Broadband & Society pieced together the statistics for defaults to date on the FCC’s RDOF and CAF II reverse auctions.

The RDOF (Rural Digital Opportunity Fund) was the biggest attempt at the time to solve the rural broadband gap. The FCC had originally slated $20.4 billion to award to ISPs in a reverse auction, meaning the ISP willing to take the smallest subsidy for a given area won the funding. Winners were to collect the funding over 10 years and had up to seven years to build the promised networks.

The program ran into problems in several dramatic ways. First, the FCC chose the areas eligible for RDOF using its badly flawed broadband maps. RDOF was supposed to be awarded to Census blocks where nobody could buy broadband of 25/3 Mbps or faster. Unfortunately, the FCC maps had huge numbers of blocks where ISPs claimed exactly 25/3 Mbps ability, and those areas were not eligible. The non-eligible eventually became most of what is being addressed now with BEAD, which indicates how poor the maps were at the time. In a problem that is still plaguing the BEAD process, the FCC made the funding available in what is best described as a checkerboard of eligible and non-eligible areas.

At the close of the BEAD auction, ISPs had claimed over $9.2 million in RDOF subsidies to serve over 5.2 million locations. Benton has assembled a spreadsheet that shows that 1.9 million of those locations and $3.3 billion were defaulted. The two biggest defaults came from FCC action. The FCC decided that Starlink broadband did not meet the speed goal of the plan, and the FCC canceled $852 million that was to cover 630,000 locations. The FCC canceled awards of $1.3 billion to cover 528,000 locations for LTD Broadband after the FCC decided the company didn’t have the financial and technical ability to fulfill its commitments.

The Benton spreadsheet shows 135 entities that defaulted on BEAD or the CAF II reverse auction. The reason for some of the defaults is obvious. Thirty ISPs won subsidies to build to less than 50 locations. It’s likely that most of them were trying to win larger areas and defaulted because the paperwork burden of complying with RDOF wasn’t worth the tiny amount of subsidy.

The other major reason for defaults is the amount of subsidy. The average award for the defaulted areas is $1,732 in RDOF subsidy per location, paid out over ten years. Starlink had asked for $1,353 per location. LTD Broadband won awards of $2,501 per location. The other awards average out to $1,503 per RDOF location. It’s not hard to imagine ISPS looking at the size of these awards and deciding they couldn’t make the math work – particularly after inflation ballooned due to the pandemic.

As Benton warns, the defaults may not be over. Most of the RDOF winners should have built 40% of their locations by the end of 2024. I’ve been working with a lot of Counties that haven’t seen any progress on RDOF and are wondering if the networks will ever be built. I hope Benton follows up by getting a tally, by State, of where RDOF has already been built. I would assume any ISP that isn’t meeting the 40% obligation is probably a good candidate for additional default.

This all sounds negative, but there have been networks built all over the country from the RDOF funding. Numerous electric cooperatives built networks more quickly than the FCC’s required timeline. Charter was a huge winner and says it is far ahead of schedule on RDOF. Yet risk of further defaults is alarming. I know there are a lot of rural folks who are counting on the remaining RDOF networks being built, because further defaults mean areas with no broadband solution.

Comcast and Charter Stocks Drop

The stock market punished Charter and Charter last week after the two companies reported small customer losses in the fourth quarter of 2024.

First the facts. Charter reported a loss of 177,000 broadband customers. With a customer base of almost 30.1 million customers at the end of 3Q 2024, that’s a 0.59% loss of customers – just over one-half of one percent. The stock market reacted by dropping Charter stock from $361.22 to $326.78 – a drop of 10%.

Comcast reported a loss of 139,000 broadband customers. With a customer base of over 31.8 million customers at the end of 3Q 2024, that’s a 0.44% loss of customers – less than one-half of one percent. The stock market reacted by dropping Comcast stock from $37.54 to $32.58 – a drop of 13%.

On the surface, this seems like an extreme overreaction to small losses. Textbook stock valuations would not concentrate on something like the customer counts but on overall earnings. Consider Charter, which released its fourth-quarter earnings. While the company lost 177,000 broadband customers, Charter also:

  • Added 529,000 cellular customers in 4Q 2024.
  • Fourth-quarter revenues are up 1.6% over the previous year.
  • Fourth-quarter EBITDA was up 3.4% from the previous year.
  • Charter bought back $1.3 billion of its shares, which is supposed to increase stock value.
  • On the bad news side, Charter lost 1.23 million cable TV customers during 2024, a trend that has been happening for years. That’s a little higher than the 1 million cable customers lost in 2023.

