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With Google Fiber pausing deployments to consider a pivot to wireless, San Francisco is one of several cities left standing at the altar. The city had been part of an effort by Google Fiber to deploy service to a few key locations where fiber was already deployed. But with Google Fiber apparently now fascinated with next generation wireless technologies like millimeter wave, the city is considering one of the biggest municipal broadband deployments ever conceived.
Like Seattle, San Francisco is tired of broadband being defined as being forced to choose between two companies whose service pricing and quality clearly reflect a disdain for paying customers.
As such, the city had begun crafting a plan to connect every single home and business in the city to fiber optic broadband. A consultant"s report (pdf) recently released by the city last year indicates that the cost of doing so would be somewhere around $1.9 billion. But the cost of that investment would result in numerous, direct benefits to the city, the report concluded.
The opportunity The City is about to present to the private sector is unprecedented, reads the 195-page report by Maryland-based consultant Columbia Telecommunications Corporation. "There has never before existed in any American community an opportunity for a private entity to lease fiber or broadband infrastructure to reach 100 percent of the homes and businesses in the community," it adds.
But San Francisco residents may be left waiting quite a bit longer to see the new network, if it ever materializes at all.
According to the San Francisco Examiner (hat tip, Ars Technica), outgoing Mayor Mark Farrell will not place a tax measure on the November ballot to fund the project before he leaves office in the coming weeks. Farrell was a major backer of the plan, which may or may not still be pursued. A ballot measure to generate $1.7 billion over 25 years was supposed to be the next step, but polling suggested the proposal was unlikely to pass.
The RFP was intended to be released in June, but will not be released this summer, Brian Roberts, a policy analyst with the Department of Technology, told the Examiner. "We will inform the bid teams and the public of our progress and proposed next steps," he added.
Whether the project is delayed or dead remains to be seen, but if voters aren"t willing to fund the initiative it"s likely to be going nowhere fast. read comment(s)
As expected, the Walt Disney Company has raised its offer for 21st Century Fox Inc"s entertainment assets to $71.3 billion, outbidding Comcast Corp. in a battle for one of the media industry s biggest prizes. Comcast had recently made a $65 billion all cash offer for the available Fox assets, which include numerous movie properties, a large array of regional sports networks, and the FX Channel. The feud between Comcast and Disney goes back years, ever since Comcast failed in a 2004 hostile bid to acquire Disney.
Fox has accepted the offer, though it"s still possible that Comcast could come back again with a higher bid.
That said, the debt load Comcast would have incurred from this deal was already monumental, and it"s unclear how hard Comcast is willing to push to secure a domination over media assets. Should Comcast win its bidding war with Disney, it could incur more than $85 billion of additional debt, in addition to the debt it will be saddled with if it continues its pursuit of European pay TV giant Sky.
Granted, Comcast and Disney have had an adversarial relationship ever since that 2004 acquisition attempt by Comcast. As such, simply driving up the cost of acquisition for Disney may be seen as a decent consolation prize for some Comcast executives. read comment(s)
Users in our Charter Spectrum forum continue to discuss the company"s belated new speed increases, which are delivering speeds upwards of 400 Mbps downstream in certain areas. The upgrades are particularly welcome by users who say the company"s upgrades stalled significantly in the wake of Charter"s $89 billion acquisition of Time Warner Cable and Bright House Networks, taking an apparent backseat to major price hikes at the nation"s second largest cable company.
Sprint and T-Mobile this week officially pitched their $23 billion merger to the FCC in a new filing (pdf) that attempts to convince the agency the job-killing, competition eroding deal will be wonderful for American consumers. Sprint and T-Mobile"s sales pitch proclaims that the United States can"t be a leader in next-generation 5G wireless without merging. The companies also state, without evidence and in stark contrast to historical precedent, that their merger will lower rates and increase competition in the wireless space.
