Tag Archives: Cox Communications

Cox Wins DMCA Case

There was another interesting court decision involving Cox. The U.S. Court of Appeals for the Ninth Circuit ruled that ISPs can’t be served subpoenas related to some portions of the Digital Millennium Copyright Act (DMCA).

The lawsuit arose from a subpoena issued to Cox by Capstone Studios concerning the movie Fall. Capstone had identified 29 Cox subscribers that it said had pirated a copy of the movie using BitTorrent. Cox notified its customers and asked them if they wanted to respond to the court, and one subscriber did. The subscriber claimed that they had an open WiFi connection and that somebody else must have downloaded the movie using their bandwidth. The U.S. District Court of Hawaii ruled that Cox qualified for the conduit safe harbor since Cox only provided the Internet connection and had no role or obligations in the transaction of downloading the movie.

The DMCA rules are key to protecting Internet service providers from being prosecuted for the information that passes through their platform at the request of users. The four safe harbors include:

  • The conduit safe harbor is the one evoked by the Court for Cox. This says that online service providers have no obligations under DMCA if they only temporarily store user data for the purpose of transmission. ISPs like Cox don’t look to see what customers are transmitting on their networks.
  • The system caching safe harbor says service providers have no liability if they cache data at the request of others to speed access to users or reduce traffic on the Internet.
  • The information safe harbor protects service providers if they store information on their platforms at the direction of users.
  • The information location tools safe harbor protects service providers from liability if their site includes search engines, directories, or hyperlinks that might send users to infringing materials.

Capstone appealed the ruling to the Appeals Court. The Ninth District agreed with the lower court and ruled that ISPs are only conduits for the data sent over their networks and that Cox hadn’t taken any actions that demonstrated that it had a role in pirating the movie. The Ninth Circuit went further than the District Court and said that the original subpoena was invalid since Cox only acted as an ISP and was not a party to the action of pirating the movie.

This is good news for ISPs since they clearly have no idea how customers are using their broadband connection. The Internet would come to a screeching halt if ISPs were held liable for actions taken by subscribers. Most ISPs have terms of service that allow them to disconnect customers who engage in bad behavior on the Internet, but ISPs only hear about that behavior from third parties.

This case is tangentially related to another case involving Cox that was recently accepted by the U.S. Supreme Court. That case involves a longstanding dispute between Cox and music labels. The case originated with a 2019 decision by a Virginia Court that found Cox liable for both contributory and vicarious copyright infringement for actions taken by its customers and awarded the record companies an astounding $1 billion in damages.

Even after an Appeals Court reversed the fine, Cox is still in violation of contributory damages over actions taken by its customers. The record labels want Cox to permanently disconnect any customer who engages in repeated copyright infringement. If that ruling holds, it would turn ISPs into Internet policemen who must monitor and punish customers who engage in copyright infringement for music, movies, games, books, and sports events.

Supreme Court to Hear ISP Copyright Case

The Supreme Court has agreed to hear a case that will determine if ISPs are required to terminate broadband service for customers who are accused of copyright violations. The suit is a result of a longstanding dispute between Cox Communications and music labels, including Sony Music Entertainment.

The Supreme Court case stems from a series of court cases that ended with the Fourth Circuit Court of Appeals ruling against Cox. The case was accepted by the Supreme Court since the ruling conflicts with some aspects of similar cases in the Second and Ninth Circuit Courts.

The case originated with a 2019 decision by a Virginia Court that found Cox liable for both contributory and vicarious copyright infringement and awarded the record companies an astounding $1 billion in damages. Cox appealed, and the Fourth Circuit U.S. Court of Appeals reversed the charges for vicarious infringement and vacated the $1 billion of damages.

This was still a troublesome ruling for ISPs because even after getting rid of the damage penalty, Cox still stands in violation of contributory damages over actions taken by its customers. The record labels insist that Cox should permanently disconnect any customer who engages in repeated copyright infringement. This ruling would turn ISPs into Internet policemen who must monitor and punish customers who engage in copyright infringement. That doesn’t just mean people who download copies of music, but also movies, games, books, and pirated sports events.