Comcast results are similar for the fourth quarter. In addition to losing 139,000 broadband customers,

  • Comcast added 307,000 cellular customers in 4Q 2024.
  • Fourth-quarter revenues are up 0.2% over the previous year.
  • Fourth-quarter EBITDA was up 3.5% from the previous year.
  • On the bad news side, Comcast lost 1.58 million cable TV customers during 2024. That’s an improvement over the 2 million cable customers lost in 2023.

Perhaps the drops are recognition of the long-term trajectories for cable companies. Both companies told investors in 2024 that they had weathered the storm to offset losses due to FWA wireless. However, AT&T, T-Mobile, and Verizon had another great quarter and added 960,000 FWA customers.

Cable companies are also seeing increased competition from fiber overbuilding. RWA LLC recently issued a report that fiber overbuilders passed 10.3 million total homes for the year ended September 30, 2024. Over 9% of that new fiber is being built by cable companies. RVA says that in neighborhoods where fiber has been in place for several years, cable companies lose an average of 33% of their customers.

It’s actually amazing that the cable companies have maintained customers over last year while fending off FWA and fiber overbuilding. The fact that customer losses are small is a success story. However, there is a darker side to the story – they’ve kept customers by cutting prices. While Charter and Comcast both had broadband rate increases in 2024, both have been keeping customers by lowering rates.

It’s likely that the size of the stock price drops were exaggerated due to the craziness that happens in markets in times of economic uncertainty. These are not the only companies getting punished in the stock market. But maybe this is an overdue adjustment due to changes in the underlying fundamentals of the businesses.

What Does Unlimited Mean?

It’s always entertaining and informative when the big ISPs fight with each other. One recent battle comes from Verizon filing a complaint with the National Advertising Division (NAD) of the Better Business Bureau.

Verizon complained about Charter advertising that touted its cellular service as unlimited. Charter has been marketing both an Unlimited and Unlimited Plus cellular plan, and the advertisement for these plans implies that customers can use as much voice, data and texts as they want. The very name Unlimited implies to the average customer that there is no cap on usage.

As you would expect, this isn’t exactly true, and none of the cellular carriers, including Verizon, has a truly unlimited cellular data plan. In Charter’s case, data speeds are severely restricted once a customer reaches a monthly cap. There are also other limitations on data usage, such as the amount that can be used for tethering during a month.

The dispute went to NAD since the big carriers have all agreed to use NAD as the arbiter of disputes about advertising claims. This saves the carriers from taking each other to court, and the carriers all accept decisions made by NAD.

Interestingly, NAD decided that the Charter plans are unlimited since customers never get cut off entirely from using data. However, NAD asked Charter to fix its advertising to disclose that there are limitations placed on data usage after reaching a cap.

This particular tussle between Verizon and Charter is typical of the disputes that have been forwarded to NAD over the years. The telcos and cable companies keep a close watch on each other, and complaints are lodged when a carrier makes exaggerated marketing claims.

I predict we’ll see an uptick in advertising disputes as carriers react to being freed from regulation. The FCC clearly no longer regulates broadband as a result of the Sixth Circuit ruling that killed Title II regulation. My guess is this will embolden ISPs and cellular carriers to push the envelope in their advertising to the public.

There are some regulations that will stay on the books. For example, the Infrastructure Investment and Jobs Act created broadband labels, and the FCC can’t kill that requirement without action from Congress. But most ISPs have already buried these where customers can’t easily find them.

Seeing the Impact of ACP

The Affordable Connectivity Program lapsed in May of this year. At the time the program ended there were more than 13 million ACP recipients getting a discount on a cellphone plan and 10 million getting a discount on landline broadband. Charter had fully embraced ACP and was reported to have over half of the landline ACP participants.

There were dire predictions at the end of the ACP that many millions of households would drop landline broadband since they could no longer afford it. For example, a survey conducted by the Benton Institute in June reported that 13% of ACP recipients would be forced to drop home broadband. The Benton survey showed that as many as 43% of low-income homes are subscription vulnerable, meaning they struggle to pay a broadband bill.

Any immediate impact of the end of ACP was softened as many ISPs extended ACP benefits for a few months out of their own pockets in the hope that Congress would pass legislation to continue the plan. That likely pushed any noticeable impact from ACP out until late summer.

