U.S. Broadband Growth Slows As the Profit Party Grinds To A Halt
from the do-not-pass-go,-do-not-collect-$200 dept
For years we've watched major cable TV providers lose traditional cable TV subscribers hand over fist to cheaper, more flexible streaming alternatives. It was a trend that only accelerated during COVID. Don't feel too badly for companies like Charter and Comcast however; the companies' growing monopoly over faster fixed-line broadband across huge swaths of the country have allowed them to recoup their pound of flesh via broadband fees (or unnecessary usage caps) without much in the way of repercussion.
But there's signs that the cable broadband party could be slowing down. Both Comcast and Charter (Spectrum) reported the usual number of cable TV subscriber losses, but also reported significantly fewer broadband subscribers than usual:
"Charter on Friday reported 25% fewer new broadband subscribers than analysts estimated and said the overall number of new customers would fall back to 2018 levels. Comcast, which had earlier cut its subscriber forecast, reported 300,000 new internet customers Thursday, less than half the number added a year ago."
What's the reason for the slowdown? For one thing, the COVID telecommuting boom had artificially been boosting subscriber uptick as people struggled to work and learn from home. That's ending as people return to something vaguely resembling normal school and work life. Charter and Comcast largely blame a slow down in the new home market, leaving them trying to wring more subscribers out of a fairly saturated subscriber base (they often don't want to expand into new, often more rural areas because it's not profitable enough, quickly enough, for Wall Street).
Consumers also struggling during the pandemic aren't spending as much on services, which means downgrades to slower tiers, or cancelling service altogether and going cell phone only:
"Other factors could include a dropoff in lower-paying customers as government assisted broadband funds dry up. “There’s clearly softness in consumer spending,” said Maribel Lopez with Lopez Research. “They are making choices on tiers and downgrading services.”
This is where it gets interesting. With a saturated market and slowing growth, cable giants like Comcast will be forced to find a revenue boost from somewhere else to satisfy the insatiable appetite for quarter over quarter growth. Streaming isn't going quite as they planned (Comcast took a $520 million loss on its streaming service Peacock last quarter) due to intense competition. That means increased pressure to do a lot of the dodgy shit (arbitrary usage caps, overage fees, prioritizing certain services over others) that got them in trouble in the net neutrality wars.
With the FCC effectively crippled courtesy of the Trump administration, and Comcast lobbyists busy trying to scuttle Biden appointments to mire the agency in perpetual gridlock, I wouldn't be shocked to see Comcast and Charter come up with some aggressively idiotic new nickel-and-dime money making scheme in the next year. When a monopoly's growth gets restricted and Wall Street grows impatient for its blood sacrifice, there's almost always one person who winds up paying the price: the consumer. Especially when there's neither competition nor competent regulators capable of reining in the monopoly's worst impulses.
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Filed Under: broadband, competition, fcc, growth
Companies: charter, comcast
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U.S. Broadband Growth Slows
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Competition
Don't forget the increase in competition. T-Mobile is offering cell tower based home broadband for $50/mo, and Starlink is rolling out in what are beginning to be significant numbers.
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Re: Competition
Starlink will not be rolling out in significant numbers. They could maybe some time in the next few years serve almost a million people? That will make essentially no difference.
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Re: Competition
"T-Mobile is offering cell tower based home broadband for $50/mo, and Starlink is rolling out in what are beginning to be significant numbers."
If all the other mobile providers follow suit it might start cutting into the profit margins of wired ISP's...but looking at the US market, that's unlikely. If the issue with the broadband market is that it is a monopolistic protectorate falling apart under decades of erosion in the name of cost cuts and price gouging then the issue with the US mobile market is that it's a congregation of warring tribes so hostile your smartphone working across state lines without punitive charges isn't a given.
And Starlink isn't competitive and never will be. Even Elon doesn't believe it'll scale well. It'll end up in the hands of the early comers, the very wealthy, a number of NGO's and government agencies operating in remote areas...and only for as long as the model of building and maintaining satellite constellations remains competitive.
No, this is just that sad story about a business hitting market saturation in a capitalist market. Unless they can keep growing at the same rate it really won't matter if they remain obscenely profitable.
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I thought LEOSAT-based Internet could not be anywhere near competitive with fixed-line broadband.
Also, the slowdown in growth may be because this market is approaching saturation.
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Re:
Not really, it only seems like that because they can't be arsed to build out their networks. People are screaming for the companies to build out capacity and hook up more neighborhoods, but the companies have been more interested in squeezing more and more money out of their existing customers by various means which in any other civilized country would be called fraud.
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Re:
"I thought LEOSAT-based Internet could not be anywhere near competitive with fixed-line broadband."
They can't. Some 99,9% of fixed-line broadband is served to urban areas. Starlink and other constellation-based networks are limited to the amount of connections each cubesat can handle for any given area. Meaning that in cities with just low to moderate population density starlink will only be able to offer service to a small fraction of the citizenry. I think the limit estimate would be about 50k for any given city or so - the rest will all be relying on wire.
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restrictions?
Lets see,
What do you need for a Good internet connection?
Lets say you have a 100mbps connection.
Most movies take 5-10mbps
Wondering the net is pretty fast at 1-2mbps
Every cellphone/tablet 1-2mbps
Consoles and games about 10mbps
Roku and many other TV and TV addons 5-10mbps
Then lets look at the hardware.
Router can do 4 devices per channel, 2400mhz and 5g.
So unless you get a REAL good router you are limited to 8 devices. in a 30ft range.
With all these devices, the router is limited to a max speed also, and if you get the older CHEAP, routers that arnt upgraded to current standards, SUCK.
Then we get to the Company/corps. That can restrict the speed DOWN, and you wont notice much, MAYBE.
Then we get to another big hurdle. The SITE OWNERSHIP, and the sites and movie, youtube and others. And if they restrict SPEED and if they get overwhelmed.
A new movie hit Amazon and Netflix, and they got hit hard for the 1 movie, its SLOWED access to a crawl.
In the past, many companies like SiFi, tryied to create their own site and as soon as they opened up, were HIT and Overwhelmed by 1 million people trying to watch the shows. Cartoon sites hit by TONS of kids all trying to watch programs, and they want to make money and use 3rd party adverts, so you get 2-3 downloads of CRAP along with the cartoons.
Going to a site that REALLY wants money, and they have 12 3rd party connections on the front page, and LAGG all to hell, even if you Block the 3rd party garbage, as those connections keep TRYING to get access to your machine.
So how much Connection speed do you need?
If you CLEANUP and regulate adverts, ALLOT LESS.
If you Clean up the SPAM, allot less.
If you get the Corps that want movies to Either WORK TOGETHER, insted of charging each other TO MUCH, to show the movies and shows WE WANT, Let them all goto Youtube and Build something thats Already there, and NOT charge us more then the cable corps do, PER CHANNEL. Allot less.
Can we compare with the EU? The Aussies?
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