This is an incredibly uncomfortable role for ISPs. ISPs don’t monitor customer usage because that would mean looking closely at everything that customers do. Instead, the music companies want Cox and other ISPs to react to complaints made by copyright holders. That might make sense in a perfect world, but the real world isn’t perfect. Complaints are rarely made to ISPs by copyright holders, and there is an entire industry of companies that make a living by issuing takedown requests for infringements of copyrighted materials.

The music companies expect ISPs to cut off subscribers after only a few violations of copyright. ISPs are in the business of selling broadband connections, and the last thing they want to do is to permanently disconnect paying customers. This would also be devastating for broadband customers. Most homes in the U.S. don’t feel that they have broadband choice, and most have access to only one fast ISP. If they lose that connection, they could find themselves cut off from functional broadband. It’s not hard to imagine a scenario where a teenager or visitors to a home violate copyrights and get the household disconnected from broadband. Losing broadband is a severe penalty for an infraction that would incur only a small fine if taken to court. The right penalty is to force people who infringe copyrights to pay a fine. Copyright holders are asking to bypass the law enforcement and court system, and want to turn ISPs into the judge, jury, and executioner for copyright violations.

ISPs need to keep an eye on this case and should have associations file comments in the court proceeding. A ruling against Cox is a ruling against every ISP. I assume consumer advocates will also weigh in with briefs since the penalty of permanently losing broadband doesn’t fit the crime.

A Troublesome Right-of-Way Dispute

The Virginia Supreme Court issued a ruling against Cox Communications that should trouble anybody building a fiber network that must cross railroad tracks. The case involves a dispute brought by the Norfolk Southern Railroad that challenged a new right-of-way law related to railroads.

The disputed law was unanimously passed in the General Assembly in 2023. The law requires that railroads respond and approve requests for fiber crossings across railroad tracks within 35 days or else file a dispute with the State Corporation Commission. The law sets the maximum fee for a right-of-way at $2,000 plus up to $5,000 to compensate a railroad for implementation costs.

Cox Communications invoked the new law in the spring of 2024 by requesting three underground railroad crossings in New Kent County. Norfolk Southern asked for a fee that exceeds the State’s cap and Cox refused to pay more than the amount established by law. Norfolk Southern appealed at the SCC, which declined to hear the case.

Norfolk Southern appealed to the Virginia Supreme Court. They claimed that the low rates established by the State equate to a taking of property for the benefit of Cox Communications, a for-profit corporation.

The Supreme Court agreed with Norfolk Southern. The Court said that the law violated the application of Code § 56-16.3 and violated Article I, Section 11 of the Constitution of Virginia. This part of the Constitution provides that property can only be taken for ‘public use’ and the party asking to take the property must prove the public use. The Court said that economic development and Cox’s private benefit do not justify a taking.

An article in the Cardinal News quotes Senator Bill Stanley, the lead proponent of the bill in the Senate, who called the decision wrong and disappointing. He says the State gave the land to railroads for the public benefit, but that railroads now seek to protect it as their own property against public benefit.

For those not familiar with legal language, the real dispute is about the fee. The railroad was ready to grant Cox a right-of-way for a fee higher than $7,000, and the railroad says it is a ‘taking’ for it to be required to the lower fee determined by the legislature.

This is an issue that plays out daily across the country where railroads charge high fees to allow fiber or other utilities to cross a railroad right-of-way. The Virginia law was trying to put a dollar limit on the cost of such rights-of-way and also trying to speed up the process. The Virginia court ruling made it clear that the legislature doesn’t have the right to put a cap on railroad fees.

Hopefully, this doesn’t make the entire law invalid and the 35-day response time will stay in place. If not, the legislature ought to act to close that gap.

The other issue that is not mentioned in the dispute is that Cox wants to place a buried conduit under the railroad tracks. From a practical perspective it’s impossible to believe that a conduit can in any way diminish the railroad’s property or operations. I can better understand why a fiber owner needs an easement to bury conduit on private land because the landowner might someday want to build something on that location. But railroad rights-of-ways are almost entirely for the purpose of laying track, and a buried conduit doesn’t stop that purpose. I know every lawyer reading this will give me several reasons why property laws are structured this way, but I also know that every fiber network owner is as perplexed by this as I am.