Many ISPs also offered an alternative low-income plan for qualified customers. It’s possible these low-income plans have enabled households to stay connected.

  • Charter kept its Spectrum Internet Assist plan that offers 50 Mbps for $24.99, with the speed for an extra $5.
  • AT&T continued its Access from AT&T that provides 100 Mbps on fiber for $30.
  • Comcast kept its Internet Essentials plan that provides 50 Mbps for $9.95.
  • Cox kept its Connect2Compete plan for households with students that provides 100 Mbps for $9.95 and $30 for other households.
  • Mediacom offers its Xtreme Connect plan for $28.99 per month, which is reduced to $14.99 for homes with students.

We got a glimpse into the impact of the end of ACP recently when Comcast announced third quarter financial results. Comcast reported that it lost 96,000 net customers in the quarter as a result of ACP, and without the ACP losses the company would have experienced a tiny gain of 9,000 customers. As a side note, this adds to the mystery of where FWA carriers are finding customers, since FWA carriers gained 913,000 customers in the third quarter.

Charter is more of a puzzle. The company announced recently that it lost 113,000 customers in the third quarter. Charter estimated that it lost 200,000 ACP customers, and without that loss it would have had a net positive gain of 87,000 customers for the quarter. If there any validity to the results of the Benson survey, Charter might be expected to eventually lose as many as 650,000 customers due to the end of ACP. Perhaps that will come to pass, and perhaps this is just the first set of losses, with other customers trying to hang on to broadband. The Charter gains after accounting for ACP is also a mystery when you consider the big gains for the FWA carriers in the third quarter. Maybe part of that answer to Charter’s growth comes from adding customers as a result of construction in RDOF and areas funded by state broadband grants.

On a national scale, there doesn’t seem to be a big customer drop as predicted by various surveys. If 13% of ACP recipients (1.3 million households) dropped broadband, it would be obvious in the quarter-to-quarter customer counts of big ISPs – and it’s not.

I think it’s more likely that the results of the end of ACP will be more subtle, spread over time, and be harder to notice. While some homes likely dropped immediately, many have likely held on with one of the low-income alternatives offered by ISPs. Homes that find they can’t sustainably afford broadband will drop off over time and likely not make a noticeable ripple in the national numbers.

The real victims of the end of ACP are customers of ISPs that have been building broadband networks in low-income neighborhoods or tribal areas and that relied on ACP payments to make a business case. I expect to hear stories over the next year of some of these ISPs having to shut the door.

Competing Against FWA

At the end of the first quarter of this year, T-Mobile and Verizon together have accumulated 8.6 million customers nationwide on FWA cellular home broadband. This is amazing success for a product that was just launched in 2021. The combined FWA customers represent 7% of the entire U.S. broadband market, and if FWA was a single ISP it would be the fourth largest ISP in the country behind Comcast, Charter, and AT&T.

Nobody knows exactly where the companies are finding the new customers because they aren’t telling, and the companies losing customers are mum about it. The FWA technology isn’t everywhere, and T-Mobile claims to cover over 50 million households with the technology, and Verizon 40 million. The appeal of FWA is obvious. The companies offer broadband between 100 Mbps and 300 Mbps in in most markets with prices from $50 to $70 depending on bundling with a cellphone and agreeing to use autopay. The two carriers have also selectively been paying customers to break contracts with other ISPs.

It’s obvious in looking at the claimed coverage of FWA in the FCC broadband maps that a lot of FWA coverage is in rural areas where there aren’t a lot of broadband alternatives. The two carriers are likely snagging customers from DSL, fixed wireless ISPs, and satellite companies, as well as migrating their own rural hotspot customers to the much-improved broadband. However, FWA also covers a lot of towns, suburbs and cities. In these markets, the FWA carriers are touting low prices and faster speeds to lure customers who stayed with telephone company DSL to save money. With low prices, FWA is also clearly targeting cable companies.

It’s been interesting to watch how competitors have been dealing with FWA. In an article in FierceNetwork, Comcast CEO Brian Roberts characterized FWA by saying “Three companies are all simultaneously within a short period of time are all offering a home connectivity product by their own admission a lower speed, more easily congested network.” Comcast is reacting to FWA by advertising the differences between the products. The company has also launched its NOW line of products. This starts with broadband priced at 100 Mbps for $30 or 200 Mbps for $45.

Charter’s CFO Jessica Fischer characterized FWA technology as “lower quality but also lower cost.” She went on to say that FWA will not be able to keep up with increased household demand in future years. Fischer characterized the impact of FWA as “temporary.”

