Fierce

“The Internet has eaten the TV,” an analyst for The Diffusion Group pointed out in a post arguing that the Federal Communications Commission needs to stop futzing about with set-top box regulation and instead accept that TV’s future lies in apps, not hardware. With the FCC’s vote on new “unlock the box” set-top rules due Sept 29, TDG analyst Joel Espelien sided squarely with the commission on its “surprisingly radical and surprisingly obvious” new policy recommendation – one that is more in line with the pay-TV industry’s counter-proposal -- that multichannel video programming distributors (MVPDs, or pay-TV) provide an app-based alternative to set-tops after a two-year transition period. That alternative would run on a streaming device like Roku or Google Chromecast and obviate the need to lease a box. Espelien suggested that the industry needs to change its perspective on streaming video and its place in the greater broadband-based internet. Getting access to broadband is far more important than being able to tune into a TV program; that’s why the FCC has encouraged programs that help lower-income Americans get high-speed broadband connections. And that’s why TV has become an “option,” not a necessity, he said.

[Commentary] With continually expanding Wi-Fi footprints and enough backhaul to choke a horse, Comcast and Charter could finally succeed where past cable efforts to break into wireless failed. And there’s good reason to be excited about that opportunity. As Shaw CTO Zoran Stakic put it, since his company was able to acquire Wind Mobile in Canada, he’s been in disbelief at how powerful a combination it is once a company can offer broadband, Wi-Fi and LTE. “I think we’ll be able to deliver solutions for our customers that we didn’t think were possible a few years ago,” said Stakic. And Nair offered a glowing review of the full mobile virtual network operator deals that Liberty Global has been able to do, which have given the multiple-system operators the flexibility to control its own SIM and switch wholesalers should the need arise because of price changes.

But perhaps the most hopeful sign for cable operators looking toward wireless is that, as wireless network architecture is shifting away from the macro tower paradigm and toward smaller, denser infrastructure schemes, telecommunication company and cable nodes are getting closer and closer to one another in the network. Options abound for cable companies seeking that wireless service piece that will help augment their video and broadband strategies as well as help them gain foothold in emerging markets like the Internet of Things. Now it’s up to the likes of Comcast and Charter to choose the right path to make sure another wireless flop doesn’t lie in cable’s future.

Georgia’s lawmakers are working together to find a way to enhance broadband service in the state’s rural areas by asking residents to take an online survey about their service experience. After tallying the survey results, state Sen Steve Gooch (R-Dahlonega (GA)) said a joint committee of state lawmakers will make a set of recommendations, including developing tax incentives to further broadband investment and getting rid of certain government regulation. State Sen Gooch said that substandard Internet service creates a barrier to economic development in rural parts of Northeast Georgia. State Sen Gooch added that businesses say broadband weighs heavily on whether they will locate their business in a particular town or city.

The Federal Communications Commission once again declined to say whether the US wireless industry is competitive in its annual report addressing the matter. And once again, industry associations offered very different views. The Commission’s Nineteenth Mobile Wireless Competition Report weighed data from the second half of 2015 in an effort to analyze competition among carriers “as well as examining competition across the entire mobile wireless ecosystem.”

The Wireless Telecommunications Bureau (WTB) for the fifth consecutive time stopped short of concluding the market “was effectively competitive,” saying the space is too complex to be summed up in such a simple way. The FCC estimated Verizon claimed 38.1 percent of overall industry service revenues in 2015, down slightly from 38.7 percent in 2014, while AT&T’s 32.4 percent share of revenues was essentially flat from the previous year. Sprint pocketed 14 percent of all service revenues last year, down from 14.9 percent the previous year, while T-Mobile’s share grew to 13.5 percent last year, up from 11.9 percent in 2014.

The Competitive Carriers Association (CCA) praised the Commission’s unwillingness to deem the mobile market competitive and encouraged the agency to develop reforms that would spur competition. “It’s true that the mobile market continues to evolve as consumers demand more wireless services. Nevertheless the Report affirms CCA’s analysis that the mobile marketplace cannot be considered effectively competitive as a result of concentrated market share, and a duopoly that continues to dominate service revenue and the number of connections and devices,” CCA CEO Steven Berry said.

Cox Communications has again in 2016 raised its broadband rates for customers, citing "product and technology investments and increases in business costs" as the reason for the increase. DSL Reports forum users posted the text from an e-mail Cox is sending out to its customers, alerting them that the new rates will go into effect on Oct. 6. Specifically, Cox’s Starter tier will change from $37.99 to $39.99, Essential from $56.99 to $62.99, Preferred from $72.99 to $77.99 and Premier from $84.99 to $87.99. Those increases come after Cox in January raised its broadband service rates.

