Tag Archives: Leichtman Research Group

2022 Was a Year of Change for the Big ISPs

There was a sea change among the big ISPs in 2022. The big news is that most of the growth in the industry came from the T-Mobile and Verizon cellular FWA broadband product. Cable company growth crawled to a halt after a robust 2021, and the sector only grew by 55,000 net broadband customers in the fourth quarter. The big telcos still had small losses for the year, but the big news is that they added 2.4 million customers to fiber during the year.

The following list of ISPs represents about 95% of the U.S. broadband market. The large ISPs, in aggregate, added just over 3.5 million net customers in 2022. The two cellular FWA companies added 3,171,000 of those additions. Cable companies added 517,103 customers for the year, with most of the growth coming at the beginning of the year. The big telcos had a net loss of 181,276 customers but continued to furiously replace DSL with fiber.

The following statistics were compiled by the Leichtman Research Group, which tracks the broadband performance of the largest ISPs in the country. Following are the customers counts for the fourth quarter and the end of year 2022:

% 4Q Annual
4Q 2022 4Q Change Change Change
Comcast 32,151,000 (26,000) -0.1% 250,000
Charter 30,433,000 105,000 0.3% 344,000
AT&T 15,386,000 (66,000) -0.4% (118,000)
Verizon 7,484,000 37,000 0.5% 119,000
Cox 5,560,000 0 0.0% 30,000
Altice 4,282,900 (7,700) -0.2% (103,300)
Lumen 3,037,000 (63,250) -2.0% (253,000)
Frontier 2,839,000 8,000 0.3% 40,000
T-Mobile FWA 2,646,000 524,000 24.7% 2,000,000
Mediacom 1,468,000 0 0.0% 5,000
Verizon FWA 1,452,000 389,000 36.6% 1,171,000
Windstream 1,175,000 0 0.0% 10,300
Cable ONE 1,060,400 (1,600) -0.2% 14,400
Breezeline 693,781 (14,173) -2.0% (22,997)
TDS 510,000 3,500 0.7% 19,700
Consolidated 367,458 (14,454) -3.8% 724
Total 110,545,539 873,323 0.8% 3,506,827
Cable 75,649,081 55,527 0.1% 517,103
Telco 30,798,458 (95,204) -0.3% (181,276)
FWA 4,098,000 913,000 28.7% 3,171,000

There are a lot of interesting trends withing these numbers:

  • T-Mobile is now the 9th largest ISP, and the Verizon FWA product comes in at eleventh. T-Mobile is poised to pass Frontier and Lumen soon at the current growth rate.
  • While all of the landline ISPs on the list are feeling pressure from the cellular FWA product, the bigger and more permanent challenge for the cable companies is the 2.4 million telco customers added to fiber to the year. That statistic shows why cable companies are scrambling to improve upload speeds.
  • The biggest loser on the list continues to be Lumen, which lost 7.7% of its broadband customers for the year. It’s worth noting that the above numbers represent the smaller Lumen after the spinoff of Brightspeed in 2022. Breezeline (Formerly Atlantic Broadband) was the biggest percentage loser among cable companies, having lost 3.3% of broadband customers during the year.
  • TDS continues to be the fastest-growing landline ISP at 4.0% growth for the year. Next is Verizon FiOS, having grown by 1.6% for the year.

A Repeat Performance for Cable TV 3Q22

Traditional cable providers continue to lose cable TV customers at the same fast pace as the second quarter of the year. In the third quarter, the cable companies list 1.68 million customers after losing over 1.65 million customers in the second quarter.

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.

2Q 2022 Change Change
Comcast 16,582,000 (562,000) -3.3%
Charter 15,291,000 (204,000) -1.3%
DirecTV 13,500,000 (400,000) -2.9%
Dish Network 7,607,000 (184,000) -2.4%
Verizon 3,383,000 (96,000) -2.8%
Cox 3,140,000 (90,000) -2.8%
Altice 2,491,800 (82,400) -3.2%
Mediacom 525,000 (15,000) -2.8%
Frontier 322,000 (21,000) -6.1%
Breezeline 323,038 (9,274) -2.8%
Cable ONE 202,000 (19,000) -8.6%
   Total 63,366,838 (1,682,674) -2.6%
Hulu Live 4,400,000 400,000 10.0%
Sling TV 2,211,000 214,000 9.7%
FuboTV 1,231,000 284,265 30.0%
Total Cable 39,536,512 (981,674) -2.5%
Total Telco / Satellite 25,513,000 (701,000) -2.7%
Total vMvPD 7,143,735 898,265 12.6%

The losses are fairly even across the industry, with every large provider except Charter losing more than 2% of total cable customers for the quarter. At the current pace, the industry might lose 10% of all cable customers this year. To put these numbers into perspective, these same companies had over 85 million cable customers at the end of 2018 – the industry has lost over a quarter of its customers since then.

