Tag Archives: Frontier

A Repeat Performance for Cable 4Q 2022

The traditional cable companies lost over 6.25 million cable subscribers in 2022, up from 5.6 million in 2021. That means that almost one in every twenty homes in the country dropped traditional cable TV during the last year.

These numbers come from Leichtman Research Group, which compiles most of these numbers from the statistics provided to stockholders, except for Cox, which is privately held and estimated. Leichtman says this group of companies represents 96% of all traditional U.S. cable customers.

% 4Q Annual
4Q 2022 4Q Change Change Change
Comcast 16,142,000 (440,000) -2.7% (2,034,000)
Charter 15,147,000 (144,000) -0.9% (686,000)
DirecTV 13,100,000 (400,000) -3.0% (1,500,000)
Dish TV 7,416,000 (191,000) -2.5% (805,000)
Verizon 3,301,000 (82,000) -2.4% (343,000)
Cox 3,050,000 (90,000) -2.9% (340,000)
Altice 2,439,000 (52,800) -2.1% (293,300)
Mediacom 510,000 (15,000) -2.9% (62,000)
Breezeline 309,627 (13,411) -4.2% (37,102)
Frontier 306,000 (16,000) -5.0% (74,000)
Cable ONE 181,500 (20,500) -10.1% (79,500)
Total 61,902,127 (1,464,711) -2.3% (6,253,902)
Hulu Live 4,500,000 100,000 2.3% 200,000
Sling TV 2,334,000 (77,000) -3.2% (152,000)
FuboTV 1,445,000 214,000 17.4% 323,000
Total Cable 37,779,127 (775,711) -2.0% (3,531,902)
Total Other 24,123,000 (689,000) -2.8% (2,722,000)
Total vMvPD 8,279,000 237,000 2.9% 371,000

The losses are fairly even across the industry, with most cable providers seeing around a 10% drop in cable customers during the year. The exceptions were Charter, which lost only 4.3%, Frontier that lost almost 20%, and Cable One (Sparklight) that lost over 30% of customers. If these trends continue for another year, Charter will pass Comcast and become the largest traditional cable provider.

The magnitude of the losses are staggering, with Comcast losing over 2 million cable customers during the year and DirecTV losing 1.5 million.

To put the loss of cable customers into context, these same large companies had over 85 million cable customers at the end of 2018 and are now down to under 62 million customers.

In the fourth quarter, the three online cable alternatives that LRG tracks gained 371,000 new customers for the year, A few major online alternatives, like YouTube TV aren’t on the list since they don’t announce customer counts.

Is Fiber Growth Slowing?

In a recent article in LightReading, Mike Dano cites data from industry analyst Cowan that shows that some of the largest fiber builders in the country have already trimmed back their construction plans for 2023.

AT&T has the largest retrenchment and is trimming 2023 plans from 3.5 to 4 million passings back to 2 to 2.5 million. The company says that it is not changing its long-term goal to reach 30 million passings with fiber, but a cutback of this size means it won’t likely reach that target in 2025.

Lumen’s new CEO Kate Johnson said the company is taking a pause while it rethinks its path forward. In doing so, the company trimmed 2023 fiber expansion plans from 1.75 million passings to something under 1 million.

Cowen says other big ISPs will also trim plans a bit. Frontier is probably trimming 2023 plans from 1.6 million to 1.4 million passings. Altice is cutting expectations back from 1.6 million to 1.5 million. Consolidated is reducing 400,000 planned new passings to 350,000.

There are other fiber builders that don’t seem to be cutting plans. Brightspeed, Metronet, and others still seem to be on track for their 2023 plans.

But cutbacks of the size of the AT&T and Lumen plans raise some questions about the trajectory of fiber overbuilding. If construction plans announced two years ago had held steady, there was a massive push to build fiber networks to compete with cable companies. Do these cuts mean that fiber competition won’t materialize as planned?