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.

Copyright Infringement – a New Worry for ISPs

In decisions that should trouble every ISP, multiple Courts have ruled that ISPs are liable if they don’t disconnect customers accused of copyright infringement.

The U.S. Court of Appeals for the 5th Circuit ruled against Grande Communications, a subsidiary of Astound Broadband. The courts sided with three record companies, Universal, Warner, and Sony that Grande had failed to disconnect customers from broadband who engaged in copyright infringement by downloading illegal copies of music. Grande might have been singled out because it had a firm policy since 2010 that it wouldn’t disconnect customers over the infringement issue. The appeals court upheld a lower court ruling that Grande is liable for copyright infringement. The appeals court said it would consider lowering the original award of $46.8 million.

This is the second major lawsuit on the issue. In 2018 the major record labels sued Cox Communications over its copyright policies. The labels accused Cox of refusing to disconnect customers who repeatedly broke copyright rules by downloading music without paying for it. In 2019, a court in Virginia found Cox liable for both contributory and vicarious copyright infringement and awarded the music labels an astounding $1 billion in damages. Cox appealed, and the Fourth Circuit U.S. Court of Appeals upheld the charge of contributory infringement but reversed the charges for vicarious infringement and vacated the $1 billion in damages.

Cox asked the Supreme Court in August to decide whether the 4th Circuit erred in deciding that an ISP can be held liable for copyright infringement without proof that the company fostered or promoted copyright infringement. The record labels are asking the Supreme Court to reinstate the original $1 billion award.

This has to concern all ISP, because if these two cases are resolved in favor of the record industry, then all ISPs are vulnerable. Altice USA, Frontier Communications, Lumen, and Verizon filed a brief with the Supreme Court saying that the 4th Circuit ruling imperils the future of the Internet by making ISPs liable for huge damages if they don’t carry out mass Internet evictions.

Folks might have a visceral reaction thinking that copyright offenders should be punished. There is some needed context to fully understand the issue. Complaints of copyright infringement are rarely made directly by record companies or others who hold copyrights, There is an entire industry of companies that makes a living by issuing takedown requests for infringements of copyrighted materials. These companies get paid by issuing huge numbers of takedown requests. Social media companies are inundated with these takedown requests every day to remove posts that link to copyrighted music, movies, and other materials.

The takedown process is completely one-sided and there is no appeal for a broadband customer who is unjustly accused of bad behavior. The music companies expect ISPs to cut off subscribers after only a few claimed violations of copyright.

This is also troubling to broadband customers. Any home with teenagers will have to worry if teens will download copies of games, movies, or music. People could hit a link on social media that downloads copyrighted material without even realizing they did something wrong. The bad behavior doesn’t even have to be done by a family member. Losing an essential broadband connection because teens, roommates, or visitors violated copyright laws seems like an extreme penalty. If ISPs start cutting customers dead for violating copyrights, I have to imagine that people are going to be a lot more cautious against giving visitors or even family members the WiFi password.

Copyright holders want ISPs to act as judge, jury, and executioner and unilaterally punish customers without a trial or hearing by taking away their Internet access. Like many other problems in the industry, the only real fix for this is to have Congress update or replace the Digital Millennium Copyright Act (DMCA), which was adopted in the 1990s when we were all still using dial-up access.

The recording industry has a legitimate gripe, but their complaint is against the folks who steal copyrighted materials. They should be required to pursue a law enforcement solution, like is done for folks who violate other laws. The solution is not to turn the intermediate ISP into a policemen on the issue. This goes down an ugly and slippery slope. What’s next, forcing ISPs to turn off broadband for customers who break myriad other laws?

Cox Sues Rhode Island

In news that probably makes all State Broadband Offices nervous, Cox Communications has sued the Rhode Island Commerce Commission – which is the group that is heading up the BEAD grant effort. This raises the uncomfortable position that ISPs who feel shorted in the BEAD process could sue Broadband Offices as a way to be heard.

