Tag Archives: Comcast

Broadband Shorts February 2026

The following are a few interesting stories that don’t warrant a standalone blog, but that I found interesting.

Amazon One Delays. Amazon asked the FCC for a two-year delay in meeting its commitment to launch half of its promised constellation of 3,236 satellites. The deadline for having more than 1,600 satellites in orbit was July 30 of this year. As of the date of writing this blog, the company only has 212 satellites in orbit. Amazon says it has contracted for ten additional 10 SpaceX launches to speed up its process.

This is bad news for homes where Amazon One was the BEAD winner, like a number of counties where I live in Western North Carolina. If Amazon follows the historical path of Starlink, it will need at least 1,600 satellites in orbit to provide reasonable service, and more is better. With no additional delays, the service likely won’t be available until at least late summer 2028.

In related news, the FCC granted Amazon One the ability to add 4,500 satellites to its broadband constellation. This increase would result in the following: 3,232 Generation 1 satellites, 3,212 second-generation satellites, and 1,292 satellites in a polar orbit.

NTIA Opposes Relaxation of BEAD Compliance Requirements. Starlink sent a request to numerous states asking for relaxed BEAD implementation rules, which included a request that Starlink would not have to conduct speed tests for BEAD-funded customers. NTIA quickly added a new item to its Frequently Asked Questions that states that, “no BEAD statutory requirements or other program rules may be altered by a BEAD subgrant agreement”.

Charter Grows Cable Subscribers. Charter surprisingly grew cable customers in the fourth quarter of 2025 after losing customers every quarter for years. I laughed when I read that, because I know how they did this since I am one of their new cable subscribers. We called and asked about upgrading to gigabit broadband and were offered a lower price than what we pay today for 500 Mbps, but only if we agreed to take cable TV. I am now a phantom Charter cable customer who will never watch any of the content. Like many millions of households, I am no longer interested in linear TV that forces me to surf through channels I don’t want to watch.

This is not the first time this has happened to me. Twelve years ago, I was forced to take cable TV from Comcast in order to get broadband. The settop box went into the closet the first day and was never plugged in. I have to assume both Comcast and Charter paid programmers on my behalf, which is an odd and expensive financial choice.

Rural Backhaul. WISPA, the trade association for wireless ISPs, complained to the FCC that Charter is refusing to renew contracts to provide backhaul to many of its WISP members. WISPs are reliant on having at least some of the towers in a network connected by fiber, and if companies like Charter stop selling backhaul, some WISP networks will be degraded or could even go dark.

Buying rural backhaul has always been a challenge in many parts of the country due to the small number of companies with fiber that are willing to sell bandwidth to other ISPs. Many rural ISPs are forced to pay far more per gigabyte to buy rural backhaul from telcos and cable companies. It’s hard to speculate why Charter would do this. The company might want to focus its sales and marketing efforts elsewhere. But it could also be for a more sinister reason if Charter is doing this to eliminate or cripple rural competition.

Comcast Class-Action Settlement. Comcast settled a class-action lawsuit and agreed to pay $117.5 million as a result of a data breach that released sensitive customer data. That may sound like a lot, but the settlement covers 31.7 million customers and works out to a settlement of $3.70 per customer before subtracting out the amount that will go to lawyers. This settlement doesn’t place much value on customer privacy and data.

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.

The Challenge of Adding Fiber to Poles

On February 5, the FCC issued a Memorandum and Order related to a pole attachment dispute between Comcast and Appalachian Power Company (APCO). The Order was issued under the authority of section 224 of the Telecommunications Act, which gives the FCC the authority to “regulate the rate, terms, and conditions for pole attachments to provide that such rates, terms , and conditions are just and reasonable”. This order highlights the nuances of regulations that can make it a challenge to build new fiber. This particular case provides a cautionary tale that shows why it can be so hard to get on poles when working with an uncooperative pole owner.

Before discussing the FCC decision, let me review existing FCC pole attachment rules and processes that an ISP must follow to get onto a pole. Just starting the process of getting on a pole requires a well-defined step-by-step paperwork-heavy process that obligates both the pole owner and the attacher to take steps within specified time frames.