There have been big external changes affecting the entire industry. Fiber material costs are up, as evidenced by the recent price hike announced by Corning. Prices of fiber components are up across the board for everything from conduit, handholes, drop wires, etc. A bigger cost impact is the cost of labor, with technicians labor rates rising across the industry.

Fiber construction is also not immune from interest rate increases. I already have some clients thinking of shelving fiber expansion projects until interest rates come back to earth.

All of this adds up to a lower return for fiber builders. I was always a bit mystified by the frenetic planned pace of fiber expansion craze in cities since the returns have never been spectacular. I’ve always assumed the push to build fiber has been more of a land grab as big ISPs see other fiber builders encroach on areas they want as markets. I think much of the fiber construction craze has been about either building now or getting locked out of markets in the future.

Any level of cutbacks is good news for cable companies, since the above cutbacks mean several million fewer fiber passings to compete with by the end of 2023. Any relaxing of the competitive pressure gives cable companies more time to upgrade upload speeds over the next three years. I have to wonder if the cable company’s plans to increase upload speeds play into any of the decisions to cut back on fiber expansion. It would be really interesting to sit inside the Board rooms as the big ISPs debate these strategies. The broadband environment is getting more complex by the day.

Can Frontier Reinvent Itself?

Diana Goovaerts recently wrote an article that quotes Frontier’s Consumer EVP John Harrobin as saying that Frontier expects to become the ‘un-cable” option in the market. He says that Frontier is doing this by simplifying its product lines to eliminate behavior that customers hate.

One of the biggest changes is to get rid of special pricing, where a customer signs with an ISP due to a low-price special, only to see the rates jump up at the end of the special period. This is the one characteristic of big ISPs that customers dislike the most. For years I’ve been advising smaller ISPs to avoid the practice and to offer a fair price all of the time.

I have ISP clients who sometimes panic when they see big ISPs offering special prices as they enter a new market. The specials work to some degree, and the big ISPs lure some customers with the special prices. But small ISPs have learned that after a year or two, when the special pricing ends, they have a good chance to win most of these customers. Small ISPs have learned that when they treat customers fairly that those customers don’t bite on new pricing offers. In the long run, the best way to reduce churn is to treat customers fairly and with transparency.

The interview didn’t mention it, but if Frontier is going to be an un-cable ISP, it also will have to eliminate hidden fees. These are the fees that are not included in advertising but appear on the first customer bill, usually as an unpleasant surprise. The biggest hidden fees are for cable TV service where ISPs hide programming and sports fees and settop box fees – and where a first bill can be $30 higher than the advertised price. But big ISPs do the same thing and don’t mention expensive modem fees in advertising – and customers are instantly unhappy when they get a first bill where the actual price is $10 or $15 higher than the price they expected.

Frontier has announced plans to build fiber to pass 10 million homes and businesses. The company was getting creamed by competition as long as it primarily offered DSL. In 2018, Frontier lost over 200,000 broadband customers. In 2019 the losses grew to 235,000, and in 2020 the company lost 400,000 broadband customers. But by 2021, Frontier started turning the ship around and only lost 35,000 customers for the year as fiber additions started to outnumber DSL losses.

Frontier has a long way to go to have its customer base come to trust it. The company was guilty of all of the same sins as other big rural telcos. It cut back on maintenance to the point where customers might be out for a week or two before they heard from a technician. In many cases, the company would disconnect a customer that had a problem rather than fix it. The company accepted federal CAF II funding, but many customers saw little or no improvements. Frontier has a long way to go to regain the trust of customers that it largely abandoned for many years.

Building fiber is a huge start to regaining customer trust since delivering broadband that actually works is essential to have customers want to stay with any ISP. But Frontier is still going to have to demonstrate to customers that it cares about them when there is a problem. Most small ISPs try to clear customer problems within a day of a trouble report and will work extra hours to do so. If Frontier really wants to be the un-cable company it will mean adding maintenance staff. Folks have become so reliant on broadband that they are annoyed if they lose service for an hour – they won’t forgive an ISP that puts them out of service for a day or longer.