In the quarter, the three online cable alternatives that LRG tracks gained almost 900,000 new customers for the quarter, A few major online alternatives, like YouTube TV aren’t on the list since they don’t announce customer counts.

The biggest percentage losers continue to be Frontier and Cable ONE, with Comcast the third largest.

Traditional Cable in Less than Half of Households

Leichtman Research Group recently released the cable customer counts for the largest providers of traditional cable service at the end of the second quarter of 2022. LRG 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.

The traditional cable providers continue to lose customers at a torrid pace, losing over 1.65 million customers in the second quarter, up from 1.4 million customers the previous quarter. Overall, the traditional cable providers lost almost 18,200 customers every day during the quarter.

The big news for the quarter is that traditional cable providers are now in less than half of homes and have collectively dropped to a 49% market penetration. The industry has lost almost seventeen million customers since the end of 2017, when traditional cable was in over 73% of homes.

2Q 2022 Change Change
Comcast 17,144,000 (520,000) -2.9%
Charter 15,495,000 (226,000) -1.4%
DirecTV 13,900,000 (400,000) -2.8%
Dish Network 7,791,000 (202,000) -2.5%
Verizon 3,479,000 (87,000) -2.4%
Cox 3,230,000 (80,000) -2.4%
Altice 2,574,200 (84,500) -3.2%
Mediacom 540,000 (15,000) -2.7%
Frontier 343,000 (20,000) -5.5%
Breezeline 332,312 (6,709) -2.0%
Cable ONE 221,000 (17,000) -7.1%
   Total 65,049,512 (1,658,209) -2.5%
Hulu Live 4,000,000 (100,000) -2.4%
Sling TV 2,197,000 (55,000) -2.4%
FuboTV 946,735 (109,510) -10.4%
Total Cable 39,536,512 (949,209) -2.3%
Total Telco / Satellite 25,513,000 (709,000) -2.7%
Total vMvPD 7,143,735 (264,510) -3.6%

It doesn’t look like people are replacing traditional cable with an online alternative like Hulu and Sling TV – which collectively lost 264,000 customers in the quarter. A few major online alternatives like YouTube TV aren’t on the list, but the loss in traditional cable far surpasses any possible net gain for the online cable alternatives.

Charter is still losing customers at a slower rate than everybody else in the industry and has for the past several years – although Charter’s losses are starting to climb. Charter CEO Tom Rutledge says that Charter actively points out to customers that the online alternatives cost more. The rest of the industry seems resigned to letting cable customers go.

The biggest percentage losers continue to be Frontier and Cable ONE.

Traditional Big ISPs Stagnate

In the first quarter of this year, the big cable companies added 482,000 customers while telcos added over 50,000 customers. In what is a surprise to the industry, that growth has disappeared, and all of the big ISPs collectively lost almost 150,000 customers. That’s a loss of 60,000 customers for the cable companies and 88,000 for the big telcos.

The following statistics have been compiled by the Leichtman Research Group, which tracks the broadband performance of the largest ISPs in the country.

The other big news is that the Fixed Wireless Access (FWA) products of T-Mobile and Verizon added 816,000 customers in the second quarter to bring the sector to net growth of 668,000 customers. This is huge news – FWA is booming while the big ISPs are standing still. The FWA product 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 even hotter when AT&T and Dish networks enter the market in a big way.

The numbers for the second quarter of 2022:

 2Q 2022 2Q Change % Change  
Comcast 32,163,000 0 0.0%  
Charter 30,253,000 (21,000) -0.1%  
AT&T 15,509,000 (24,000) -0.2%  
Verizon 7,412,000 12,000 0.2%  
Cox 5,560,000 0 0.0%  
Lumen 4,377,000 (93,000) -2.1%  
Altice 4,333,600 (39,600) -0.9%  
Frontier 2,827,000 8,000 0.3%  
T-Mobile FWA 1,544,000 560,000 56.9%  
Mediacom 1,468,000 0 0.0%  
Windstream 1,178,500 2,500 0.2%  
Cable ONE 1,059,000 2,000 0.2%  
Breezeline 717,919 (1,689) -0.2%  
Verizon FWA 700,000 256,000 57.7%  
TDS 500,800 5,600 1.1%  
Consolidated 381,213 1,063 -0.2%  
   Total 109,984,032 667,874 0.3%  
         