  • The ISP must formally request access to a pole. Every pole owner has a unique set of forms needed to make such a request. The request must be detailed and specifically describe the changes that are wanted, and the attacher often includes drawings showing the desired connection.
  • The pole owner then conducts a survey to determine if there are any issues involved in meeting the request. Some pole owners invite the attacher to participate in a physical survey.
  • If the pole owner accepts the request, it must provide an estimate of the ‘make-ready’ costs needed to accommodate the request.
  • If the attacher accepts the estimate, it must pay the make-ready costs upfront, and the make-ready work proceeds.
  • Finally, if the pole owner finds that the actual cost was higher than the estimate, the attacher can request a detailed invoice showing all of the costs.

The dispute in this Order arose over poles that APCO said needed to be replaced in order to accommodate Comcast. Comcast claims that many of the poles had preexisting violations of safety and engineering standards, and because of that, Comcast wanted to pay nothing for APCO to replace the poles. APCO wanted Comcast to pay the full cost of replacing the poles, which would mean that Comcast would be paying to fix problems caused in the past by other attachers.  As an aside, Comcast would be required to pay the full cost to replace a pole that didn’t have any safety violations, as long as the only reason for having to replace a pole is that there isn’t enough room to add the new fiber.

Comcast filed a formal complaint with the West Virginia Public Service Commission in May 2025. The Commission ruled in favor of Comcast and said that APCO unlawfully assigned costs to Comcast and also delayed the pole attachment process. Rather than comply with that decision, APCO appealed the case in July to the FCC’s new Rapid Broadband Assessment Team (RBAT). This was the first FCC case processed under the new RBAT appeal system. The parties entered into mediation, but failed to reach an agreement.

In September, APCO issued new rules across its pole network that require any attacher to pay 100% of the cost for a poles replacement, even when a pole has preexisting violations.  At the end of November, Comcast filed a complaint with the FCC that resulted in this Order. The FCC sided with Comcast and said that its rules had been clear for twenty years that an attacher is only responsible for the incremental cost of moving to a new pole when an existing pole is in violation of safety or engineering standards.

You might read this and view it as a victory for Comcast, but it’s really not. This process delayed Comcast by nine months, and this is one of the faster regulatory resolutions of a pole dispute I can remember. This case shows the challenge that any attacher faces when a pole owner elects not to follow existing pole attachment regulations. In this case, APCO wanted to charge Comcast incorrectly at the time of the application. APCO then ignored an order from the State PUC and took the issue to FCC arbitration, where it failed to come to a mediated agreement. Finally, Comcast had to appeal to the FCC for a resolution.

Most ISPs don’t have the budget or the legal resources to fight an issue like this through this maze of steps. A smaller attacher with a similar situation would likely either have to agree to meet the conditions of the pole owner, and pay far too much for the attachment, or it might instead elect to bury fiber to bypass the poles, also at an increased cost.

Most attachers also worry about getting into formal disputes with pole owners who can retaliate by making it more difficult or costly for other desired attachments. The FCC and States can pass as many rules and regulations as they want, but the pole owner still has the ultimate power to make life costly and miserable for an attacher. I don’t know if any amount of regulations can fix that.

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.

 

Are Cable Companies “Permanently Impaired”?

KeyBanc Capital Markets analyst Brandon Nispel recently said in an industry report that “There are reasons to believe that cable is permanently impaired.” By that, he believes that cable companies are going to continue to lose broadband customers as they compete with fiber and FWA cellular wireless.

The problem that cable companies are experiencing stems largely from the time when they enjoyed a near-monopoly status in broadband markets across the country, when their only real competition was DSL provided over copper wires. For well over a decade, cable company broadband customers grew by huge numbers each quarter as people abandoned DSL. The reason for the cable company decline today is that the monopoly is now over and cable companies suddenly have to compete with alternatives like fiber and FWA cellular.

Using the term ‘permanently impaired’ makes it sound like cable companies have inferior broadband. From a technology perspective, fiber is clearly superior to cable broadband. Fiber has lower latency and less jitter for a more reliable signal, and fiber can provide very fast or symmetrical upload speeds for customers who care about upload. But a technology comparison would give the nod to cable over FWA wireless. Cable speeds are faster, and wireless networks generally have more variability of signal over time.

But most customers don’t buy broadband based on the performance specifications. Households that don’t need a lot of upload are perfectly happy with cable company download speeds, with tiers available from 300 Mbps to over a gigabit. Surveys show that a lot of cable company customers are happy with the broadband speed and performance.