Frontier has also been embroiled in a few overbilling controversies in recent years, and being the un-cable ISP means taking the attitude that the customer is right, even if that costs the company a few bucks.

It’s going to be interesting to see if Frontier’s practices live up to the public relations hype. There is one sign that perhaps the company has started to turn the ship. In the 2022 American Customer Satisfaction Index, the consumer rating of Frontier jumped from 57 to 61 in one year. In 2020, the only ISP with a worse customer rating was Suddenlink. Within a year, the company bypassed the rating for MediaCom and CenturyLink. A 60 rating still means that Frontier (and most other ISPs) is still the most disliked companies among 45 different major business sectors. But if Frontier can sustain being an un-cable ISP, then over time, customers will begin to trust the company again.

Here Comes FWA

Broadband industry statistics have been compiled by the Leichtman Research Group which provides an interesting new narrative for the industry. The biggest ISPs added just over one million new broadband customers in the first quarter of 2022, but half of the new customers went to the FWA products from Verizon and T-Mobile.

FWA stands for Fixed Wireless Access and is home broadband delivered using cellular frequencies. T-Mobile and Verizon are aggressively marketing the product, which is touted to have download speeds over 100 Mbps. The market is going to get hotter when Dish gets its launch underway soon. AT&T has also been promising a major new marketing effort to sell the product.

 1Q 2022 1Q Change % Change
Comcast 32,163,000 262,000 0.8%
Charter 30,274,000 185,000 0.6%
AT&T 15,533,000 29,000 0.2%
Verizon 7,400,000 35,000 0.5%
Cox 5,560,000 30,000 0.5%
Lumen 4,470,000 (49,000) -1.1%
Altice 4,373,200 (13,000) -0.3%
Frontier 2,819,000 20,000 0.7%
Mediacom 1,468,000 5,000 0.3%
Windstream 1,176,000 11,300 1.0%
Cable ONE 1,057,000 11,000 1.1%
T-Mobile FWA 984,000 338,000 52.3%
Breezeline 719,608 2,830 0.4%
TDS 495,200 4,900 1.0%
Verizon FWA 433,000 194,000 81.2%
Consolidated 380,150 (850) -0.2%
   Total 109,305,158 1,065,180 1.0%
Total Cable 75,614,808 482,830 0.6%
Total Telco 32,273,350 50,350 0.2%
FWA 1,417,000 532,000 60.1%

FWA was originally touted as the replacement for rural DSL. However, both T-Mobile and Verizon report having success selling the product in urban areas and competing with cable companies. This means that FWA success is going to bring down customer counts for other ISPs.

Over the past several years, Comcast and Charter have been accounting for most of the growth in broadband customers. In the first quarter, the two FWA providers and Comcast and Charter together account for 92% of net increases in broadband customers.

There are some interesting numbers inside this report.

  • Frontier has clearly turned it around after steady losses for several years and saw growth of 0.7% for the quarter.
  • The big loser is now Lumen, which lost over 1% of its broadband customers in the quarter.
  • We know that AT&T has been selling fiber connections at a hot pace but is still seeing significant losses of DSL customers to net out at a small positive growth.
  • The biggest percentage gainer among landline companies for the quarter is CABLE ONE, with quarterly growth of 1.1%.
  • Altice continues to struggle and lost broadband customers for the quarter.

National Broadband Growth is Slowing

Leichtman Research recently released the broadband customer statistics for the end of the fourth quarter of 2021. The numbers show that broadband growth has slowed significantly for the sixteen largest ISPs tracked by the company. LRG compiles these statistics from customer counts provided to stockholders, except for Cox which is privately owned.