Cox Communication has been advertising against FWA since the end of 2022. In it’s first ads the company said that “FWA is just phone Internet, not home Internet” and isn’t as fast or reliable as Cox’s cable Internet service. The ads went on to warn the public not to “put a cell tower in charge of your home Internet connection.”

Frontier’s Executive Chairman of the Board was quoted at a J.P. Morgan conference as saying that FWA is having almost no impact on Frontier’s fiber business, which is believable since Frontier offers symmetrical 500 Mbps broadband for a standard rate of $64.99, with an introductory rate of $44.99. But Frontier hasn’t been saying anything about the impact of FWA on its DSL service, which is an obvious target for FWA where Frontier has not yet converted to fiber.

It’s an interesting set of reactions. Only Comcast is trying to openly compete with price. It’s likely that the others are quietly offering price deals to keep customers. However, lowering prices has a downside by lowering average revenue per customer – a key financial metric for the industry. ISPs have to decide which is worse – losing customers or lowering prices.

The primary thing that FWA has done to the industry is to shake up the price point for broadband. The big cable companies have all increased list prices annually over the last decade to goose prices to $90 and more. Charter just announced another $3 rate increase across the board. However, a shrinking number of cable customers are paying the list price for broadband.

The cable companies all warn about the ability of FWA technology to serve a lot of customers. The cable companies seem to believe (or at least want the public to believe) that many people will try FWA and not like the broadband experience. The cellular carriers have enough capacity to have gained 7% of the U.S. market in an incredibly short time, and only time will tell if the cell carriers can hang on to these customers over the long haul.

RDOF Amnesty

I have been asked my opinion several times recently about RDOF amnesty – letting RDOF winners walk away from their obligations without big penalties. There is no easy answer to the question.

It’s certainly a timely topic, since we are seeing ISPs walk away from RDOF. As I was writing this blog, Charter announced it was returning RDOF winnings in 125 Census block groups in Michigan, Missouri, and Wisconsin due to pole replacement issues. Altice defaulted on 18 Census blocks in Louisiana. Other RDOF winners are considering walking away from RDOF commitments.

There are several good arguments to be made that favor some kind of amnesty. Soon after the end of the RDOF auction the country experienced much higher inflation than has been seen for more than a decade. I’ve seen estimates across the industry that the cost to build a new broadband network increased 20% to 25% over the last few years. That certainly makes it significantly harder for an RDOF winner to build the markets it won in the auction.

The counterargument is that this same inflation also impacted other federal grants like ReConnect and various state broadband grants awarded across that same time period. When the FCC offered a 10-year RDOF subsidy, there was no guarantee that the economy would not change over that time frame. In fact, anybody winning a 10-year subsidy should expect at least one economic downturn during a ten-year cycle. The current spate of inflation is significant, but it’s not unprecedented, and there have been several worse periods of inflation during my career.

Another argument that can be made for amnesty is that RDOF was never enough funding to build rural networks. While RDOF wasn’t a grant program, many companies who took the funding treated is as such. Most ISPs, except perhaps the few giant ISPs, use the RDOF subsidy to secure funding to build the promised network. In doing so, RDOF winners treat the funding as if it is a grant.

Anybody who now complains that they didn’t get enough funding from RDOF doesn’t have a strong argument. Nobody required winners to bid below a price that they thought was sufficient. It’s clear that the reverse auction for RDOF got crazy due to bidders who had no business being in the auction – but anybody that got into a bidding war with one of the crazy bidders can’t complain that they didn’t achieve the RDOF award they were hoping for.

Perhaps the best reason to allow RDOF amnesty is that there is a good chance that anybody asking for amnesty might walk away. Or they might build a minimal network to try to say they satisfied the RDOF rules – but there is a good chance they will eventually walk away from RDOF, penalties or no penalties.

The immediate issue with RDOF amnesty is the impact it could have on BEAD grants. It’s completely unfair to State Broadband Offices to ask them to toss new locations into the BEAD process at this late date. Many States have already finished or are in the middle of the BEAD map challenge – and RDOF locations were not part of that process. States also didn’t look at the RDOF areas when defining high-cost plans.

Maybe even worse, ISPs haven’t considered building in any RDOF areas that are suddenly dumped into BEAD. The BEAD grants require careful deliberation by ISPs, and a significant amount of work is needed to understand the cost of building into grant areas. This isn’t something that ISPs are going to quickly tackle. This is even more so for areas like the ones that Charter is abandoning because of the cost of replacing poles – that would scare anybody else off from considering such areas.