Total Cable 75,554,519 (60,289) -0.1%  
Total Telco 32,185,513 (87,837) -0.3%  
FWA 2,244,000 816,000 57.1%  

There is a lot to unpack in these numbers:

  • The cable companies have gained customers every quarter for far longer than a decade, so this net loss for the sector is a big surprise.
  • There is another story underneath the big telco losses – fiber is doing well. AT&T added 316,000 fiber customers in the quarter but still had a small net customer loss. Frontier added 54,000 fiber customers for the quarter and had a small net customer gain. Verizon added 36,000 FiOS customers in the quarter. Lumen added 28,000 fiber customers for the quarter but continued to bleed DSL customers.
  • T-Mobile leaped to become the ninth largest ISP in the country.
  • TDS repeated as the fastest growing traditional ISP.
  • Lumen lost the largest percentage of customers compared to other telcos. Altice was the biggest percentage loser among cable companies.

Cable Subscriptions Continue to Dive

Leichtman Research Group recently released the cable customer counts for the largest providers of traditional cable service at the end of the first quarter of 2022. LRG 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.

The industry continues to bleed customers, losing over 1.4 million customers in the fourth quarter, up from 1.3 million customers the previous quarter. Overall, the traditional cable providers lost almost 15,900 customers every day during the quarter.

1Q 2022 Change Change
Comcast 17,664,000 (512,000) -2.8%
Charter 15,721,000 (112,000) -0.7%
DirecTV 14,300,000 (300,000) -2.1%
Dish Network 7,993,000 (228,000) -2.8%
Verizon 3,566,000 (78,000) -2.1%
Cox 3,310,000 (80,000) -2.4%
Altice 2,658,700 (73,600) -2.7%
Mediacom 555,000 (17,000) -3.0%
Frontier 363,000 (17,000) -4.5%
Breezeline 339,021 (7,708) -2.2%
Cable ONE 238,000 (23,000) -8.8%
   Total 66,707,721 (1,448,308) -2.1%
Hulu Live 4,100,000 (200,000) -4.7%
Sling TV 2,252,000 (234,000) -9.4%
FuboTV 1,056,245 (73,562) -6.5%
Total Cable 40,485,721 (825,308) -2.0%
Total Telco / Satellite 26,222,000 (623,000) -2.3%
Total vMvPD 7,408,245 (507,562) -6.4%

It doesn’t look like people are replacing traditional cable with an online alternative like Hulu and Sling TV – which are also losing customers. A few major online alternatives like YouTube TV aren’t on the list, but the loss in traditional cable far surpasses any net gain for the online cable alternatives.

Charter is still losing customers at a slower rate than everybody else in the industry and has for the past several years. Charter CEO Tom Rutledge explains this by Charter’s willingness to move cable subscribers to less expensive tiers, such as the $44.99 Spectrum TV Select product. He says that Charter actively points out to customers that the online alternatives cost more. The rest of the industry seems resigned to letting cable customers go.

This drops the overall penetration rate of traditional TV to just above 51% of households. The industry has lost over fifteen million customers since the end of 2017 when traditional cable was in over 73% of homes.

One of the consequences of the rapid drop in cable customers is that cable companies are losing the power of the bundle. The traditional cable industry has lost almost one-third of all cable customers since 2017, greatly reducing opportunities to retain customers with bundling discounts.

Traditional Cable Dives in 2021

Leichtman Research Group recently released the cable customer counts for the largest providers of traditional cable service at the end of the fourth quarter of 2021. LRG compiles most of these numbers from the statistics provided to stockholders other than for Cox, which is privately held and estimated. Leichtman says this group of companies represents 96% of all U.S. cable customers.

The industry continues to bleed customers, losing over 1.3 million customers in the fourth quarter. This follows similar losses in the second and third quarters and a drop of over 1.6 million customers in the first quarter of 2021. Overall, the traditional cable providers list almost 5.6 million customers for the year or a loss of 15,300 customers every day during the year.