Net customer additions sank each quarter during the year.  The first quarter of 2021 saw over 1 million net new broadband customers. That dropped to just under 900,000 in the second quarter, 630,000 in the third quarter, and now 423,000 in the fourth quarter. The statistics for all of 2021 and for the fourth quarter are as follows:

Annual % 4Q %
4Q 2021 Change Change Change Change
Comcast 30,574,000 1,327,000 4.3% 213,000 0.7%
Charter 28,879,000 1,210,000 4.2% 190,000 0.6%
AT&T 15,384,000 120,000 0.8% (6,000) 0.0%
Verizon 7,129,000 236,000 3.3% 28,000 0.4%
Cox 5,380,000 150,000 2.8% 20,000 0.4%
CenturyLink 4,767,000 (248,000) -5.2% (70,000) -1.5%
Altice 4,389,600 (3,400) -0.1% (1,900) 0.0%
Frontier 2,834,000 (35,000) -1.2% 10,000 0.4%
Mediacom 1,438,000 25,000 1.7% (3,000) -0.2%
Windstream 1,109,300 55,200 5.0% 17,500 1.5%
Cable ONE 992,000 63,000 6.4% 25,000 2.4%
Atlantic Broadband 698,000 18,778 2.7% (222) 0.0%
WOW! 498,800 12,900 2.6% 2,200 0.4%
TDS 493,300 32,700 6.6% 3,200 0.6%
Cincinnati Bell 436,100 3,900 0.9% 1,000 0.2%
Consolidated 401,357 (16,793) -4.2% (6,097) -1.6%
Total 105,403,457 2,951,285 2.8% 422,681 0.4%
Cable 72,849,400 2,803,278 3.8% 445,078 0.6%
Telco 32,554,057 148,007 0.5% (22,397) -0.1%
           
Fixed Wireless 874,000 719,000 82.3%    

There are a few interesting things to keep an eye on in the future. The growth for Comcast and Charter have slowed significantly and my prediction is that there will come a quarter within a year where one or both of them will lose net customers. For several years running, Frontier has been bleeding customers but seems to be turning it around. The big loser is now CenturyLink.

For some reason, LRG is leaving out fixed cellular customers. At the end of 2021, T-Mobile reported 646,000 fixed cellular customers, with 546,000 added in 2021. Verizon is up to 228,000 fixed cellular customers, up by 173,000 during 2021. The two companies, along with AT&T, are making a major push in this market and expect to add millions of customers in 2022 – many at the expense of the other ISPs on the list. It’s an odd choice to exclude these customers since the speeds on fixed cellular are faster than the DSL delivered by the telcos on the list. Also missing are other big providers that are probably larger than Consolidated, like a few of the largest WISPs and fiber overbuilders like Google Fiber.

But even after counting the growth of fixed cellular broadband, it’s obvious that the broadband market growth has cooled. The burst of new customers in 2020 and the first half of 2021 were clearly fueled by homes buying broadband during the pandemic.

It’s also worth noting that the numbers for WOW! and Atlantic Broadband (now Breezeline) have been adjusted for the sale of customers by WOW!.

Big Telcos and Federal Grants

Several large telcos have announced big plans to expand fiber coverage, and I assume that also means heavily participating in the upcoming $42.5 billion BEAD grants that are aimed primarily at bringing better broadband to rural areas.

When Frontier came out of bankruptcy, the company announced plans to pass 6 million homes with fiber by 2025. As part of its Build Gigabit America plan, the company raised that goal to 10 million homes. Frontier already has undertaken the first step in that plan. It set a goal of 495,000 new fiber passings for 2021 but recently announced that it expects to hit 600,000 passings for the year.

AT&T also has big plans. The company has been steadily building a fiber customer base and announced at the end of the third quarter that it now has 5.7 million fiber customers, representing a 37% market share of its 15.4 million fiber passings. A year ago, AT&T announced a goal to pass 25 million homes and businesses by 2025 – another 10 million passings. CEO John Stankey announced recently that the federal infrastructure bill will entice AT&T to increase that goal to 30 million passings, adding 5 million rural passings.

Windstream didn’t express expansion plans in terms of passings but announced this past summer that it is embarking on a $2 billion fiber expansion plan. It seems likely that the federal grants will entice the company to tackle even more growth.