"The combined company will have lower costs and the incentives to engage in aggressive pricing to expand its 4G LTE customer base as the industry continues its major transformation towards 5G," the duo claim. "To date, T-Mobile and Sprint, individually, have not been able to materially erode Verizon and AT&T s wireless market share or overcome their scale advantages. New T-Mobile, however, will be able to go toe-to-toe with the two larger rivals to the benefit of competition and consumers."
Except that history repeatedly shows how reducing the overall number of direct competitors in a sector reduces the overall incentive to compete on price, often raising rates and reducing quality customer service (go ask a Canadian wireless user). And any financial gains are routinely pocketed by executives and investors.
Sprint and T-Mobile also continue to claim that their $23 billion merger will be a huge job creator.
"The merger will create jobs on New T-Mobile s first day and going forward. New T-Mobile will hire employees to build the new network; extend the Un-carrier customer care model to a wider subscriber base; and support customers in growing segments like in-home broadband, enterprise, and IoT. New T-Mobile s increased investment and rapid growth--and resultant accelerated roll-out of 5G services--also will stimulate thousands of additional jobs throughout the U.S. economy."
That"s again in stark contrast to both historical precedent and Wall Street analysis, which claims the deal will, sooner or later, result in the loss of anywhere between 10,000 and 30,000 jobs as the new, bigger company slowly purges redundant employees.
Meanwhile Sprint and T-Mobile also continue to insist that they can only truly deliver fifth-generation wireless if merged, despite repeated, previous claims by the same two companies that they would individually have no problem deploying complex, impressive 5G network builds.
"This proposed merger is necessary to accomplish a goal critical to enhancing consumer welfare in this country: the rapid and widespread deployment of 5G networks in a market structure that spurs rivals to invest in a huge increase in capacity, and, correspondingly, to drop tremendously the price of data per gigabyte," the companies say in their filing. "New T-Mobile will be able to leverage a unique combination of complementary assets to unlock massive synergies in order to build a world-leading nationwide 5G network that will deliver unprecedented services to consumers, increasingly disrupt the wireless industry, and ensure U.S. leadership in the race to 5G."
Telecom consumers are no stranger to empty promises when it comes to broadband and media mergers. And you"d be hard pressed to find a merger in telecom over the last two decades where the pre-deal promises even remotely matched the post-deal reality.
Consumers were informed Charter"s $89 billion acquisition of Time Warner Cable and Bright House Networks would result in faster, cheaper, and better service, only to ultimately deliver higher prices and even worse customer service. Similarly AT&T and Comcast have completed merger after merger promising a universe of benefits, only to deliver higher prices and what"s broadly considered some of the worst customer service among any industry in America (and dropping).
The closest thing to a legitimate argument for Sprint and T-Mobile"s merger is that Sprint can"t survive on its own. But even if that"s true (and no, Sprint"s failure is not guaranteed), there"s plenty of potential partners for Sprint should the deal be blocked on anti-competitive grounds, with plenty of companies, including Charter, Comcast and Dish, with an eye on potential wireless sector expansion. Deals that wouldn"t reduce overall competition in an already competitively-challenged space.
Like Charlie Brown and his damn football, Americans are bizarrely gullible to pre-merger promises of utopian synergies. Time after time we"re promised the world by companies looking to merge, and time after time we find that these deals only benefit company investors and executives, resulting in fewer jobs and higher rates. By every indication, we"re collectively eager to repeat the trend yet again. read comment(s)
Verizon FiOS has once again topped the PC Magazine"s ranking of the fastest large ISPs, but Nextlight--the municipal broadband operation run by the local utility in Longmont, Colorado, took top speed honors overall. The survey (you can find the full methodology here) is based on 346,431 individual speed tests completed by global users between May 23, 2017 and June 5, 2018, using the PCMag Speed Test. ISP scores are then weighted using 80% of the download speed and 20% of the upload speed.
According to the latest rankings, Verizon FiOS saw top honors among large ISPs with a PSI (PCMag Speed Index) score of 138.7, followed by RCN (129.8), Suddenlink (102.5), Hotwire (90.8), and Optimum (81.8).