I believe that at this late stage, the FCC needs to own the consequences of ISPs abandoning RDOF. I hope that the NTIA and states refuse to roll abandoned RDOF locations into BEAD grants at this late date. The FCC broke RDOF, and whether they allow amnesty or ISPS just walk away, the FCC needs to be the one to fix the problems caused by RDOF defaults.

Cord Cutting Continues in 2023

Leichtman Research Group recently released the cable customer counts for the largest providers of traditional cable service at the end of 2023. LRG compiles most of these numbers from the statistics provided to stockholders, except for Cox and Mediacom – they now combine an estimate for both companies. Leichtman says this group of companies represents 96% of all traditional U.S. cable customers.

I suspect there are regular blog readers who wonder why I post these statistics every quarter. There are several reasons.

  • I find it fascinating to watch the slow train wreck of the implosion of the cable TV industry. Recall that the big cable companies like Comcast and Charter got so large through selling only cable TV and no other products. Technology let them compete and then beat telcos for broadband customers, but they already had a huge number of customers in 2000 when broadband competition kicked off in earnest.
  • I’m fascinated to see that there are still over 55 million household buying cable TV from the largest companies. A lot of folks have completely written off cable TV as irrelevant, and a thing of the past, but 42% of households are still buying a traditional cable TV package. Roughly 30 million homes have cut the cord since 2018, but there are still 55 million more homes that might someday migrate all of their video to broadband networks.

The traditional cable providers continue to lose customers at a torrid pace, losing 1.7 million customers in the third quarter. Overall, traditional cable providers lost over 18,700 customers every day during the quarter. The overall penetration of traditional cable TV is now down to 42% of all households, down from 73% at the end of 2017.In the fourth quarter, Comcast dropped from being the large cable provider and fell below Charter. Losses were big across the board, and only Charter, Verizon, and Breezeline lost less than 10% of the cable customer base for the year. The traditional cable providers lost over 6.9 million cable customers for the year – with only a fourth of those customers choosing an online cable substitute.

In the fourth quarter, online cable substitutes like YouTube and Hulu Live picked up 1,476,000 customers, almost all by YouTube. For the year, these providers added almost 1.9 million customers.

Telcos Shedding Jobs

I heard a chilling story recently. AT&T apparently notified a bunch of employees in Los Angeles that their jobs are being eliminated and that they need to report to other cities like Dallas or lose their job. Many of these employees were relocated to Los Angeles in the last five or six years, and the company paid for that past relocation. Employees now must move at their own expense. I was told the same thing was happening in other AT&T markets across the country. This is a particularly callous way to eliminate employees, and AT&T is clearly trying to induce employees to resign to avoid paying severance. This is not the kind of behavior that would normally be expected from a large corporation. It certainly tells the remaining employees of the company that they are not valued.

There is rarely a month that doesn’t go by without hearing that one of the big telcos is laying off a group of employees somewhere. The story piqued my interest, and it took only a little research to see that telcos have steadily been eliminating staff while the biggest cable companies have not.

Consider the following chart that shows employment at the biggest ISPs and carriers since 2018.

2018 2023 Change
AT&T 268,220 150,500 -44%
Verizon 144,500 105,400 -27%
Lumen 45,000 28,000 -38%
T-Mobile 80,500 67,000 -17%
Comcast 184,000 186,000    1%
Charter 98,000 101,100    3%

It’s not easy to make sense of the staffing changes at the various carriers. Consider some of the big trends at each company since 2018.

Some of the staff reductions at AT&T can be justified since the company suffered from several disastrous investments. The biggest was buying Time Warner Media and spinning it off just three years later to Discovery with a huge loss. The company had another big failure from its purchase of DirectTV. While AT&T flourished from 2018 to 2023 in adding cellular customers, competition dropped the average revenue per customer over that time period. AT&T lost only 3% of its net broadband customers over that period while it has been transitioning from copper to fiber.

Verizon has a similar story of making bad investments in AOL and Yahoo. Due to the big surge of FWA cellular broadband and good sales in FiOS, Verizon has 54% more broadband customers today than it had in 2018. Verizon also thrived and grew cellular customers during this period.

Everybody has likely heard Lumen’s story. The company has struggled since it was spun off from AT&T as US West. The company divested it’s copper assets in twenty states and recently announced more layoffs.