Consolidated Communications is passing 300,000 new potential customers with fiber this year and has plans to continue fast growth into the future. I couldn’t find any specific plan related to federal grants, but I speculate that the company is likely going to chase grants close to existing properties.

The big mystery is CenturyLink. The company is passing 400,000 locations with fiber this year. But the company also announced the sale of its copper networks in twenty states.

It’s likely that all of these telcos want to benefit from the huge upcoming federal grants. The easiest ways for telcos to take advantage of the federal grant is to plan to overlash fiber onto existing telco copper where the companies are already the incumbent. But if the grants are lucrative enough, they might seek grants in other areas as well.

It would be interesting to be a fly on the walls of the corporate board rooms of these big telcos to see how they feel having the huge federal funding flowing through the states. The big companies have always done well with subsidies coming directly from the federal government, such as the $11 billion CAF II subsidies.

But will the telcos do as well with funding being decided at the state level? State regulators and state governments across the country have been unhappy with the way that the big telcos abandoned rural telephone networks. Most states have been able to make an easy comparison between smaller telcos and cooperatives that have invested in rural fiber and the big telcos that have done as little as possible to keep rural networks operating.

I’m curious about the degree to which the big telcos might have burned their bridges with past behavior. I know a lot of state regulators and state broadband offices who will not want to see money going to the companies that were largely responsible for creating the rural broadband gap. Are states going to be willing to give another chance to these big telcos?

I am sure that the state politics involving these grants is going to get intense. Most of the broadband offices that will be awarding these grants will be understaffed and under a lot of pressure to spend the grant money on schedule. Legislators are bound to get involved in some states to try to steer the grant process, although the federal money must meet federal grant rules set by the NTIA. Governors will also weigh in on the issue, and in some states, the grant offices are part of the executive branch. State regulators who have tussled with the big telcos will weigh in. And the public is likely to make itself heard as communities are coalescing around grant applications.

It’s going to be nearly impossible to follow grant policies and trends everywhere when all fifty states will be embarking on a giant grant program at the same time. One thing is for sure – the next few years are going to be interesting.

The Regulatory Struggle to Maintain Copper Networks

The California Public Utilities Commission has been investigating the quality of service performance on the telco networks operated by AT&T and Frontier. The agency hired the consulting firm Economics and Technology, Inc. to investigate numerous consumer complaints made against the two telcos. Thanks go to Steve Blum for following this issue in his blog.

Anybody who still has service on the two carriers will not be surprised by the findings. The full study findings have not yet been released by the CPUC, but the portions that have been made public are mostly what would be expected.

For example, the report shows a correlation between household incomes in neighborhoods and the quality of service. As an example, the average household incomes are higher in neighborhoods where AT&T has replaced copper with fiber. More striking is a correlation between service calls and household income. The annual frequency of repair calls is double for neighborhoods where the average household income is $42,000 per year or less compared to neighborhoods with household incomes of $88,000 or more.

Part of that difference is likely because more high-income neighborhoods have fiber, which has fewer problems and generally requires less maintenance. But there are also hints in the report that this might be due to economic redlining where higher-income neighborhoods get a higher priority from AT&T.

This is not the first time that AT&T has been accused of redlining. I wrote a blog a few years ago about a detailed study made in Dallas, Texas that showed a direct correlation between the technology being delivered and household incomes. That study followed up on a similar report from Cleveland, Ohio, and the same things could likely be said for the older telco networks in almost every big city.

The big telcos are in a rough spot. The older copper networks have largely outlived their economic lives and are full of problems. Over the years copper pairs of wire in the outdoor cables have gone bad and the remaining number of working copper pairs decreases each year. The electronics used to deliver older versions of DSL are long out of production by the telco vendors.

I’m not defending the big telcos, because the telcos caused a lot of their own problems. The telcos have deemphasized copper maintenance for decades. The copper networks would be in bad shape today even had they been maintained perfectly. But purposefully neglected maintenance has hastened the deterioration of copper networks. Additionally, the big telcos have also been laying off copper-based technicians over the last decade and the folks who knew how to best diagnose problems on copper networks are long gone from the companies. Consumers have painfully learned that the most important factor in getting a repair made for DSL or copper is the knowledge of the technician that shows up to investigate an issue.

