A New Low: Just 46% Of U.S. Households Subscribe To Traditional Cable TV

Culture

from the not-a-fad-after-all dept

The “cord cutting” trend cable execs spent a decade claiming was a fad just broke another round of new records. According to Leichtman Research, major cable TV providers lost another 1.7 million subscribers last quarter, as users flock to streaming, over the air TV, TikTok, or, you know, books. Roughly 17,700 customers cut the cord every single day during the second quarter of 2023.

Over the last year (Q2 ’22 to Q2 ’23) the traditional cable TV sector lost a whopping 5,360,000 customers, compared to 4,235,000 customer defections the year earlier. The current number of U.S. households that has a cable connection sits somewhere around 46 percent, down from 73% at the end of 2017.

Comcast wound up being among the biggest losers in the quarter, losing 543,000 paying customers:

Historically, a big cable company like Comcast or Charter wasn’t too hurt by “cord cutting” because it could just jack up the cost of monopolized broadband access. And while that’s still generally true; here too cable giants are seeing increased competition from community broadband (co-ops, utilities, municipalities), 5G home wireless, and phone companies belatedly upgrading to fiber.

Interestingly though, streaming TV providers also wound up losing subscribers, albeit at a much slower rate:

The shift from traditional cable to streaming had some very obvious benefits. Lower costs, greater flexibility in choice, and even better customer service.

At the same time, as the streaming sector pursues quarterly growth, it’s increasingly adopting the kind of tactics that made cable TV so unpopular: relentless price hikes, shitty labor practices, and annoying new restrictions on usage. That, in turn, is driving more people to even less traditional services like Twitch or TikTok as the cycle of innovative disruption stumbles ever forth.

Filed Under: competition, cord cutting, disruption, streaming, tv, video
Companies: charter, charter spectrum, comcast

Charter Spectrum Customers Lose Access To ESPN, ABC Channels Just As NFL Season Heats Up

Failures

from the grow-up-and-do-business-like-adults dept

For the last decade or so, U.S. cable TV customers have been plagued by a steady parade of content blackouts as cable providers and broadcasters bicker over new programming contracts.

For the end user, so-called “retransmission feuds” usually go something like this: a broadcaster demands a cable company pay significantly more money to carry the same content. The pay TV provider balks, and one side or the other blacks out the aforementioned content. Consumers spend a few months paying for content they can’t access, while the two sides bicker and try to turn the consumer against the other guy.

Eventually a new confidential deal is struck, customers face a higher bill, and never get any sort of refund for being unable to access programming they paid for. Wash, rinse, repeat. Over and over again. With regulators largely sitting on their hands as consumers get the short end of the stick.

The latest such standoff is between Charter (Spectrum) and Disney Corporation, with Spectrum’s 14 million cable TV customers losing access to ABC and ESPN channels after the two sides couldn’t agree on a new contract like grown adults.

Disney blames Charter; Charter blames Disney; and regulators are nowhere to be found as Charter customers pay for 20 Disney channels they can’t watch just as the NFL season heats up. The details kind of matter; ESPN is threatening going straight to consumer with its own streaming app; Charter is threatening to dismantle the cable model and offer users a hodgepodge of smaller packages:

“Charter claims in part that Disney wants a deal that would require the operator to pay license fees even for customers who do not receive Disney content while also putting more restrictions on Charter’s ability to create more flexible programming packaging. That, Charter, argued, would lead to more consumer price increases. Disney, meanwhile, has issued statements that it has been successful in cutting deals with other pay-TV providers with rates and terms that “are driven by the marketplace.”

But in another way the underlying facts of the dispute don’t matter. Because if historical trends hold, the two companies will simply strike a secret new deal a week or two after this story is published and nothing will truly fundamentally or structurally change in the way either do business.

Consumers will continue to pay significantly higher prices for the same content and services, and nobody in any position of regulatory authority will even dare suggest that maybe cable and broadcast companies find ways to strike business deals like adults without screwing over millions of paying customers.