The cable companies have been investing in increasing upload speeds, which will satisfy a lot of their broadband customers. Whether they goose upload speeds to 200 Mbps with a mid-split upgrade or invest in symmetrical speeds with a DOCSIS 4.0 upgrade, the increased upload speeds will be enough to satisfy the large majority of households.

I don’t think that most of the households leaving cable companies are doing so because of the technical differences in the technologies, other than perhaps heavy gamers and others who care about the difference in latency and jitter. The cable companies are seeing customers leave because of the way they treated customers over the last decade.

A lot of customers soured over the years on cable companies because of cavalier customer service, where customers had long wait times on the phone, and cable technicians routinely showed up late for customer appointments. It’s been a running joke about how dreadful it is to be stuck in a Comcast call queue. Cable companies didn’t create loyal customers when they had a big rate increase every year for more than a decade, and now have base rates approaching $100. Customers grew frustrated when new customers got low prices while long-term customers continued to pay the full list price. I think it’s the millions of customers who have a sour taste in their mouth for the cable companies who are bailing when they finally have a reasonable alternative that is not DSL.

I’m starting to get public feedback that the big fiber companies like AT&T are headed down the same path as the cable companies. I’ve been contacted in recent months by several AT&T fiber customers who are unhappy with their fiber service. One told me about an outage that lasted for nearly a week before AT&T finally fixed the problem – and then offered them a $3 discount off the bill for their inconvenience. Another customer told me about regular short outages on AT&T fiber – and this customer originally left the cable company for AT&T for this reason. AT&T fiber won a lot of customers when they entered markets because they were cheaper than the big cable companies, but the company has now raised rates for broadband by $5 per month two years in a row, at a time when the company is bragging about record profits.

Nispel is right that cable companies will continue to lose customers. That’s a natural consequence of the end of a near-monopoly. But urban markets will eventually reach an equilibrium, and cable will settle in at a lower penetration rate. We already know what that looks like after seeing how Verizon FiOS and cable companies reached an equilibrium in the Northeast.

The story is not that cable companies are losing customers and are doomed. The real story is that the ISPs displacing them are repeating the same mistakes made by the cable companies, and the public isn’t going to like them any more than the cable companies. A colleague recently observed that competition in urban areas is largely illusory and we’re largely seeing competition between equally inept ISPs. I’m starting to think he’s right.

 

Big ISPs and Speeds

I was recently reminded in a conversation with a client how cable company executives used to tell the public that they didn’t need faster broadband speeds, and what the cable companies offered was fine. Looking through my archives, I found the following statements from 2013, where cable companies were responding to the first Google Fiber offerings of symmetrical gigabit broadband.

In 2013, Time Warner Cable CFO Irene Esteves announced that the company didn’t see the need to deliver Google Fiber speeds to consumers. Comcast Executive Vice President David L. Cohen was quoted as saying that gigabit speeds were pointless due to limitations on the data speeds that could be delivered from websites and the lack of capability of home WiFi routers. Michael Powell, the CEO of the National Cable & Telecommunications Association, characterized gigabit speeds as an “irrelevant exercise in bragging rights”.

The criticisms had some merit at the time. There was no web traffic that operated at speeds even close to a gigabit. Off-the-shelf WiFi routers couldn’t handle anything close to gigabit speeds. But the public didn’t care because performance on fiber was perceived as being significantly better than what was delivered by cable companies, and customers flocked to Google Fiber in the markets where it was introduced. Interestingly, Time Warner obviously thought the Google Fiber threat was real, because the company quickly built fiber-to-the-premise to compete against Google in North Carolina.

There were some customers who benefited from gigabit speeds. I recall talking to a doctor who subscribed to gigabit speeds when it became available from a municipal ISP. This hospital also had gigabit broadband, and the doctor was able to download large MRI files at home in a reasonable amount of time once he had gigabit fiber. I also talked to a photographer who used a different municipal ISP who told me that gigabit speeds made it possible for the first time to upload photography and video libraries to clients without having to wait for hours for the uploads to complete.