The California Commission is likely at some point to threaten the big telcos with penalties or sanctions, as been done in the past and also by regulators in other states. But the regulators have little power to effect improvements in the situation. Regulators can’t force the telcos to upgrade to fiber. And no amount of documentation and complaining is going to make the obsolete copper networks function any better. AT&T just announced that on October 1 that it is not longer going to add new customers to the DSL network – that’s likely to really rile the California Commission.

I’m not sure exactly how it will happen, but the day is going to come, likely during the coming decade when telcos will just throw up their hands and declare they are walking away from copper, with zero pretenses that they are going to replace it with something else.  Regulators will rant and rave, but I can’t see any ways that they can stop the inevitable – copper networks at some point won’t work well enough to be worth pretending otherwise.

Cord Cutting Continues in Q2 2020

The largest traditional cable providers collectively lost over 1.5 million customers in the second quarter of 2020 – an overall loss of 2.0% of customers. This is the smaller than the loss in the first quarter of 1.7 million net customers. To put the quarter’s loss into perspective, the big cable providers lost 16,700 cable customers per day throughout the quarter.

The numbers below come from Leichtman Research Group which compiles these numbers from reports made to investors, except for Cox which is estimated. The numbers reported are for the largest cable providers, and Leichtman estimates that these companies represent 95% of all cable customers in the country.

Following is a comparison of the second quarter subscriber numbers compared to the end of the first quarter of 2020:

1Q 2020 2Q 2019 Change % Change
Comcast 20,367,000 20,845,000 (478,000) -2.3%
Charter 16,168,000 16,074,000 94,000 0.6%
DirecTV 14,290,000 15,136,000 (846,000) -5.6%
Dish TV 9,017,000 9,057,000 (40,000) -0.4%
Verizon 4,062,000 4,145,000 (83,000) -2.0%
Cox 3,770,000 3,820,000 (50,000) -1.3%
AT&T U-verse 3,400,000 3,440,000 (40,000) -1.2%
Altice 3,102,900 3,137,500 (34,600) -1.1%
Mediacom 676,000 693,000 (17,000) -2.5%
Frontier 560,000 594,000 (34,000) -5.7%
Atlantic Broadband 311,845 314,645 (2,800) -0.9%
Cable One 290,000 303,000 (13,000) -4.3%
     
Total 76,014,745 77,559,145 (1,544,400) -2.0%
Total Cable 44,685,745 45,187,145 (501,400) -1.1%
Total Satellite 23,307,000 24,193,000 (886,000) -3.7%
Total Telco 8,022,000 8,179,000 (157,000) -1.9%

Some observations about the numbers:

  • The big loser is AT&T, which lost 886,000 traditional video customers between DirecTV and AT&T U-verse. For many quarters AT&T claimed losses were due to the company eliminating low-margin customers. It seems losses are more likely now due to price increases.
  • The big percentage loser is Frontier that lost almost 6% of its cable customers in the quarter. The Frontier numbers have been lowered for both quarters to reflect the sale of its property in the Pacific northwest.
  • While DirecTV continues to bleed customers, Dish Networks has seemed to have stemmed losses.
  • The most interesting story is for Charter that gained customers during the quarter. The company credits the gains to offering a lower-price package and also to a marketing campaign that is giving two months free of broadband. 329,000 customers took that offer in the second quarter and nearly half of those customers elected to add on cable TV and/or cellular service, both of which were for pay, and not free. Charter has been beating the industry as a whole for cable subscribers every quarter since Q3 2018.

The losses of cable companies continue to mount at dizzying levels for the industry. This is the sixth consecutive quarter where the industry lost over one million cable subscribers. The big providers collectively have lost 3.2 million customers this year, from a starting point of 79.3 million customers at the end of 2019.