Filed Under: blackout, cable, fcc, nfl season, retrans feud, retransmission fights, streaming, tv, video
Companies: charter, charter spectrum, disney, espn

Comcast, AT&T Try To Kill New Requirements To Be Transparent About Their Shitty Pricing

Broadband

from the this-is-why-we-can't-have-nice-things dept

The 2021 infrastructure bill did some very good things for broadband. Not only did it include a massive, $42 billion investment in broadband deployment and require better mapping, it demanded that the FCC impose a new “nutrition label for broadband,” requiring that ISPs be transparent about all of the weird restrictions, caps, fees, and limitations of modern broadband connections.

It’s 2023 and there’s still no label. And big broadband providers including Cox, AT&T, Comcast, and Charter are, unsurprisingly, trying to have the entire requirement killed. After whining for two years that it was too hard to comply with the requirement, industry trade groups and lobbying organizations have been petitioning to have the new rule killed entirely:

The US broadband industry is united in opposition to a requirement that Internet service providers list all of their monthly fees. Five lobby groups representing cable companies, fiber and DSL providers, and mobile operators have repeatedly urged the Federal Communications Commission to eliminate the requirement before new broadband labeling rules take effect.

To be clear, requiring that these regional monopolies be clear about pricing is pretty much the bare minimum when it comes to regulatory oversight. Big ISPs for decades have advertised one price, then saddled your bill with spurious below the line surcharges to hit you with a higher rate.

The FCC, lobotomized after decades of lobbying, routinely engages in regulatory theater when it comes to big telecom. As in they’ll implement some fairly tepid efforts to demand “transparency” by big monopolies, but they routinely lack the courage to actually take aim at the underlying monopoly power and lack of competition (lest it upset campaign contributors and domestic surveillance allies).

And even the transparency efforts are routinely undercooked. Activists and consumer groups were already annoyed at the Rosenworcel FCC’s implementation of these new rules, noting that the agency didn’t really require that ISPs put the label anywhere conspicuous, defeating the whole purpose, and wasn’t doing a good job illustrating real world speeds.

It’s not particularly clear where this goes from here. The Rosenworcel FCC has generally been fairly feckless when it comes to standing up to predatory monopolies. And the telecom industry just successfully scuttled the nomination of popular reformer Gigi Sohn, leaving the FCC without the voting majority needed to do much of anything “controversial” — even if it was actually inclined to do so.

A reformer like Sohn would have likely pushed the FCC staff to try a little harder. I’d imagine that once Sohn’s less “controversial” replacement (Anna Gomez) is confirmed by Congress there will be some kind of label eventually, but it’s far from clear that the actual implementation will hold much value once big ISPs get done watering it down.

And this is the “best case” scenario under feckless Democratic leadership. If Trump or DeSantis win the presidency, control of the FCC will revert to Republican “leadership,” which in telecom historically involves simply doing whatever Comcast and AT&T tell them to.

Filed Under: broadband, broadband label, fcc, fees, high speed internet, telecom, transparency, usage caps
Companies: at&t, charter, comcast, cox

FCC Low Income Broadband Program A Huge Windfall For Monopolies Causing The Broadband Affordability Problem We’re Pretending To Fix

Broadband

from the dysfunction-junction dept

During the COVID crisis, the FCC launched the Emergency Broadband Benefit (EBB program), giving lower income Americans a $50 ($75 for those in tribal lands) discount off of their broadband bill. Under the program, the government gave money to ISPs, which then doled out discounts to users if they qualified.

But (and I’m sure this will be a surprise to readers), reports are that big ISPs erected cumbersome barriers to actually getting the service, or worse, actively exploited the sign up process to force struggling low-income applicants on to more expensive plans once the initial contract ended. Very on brand.

The EBB was rebranded the Affordable Connectivity Program (ACP) as part of the Infrastructure Bill (the payout to the general public was dropped to $30 a month). And, once again, not at all surprisingly, the FCC discovered that “dozens” of U.S. broadband providers were ripping the program off to the tune of millions of dollars across Alabama, Ohio, Oklahoma and Texas.

At the same time, many of these monopolies have found the program to be big windfall for the very same companies that have historically fought tooth and nail against broadband competition, driving up consumer costs. A Senate inquiry last week found that Charter (Spectrum), for example, has seen more than a billion dollars funneled through its coffers via both programs:

Several of these companies have a very rich history of significant subsidy fraud. And I strongly suspect accounting reviews in a few years will find no shortage of dubious behaviors, especially given what we’ve seen already.