What’s particularly uncomfortable about the Rhode Island lawsuit is that the issues at the heart of the complaint involves the broadband maps used for BEAD grants. I doubt that any Broadband Office is comfortable with their BEAD maps. These maps derive from the FCC broadband maps, and each state modifies the maps through a BEAD map challenge process. Every time I’ve sat with an ISP or a county government and looked at the maps at the household level that there are still many aspects of the maps that are disturbing. The maps include eligible BEAD locations where there are no buildings, multiple BEAD locations where there is only one building or buildings that don’t have an associated BEAD location. The degree to which the maps are off differs from neighborhood to neighborhood. Of more concern and germane to this lawsuit are the broadband speeds claimed at every location – many speeds are clearly fictional and come from the FCC rule that allows ISPs to report ‘marketing’ speeds on the maps rather than some approximation of actual speeds.

The Cox challenge says the State is trying to award BEAD dollars to affluent parts of the state that don’t need broadband while missing areas that could use the grant help. There are already quotes in the press from the State complaining that that Cox didn’t participate in the BEAD data gathering or map challenge process.

Cox goes on to accuse the State of using a map challenge process that is impossible to follow. The suggestions on how to conduct a BEAD challenge came from the NTIA, and the rules are hard to meet. To provide or disprove having broadband at a location requires conducting multiple speed tests at different times of the day – something that is hard to convince a resident to do. The tests have to be conducted during a short time frame during a map challenge process. Cox gave the example of how impossible it would be for them to gather the needed speed tests from their own customers.

I heard the same complaint from local governments that tried to meet the speed challenge rules but couldn’t. A local government doesn’t know who subscribes to each ISP, and before even thinking of mounting a map challenge against a specific ISP they had to somehow find customers of that ISP willing to take the challenge.

I don’t know enough about the Rhode Island situation to have an opinion. What is troublesome about the lawsuit is that it’s bound to put the BEAD grant process in the State on hold. A judge is unlikely to let the State move forward with the BEAD grant, since doing so would be essentially siding with the State without considering Cox’s side of the story.

There are ISPs all over the country who are unhappy with the BEAD maps and the state BEAD map challenges. Any one of them could sue if a State rules against them in the map challenge process.

The threat of lawsuits goes way beyond just the mapping issues. It’s not impossible to foresee somebody suing State Broadband Offices over other issues. For example, some states are forcing BEAD winners to offer low rates – something that specifically prohibited in the IIJA legislation. There are states that have taken positions against using technologies other than fiber. There are states that are trying to require an ISP to serve entire county to qualify for a grant. Any one of these decisions disadvantages somebody and could lead to suits.

Any lawsuits against a State Broadband Office will mean an interminable delay. For example, even if Rhode Island concedes that the map challenge rules were unfair, it would probably have to open the map challenge again using a new set of rules.

Copyrights and ISPS

There is a long-running legal case that could have dire consequences on broadband households. The case started in 2018 when a group of major record labels sued Cox Communications over its policies related to copyrights. The labels accused Cox of refusing to disconnect customers who repeatedly broke copyright rules by downloading music without paying for it.

In 2019, a court in Virginia found Cox liable for both contributory and vicarious copyright infringement and awarded the music labels an astounding $1 billion in damages. Cox appealed, and the Fourth Circuit U.S. Court of Appeals reversed the charges for vicarious infringement and vacated the $1 billion of damages. There will be a new trial to reassess the size of the damage award.

The troubling part of the legal ruling is that, even after appeal, Cox still stands in violation of contributory damages over actions taken by its customers. That’s a ruling that should concern every ISP – and every Internet user.

The record labels are insisting Cox should have permanently disconnected any customer who engaged in repeated copyright infringement. This ruling turns ISPs into Internet policemen who must monitor and punish customers who engage in copyright infringement. That doesn’t just mean people who download copies of music but also movies, games, and books. It means that in order to avoid having to pay big damages, ISPs might cut off customers for watching a pirated sporting event.

This is an incredibly uncomfortable role for ISPs. ISPs are not going to monitor everything their customers do, but will instead react to complaints made by copyright holders. Complaints are rarely made directly by those holding copyrights, and there is an entire industry of companies that make a living by issuing take-down requests for infringements of copyrighted materials. Social media companies are inundated with these take-down requests every day to remove posts that link to copyrighted music, movies, and other materials. The music companies expect ISPs to cut off subscribers after only a few violations of copyright. ISPs are in the business of selling broadband connections, and the last thing they want to do is to disconnect paying customers.