"To be considered major, this is the one chart in the story where we require 1,000 tests--plus we also take into consideration providers that are available across multiple states," notes the report.
But smaller ISPs significantly outperformed their larger counterparts, according to the study. The list of fastest overall ISP goes to Nextlight--the municipal broadband operation run by the local utility in Longmont, Colorado, which saw a top PSI score of 278.4, followed by Google Fiber (237), Sonic (206.8), Chattanooga"s EPB (149.7) and Allo (142.4).
In a rare instance of backbone, the US Senate this week stood up to President Donald Trump...by voting to overrule his administration s deal with Chinese telecom firm ZTE and reimpose a ban on hi-tech chip sales to the company. Trump has pushed protectionist policies attempting to ban Chinese hardware vendors from doing business in the States, most recently by pushing the FCC to blacklist Huawei by prohibiting ISPs from doing business with the company if they take broadband subsidies.
In Huawei"s case, the ban is based on allegations that Huawei spies on Americans, despite an 18 month government inquiry finding no evidence of that actually occurring. Such fears are routinely stoked by companies like Cisco, eager to avoid having to compete with cheaper overseas gear.
But the Trump administration also banned US companies from selling chips to Chinese hardware maker ZTE for a period of seven years, based on more concrete evidence that the company violated sanctions on Iran and misled investigators trying to uncover the company"s actions. The deal was considered fatal for a company that relied on Qualcomm chips and Google"s Android app store, resulting in ZTE effectively freezing operations last May.
But the Trump administration then reversed course, striking a deal with the company that lifted the ban in exchange for a $1 billion fine and a promise to fire all of the company"s senior leadership. The reversal came just as Chinese government loaned $500 million to help "build an Indonesian theme park that will feature a Trump-branded golf course and hotels."
White House trade advisor Peter Navarro has previously described Trump"s sharp reversal as a "personal favor to the president of China."
Senators Tom Cotton (R-AK) and Sen. Marco Rubio (R-FL) teamed up with Senate Minority Leader Chuck Schumer (D-NY) to include an amendment to a "must pass" military spending bill--to reimpose the export ban on ZTE. The amendment was subsequently approved by the Senate in an 85-10 vote.
The restoration of the ZTE ban is likely to become part of the final bill and should it be approved by both houses of Congress, it would still require President Donald Trump"s signature, resulting in a potential showdown if Trump veto"d the legislation then found his veto over-ridden. read comment(s)
Disney isn"t going to let Comcast gobble up Fox without a fight. Last week we noted that Comcast unveiled a $65 billion all-cash bid for Fox in the hopes of undermining Disney"s own $52.4 billion offer, setting up a showdown between two companies that haven"t got along well since Comcast"s failed hostile takeover attempt of Disney back in 2004. Both companies are hoping to gobble up a huge chunk of Fox assets including the FX channel and a large number of regional sports networks, while leaving channels like Fox Sports and Fox News under Murdoch family control.
quote:Disney is expected to add cash to its bid for Twenty-First Century Fox assets, sources tell CNBC...Fox"s board meets Wednesday to discuss Comcast"s bid, and would engage in talks if it deems the offer superior. If that happens, Disney has five days to match Comcast"s offer.
Like AT&T and Verizon, Comcast is trying to avoid becoming a dumb pipe by increasingly shifting focus from broadband and cable TV to media and online advertising. Comcast felt buoyed by AT&T"s merger victory over the DOJ, seeing it as setting a likely precedent resulting the in the DOJ being less likely than ever to seriously challenge major mergers and consolidation in the media and telecom space.
But consumer advocates continue to worry that letting companies that enjoy a monopoly over broadband service also dominate media creates all manner of new anti-competitive pitfalls, especially in the wake of the Trump FCC"s attack on net neutrality, and over-arching efforts to obliterate oversight of these companies on both the state and federal level. read comment(s)
For years wireless cell carriers have sold off consumer location data to everyone from urban planners to marketers without much in the way of oversight. Every so often that lack of oversight becomes painfully clear as we just saw with the Securus and Locationsmart scandal, which exposed the location data of roughly 200 million US and Canadian wireless consumers. Both companies buy real-time access to this data from cell carriers, but a lack of oversight resulted in access to this data being routinely abused.