To be clear: I’ve spoken to several communities who say this program genuinely has reduced broadband costs for low income residents seeking access to an essential utility. While we get hung up on broadband coverage, data suggests that broadband affordability is the biggest barrier to broadband adoption. A $30 a month savings is a big deal for lower and middle income households.

Here’s the problem though: a regulatory agency with a history of poorly tracking broadband subsidies, failing to track broadband coverage, or standing up to telecom monopolies, is funneling billions of dollars through the pockets of companies that not only have long histories of fraud, but also have intentionally driven up the cost of broadband service via decades of lobbying and dirty pool aimed at crushing all meaningful competition.

We’re paying giant telecom monopolies to temporarily lower high prices they’re directly responsible for.

At the same time, the FCC and federal lawmakers generally lack the political backbone to actually embrace things like antitrust reform. They’re comically incompetent at measuring the impact of monopolization, crafting policies that directly address monopolization, or even acknowledging that telecom monopolies exist and are the biggest contributor to high consumer broadband costs.

But they are very good at throwing billions of dollars at companies with a long, rich history of ripping off subsidy programs, then turning a blind eye to the resulting mess. And while the ACP genuinely will help some folks with temporarily lower broadband bills (money is expected to run out in a year or two), it’s a band aid for the actual problem that federal policymakers lack the backbone to actually address.

On the other end, you’ve got Republicans and Libertarians pointing to this dysfunction as justification for government doing absolutely nothing whatsoever about our broadband monopoly problem, which isn’t the answer either. Leaving companies like AT&T or Comcast in a market space with neither competition nor competent regulatory accountability genuinely hasn’t worked out well for anybody.

Combined, it doesn’t take long to realize why telecom monopolies have easily ripped off U.S. consumers and taxpayers for decades, with very little in the way of meaningful reform.

Filed Under: ACP, broadband, broadband affordability, broadband subsidies, digital divide, emergency broadband benefit, fcc, high speed internet
Companies: charter, charter spectrum

Charter’s $7 Billion Penalty For Murdering An Elderly Customer Reduced To $262 Million

Legal Issues

from the murder-costs-extra dept

Last August, cable giant Charter Communications (Spectrum) was slapped with a $7 billion lawsuit after one of the company’s cable technicians murdered an 83-year-old customer after hours. The lawsuit (pdf) claims that Charter had eliminated a more rigorous screening process when they merged with Time Warner Cable, letting the employee and his history slip through the cracks.

By September, that tally had been dramatically reduced to $1.1 billion by a jury. This week the cable monopoly managed to strike a settlement with the family for $262 million, all of which will be covered by insurance. Still, the courts found that Charter was responsible for gross negligence, and had forged documents to try and force the family out of the court system and into binding arbitration:

“Charter Spectrum attorneys used a forged document to try to force the lawsuit into a closed-door arbitration where the results would have been secret and damages for the murder would have been limited to the amount of Ms. Thomas’s final bill,” the law firm said.

Back in the early aughts, when I wrote exclusively about the broadband sector, you couldn’t go a week without a story about a cable broadband technician  falling asleep on the job, blowing up homes, occasionally murdering people or getting arrested for torturing and spray painting kittens.

The problem was several fold: one, these companies’ executives were so fixated on growth for growth’s sake and pleasing Wall Street, they routinely failed to scale their investment into customer service. They also really adored using a series of low-quality, low-cost subcontractors both for the cost savings, and because the layered proxy relationships often offered reduced liability for fuck ups.

US cable broadband customer service has improved some in the years since, but not by much, as there remains little incentive to meaningfully improve thanks to market failure and federal regulators that generally lack the courage to stand up to monopolies with any consistency.

The cable sector still has some of the lowest customer service ratings in any industry in America, a true feat in a country where banks, insurance companies, oil companies, pharmaceutical companies, and airlines exist.

Filed Under: broadband, cable, cable technician, customer service, high speed internet, installation horror stories, murder, telecom
Companies: charter, charter communications

Cable Giant Charter Once Again Jacks Up Broadband Prices

Broadband

from the do-not-pass-go,-do-not-collect-$200 dept

Cable giants like Comcast and Charter continue to struggle to retain traditional TV subscribers, so they’re extracting their pound of flesh from their captive cable broadband customers that have no alternative ISPs to flee to thanks to a continued lack of competition in the United States.