T-Mobile is an interesting case. Cellular customer additions have been sluggish since it merged with Sprint. It recently added 4.8 million FWA broadband customers. The layoffs at T-Mobile seem to be clearly aimed at improving the bottom line – even though one of the big promises made to employees with the Sprint merger was that it would create new jobs, not lose jobs.

Comcast has thrived in everything except cable TV. Since 2018, the company added 5 million broadband customers and 6.5 million cellular customers.

Charter also did well except with cable TV. Charter added 5.3 million broadband customers since 2018 and 7.8 million cellular customers.

The bottom line of my quick analysis is that telcos have been reducing staff at a much greater pace than can be justified by looking at the overall trends of each business. I have to wonder how Comcast and Charter are going to react to the sudden slump in broadband growth? Will they now start shedding employees like the telcos have done?

What’s Up With Comcast and Charter?

The two biggest cable companies in the country have clearly bogged down. In the third quarter of 2023, Comcast lost 18,000 broadband customers while Charter gained 63,000. To contrast the extent of the slowdown, Charter gained over 1.3 million customers in 2021 while Charter gained 1.2 million. The growth during the pandemic was not extraordinary, and both companies added 1.4 million customers in 2019 before the pandemic.

The two companies are still the largest ISPs. Comcast had 32.3 million broadband customers at the end of the third quarter of 2023, while Charter had over 30.6 million. Third in size is AT&T at 15.3 million.

Charter is still slowly adding customers due to its strategy of building broadband in rural markets. In the third quarter, half of its growth came from rural areas. Charter won a significant amount of rural subsidy in the RDOF reverse auction in 2020 and has been aggressively pursuing state broadband grants since then. Comcast has also been chasing state grants, and analysts expect that both companies will pursue the upcoming BEAD grants.

There are a number of reasons for the sudden slowdown. At the top of the list is probably prices. The following are the current list prices for the most common broadband products. For both companies, the prices and speeds vary in some markets.

  Download Upload Price
Charter 300 Mbps 10 Mbps $84.99
500 Mbps 20 Mbps $104.99
1 Gbps 35 Mbps $124.99
Comcast 200 Mbps 10 Mbps $90 + $15 for router
400 Mbps 10 Mbps $105 + $15 for router
800 Mbps 20 Mbps $110 + $15 for router
1 Gbps 20 Mbps $115 + $15 for router
1.2 Gbps 35 Mbps $120 + $15 for router

These prices are significantly higher than the prices being charged by fiber competitors:

  Download Upload Price
AT&T 100 Mbps 100 Mbps $60
300 Mbps 300 Mbps $65
1 Gbps 1 Gbps $80
2 Gbps 2 Gbps $110
Frontier 500 Mbps 500 Mbps $59.99
1 Gbps 1 Gbps $79.99
2 Gbps 2 Gbps $109.99
Windstream 500 Mbps 500 Mbps $60
1 Gbps 1 Gbps $85
Verizon 300 Mbps 300 Mbps $49.99
500 Mbps 500 Mbps $69.99
1 Gbps 1 Gbps $89.99

To offset the big price difference with competitors, both companies offer substantial discounts for new customers. Charter tends to continue to renew special pricing while a customer has to work harder to get the discounts at Comcast. Both companies are pushing bundles that include discounted cellular.

As the two charts demonstrate, another big difference is the upload speeds. Both cable companies are upgrading upload speeds to speeds between 100 Mbps and 300 Mbps using mid-split technology upgrades. Both have been talking about upgrading to DOCSIS 4.0 to get symmetrical speeds.

The other new competitor is FWA Cellular Wireless from T-Mobile and Verizon. We don’t know how much traction these companies have in competing against cable companies, but the two companies have added over 7 million customers in the last two years, while Comcast and Charter have stagnated.

  Download Upload Price
T-Mobile 100 Mbps Best Effort $65
100 Mbps Best Effort $60 with Autopay
Verizon 300 Mbps Best Effort $45 with Verizon Cell Plan
300 Mbps Best Effort $60
  300 Mbps Best Effort $50 with Autopay

It’s going to be interesting to see if the two cable companies increase rates in 2024. If they don’t, then the only path to higher earnings would be to cut back on customer or slash expenses.

Both companies have thrived on the combination of customer growth and revenue growth from rate increases. Both companies face a serious earnings challenge in the next few years as competitors chip away at customers.