CenturyLink said that as it extends broadband services to rural areas via the Federal Communications Commission’s Connect America Fund-II program, it can attract a larger amount of customers that reside in 1.2 million homes with 10/1 Mbps speeds. In 2015, CenturyLink accepted $500 million in the second phase of the FCC's Connect America Fund (CAF-II), enabling it to deliver broadband services to about 1.2 million rural households and businesses in 33 states over the next six years. By accepting the 33 CAF II statewide offers, CenturyLink will be able to deliver up to 10/1 Mbps to locations in FCC-designated, high-cost census blocks that today can get at best between 1.5 to 3 Mbps speeds. Stewart Ewing, CFO of CenturyLink, said that as its technicians begin building service in a community, more users will sign up. “There are numerous examples of places where we have gone out and enabled locations that did not have service before,” Ewing said. “With door hangers left by the technicians and word of mouth, basically you can quickly get penetration of 50 percent.”

Charter Communications says a provision buried deep within the Federal Communications Commission’s proposed set-top regulation would, if adopted, require it to charge a modem fee. “We’re the only major broadband provider that doesn’t charge this fee, because we view modems as part of providing a superior broadband service, and it makes us a stronger competitor by allowing us to offer better deals to our subscribers,” Charter said.

“Deep within” the FCC’s “Unlock the Box” proposal, the company added, “is a provision that has the potential to affect millions of consumers, requiring all internet providers to charge a modem rental fee and include it as a distinct line item in their customers’ bills, even if that company (like Charter) doesn’t currently charge a modem fee.” The blog post followed an ex parte filing rendered earlier by Charter, in which it said the FCC proposal is in direct conflict with Time Warner Cable and Bright House Networks merger conditions that require it to supply free modems.

Verizon and Incompas’ joint business data services (BDS) proposal has gotten the support of several state and local trade associations which say it will enhance network investment and provide greater choice to businesses and non-profit organizations. The letter was signed by the Midwest Association of Competitive Communications, CALTEL, Michigan Internet & Telecommunications Alliance, Northwest Telecommunications Association, and CompSouth.

“The beneficial effects of BDS reform will reverberate throughout the economy,” said the group of organizations. “Competitive wireline and wireless providers will be able to invest more in their own networks and innovative products and services, benefitting customers and competition throughout their communities. Indeed, one study shows that the spill-over effects of price reductions in the broader economy are substantial and an annual boost to GDP 2.6 times as great as the direct reduction in prices.” The group said that it agrees with the Verizon-Incompas proposal that implementing a “competitive market test using three bandwidth tiers is appropriate” because “it recognizes where it makes economic sense for competitors to build and where it doesn’t.” Additionally, the trade groups said that by implementing a 15 percent price cap reduction for TDM, the FCC can achieve its goals to ensure greater competition in the BDS market.

Google Fiber may have lit the fiber-to-the-home (FTTH) fire, but network construction company Dycom said that AT&T and CenturyLink’s ambitious FTTH expansion plans represent the consumer and business customer’s demand for higher speed bandwidth. Steven Nielsen, CEO of Dycom, told investors during this week’s DA Davidson 15th Annual Engineering & Construction Conference that AT&T and CenturyLink’s FTTH aren’t directly linked to Google Fiber’s actions. “Google Fiber is responding to the same factors for consumer demand for high bandwidth that the incumbents are,” Nielsen said. “They are the effect of the consumer demand and not the cause of other people spending because they are all reacting to the same environment.”

Nielsen added how a number of Canada’s key incumbent telecommunication and cable operators – a list that includes Bell, Telus, Shaw and Rogers – all stated they will enhance their fiber and broadband footprints. “In Canada where Google Fiber is not present, you have the exact same dynamic as you have here in the U.S.,” Nielsen said. AT&T and CenturyLink have set some ambitious targets for their FTTH deployments, a process that will represent potential new revenue streams for Dycom. During the second quarter, AT&T had only 2.2 million homes passed with fiber, a figure the telecommunication company expects to ramp to 2.6 million by the end of 2016.

Delivering some hard subscriber data to indicate why Google Fiber is reportedly considering a pause, MoffettNathanson analyst Craig Moffett said that the service had only 68,715 video subscribers at the end of June. “For those keeping score at home, that’s a little less than seven one hundredths of 1 percent of the US video market,” Moffett said.

The numbers come via a filing with the US Copyright Office – necessary for maintenance of a compulsory license for broadcast signals. With Google Fiber eschewing the release of customer metrics, the tiny market share in pay-TV services hints at the diminutive size of the overall business, and explains why the division has laid off half its staff and has stopped deploying its lines in new markets. Using a conservative estimate that only around 15 percent of Google Fiber subscribers also take video, Moffett estimated that the service would have had 453,000 broadband customers as of the end of June, representing less than one half of 1 percent of total US ISP customers.