Cable guys: Cord-cutters live in the Bermuda Triangle with Bigfoot and E.T. [telecom]

By Mark Sullivan, TechHive, Dec 4, 2013

| The cable cord-cutter has become a bit like the UFO. Lots of | people, many in the tech community, want to believe this | person is everywhere, while a whole lot of other people -- | many in and around the cable industry -- deny his existence | altogether. | | But one class of cord-cutter -- the kind who cancels cable TV | service but holds on to cable broadband service -- has finally | begun showing up in the financial reports of cable companies, | and in the speeches of their executives. | | Time Warner Cable's CFO Arthur Minson addressed the phenomenon | at an investor conference in Barcelona last week, saying that | his company is seeing an increased number of single-service | broadband customers, as well as an increased number of | customers who buy faster Internet service tiers. In other | words, more and more cable customers are paying for Internet | service, but eschewing Comcast's TV content and phone service. | This development suggests a growing segment of cable customers | want to download a lot of rich media--like video. | | Time Warner Cable, the second largest U.S. cable company, has | roughly 5.5 million "single-play" customers, Minson said. | About 3 million of those buy TV service alone, while about 2.5 | million buy broadband service only. He didn't say how quickly | either group was growing or shrinking. | | But the overall subscriber group numbers suggest that the | broadband-only group is growing while the TV-only group is | shrinking. In its most recent quarterly report, TWC reported | that it lost 6 percent of its video customers over the past | year, but grew its broadband customer base by 1.7 percent. | TWC says that it's counting on home broadband sales -- and | upselling existing broadband customers to higher service | tiers -- for its future growth.


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Well, I'm one of those broadband-only customers who "cut the cord" on cable TV. But it's not because I want to "download a lot of rich media-like video" -- it's because I switched to satellite so I can access programming that the local cable company doesn't carry (e.g. MSNBC, C-Span, RFD-TV, Rural TV, SiriusXM). Although I occasionally watch YouTube videos, I have never downloaded any media.

As I drive around town and nearby rural areas, I see satellite antennas on a substantial proportion of the houses. I'd guess over

50% homes have dishes.

I also note that a lot of these homes are connected to the cable TV network. Maybe these are old abandoned connections formerly used for TV. But I suspect that a lot of them are broadband customers.

The article continues:

| Still, while the stats in the SEC filings strongly suggest | that the numbers of broadband-only customers are growing | rapidly, they don't prove it. That's because a high number of | cable customers still buy some combination of TV, broadband, | and phone service from the cable company. So a good chunk of | the 86,000 new broadband accounts added by Charter, for | example, may have also bought voice or TV.

Maybe they don't prove it. But the fact remains that I see lots of houses with satellite dishes and cable drops. They sure look like broadband-only customers to me.

And I'm speaking as a former cable guy who did exactly the same thing myself: switched to satellite for video but kept my connection to the cable company for broadband.

Neal McLain

***** Moderator's Note *****

ISTM that the real question is "How many cable subscribers have /phone/ service through cable providers?", because IMHO that's a better indicator of the cable operators' future.

If those who "cut the cord" on cable /TV/ offerings are choosing VoIP phone service instead of the cable operators' dial tone, or are retaining existing POTS dial tone, then cable companies will have to look forward to a future where all their money will come from 'ping and pipe' offerings.

Bill Horne Moderator

Reply to
Neal McLain
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All of the "cord-cutters" I know don't have a landline, and have never had one since they moved out of their parents' houses. They get their television through Netflix and Hulu, and their telephone service from the cellular oligopoly. They think I'm ridiculously old-fashioned for continuing to pay Verizon $30 a month, plus ever-increasing fees and taxes, for a landline that is only ever used by phone-spammers. Why don't you just port it to Google Voice, they ask. In point of fact, even the ones who still have video service from the cableco don't have landlines. It's only the ones over 40 who still have anything like a "home phone".

I don't like keeping all my eggs in one basket, so I have video service from Comcast and (business) data service from RCN. Yes, it is more expensive (by quite a bit), but it's worth it to me. Not so much for many other people.


Reply to
Garrett Wollman

I've seen numbers that show cable taking 25-30% of the residential telephone business in their homes passed. In some markets it's more like 50%, and Cablevision may have more residential subs in Nassau County NY than Verizon, and Cox may outdo Verizon in Rhode Island. Or at least close.

Of course the ILECs don't really want that business. They always whined about how they lost money on residential. And except for FiOS, Verizon has disinvested from it, deliberately leaving it to cable.

Over-the-top VoIP tops out at something like 6% of lines, and is going nowhere fast. You can't get good reliable voice quality over the public Internet. Cable telephony is not Internet; it is on managed bandwidth. While there is an IP layer in the middle, it's not "over" an IP network, it "uses" IP internally. I prefer to refer to such applications as "VuIP", for Voice Using IP, rather than VoIP. The FCC conflates the two in its statistics which makes them much less useful. And they should not be treated the same for regulatory purposes, as one is just POTS, the other an Internet application interconnected to POTS somewhere.

Reply to
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