It’s especially worth noting that these losses happened during a quarter when the biggest ISPs gained over 1.2 million customers for the quarter.

We’re likely going to have to wait to understand exactly what is happening in the cable industry. For example, a recent large survey from TiVO showed that 25% of US homes have downgraded to less expensive cable packages (cord-shaving). That would mean total revenue losses over and above what would be expected by just net customer losses.

Interestingly, homes don’t seem to be fleeing traditional cable for the online equivalents. Leichtman also tracks Hulu Live, Sling TV, and DirecTV Now and those three companies collectively lost 24,000 customers for the quarter.

Loving to Hate Our Big ISPs

The American Customer Satisfaction Survey (ACSI) was released earlier this summer that ranks hundreds of companies that provide services for consumers. Historically cable companies and ISPs have fared poorly in these rankings compared to other businesses in the country. The running joke reported in numerous articles about this survey is that people like the IRS more than they like their cable company (and that is still true this year).

But something interesting happened in this year’s survey and the ranking for cable companies collectively improved by 3% and consumer confidence in ISPs climbed 5%. There is no easy way to understand a national satisfaction survey, but those trends are interesting to contemplate.

Let’s start by looking at the numbers. Consumers still rank cable TV providers as the least liked group of companies in the country across all industries, joined at the bottom by ISPs. The ACSI ranks each company and each industry segment on a scale of 1 to 100. The top-rated industries are breweries (84%), personal care and cleaning products (82), soft drinks (82), and food manufacturing (81).

By contrast, cable providers are ranked the lowest at 64 followed closely by ISPs at 65. Joining these companies at the bottom are local governments (65.5), video-on-demand providers (68), and the federal government (68.1).

The overall ranking for cable providers grew from a 62 in 2019 to a 64 in 2020. I can only speculate why people like cable companies a little more this year. This could be due in part to huge growth in cord-cutters who no longer watch traditional cable TV and who might perhaps no longer rate a product they don’t use. Or perhaps folks have come to appreciate the cable product more during the pandemic when people are going out less, and likely watching TV more.

The cable providers at the bottom of the rankings continue to get low satisfaction ratings, with Suddenlink (56), Frontier (58), and Mediacom (60). Just above these companies are two of the largest cable providers – Charter (60) and Cox (61). But all of these companies had a slightly improved satisfaction ranking over 2019. The highest-ranked cable providers continue to be Verizon FiOS (70) and AT&T U-verse (70), now relabeled as AT&T TV.

ISPs didn’t fare much better. It’s worth noting that this list contains many of the same companies on the cable provider list, but consumers are asked to rank cable services separately from broadband services. The overall satisfaction for ISPs grew from a 62 in 2019 to a 65 in 2020. The same three providers are at the bottom – Frontier (55), Suddenlink (57), and Mediacom (59). At the top are the same two providers – Verizon FiOS (73) and AT&T Internet (68).

Part of the explanation of the change in approval ratings for the industries might be little more than statistical variance within the range of sampling. The rankings of individual ISPs vary from year to year. Consider Charter, ranked as an ISP. The company was ranked highest in 2013 and 2017 at a 65 ranking and lowest in 2015 (57) and 2019 (59). This year’s increase might just be variance within the expected range of sampling results.

What matters a lot more is that our cable companies and ISPs are generally consumer’s least favorite companies. This has always benefited smaller ISPs that compete against the big companies. One of the most common forms of advertising for smaller ISPs is, “We are not them”.

People don’t rate cable companies and ISPs so low due because they deliver technical products. Other technology sectors have much higher satisfaction ratings such as landline telephones (70), cellphones (74), computer software (78), internet search engines (76), and social media (70). Consumers are also like electric utilities a lot more than cable companies and ISPs – electric coops (73), and investor-owned and muni electric companies (72).

