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Cable Will Keep Ruling US Broadband

Alan Breznick
12/30/2016
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With US broadband penetration still growing at a healthy pace and showing no signs of slowing down, cable operators stand poised to further increase their control of the high-speed data market.

Combing through the latest tallies compiled by the Leichtman Research Group Inc. (LRG) and Charter Communications Inc. , the nation's two biggest MSOS, led the way among the biggest cable operators. Although it's the smaller of the two MSOs, Charter actually gained more broadband subscribers than Comcast in the third quarter, beating it by a margin of 58,000 subs (387,000 to 329,000). Thanks to its acquisitions of Time Warner Cable and Bright House Networks earlier this year, Charter is now the second largest broadband provider in the land with 22.2 million subs, having zipped past AT&T Inc. (NYSE: T). Comcast remains the nation's top broadband provider with 24.3 million subs.

All seven of the top MSOs registered broadband subs gains in the summer quarter. Over the past year, the cable companies have added more than 3.5 million data customers.

Once again in contrast, five of the seven leading telcos lost broadband subscribers overall in the third quarter as they focused mainly on upgrading their DSL customers to fiber lines, not bringing on new customers. Only Verizon Communications Inc. (NYSE: VZ) and Cincinnati Bell Inc. (NYSE: CBB) managed to register any gains, while both CenturyLink Inc. (NYSE: CTL) and Frontier Communications Corp. (NYSE: FTR) lost at least 40,000 data customers. Over the past year, the telcos have lost more than 500,000 broadband subs.


For more of Light Reading's coverage of broadband market trends, visit our broadband services content channel.


Despite the recent aggressive rollouts of gigabit services by AT&T, CenturyLink, Cincinnati Bell and other leading telcos, these trend lines will likely continue in 2017, especially as cable operators rev up their own gigabit rollouts. With the notable exception of Charter, such large MSOs as Comcast, Cox Communications Inc. , Altice , Mediacom Communications Corp. and WideOpenWest Holdings LLC (WOW) all are in the midst of ramping up gig launches throughout their regions with the help of DOCSIS 3.1. (See Mediacom Going All DOCSIS 3.1 by Year-End.)

What's also notable in the latest LRG figures is that the US broadband market just keeps growing, defying earlier predictions that it would soon hit a saturation point. With nearly 92.5 million American households now subscribing to high-speed data services, 81% of all homes have broadband, up from 74% in 2010 and 42% in 2006. At the current growth rate, more than 100 million US homes will subscribe to broadband service by the end of the decade.

— Alan Breznick, Cable/Video Practice Leader, Light Reading

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KBode
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KBode,
User Rank: Light Sabre
1/17/2017 | 9:06:39 AM
Re: Question!
There are I think, it just doesn't get talked about enough.

"Users tired of paying too much for too little" isn't really a sexy story in the eyes of most media outlets, so it's a story many just skip over. But it's a constant drumbeat, especially in the cable market -- where these companies are seeing less competition than ever before as AT&T and Verizon retreat from DSL networks they don't want to upgrade -- or even own.
KBode
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KBode,
User Rank: Light Sabre
1/17/2017 | 9:05:32 AM
Re: Broadband subscriber rates in rural areas
I imagine you're right. Hopefully pricing decreases in time. If we see more mergers (like between Sprint and T-Mobile) there will be less incentive than ever to actually do that, however. 
kq4ym
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kq4ym,
User Rank: Light Sabre
1/14/2017 | 10:51:43 AM
Re: Question!
I'm always surprised there's not more subscriber complaints about cost. With all the advertising about unlimited, best coverage, and fastest networks, there's little to see about keeping the costs down. Granted some of the "discount" groups offer those fixed prices, but the fine prnt is so huge you need a lawyer to decipher.
Michelle
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Michelle,
User Rank: Light Sabre
1/7/2017 | 1:28:25 PM
Re: Broadband subscriber rates in rural areas
@KBode Data caps are certainly a concern. Traditional ISPs still throttle traffice and cap data usage. I could see the cost of 5G being quite high. 
KBode
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KBode,
User Rank: Light Sabre
1/3/2017 | 11:20:30 AM
Re: Broadband subscriber rates in rural areas
I think with the rise of 5G the quality may be there, but affordability will be key. Especially if these networks have particularly restrictive usage caps that the current rural DSL offerings do not.
KBode
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KBode,
User Rank: Light Sabre
1/3/2017 | 11:19:00 AM
Re: Question!
That would really depend on the incumbent cable providers being willing to more seriously compete on price, I'd think. And for many of them, the cost of programming is outside of their control. 
tyrellcorp
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tyrellcorp,
User Rank: Light Beer
1/3/2017 | 8:23:59 AM
Re: Question!
It's not so much the Gigabit speeds it's that when ISPs offer higher speeds, they usually drop prices of lower tiers especially if there is competition.  In KC with 5 Gigabit ISPs, TWC dropped 50/5 to $30, Comcast dropped 250/35 to $50.  DOCSIS providers can drop lower tier prices easily because they don't have massive infrastructure upgrade costs to recoup (no last mile FTTH costs).  Most infrastructure is already fully decpreciated or new infrastructs not as pricess as full FTTH rollout.

DOCSIS will probably win in the end because their upgrade pace will be 'good enough' and they can compete with Gigabit players by offering 'good enough' speeds for much lower.
Michelle
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Michelle,
User Rank: Light Sabre
1/1/2017 | 5:34:00 PM
Re: Question!
Ha! That's an add-on I would want. :D I never thought of myself as a person who cared to have the fastest speeds, I just wanted fast enough. My opinions have changed now that I've had multiple terrible ISPs. Now I want solid service at blazing speeds.
danielcawrey
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danielcawrey,
User Rank: Light Sabre
1/1/2017 | 12:21:08 PM
Re: Question!
Could gigabit services be counted as an add-on?

I think there's only a subset of homes that really need this kind of speed right now. Many of these service providers, like Comcast, have done well in the business space because that market needs speed. 

If homes tack on gigabit as an add-on, it might look more enticing. 
Michelle
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Michelle,
User Rank: Light Sabre
12/31/2016 | 10:08:49 PM
Re: Question!
I suspect service providers are planning to rebuild lost revenues through add-on services (HBO, Showtime, etc). The add-ons cost nearly the same as they would with cable while the core service pricing continues to go up. We're seeing a shift in how we pay for content.
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