Hoping to get out ahead of this scandal before the press and public realizes that abuse of location data makes the Cambridge and Facebook scandal look cute, Verizon today sent a letter to Senator Ron Wyden (pdf) stating the company would stop selling private consumer location data to third party brokers.
"We are committed to protecting the privacy and security of our customers" location information, and will keep you informed as we execute our plan to terminate these location-based aggregation arrangements with the aggregators," said Verizon chief privacy officer Karen Zacharia.
Wyden had begun probing the largely unaccountable rabbit hole that is location data sharing. Verizon says it has ending its contracts with location aggregators like LocationSmart and Zumigo, and admitted that those deals in turn passed that anonymized data on to more than 75 other partner companies. And as the Location Smart and Securus scandal proved, that data isn"t always all that anonymous, and can routinely be abused.
Verizon"s decision to pre-emptively back away from this behavior in the wake of huge profits likely indicate its lawyers realized the company was potentially in some very deep, very hot water. Verizon also likely wants to avoid any real, meaningful privacy rules, something the company has been fighting against for the better part of the last decade.
"When these issues were brought to our attention, we took immediate steps to stop it. Customer privacy and security remain a top priority for our customers and our company," Verizon said of the decision in a company statement.
"Verizon did the responsible thing and promptly announced it was cutting these companies off," Wyden said in a statement of his own. "In contrast, AT&T, T-Mobile, and Sprint seem content to continuing to sell their customers" private information to these shady middle men, Americans" privacy be damned."
But shortly after Verizon"s announcement AT&T announced it would similarly stop third-party location data sales in a bid to prevent a deeper inquiry or tougher privacy guidelines. So far, neither Sprint nor T-Mobile have been willing to comment or join the fun, despite T-Mobile"s reputation as a fierce consumer ally (ignoring their opposition to net neutrality, of course).
Update: Both Sprint and T-Mobile have followed suit, but it"s worth noting that most of these promises are decidedly short on hard details:
Users in our AT&T forum note that AT&T has made a number of changes to its fiber broadband pricing, including a price hike on the company"s gigabit offering (which has limited availability), and the introduction of a new 300 Mbps tier.
There"s been a spike in complaints out of Nashville regarding Google Fiber outages locals say is thanks to the company"s increased use of "microtrenching" to bury fiber lines. Google increasingly began using microtrenching a few years ago as a way to speed up and reduce the cost of the company"s clearly languishing Google Fiber deployment. The concept of microtrenching isn"t new, and Google has been experimenting with it for six years or so, It allows companies to use a machine to dig just a few inches deep under the edge of the road, avoiding more disruptive digging particularly on homeowners" property.
While microtrenching might be cheaper initially, Nashville locals are finding out that the shallow fiber depth means that routine road construction is more likely to cause damage to fiber lines that Google crews then have to come back and repair:
quote:A section of East Nashville is the latest to learn the perils of burying lines in shallow trenches. A routine road-repaving project went deep enough to disrupt the cables, which have been frayed, cut, pulled out of the ground and left strewn about as the roadwork continues.
Metro Public Works says its crews have had to tear up fiber lines five times this year, and that Google Fiber"s team is then asked to respond quickly to cut deeper trenches and replace the fiber, so as to allow the paving jobs to be completed.