This could be devastating for broadband customers. Most homes in the U.S. don’t feel that they have broadband choice and only have access to one fast ISP. If they lose that connection, they could find themselves cut off from functional broadband.

It’s easy to believe that customers who get cut off for such violations deserve it. But the process is completely one-sided and there is no appeal for a broadband customer that they were unjustly accused of bad behavior. They can be cut off without appeal or recourse. Any home with teenagers will have to worry that their teens don’t download copies of games, movies, or music. People could hit a link on social media that downloads copyrighted material without even realizing they did something wrong. Such downloads could be done on a cellphone that is using a home’s WiFi – and the bad behavior doesn’t even have to be done by a family member.

This is a case where the punishment does not fit the crime. Rather than directly pursuing people who download pirated copyrighted material through a legal process, copyright holders want ISPs to act as judge, jury, and executioner and unilaterally punish customers by taking away their Internet access.

There are numerous surveys since the pandemic that show that a large majority of people now consider a broadband connection to be essential. All of the surveys my consulting business has done in the last year show that half or more of homes now have somebody working from home using broadband at least part-time every week, and we routinely find 10% to 15% of homes with somebody working at home full time. We now use broadband for a wide variety of essential activities such as shopping, banking, hunting for a job, and connecting with a doctor.

While the courts vacated the billion-dollar penalty against Cox, ISPs are all going to notice if the Appeal Courts still imposes a sizable penalty during the rehearing of the damages. Losing an essential broadband connection because teens, roommates, or visitors violated copyright laws seems like an extreme penalty. If ISPs start cutting customers dead for violating copyrights, I have to imagine that people are going to be a lot more cautious against giving visitors or even family members the WiFi password.

Like many other problems in the industry, the only real fix for this is to have Congress update or replace the Digital Millennium Copyright Act (DMCA), which was adopted in the 1990s when we were all still using dial-up access.

Cable Company Speed Claims

I don’t know if it’s just me, but my perception of ISP and cellular advertising is that the big ISPs and cellular carriers push the envelope more every year in trying to make claims that can give them a marketing edge over the competition.

The advertising for 5G cellular has repeatedly made claims over the years that are far in excess of the ability of the technology to deliver. If your only view of the state of broadband technology is ads seen on TV during sporting events, you would be fully convinced that we live in a completely wireless world and that 5G is the end-all-and-be-all of the broadband world.

What’s funny about many ads is that carriers try to differentiate themselves from their competitors, even though their peers are delivering essentially the same product to the market. There is not much difference in the cellular technology being delivered by AT&T, T-Mobile, and Verizon – although ads claim that each is by far the superior company. In real life, the biggest differentiator between the three carriers is the strength of their signal at your home, office, and other places you frequent – a strictly local difference based on the location of cell towers.

The competition between cable companies and fiber overbuilders is not based on equivalence. There is a clear technical advantage of a 300 Mbps broadband connection on fiber versus the same connection on a cable company. Fiber has a steadier signal throughout the day with lower latency and jitter, and any consumer comparing the two can quickly spot the difference. This puts cable companies in a tough spot. They know that fiber ISPs have a quality advantage for downloading and a huge advantage for upload speeds. Fiber networks tend to also have fewer glitches and outages.

Cable companies know when a fiber network shows up in a market that they will lose customers who care about signal quality. Since cable company prices are normally higher than the prices of fiber ISPs, the cable companies have to scramble and lower prices drastically with special prices to try to hang on to customers and lure new ones.

But cable company marketers never stop trying to make a pitch that makes them sound better than fiber. One of the latest examples comes from Comcast, which has started to advertise itself as the 10G ISP. The company now refers to its broadband network as the ‘Xfinity 10G Network’. This is based on the CableLabs 10G standard that lays out a future upgrade path for cable companies to eventually achieve an overall speed as fast as 10 Gbps download and 6 Mbps upload.