Annual Annual 4Q 4Q
4Q 2021 Change Change Change Change
Comcast 18,176,000 (1,670,000) -8.4% (373,000) -2.0%
Charter 15,833,000 (367,000) -2.3% (58,000) -0.4%
AT&T / DirecTV 14,600,000 (1,905,000) -11.5% (400,000) -2.7%
Dish Network 8,221,000 (595,000) -6.7% (203,000) -2.4%
Verizon 3,644,000 (283,000) -7.2% (70,000) -1.9%
Cox 3,390,000 (260,000) -7.1% (70,000) -2.0%
Altice 2,732,300 (240,900) -8.1% (70,700) -2.5%
Mediacom 572,000 (71,000) -11.0% (18,000) -3.1%
Frontier 380,000 (105,000) -21.6% (20,000) -5.0%
Atlantic Broadband 346,729 (36,271) -9.5% (13,271) -3.7%
Cable ONE 261,000 (50,000) -16.1% (18,000) -6.5%
   Total 68,156,029 (5,583,171) -7.6% (1,313,971) -1.9%
Hulu Live 4,300,000 300,000 7.5% 300,000 7.5%
Sling TV 2,486,000 12,000 0.5% (70,000) -2.7%
FuboTV 1,129,807 581,927 106.2% 185,202 19.6%
Total Cable 41,311,029 (2,695,171) -6.1% (620,971) -1.5%
Total Telco / Satellite 26,845,000 (2,888,000) -9.7% (693,000) -2.5%
Total vMvPD 7,915,807 893,927 12.7% 415,202 5.5%

It doesn’t look like people are replacing traditional cable with an online alternative like Hulu and Sling TV. A few major online alternatives like YouTube TV aren’t on the list, but the loss in traditional cable far surpasses the net gain for the online cable alternatives.

Charter is losing customers at a far slower rate than everybody else in the industry and has for the past several years. Charter CEO Tom Rutledge explains this by Charter’s willingness to move cable subscribers to less expensive tiers, such as the $44.99 Spectrum TV Select product. He says that Charter actively points out to customers that the online alternatives cost more. The rest of the industry seems resigned to letting cable customers go.

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!.

The Fixation with Broadband Speeds

Leichtman Research Group recently conducted a nationwide poll of 2,000 households asking about broadband usage. LRG has been tracking broadband for many years and reports that overall broadband subscriptions are at 87% of all households in 2021, up from 83% in 2016, and 69% in 2006. There are a few results of the survey that I think warrant additional examination.

According to the LRG survey, 63% of broadband subscribers rate the speed of their Internet connection as 8 to10 on a 10-point scale with 10 being excellent. In a similar question, 69% of respondents who subscribe to speeds of at least 100 Mbps are satisfied with their broadband service.

The big news here isn’t that many homes are satisfied with broadband speeds – it’s that one-third of all households don’t think their broadband speeds are great. The news is that over 30% of homes with speeds over 100 Mbps are not satisfied with their broadband.

My consulting firm conducts surveys at the community level, and I often see similar results. LRG only released the high-level summary responses to the survey, so we don’t know all of the questions they asked. But if LRG only asked about broadband speeds, they asked the wrong question. This was borne out by the response to a different survey question where 45% of the respondents in the LRG poll don’t even know their subscribed broadband speed.

What I’ve found through surveys is that people don’t really care about broadband speeds – they care if their broadband connection works. Most people haven’t the slightest idea at any given time how much broadband speed is being delivered to their home. I sometimes hear dismay when people finally take a speed test and find out that they are only receiving a portion of what they are paying for – but even these people might not be unhappy with broadband if it works.

Here are the things I hear from the public when we ask the same kinds of questions that LRG asked:

  • One of the most common complaints I hear about big cable company broadband is outages. The issue in most markets is not big hours-long outages but frequent small outages of a few minutes in duration. These small drive people mad because it invariably disrupts whatever they were doing with the broadband.
  • Right behind unhappiness with outages is unhappiness with slowdowns. The complaint I hear is that broadband works most of the time but then gets maddingly slow at times. It’s almost as disruptive as an outage when broadband slows to a crawl.
  • The other big recurring complaint I hear is when broadband won’t perform an expected function. People become quickly unhappy with their broadband connection when they can’t do something like maintain a Zoom call or if they get kicked off a school or office connection. Somebody might have no trouble streaming Netflix movies but find that they can’t stream the more demanding live sports broadcasts.

This survey reminded me of something that has become clear to me over the last year – policymakers are fixated on broadband speeds but people care about broadband performance. These are not the same thing. I’ve never talked to anybody outside the industry who cares one iota about the definition of broadband – they only care if everybody in the household can use the Internet at the same time.