A spokeswoman for Public Works states that the city mandated microtrenching bury fiber at a depth of at least four inches back in 2016, a requirement that should prevent such disruption. But much of the earlier Google deployments were at a shallower depth, meaning there"s likely more outages to come for area Google Fiber customers. Google Fiber has been forced to embrace microtrenching in Nashville, in part, thanks to nuisance lawsuiits by AT&T and Comcast making it more cumbersome to use city (and frequently AT&T owned) utility poles. read comment(s)
The average US broadband home now consumes somewhere around 190 GB per month, according to a new report by iGR (hat tip, Telecompetitor). The firm notes that somewhere around 90% of that data consumption is video, with those tallies expected to soar quickly thanks to two things: 4K and HDR video streaming becoming more commonplace, and a greater number of DSL customers fleeing to faster cable connections in the wake of US telco upgrade phobia. The problem: many of those users are flocking to cable providers who have a monopoly over faster speeds, resulting in unnecessary and punitive usage caps and overage fees and historically terrible customer service and pricing. read comment(s)
Over the longer term, most consumer advocates believe the AT&T Time Warner merger will be a bad thing for overall competition, as AT&T inevitably jacks up the price of "must have" content licensing (like HBO) for its streaming competitors, and uses the death of net neutrality to similarly hamstring threats to its own businesses in a variety of "creative" new ways. But in the meantime, AT&T is trying to soften the PR edges of its merger by promising to launch a new $15 TV service next week that will be free for the company"s wireless subscribers.
Dubbed AT&T Watch, the $15 service is primarily being used as a way to incentivize users to switch to AT&T wireless, where the service will be free.
AT&T CEO Randall Stephenson tells CNBC"s Squak Box that more detail on the product should drop sometime this week.
Company executives have previously described AT&T Watch as a "very low end, very thin collection of products" that will take "some of the Turner video channels and bundle them with a small number of other channels and put a very small product for a customer base who is looking for that value and have a price point in the $15 range."
Similar products, like Discovery, A&E and FX"s Philo, are already on the market. But AT&T"s domination in wireless will allow the company to offer its own service to its wireless users for free, giving it a major leg up in direct competition with these challengers. Still, the channel lineup is so limited it"s unclear just how much of an appeal AT&T Watch will have.
Meanwhile, with the death of net neutrality, AT&T also has been given the green light by the Trump administration to use its domination of fixed and wireless broadband to erect new impediments to streaming competitors like Netflix, Amazon, or numerous smaller startups. AT&T isn"t likely to behave badly at first for fear of providing ammo to looming lawsuits over the rules, but should the FCC prevail in court, AT&T"s ethically dubious history makes it abundantly clear the company will be using its newfound regulatory freedom to full anti-competitive advantage in time. read comment(s)
Buoyed by AT&T"s merger win this week, Sprint and T-Mobile are expected to officially file their merger application with the FCC this week as a wave of M&A mania continues in the Trump era. Given the agency"s willingness to green light every industry whim, the Ajit Pai FCC is generally seen as likely to be a rubber stamp to the deal, which would combined the nation"s third and fourth largest wireless carriers. It"s the second attempt to merge in as many years after previous attempts were blocked by regulators due to anti-competitive concerns.
And while the DOJ could apply some modest conditions to the deal, last week"s massive court win by AT&T is generally seen as reducing the likelihood that the DOJ will intervene to stop many more megamergers.
While Sprint and T-Mobile executives have been making the rounds insisting that the deal will result in faster speeds and lower prices for consumers and more jobs for employees, that"s generally not how it works in telecom. Analysts say in reality the deal is likely to result in the elimination of anywhere between 10,000 and 30,000 jobs as redundant retail, management and support positions are inevitably eliminated.
And while Sprint and T-Mobile say that combining will create a stronger competitor to AT&T and Verizon, that"s also generally not how things work, especially in the oft-broken telecom sector.
The elimination of one of just four major wireless competitors is more than likely to result in a reduction in overall price competition. Despite a lot of bluster from the industry, overall price competition was already down in 2018, and is likely to shrink further in the wake of fewer overall competitors. This is a major reason why AT&T and Verizon have shown no real resistance to the idea, something they likely would if the combind company did pose a genuine competitive threat.
Granted many Millennials aren"t old enough to understand that these types of deals tend to end up badly for everybody but company executives, and are about to get a crash course in the chasm between merger promises -- and merger realities. read comment(s)
AT&T, Comcast, and Verizon lobbyists are working in concern to try and weaken California"s tough new net neutrality law before it can pass through the state legislature. California State Senator Scott Wiener"s SB 822 was recently approved by the California Senate Energy Committee and now moves on to the Judiciary Committee. The proposal has been called the "gold standard" by groups like the EFF, and goes notably further than even the modest FCC rules did by addressing things like "zero rating" (using usage caps anti-competitively).