Both companies were quick to jack up broadband prices during the pandemic. More recently, in a giant middle finger to net neutrality, Comcast announced it would force you to use Comcast hardware if you want faster speeds. Now, Charter Communications, whose broadband services are sold under the Spectrum brand, is informing 9.5 million users they’ll soon be seeing price hikes.

As with most companies, Charter vaguely blamed inflation for the $5 monthly price hike on most of its tiers:

Executives mentioned plans to hike broadband prices on Charter’s Q3 2022 earnings call, stating the move was a response to inflationary pressure. However, they didn’t provide specifics. In a statement to Fierce, a Charter representative confirmed rack rates for its service tiers will be increasing $5 per month. The change will take effect in most markets starting November 1.

These price hikes would have arrived regardless of inflation. And these companies can routinely jack up prices because they see no competitive or regulatory penalty for doing so. In Charter’s case it was restricted from imposing broadband usage caps and overage fees due to conditions affixed to its merger with Time Warner Cable, but those restrictions have sunsetted, meaning caps won’t be far behind.

AT&T also raised prices by $3 for all of its customers. Cable company Altice jacked up prices by $10 for all new customers. In wireless, Verizon also jacked up prices, while one-time industry darling T-Mobile informed everybody they’d be implementing a new $35 fee for all activations and upgrades.

Just another round of incredible innovation from an industry that already charges Americans some of the highest prices in the developed world for what’s very often substandard service and comically terrible customer support. It’s the kind of freedom you get to enjoy when you not only don’t have many competitors, but have figured out how to cripple the nation’s top telecom regulator for six straight years.

Filed Under: broadband, digital divide, fcc, high speed internet, monopoly, price hikes, telecom
Companies: charter, charter spectrum

Cable Giant Charter Will Pay $1.1 Billion After Tech Murders Elderly Customer

Legal Issues

from the maybe-don't-murder-your-customers dept

Back in the early aughts, when I wrote exclusively about the broadband sector, you literally couldn’t go a week without a story about a cable broadband technician  falling asleep on the job, blowing up homes, occasionally murdering people or getting arrested for torturing and spray painting kittens.

The problem was several fold: one, these companies’ executives were so fixated on growth for growth’s sake and pleasing Wall Street, they routinely failed to scale their investment into customer service. They also really adored using a series of low-quality, low-cost subcontractors both for the cost savings, and because the layered proxy relationships often offered reduced liability for fuck ups.

US cable broadband customer service has improved some in the years since, though the sector still has some of the lowest customer service ratings in any industry in America (think about the competition the sector has for that title, for a moment).

Case in point: a court ruling this week required that Charter Communications (which uses the brand name Spectrum) will have to pay $1.1 billion dollars after a Charter tech murdered an 83-year-old woman in her home after trying to steal her credit cards.

The lawsuit claims Charter weakened its screening process during its merger with Time Warner Cable:

According to the complaint, brought by the victim’s family, Charter got rid of an employee screening program put in place by Time Warner Cable when Charter purchased the MSO in 2016.

The plaintiffs also said that a cursory look at Holden’s background would have revealed his history of firings for forging documents and harassing coworkers.

The case also revealed that Charter apparently forged a document to try and force the family away from the courts and into binding arbitration:

The jury also found that “Charter knowingly or intentionally committed forgery with the intent to defraud or harm Plaintiffs,” Renteria wrote. The family’s attorney previously said that “Charter Spectrum attorneys used a forged document to try to force the lawsuit into a closed-door arbitration where the results would have been secret and damages for the murder would have been limited to the amount of Ms. Thomas’s final bill.”

On the plus side, $1.1 billion is a lot lower than the whopping $7.37 billion Charter was originally on the hook for. Charter says it plans to appeal, claiming the “crime was not foreseeable.” And while the lawsuit states the tech had been fired several times for forging documents and harassing coworkers, Charter claims a criminal background check “showed no arrests, convictions, or other criminal behavior.”