The next time that cable companies told the public they didn’t need faster speeds was during the pandemic, when it became clear that cable company upload speeds of 10 Mbps were not able to handle multiple people working and schooling at home at the same time. Every big cable company defended its networks. Charter CEO Tom Rutledge said at the time that Charter’s network was adequate and justified that by pointing out that the majority of customer data usage was downstream. But Charter and other cable companies tweaked their networks during the pandemic to improve upload speeds to 15-20 Mbps. Still today, there are numerous cable networks that have not yet implemented any upgrades to bring significant improvement to upload speeds.

Many ISPs subtly tell their customers they don’t need fast broadband through their pricing. I find small ISPs around the country that still charge extremely high prices for anything faster than their basic broadband product.

This frankly mystifies me. I’ve always guessed that this kind of pricing is for two reasons. First, I think some small ISPs fear that customers who buy faster speeds will somehow cost the ISP a lot more money. But that doesn’t seem to be the case. I recall an Ookla article last year that said that, in some markets, the biggest data users were the customers buying the least expensive broadband package. I’ve had numerous ISPs tell me that their gigabit customers don’t use more broadband than their 100 Mbps customers.

The only other reason for high prices for faster speeds is that they are trying to create the idea that fast speeds are a super-premium product. But I think these ISPs are losing out on a lot of revenue. ISPs who space prices between speed tiers of $15 to $20 see that a lot of customers who are willing to upgrade to faster speeds when it doesn’t cost a lot more per month. Most customers are leery about paying $50 or more per month for a faster speed.

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.

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.

 

Increasing Broadband Price Competition

Competition has been creeping into broadband pricing for the last several years as cable companies have been using low introductory rates to try to win new customers and offering similarly low price to try to keep them. Anybody who competes against the big cable companies will tell you that cable companies have been competing for years by offering two-year promotional prices to keep customers.

However, competition might have gone into a new gear recently when Comcast began offering low rates with a five-year price guarantee. The 5-year guaranteed rates were introduced soon after Verizon offered a 3-year price guarantee for FWA wireless home broadband.

In a Comcast blog dated April 15, Comcast announced a 5-year guaranteed rate plan for new customers for 400 Mbps broadband for $55 per month. The product comes with the company’s WiFi Gateway and no contract is required. The plan also includes a free Comcast cell phone plan with a 30 GB data cap for one year. This is a substantial discount. The list price for 400 Mbps is $86, and the normal charge for the WiFi Gateway is $15. The cell phone normally costs $30 per month. The 5-year rate is available through June 23, but Comcast has already told some news outlets that the special rate offer will probably be extended.

On the announcement date, several news outlets like PC Magazine listed the 5-year deal packages as 400 Mbps ($55), 600 Mbps ($70), 1.1 Gbps ($85), and 2.1 Gbps ($105). The outlets also reported that these rates only come with an auto debit to a bank account. Comcast will charge $8 more to bill to a credit card and $10 more for a paper bill.

The low prices were likely also prompted by the recent announcement that Comcast lost 199,000 broadband customers in the first quarter. In this same quarter, the FWA products from AT&T, T-Mobile, and Verizon gained 913,000 customers.

Comcast’s competition isn’t sitting still. Verizon recently announced a 3-year lock for FWA broadband prices at $35 per month for customers who accept autopay and who also buy a Verizon cell plan. Verizon includes up to a $250 Amazon gift card. Not to be outdone, T-Mobile now offers a $35 price for FWA broadband with a 5-year guarantee for customers who have a T-Mobile cellular plan. The Verizon and T-Mobile plans seem to be more focused on reducing cellular churn than gaining new broadband customers.

Comcast is clearly trying to stop the loss of customers. I have to wonder about the overall impact of such widely advertised special rates. How will these low play with the millions of customers who are paying a lot more, including the many paying $15 per month for a WiFi gateway?

Will this lead to Comcast finally lowering its list prices? The company has raised rates annually for over a decade. Can the company maintain high rates in noncompetitive markets while widely advertising severely discounted prices elsewhere?

I’ve been saying for years that broadband will cost $100 per month. When considering the WiFi gateway, Comcast’s list prices were already there. Comcast isn’t even the most expensive cable company, and a handful of cable companies like Cox, Breezeline, and Mediacom have even higher list prices.

This announcement by Comcast, and the constant advertisements from the FWA providers, could prove to be a watershed moment for prices in the industry. Just imagine the glee that USTelecom will have next year if they can announce that prices for broadband are actually decreasing.