Federal FCC net neutrality rules expired as of June 11 after a historically unpopular lobbying power play by major ISPs, and many states are now rushing it to try and protect consumers.
Needless to say, AT&T, Verizon and Comcast lobbyists and executives don"t much like that, and according to a new report by the EFF are engaged in a last-minute bid to weaken the rules before it can pass.
"California s legislature has so far opted to ban discriminatory users of zero rating and prevent the major wireless players from picking winners and losers online," notes the EFF. "But new and increased resistance by the ISP lobby (led by AT&T and their representative organization CALinnovates) unfortunately has legislators contemplating whether discriminatory zero rating practices should remain lawful despite their harms for low-income Internet users."
"In fact, AT&T and their representatives are even going so far as to argue that their discriminatory self-dealing practices that violate net neutrality are actually good for low income Internet users," says the EFF.
The idea that usage caps, overage fees and zero rating help poor people is something AT&T lobbyists (and their friends like FCC boss Ajit Pai) have been insisting for years. Of course AT&T"s goal has always been anti-competitive: especially since it exempts its own content from usage caps while penalizing competitors like Netflix, in the process driving up costs for users that veer too far away from AT&T"s own content or services.
In fact the last FCC clearly stated that AT&T"s usage of zero rating is anti-competitive. However, their realization that usage caps could be used anti-competitively came too late, and once Trump was elected the new FCC declared such arbitrary limits and gamesmanship was perfectly acceptable. Whether California lawmakers can be bribed cajoled into buying into AT&T"s logic remains to be seen.
"Upholding S.B. 822 means upholding a free, open Internet for all Californians," the EFF notes. "Without it, ISPs may have free rein to create two Internets that will be premised on how much income you have to the benefit of their own services and partners. With AT&T"s recent victory in the courts over the Department of Justice and the expiration of federal net neutrality rules, S.B. 822"s net neutrality protections have become more important than ever." read comment(s)
AT&T suffered a number of major wins last week, from the formal death of net neutrality to the company"s major court win against the DOJ, which will allow the company"s $86 billion merger with Time Warner to proceed. But not everything is coming up roses for Dallas-based AT&T, with many Wall Street analysts expressing concern that the merger saddles AT&T with an ocean of debt at a time when its future is anything but certain.
AT&T, like Verizon, wants to pivot from stodgy, protectionist telco to a sexy new media and advertising company, but questions remain about whether the company has the innovation and disruption chops to do so, and just how much it will cost.
Wall Street analysts like Craig Moffett downgraded the company"s stock on the news of the merger win, noting that the debt load it creates is monumental.
"The only way to describe the size of the debt is terrifying," said Moffett. "We have never seen anything of this scale before. If AT&T were a rapidly growing company, the debt would raise some eyebrows; but it isn t growing -- profit and revenues are shrinking. I don t know why the market isn t more concerned."
AT&T spent $67 billion on DirecTV and another $86 billion on Time Warner instead of focusing on its core competency: running a broadband network. And while the company"s DirecTV Now streaming service is gaining traction, AT&T"s actually losing money as traditional cable customers flock to the cheaper alternative. The problem: those users pay significantly less per month than traditional TV users do, resulting in a dip in revenue despite AT&T"s endless mergers and acquisitions.
"They thought that getting into the pay TV business was going to be a good differentiator for them, but I think if anything it has made the business inherently more risky given the structural challenges in that market," an analyst told The International Financing Review. "They are basically doubling down with Time Warner. They are getting out of their core competency."
AT&T desperately wants to avoid being a "dumb pipe." And while the death of net neutrality and its growing size will give it ample anti-competitive potential, the company"s ability to transition from grumpy old telco to sexy new media brand remains far from a sure thing. read comment(s)
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