Filed Under: cable tv, high speed internet, install, murder, tech, telecom
Companies: charter

US Cable Giant Charter Hit With $7 Billion Verdict After Tech Kills 83-Year-Old Customer

Legal Issues

from the do-not-pass-go,-do-not-collect-$200 dept

A decade or so ago you couldn’t go even a week without a major U.S. cable company finding its technicians in the headlines for all the wrong reasons. You’d routinely see technicians that fall asleep on the job, blow up homes, occasionally murder people and get arrested for torturing and spray painting kittens (seriously).

And while major U.S. cable companies have made some small inroads with their historically abysmal customer service, apparently there’s still some work to be done. Charter Communications (which sells service under the brand Spectrum) recently found its name in headlines due to an uncharacteristically massive $7.37 billion verdict handed down against the company after one of its technicians murdered an 83-year-old customer.

The employee had taken to robbing customers as a side gig. The lawsuit (pdf) claims that Charter had eliminated a more rigorous screening process when they merged with Time Warner Cable, letting the employee and his history slip through the cracks:

According to the complaint, brought by the victim’s family, Charter got rid of an employee screening program put in place by Time Warner Cable when Charter purchased the MSO in 2016.

The plaintiffs also said that a cursory look at Holden’s background would have revealed his history of firings for forging documents and harassing coworkers.

Again, U.S. cable company customer service is some of the worst in the United States. Cable giants routinely rank worse than nearly any other industry (an incredible feat if you stop and think about all the terrible companies in the United States), and even government agencies like the IRS.

There are usually several reasons. These companies are all so consolidation and merger crazy they’ve expanded at a breakneck pace for years. Rarely are they willing to spend the money to ensure customer service scales with that growth. They’re also keen on using a chain of low-cost, legally firewalled subcontractors to ensure they’re not liable for substandard repair and install work.

And, of course, when you’re the only broadband option in town, your local monopoly means you don’t really have to try very hard. So, as a result, Comcast and Charter often… don’t. The result isn’t always murder, but it happens more often than you’d think.

Filed Under: broadband, cable install, customer service, high speed internet, monopoly, murder
Companies: charter, charter spectrum

America’s Two Biggest Cable Broadband Monopolies Failed To Add Any New Customers Last Quarter

Broadband

from the do-not-pass-go,-do-not-collect-$200 dept

Roughly 83 million Americans currently live under a broadband monopoly. In most instances, their only choice is Comcast or Charter Communications, which sells service under the “Spectrum” brand. And in both cases, users pay significantly higher prices for spotty, slow, service with statistically terrible customer service, because that’s how monopolization works.

But the nation’s two biggest cable companies are having a rough year so far.

Comcast, for example, has not only lost more than a million traditional pay TV subscribers so far this year, last quarter the company failed to add any new broadband subscribers for the first time in company history. Now Charter has followed suit, not only losing 226,000 pay TV subscribers last quarter, but losing 42,000 broadband customers as well.

Charter blames the end of a $50 a month COVID-relief broadband subsidy program (which didn’t really end, it was just made permanent via the infrastructure bill and renamed):

“During the second quarter, we added 38,000 Internet customers when excluding an unfavorable impact related to the discontinuation of the Emergency Broadband Benefit program and additional definitional requirements of the Affordable Connectivity Program,” Charter CEO Thomas Rutledge said in a call with analysts, according to a Seeking Alpha transcript.

But Charter’s broadband losses likely would have happened earlier if not for the COVID subsidy program, which effectively advertised the company’s service to low-income Americans. And there’s several contributing factors to the shift.

One, companies like Charter and Comcast are starting to see more competition from 5G fixed wireless, and low-orbit satellite services. Though folks shouldn’t make too much of said competition; Starlink for example has a maximum total capacity of 800,000 or so total global users, and will hardly put much of a dent in the 83 million monopoly total. And while fixed 5G will grow, wireless, in general, still comes with network limits not seen on superior broadband options like fiber.

But the primary reason for the slowdown is the broadband market is simply becoming saturated. Cable giants aren’t really willing to expand broadband into higher ROI rural and urban areas, and everybody already has access in the markets they serve. As a result, these companies just aren’t seeing the same kind of growth they’re used to.