From a policy perspective, it seems like we’ve decided that there are no urban broadband problems because everybody can buy Internet faster than 100 Mbps download. Even if we set aside the issue that many homes can’t afford broadband, this survey points out that a lot of urban households find their broadband connection to be inadequate.

Our policies are all due to the fixation with broadband speeds. Concentrating on speeds as the only way to measure broadband means that policymakers can yield to cable company lobbying that says we have no urban broadband issues.

I am absolutely thrilled that we are finally going to use some money to bring faster broadband to rural areas that have little or no broadband. But policymakers need to understand that this will not eliminate broadband problems elsewhere. A huge number of people in urban areas are still not happy with their broadband connection – and that’s a problem that’s not going to go away by throwing grant money at rural markets. If anything, building rural fiber is going to remind urban residents that they have something of lesser quality.

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.

Big Broadband Growth in the Second Quarter

Leichtman Research Group recently released the broadband customer statistics for the end of the second quarter of 2020 for the largest cable and telephone companies. Leichtman compiles most of these numbers from the statistics provided to stockholders other than for Cox, which is estimated. Leichtman says this group of companies represents 96% of all US landline broadband customers.

The second quarter shows big growth in broadband customers with almost one and a quarter million customers added to the big ISPs in the second quarter. However, due to the pandemic, those numbers need to be accompanied by an asterisk based upon several factors that are inflating broadband subscribers. Before discussing those issues, the following are the statistics for the first and second quarters of 2020.

6/30/20 2Q Change % Change 1Q 20 Adds
Comcast 29,429,000 323,000 1.1% 477,000
Charter 28,096,000 850,000 3.1% 582.000
AT&T 15,201,000 (114,000) -0.7% (74,000)
Verizon 6,959,000 (23,000) -0.3% 26,000
Cox 5,280,000 50,000 1.0% 60,000
CenturyLink 4,638,000 (29,000) -0.6% (11,000)
Altice 4,307,800 70,400 1.7% 50,100
Frontier 3,142,000 (41,000) -1.3% (33,000)
Mediacom 1,396,000 47,000 3.5% 21,000
Windstream 1,089,400 22,100 2.1% 18,000
Cable ONE 838,000 45,000 5.7% 21,000
WOW! 805,600 8,000 1.0% 16,100
Consolidated 791,203 5,078 0.6% 1,960
TDS 479,500 19,500 4.2% 4,800
Atlantic Broadband 478,689 6,000 1.3% 5,770
Cincinnati Bell 432,000 4,500 1.1% 1,800
103,363,192 1,243,578 1.2% 1,166,530
         
Total Cable 69,216,233 1,399,400 2.0% 1,231,970
Total Telco 33,184,925 (155,822) -0.5% (65,440)

Going purely by the numbers, the cable companies collectively added 1.4 million customers in the second quarter compared to the first quarter. However, there are some issues related to the pandemic that are inflating the second-quarter numbers. First, Charter alone added 160,000 free households during the quarter as the company kindly provided free broadband to homes with students with no broadband. But is a home that is not paying a broadband bill really a customer?

All of the ISPs on this list were not disconnecting customers for non-payment in the second quarter due to the pandemic. With tens of millions of people newly unemployed, it seems likely that the ISPs are going to be disconnecting a lot of customers when that policy finally ends. The ISPs all have to be discussing how long to extend that policy. It seems unrealistic that they will continue to provide free broadband to millions too far into the future.

I don’t think anybody, including the ISPs know how many customers they will lose as a result of the pandemic. We got something of a clue during the second quarter when almost 1.6 million households disconnected cable TV. A lot of that cord-cutting has to be coming from homes that could no longer afford to pay their cable bill. At some point there is going to be a reckoning and many of the gains shown in the first and second quarters of 2020 will be wiped out by homes that can no longer afford broadband.

But there is another industry story that is not reflected in these numbers. It seems that a huge number of homes have been upgrading to faster broadband speeds. OpenVault reported recently that at the end of the second quarter 4.9% of homes were subscribed to gigabit broadband products, more than double the 2.1% of gigabit subscribed at the end of the second quarter of 2019. Students and adults working at home have been finding that their existing broadband plans are inadequate for multiple people to connect to remote servers simultaneously.

The quarterly numbers continue to reflect the migration away from DSL. Many of the telcos showing customer losses have been actively adding customers on fiber, so DSL losses are a lot larger than are indicated by the net numbers above.