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Competition Wanes as Cable Dominates U.S Broadband

Cable continues to absolutely dominate phone companies when it comes to quarterly broadband user additions. According to the latest data from Leichtman Research, broadband additions last quarter were the lowest the firm has seen since it began tracking the industry fifteen years ago. That said, while cable managed to add a net 553,293 broadband subscribers on the quarter, the nation's phone companies saw a net loss of 360,783 broadband users during the same period.

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According to Leichtman, phone companies have now seen net broadband losses in four of the past five quarters.

"While Telcos lost more broadband subscribers in 2Q 2016 than in any previous quarter, cable companies added over 550,000 subscribers in the traditionally weak second quarter," said Bruce Leichtman. "Over the past year, cable companies have added about 3.5 million broadband subscribers, while Telcos have had net losses of about 500,000 broadband subscribers."

Curiously, Leichtman doesn't explain why this is happening.

Most of these customers are fleeing to cable because they're tired of last-generation DSL speeds. AT&T and Verizon are giving up on huge swaths of unwanted DSL territories, either selling them to smaller phone companies, or actively trying to drive them away via DSL price hikes. Their focus is now almost exclusively wireless service, which despite hype still isn't an adequate replacement for fixed-line service (especially on price).

Meanwhile, many of the companies acquiring these unwanted users (CenturyLink, Frontier) are only doing so to present the illusion of healthy growth to Wall Street. In reality, these acquisitions are saddling these companies with so much debt, they're left unable to afford meaningful copper to fiber upgrades in any scale. Others (Windstream) see so little competition in mostly rural markets they have no incentive to try very hard, something that users notice fairly consistently.

In addition to frustrating DSL customers, this is giving cable a greater monopoly than ever before across huge swaths of America. With less real competition than ever, there's less incentive in many market than ever before for cable providers to lower prices or improve historically abysmal customer service. This lack of competition and overall cable consolidation is also opening the door to a spike in usage caps.

So while this dominance is good news if you're named Charter or Comcast (who collectively added about 500,000 of cable's total all by themselves), this increasingly asymmetrical competition is not going to be great news if you're looking for lower prices and better customer service.

Most recommended from 39 comments



karpodiem
Hail to The Victors
Premium Member
join:2008-05-20
Troy, MI

8 recommendations

karpodiem

Premium Member

In the absence of a national fiber plan

we now have a single monopoly - what % of two national providers territory (Charter, Comcast, Verizon FiOS) actually overlap?

free markets, woo!
tkdslr
join:2004-04-24
Pompano Beach, FL

1 edit

4 recommendations

tkdslr

Member

At&t at 2.7x the price of google..

Might as well give up fiber as well.

(I.E. 70/mo(100Mbps)+equip+$30(no snoop)+$30(no cap) verses $50GF(100 MBps)/mo)

At&t just close the doors and let some one else take over, runing everything.
You don't have the proper attitude to operate in the future..

tshirt
Premium Member
join:2004-07-11
Snohomish, WA

3 recommendations

tshirt

Premium Member

It's easy to see...

why Verizon has been exiting wireline as fast as possible.
After bobbling the FiOS buildout they recognized they couldn't afford to build out FTTH fast enough to make this deadline on a nationwide scale, or even on a single coast scale.
Now they'll try FTT cell tower for point to point, but they may find themselves relying on cellular income at a time when margins are crumbling. where will next years cashflow come from?
sd70mac
Premium Member
join:2015-10-18
Woodstock, IL
Netgear CM1200
Linksys WRT1900ACS
Ooma Telo

3 recommendations

sd70mac

Premium Member

I noticed this Astroturfing Advertisement

This astroturfing site (»www.investinbroadband.org/) was advertising on DSLReports on this very article! They claim that there is already plenty of competition, and that ILECs discourage investment in middle mile and core network upgrades. =P Shaking my head...

HunterZ
join:2003-07-16
Kent, WA

3 recommendations

HunterZ

Member

Also

Not mentioned in the article is that people are also probably leaning towards cable broadband because while both industries are pushy about bundling, even fewer people are interested in POTS than Cable TV these days.

It's mostly the speeds though. Like the article said: The local telcos have too much debt from getting suckered by the bigger telcos to be able to invest in upgrades, while the bigger telcos are supposedly focusing on wireless broadband stuff that doesn't seem to be revolutionizing anything yet.

For those of us in the suburbs, the little telcos are often the only non-cable option for broadband (because the bigger telcos suckered them into buying their lower-RoI suburb service areas), and their level of service is laughable compared to the cable giants like Comcast.
six9
join:2001-12-03
Wake Forest, NC

2 recommendations

six9

Member

Speed over price

The only reason I have telco based internet is because it is 1000mb fiber. If their availability tool would have showed anything less than 300mb, I would not have even inquired about their service. Due to GF in the area, TWC bumped up to 300mb rather quick. When I canceled, they tried to argue that 300mb is more than 1000mb. Thought that was nuts.

The folks I feel bad for are the rural ones. I have a buddy who all he can get is satellite. Not even fixed LTE is available for him. He said his cap is blown through in a day or three.