Non-competitive Broadband

The FCC defines broadband at 25 Mbps by 3 Mbps. At that speed, most Americans have one choice: cable!

How funny is it that telcos had DSL in the Lab in the late 1960s and didn’t roll it out until Covad, Northpoint and Rhythms basically forced their hand. They then pushed all 3 into bankruptcy to be the sole high speed Internet providers — except for a smattering of independent ISPs that they would kill off later. Then the ILECs – especially Ma and Pa Bell – basically get their asses kicked by cable – and all but lose the SMB market. Who would have thunk it?

The whole time the Bells were worried about the CLEC industry, they should have been more concerned with better technology to combat DOCSIS 3.0. The CLEC industry at least gave the techs work to do and the Bells wholesale revenue (many times that revenue was more than retail). The Bells should have welcomed the wholesale – as both the ILEC and CLEC had cable to battle.

I know Ma and Pa Bell think that cellular is their answer, but that pie is flat. How much more can they ring out of it except for the IoT income stream? Meanwhile they lost millions of residential and small business customers.

Both have whopping huge debt and need a new revenue stream. VZ bought AOL thinking that might be mobile video and ad revenue, although I have to wonder how much more ARPU they can ring out of their customers. People aren’t cord cutting because they don’t watch TV. They are cord cutting because the ticket price is too high (plus other reasons). The same will eventually happen to VZW and ATTM.

The reason that the counties and cities want to build fiber is because the Duopoly isn’t providing the broadband that businesses need and consumers clamor for. Comcast has data caps just because they can. Google Fiber is able to goose the Duopoly enough to get some PR rolling from the big boys but not enough to see $70 ultra-fast Internet through America. And this is after billions in BIP, BTOP, NTIA, RUS and CAF monies have been spent across the plains.

It makes it hard on Agents too. Cable as the only option means that often the Agent can’t get paid. (Not every cableco has an agent program.)

Likely there will be more programs like Granite Telecom’s Grid, where a CLEC will put in a fat pipe and spread it throughout a business park, strip mall or shopping center. And the agent that finds those opportunities will get paid (or do it herself).

As the price of Gigabit falls to a ridiculous Spectrum price of $1200, it is harder ad harder to make a living on pipes alone. As one CLEC explained, revenue was off from last year mainly due to price compression, not because we aren’t signing deals. Three years ago, what was $680 is now $505. More deals have to be closed just to maintain — not even get ahead.

Everyone is feeling it which is why so many telcos have so many product offerings: Buy something from us please? And will you please also get service ABC too? How about DEF? How about GHJ?

Tags: agents, broadband, cableco, clec, commissions, duopoly, fiber, ilec, Internet
Related tags: cutting because, revenue, because, cable, price, bells