Verizon took exception to Comcast’s advertising and asked the National Advertising Division (NAD) of BBB National Programs to get Comcast to stop using the term 10G. The NAD program is something that many of the big ISPs voluntarily participate in to avoid expensive lawsuits between each other over advertising claims. NAD ruled that the 10G term was not factual and said Comcast should stop using it. The participants in the NAD generally comply with NAD rulings, but this time, Comcast is appealing the ruling. An interesting sidebar of the NAD ruling is that it also felt that consumers would interpret 10G as some advanced version of cellular 5G.

As an outsider, it’s pretty easy to agree with Verizon in this case. The 10G term was based on some theoretical future upgrade to meet the CableLabs 10G specifications, and Comcast’s coaxial networks today cannot achieve that speed. The only example of where Comcast has a 10 Gbps capability today is where it has upgraded to a 10 Gbps fiber platform – a tiny portion of the overall Comcast network. Comcast’s advertising implies to consumers that the future upgrades are already in place.

In a similar dispute, AT&T took exception to Cox ads that claim that Cox cable broadband is ‘powered by fiber’. NAD agreed with AT&T and ruled that Cox could not imply in advertising that its coaxial network is fiber-to-the-home. Again, it’s easy to agree with NAD on this ruling. Having fiber somewhere in a network does not mean that the network can deliver the same quality of broadband as an all-fiber network. Many DSL fiber nodes are fed with fiber, and I don’t recall any telcos making the claim that their DSL is “powered by fiber”.

More aggressive cable marketing is inevitable in a market where cable companies have stopped growing. There has to be a lot of angst in cable company board rooms about finding ways for the companies to claim fast broadband speeds and stop losing customers.

Cable Company Cellular Growing

Cable companies are starting to quietly build a significant cellular business to bundle with broadband and other products. Consider the most recent customer count from the eight largest U.S. cellular carriers:

Verizon 143.0 M
T-Mobile 110.2 M
AT&T 101.6 M
Dish 8.5 M
US Cellular 4.9 M
Comcast 4.6 M
Charter 4.3 M
C-Spire 1.2 M

It’s worth noting that AT&T has over 200 million cellular customers worldwide, which makes them the eleventh largest cellular carrier in the world, with China Mobile first with over 851 million customers.

Comcast’s Xfinity Mobile added 317,000 customers in the second quarter of this year to bring the company to a total of 4.6 million customers. Comcast mostly uses the Verizon network to complete calls. However, Comcast demonstrates the major benefit of a cable company being in the cellular business since the company is able to offload a large portion of its outgoing mobile traffic to its WiFi network. Comcast has been experimenting with the use of 600 MHz spectrum to carry some of its cellular traffic. The company purchased $1.7 billion of spectrum in the 2017 incentive auction that freed up spectrum formerly used by television channels. Comcast also purchased $458 million of CBRS spectrum in 2020. The company says it may selectively offload traffic onto licensed spectrum in places where that is cheaper than buying wholesale minutes.

Charter’s Spectrum Mobile added 344,000 mobile customers in the second quarter of the year to bring the company to 4.3 million customers. Spectrum also uses the Verizon network. Charter purchased $464 million of PAL licenses in the CBRS spectrum in 2020. Charter says it intends to place its own radios in high-traffic areas where that will save money. Charter’s CEO Brian Roberts said a few months ago that Charter saw $700 million in new revenues from cellular over the past twelve months.

Altice has been selling mobile services branded as Optimum Mobile for several years and added 33,000 customers in the second quarter, bringing the company to 231,000 total mobile customers. Altice uses the T-Mobile network.

Cox announced the launch of a mobile pilot program on August 29, launching Cox Mobile in Hampton Roads, Virginia, Omaha, Nebraska, and Las Vegas.

All of these companies have a huge potential upside. For example, the mobile customer penetration rate for both Comcast and Charter is under 10%, and both companies believe they can become major mobile players in their markets.

The cable companies face an unusual marketing challenge since each cable company is only in selected urban markets, meaning that a lot of nationwide advertising goes to waste.

The primary reason that Comcast first entered the mobile market was to develop another product that would create a stickier bundle. Comcast figured it would be hard for a customer to leave if that meant finding a new cellular carrier along with a new ISP. Cable companies are still only selling to their own broadband customers, which is a good indication bundling is still a key reason for doing this. It’s also less costly to sell cellular to households that can offload cellular traffic to the cable company broadband network.

