Light Reading

DirecTV's 12-Meg Bundle Comes With Caps

Jeff Baumgartner
LR Cable News Analysis
Jeff Baumgartner
11/21/2012
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Welcome to the broadband and cable news roundup.

  • DirecTV Group Inc. (NYSE: DTV) has introduced a satellite broadband bundle that supports maximum speeds of 12 Mbit/s downstream and 3 Mbit/s upstream, but the service's strict usage caps make it less than a video streamer's delight. Targeted primarily at rural areas with limited access to wired broadband services, the service, powered by ViaSat Inc. (Nasdaq: VSAT)'s new Exede platform, includes a high-end US$129.99-per-month tier with a data cap of 25GB. The service's data policy does offer some relief for customers who surf and stream during off-peak hours -- data usage is not counted from midnight to 5 a.m. in the customer's local time zone. Customers who exceed their monthly caps are subject to speed throttling, but they also have the option to purchase more data in 1GB increments.

    In a promo good through Feb. 6, DirecTV is offering a $10 discount on all tiers and waiving the $49.99 set-up fee for the first 12 months, if customers sign a two-year contract. DirecTV also has broadband and voice bundles available with several telco partners, including AT&T Inc. (NYSE: T), Verizon Communications Inc. (NYSE: VZ) and CenturyLink Inc. (NYSE: CTL). Dish Network LLC (Nasdaq: DISH) launched a similar package with ViaSat in January.

  • Cox Communications Inc. confirmed a Multichannel News report that the cable operator will offer more than 90 linear TV channels on via its IP-based Cox TV Connect app before the end of the year. Cox TV Connect debuted about a year ago, starting with 35 channels on the iPhone. The report says that Cox will soon add support for the iPad, with Android devices on tap for the first half of 2013. Until out-of-home rights are obtained, access to live TV via the Cox TV Connect app is limited to the reach of the customer's home Wi-Fi signal. (See Cox to Stream Live TV to Tablets .)

  • Eastlink of Canada is using Cisco Systems Inc. (Nasdaq: CSCO)'s Videoscape, the vendor's managed multi-screen video platform, to power Eastlink to Go, an over-the-top TV Everywhere service for PCs, laptops, tablets and smartphones. The service will support both on-demand and live TV programming.

  • An update to the Comcast Corp. (Nasdaq: CMCSA, CMCSK) Xfinity TV Player app for iOS and Android devices has added an option that lets users download selected titles from Showtime Networks Inc. and Starz Entertainment LLC and watch them on the go, reports Engadget.

  • BC Partners and CPP Investment Board have completed their $6.6 billion purchase of Suddenlink Communications , a deal that includes a $1.985 billion investment by the firms. Suddenlink's management team, led by Chairman and CEO Jerry Kent, was also in on the deal, which was announced in July. (See CEO Joins $6.6B Bid for Suddenlink .)

    — Jeff Baumgartner, Site Editor, Light Reading Cable



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    Jeff Baumgartner
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    Jeff Baumgartner,
    User Rank: Light Beer
    12/5/2012 | 5:17:21 PM
    re: DirecTV's 12-Meg Bundle Comes With Caps


    The capabilities of satellite broadband have come a long way, but the caps would make it a tough sell for me unless I lived in the sticks and had no other option. It won't take much to eat through these caps.  The other options are 15GB for $69.99/month and 10GB for $39.99 per month (with the promotional discount from DirecTV).  JB

    shygye75
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    shygye75,
    User Rank: Light Sabre
    12/5/2012 | 5:17:21 PM
    re: DirecTV's 12-Meg Bundle Comes With Caps


    Jeff -- What's the rationale for the exorbitant price? Is it a capacity issue?

    Jeff Baumgartner
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    Jeff Baumgartner,
    User Rank: Light Beer
    12/5/2012 | 5:17:20 PM
    re: DirecTV's 12-Meg Bundle Comes With Caps


    I'd have to check with them to be sure since they don't offer a line in the FAQ that addresses: Why are we so damn expensive?  :)


    but I suppose capacity and those sunk infrastructure costs for this new, higher-speed system do come into play as well as the required home equipment. However, customers already get hit with a one-time set-up fee of $149.99 (though it's "on special" for $49.99 these days), and they also include a $9.99/month lease fee... so they appear to be covering their bases there. JB


     

    shygye75
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    shygye75,
    User Rank: Light Sabre
    12/5/2012 | 5:17:18 PM
    re: DirecTV's 12-Meg Bundle Comes With Caps


    It would be interesting (love that word) to know the why behind the massive price. Maybe it's "all of the above" (bird cost, hardware on the ground, limited capacity, etc.) but it sure smells like a take-it-or-stick-to-your-two-tin-cans-and-a-string approach, which can't sit well with customers no matter how many head of cattle they own.

    paolo.franzoi
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    paolo.franzoi,
    User Rank: Light Beer
    12/5/2012 | 5:17:17 PM
    re: DirecTV's 12-Meg Bundle Comes With Caps


    Jeff,


    Why do you believe that LTE is a lower cost for this than DSL for the Telcos or DOCSIS for MSOs?


    seven


     

    Jeff Baumgartner
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    Jeff Baumgartner,
    User Rank: Light Beer
    12/5/2012 | 5:17:17 PM
    re: DirecTV's 12-Meg Bundle Comes With Caps


    I wasn't trying to make a direct cost analysis here; just noting that LTE seems to be getting a closer look in markets where a service like sat. broadband makes more sense. JB


     


     

    Jeff Baumgartner
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    Jeff Baumgartner,
    User Rank: Light Beer
    12/5/2012 | 5:17:17 PM
    re: DirecTV's 12-Meg Bundle Comes With Caps


    Yes, they do have some people in rural areas over a barrel on this one. But it does make me wonder if this could make LTE a viable competitive option in these broadband-deprived markets for the wireless guys, especially Verizon and its HomeFusion product. JB

    paolo.franzoi
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    paolo.franzoi,
    User Rank: Light Beer
    12/5/2012 | 5:17:16 PM
    re: DirecTV's 12-Meg Bundle Comes With Caps


    There is definitely an investment bias towards wireless in Telcos.  My take is that both Verizon and AT&T see it as a long term replacement for POTS.  


    Now my parents happen to have satellite broadband and I will ask them who their provider is.  They chose it over cable which is available (DSL is not although they are very close to an old 80D cabinet - within DSL reach of it).  The reason is that in their area the cable guys want to charge them for construction costs from the road to their house.  They just wanted something better than dial-up and so it was a lot cheaper than paying for the construction costs.


    seven


     

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