It’s always been somewhat disheartening to work in an industry that folks love to hate. But I’ve always been comforted by the fact that my smaller ISP and cable clients generally fare extremely well when competing against the big ISPs and cable companies. I have to assume this means people like small ISPs more than the big ones – or perhaps hate them a little less. That’s something every small ISP should periodically consider.

Who’s Chasing RDOF Grants?

There is a veritable Who’s Who of big companies that have registered for the upcoming RDOF auction. All of the hundreds of small potential bidders to the auction have to be a bit nervous seeing the list of companies they could end up bidding against.

As a reminder, RDOF stands for Rural Digital Opportunity Fund and is an auction that starts in October that will award up to $16.4 billion in broadband funding. The money will be awarded by reverse auction in a process that favors faster technologies, but also favors those willing to take the lowest amount of grant per customer. The areas that are eligible for the funding are among the most remote places in the country, which is why the list of potential large bidders is puzzling.

There are some big cable companies on the list: Altice, Charter Communications, Cox Communications, Atlantic Broadband, Midco, and Mediacom Communications. These companies serve many of the county seats or other nearby towns to many of the RDOF areas. One has to wonder what these companies have in mind. The only one that has chased any significant federal grants in the past is Midco in Minnesota and North Dakota. Midco has been using grant money to extend fiber backhaul to connect its smallest markets, to build last-mile broadband in some tiny towns, and to build fixed wireless in rural areas surrounding its cable markets.

One has to wonder if the other cable companies have a similar plan. It’s incredibly inefficient to build traditional hybrid coaxial-fiber networks in rural areas, so it’s unlikely that the cable companies will be extending their existing networks. The RDOF auction is being done by Census blocks, which in rural areas can cover a large area. The winner of the auction for a given Census block must offer service to everybody in that block. I also have a hard time envisioning all of these big cable companies getting into the wireless business like Midco is doing, so their presence in the auction is a bit of a mystery.

Then there are the traditional large telcos including Frontier, Windstream, Consolidated Communications, and CenturyLink. These companies already serve many of the areas that are covered by the reverse auction. These are the rural areas where these companies have largely neglected the old copper wiring and either offer no broadband or dreadfully slow DSL. The minimum technology allowed to enter the auction must deliver 25/3 Mbps broadband. It’s almost painful to think that these companies would chase the funding and promise to upgrade DSL to 25/3 Mbps after these companies largely botched an upgrade to 10/1 Mbps DSL in the just-ending CAF II grants. The cynic in me says they are willing to pretend to upgrade DSL all over again if that means substantial grant money. I have to think that some of these companies are considering deploying fixed wireless. To the extent any of these companies is willing to take on new debt or use equity, they could also build fiber. None of these companies has built a substantial amount of fiber to truly rural places, but may these grants are the inducement they were waiting for.

Verizon and U.S. Cellular have registered for the auction. You have to think the cellular carriers will be deploying fixed cellular broadband like the 4G FWA product that Verizon just announced recently. These companies already have equipment on towers in many of the RDOF grant areas and would love to grab a subsidy to roll out a product they might be selling in these areas anyway.

Then there are the satellite companies SpaceX, Hughes Network Systems, and Viasat. Viasat has won federal grant money before for selling broadband from its high-altitude satellites. SpaceX is the wildcard since nobody knows anything about the pricing or real speeds they can provide. We know that Elon Musk has been lobbying the FCC to let him have a shot at the billions up for grabs in this auction.

There is another interesting wildcard with Starry. Their business plan is currently selling fixed wireless to large apartment buildings in center cities and they’ve developed a proprietary technology that’s perfect for that application. They must have something else in mind in chasing grant money in remote areas that are 180 degrees different than their normal business model. Starry founder Chet Kanojia is incredibly creative, so he probably has a new technology in mind if he wins auction funding.

There may be other big players in the auction as well since many of the registered bidders are participating under partnerships or corporations that are disguising their identity for now. I think one thing is clear and some of the rural ISPs and cooperative who think nobody else is interested in their markets will get a surprise early in the auction. These big companies didn’t register for the grant auction to sit on the sidelines.