The big three cellular carriers have continued to grow in recent years, but the cable companies have definitely made a dent in the market with almost ten million retail mobile customers. The real test for the cellular industry is going to come when Dish finally gets its act together and offers low-cost mobile service in most markets. That’s going to put price pressure on everybody else. If Dish starts a price war, as promised, we’re going to see a real shake-up.

 

 

Who is the Fastest ISP?

I regularly run across articles that ask which major ISP is the fastest. Most of these articles get their speed data from Ookla, which publishes comparative median broadband speeds for mobile and landline ISPs each quarter, like in this report for the second quarter of 2022.

Americans love a horse race – we like to rank things, and articles that rank ISPs grab readers. But we have to take articles based upon the Ookla rankings with a grain of salt. Ookla doesn’t make any claims about its numbers – it just presents the data.

There are a few things to note about the Ookla numbers. First, the results come from the many speed tests reported to Ookla. We know that a significant number of speed tests aren’t perfect due to issues at the customer end, such as an old WiFi router or taking the speed test at the far end of the house away from the WiFi router. Most importantly, Ookla reports median speeds – meaning half of all speed tests for a given ISP are faster, and half are slower than the value shown. Median speeds don’t seem to be a great metric for comparing ISPs.

Here are the median speeds for the second quarter from Ookla for the largest landline ISPs.

Download Upload
Cox 196.73 10.60
Xfinity 184.08 18.88
Spectrum 183.84 11.70
Verizon 171.01 112.36
AT&T Internet 146.64 112.27
Frontier 136.99 113.21
CenturyLink 41.29 12.02

What do these numbers tell us (and not tell us)?

  • The results are only from customers who took speed tests. I have to think that customers who have blazingly fast Internet don’t take a speed test as often as customers who are seeing sluggish performance. Summarizing the speeds for only those who take a speed test is very different than measuring the average speed being delivered to all customers by an ISP.
  • One of the factors that likely has a big impact on the median speed is the mix of broadband speed products offered by each ISP. An ISP that sells a lot of 50 Mbps or 100 Mbps download products is likely to have a lower median speed than an ISP that has a minimum speed of 200 Mbps. The numbers above include ISPs with widely different speed products and prices.
  • This list only includes the largest ISPs. Smaller ISPs that offer fast products, like Ting, Sonic, US Internet, and many others, would blow away these median speeds.
  • I saw two articles that declared that Cox is now the fastest ISP in the country. Is it really? Just two quarters ago, at the end of 2021, Verizon had a median download speed of 201 while Cox was at 172. This variability from quarter to quarter is a good indication that you can’t make any serious judgment about an ISP based on median speeds. I can’t imagine that Verizon got slower – there was just a different mix of Verizon customers who took the Ookla speed test in the fourth quarter and the second quarter.
  • It’s interesting that none of the median upload speeds for cable companies is at the proposed 20 Mbps definition of broadband being considered by the FCC. This suggests more than half of all customers of the cable companies have upload speeds of less than 20 Mbps – and it’s likely that far more than half don’t achieve the 20 Mbps upload threshold. Is Cox really the fastest ISP when it doesn’t seem to meet the FCC’s proposed definition of broadband?
  • It’s clear that the measurements for CenturyLink include DSL. I’ve seen individual speed test results from CenturyLink Fiber customers that show symmetrical speeds – and far faster speeds than these numbers. By comparison, it looks like the Frontier, AT&T, and Verizon speeds are for fiber customers and don’t include DSL.

I like ranking as much as anybody, but I am unable to draw too many conclusions from the Ookla numbers. Perhaps the most you can say is that both fiber and cable companies are delivering decent download speeds – at least to the top 50% of customers. But these numbers are another example of the paltry upload speeds being delivered by the cable companies. I can’t pick the fastest ISP from this table – if I was forced to choose, I’d say Verizon. But that’s a pretty weak pick using median speeds. All of these ISPs offer a gigabit download product, and from that perspective, they are all the fastest – except for the ISPs not on this list that now offer a residential 10 Gbps broadband product.