Both Charter and Comcast are hopeful that some of this can be remedied by the historic infusion of more than $50 billion in broadband subsidies now arriving courtesy of COVID relief and the new infrastructure bill (which, ironically, they lobbied against). That money is being distributed by the FCC and NTIA to the states, which then have to develop systems determining how the money is spent.

As a result, lobbyists for both companies are working overtime convincing numerous states to pass laws literally banning some of this funding from going to any competitors. At the same time, they’re also trying to challenge community broadband and local competitor grant applications, using flawed FCC data to falsely claim they already provide service to these targeted areas.

In short, these monopolies are hopeful that any future growth comes from elbowing out others at an historic trough of new subsidies. And given the level of state and federal corruption in terms of telecom policy here in the States, I have little doubt they’ll be fairly successful at it. But here too there’s a limit; somewhere between 20 and 40 million Americans remained unserved.

As the growth opportunities tighten, these monopolies will do what they’ve always done: turn toward pleasing Wall Street by nickel-and-diming the subscribers they already have, while simultaneously fighting tooth and nail to crush any new competitors that might threaten their dominance in any real way.

Filed Under: broadband, broadband monopolies, competition, covid relief, digital divide, high speed internet, saturated market, subsidies
Companies: charter, charter spectrum, comcast

Comcast’s And Charter’s Broadband Monopoly Continues To Grow

Broadband

from the do-not-pass-go,-do-not-collect-$200 dept

Fun fact: about 2,950,000 new subscribers signed up for broadband last year, and roughly 95 percent of them signed up with the biggest cable companies (primarily Comcast and Charter). These two cable giants’ market share continues to grow not really because they’re good — but because they’re the only option countless Americans have if they want modern-era broadband speeds.

We’ve long noted how most U.S. telcos spent the better part of the last fifteen years refusing to meaningfully upgrade (or sometimes even repair) their broadband networks. As a result, if you want a modern (100-200 Mbps, low latency, no weird restrictions) connection in America, your choice is increasingly: Comcast (unless your town is building its own broadband network).

That’s the textbook definition of market failure and monopolization (shielded by regulatory capture), but in clinical analysis of market share such concepts wind up not being mentioned at all. Take this PC Magazine analysis of the latest broadband market share data from Leichtman Research:

Cable accounted for almost all of 2020’s growth, 2.8 million and change, and most of that came from sign-ups at the two biggest internet providers in America. Comcast added 1.33 million subscribers for its Xfinity service to reach 31.9 million total, and Charter’s Spectrum service took in 1.2 million new subscribers to hit 30 million.

Analysis like this is always so sterile, lacking any context of the impact of this consolidation. As Comcast dominates a market, it exploits the lack of competition not only to routinely raise rates (even during a pandemic, as it turns out) but to also impose all manner of arbitrary usage restrictions and obnoxious, unnecessary fees, allowing it to drive up the advertised price even further.

In a bid to justify market failure, monopolization, and the corruption and regulatory capture that protects it, policymakers will often point to some looming technological innovation just over the horizon that will make all of this better without intervention. In the early 2000s it was broadband over powerline (BPL), which failed due to interference issues. Now it’s technologies like Starlink and fifth-generation (5G) wireless.

But we’ve noted repeatedly in lengthy posts how both Starlink and 5G won’t be some magical panacea. Starlink has a usage ceiling of only around 800,000 subscribers (in a country where 20-42 million lack access and another 83 million live under a monopoly). 5G can help fix some coverage gaps, but cost, reliability, and network restrictions usually don’t make it a suitable replacement for something like fiber.

As somebody who’s been covering telecom for a long time, something that has always stood out to me is how unwilling regulators, lawmakers, analysts, and even reporters are to call a duck a duck. In this case, the duck is monopolization and market failure. And it’s pretty hard to fix something you’re not even willing to describe accurately in analysis, news coverage, or pretty political speeches.

The problem (market failure and monopolization shielded by corruption and regulatory capture) is always ambiguously referred to as something else — usually using terms that eliminate any responsibility and causality. For example, the problem is most commonly referred to as the “digital divide” — a term that begs you to believe that the problem just fell from the sky, and wasn’t a conscious, multi-decade policy choice by heavily lobbied U.S. lawmakers.

Filed Under: broadband, competition
Companies: charter, comcast