The game isn’t over when the California Public Utilities Commission votes to impose conditions on big mergers. Telecoms companies will immediately challenge decisions, administratively and in court, and try to wriggle out of obligations by any means possible.
Comcast is doing that now in Vermont, where that state’s public utilities commission required it to build out 550 miles of line extensions into rural areas. According to an article by Jon Brodkin in Ars Technica…
The company’s court complaint says that Vermont is exceeding its authority under the federal Cable Act while also violating state law and Comcast’s constitutional rights…
Comcast’s complaint also objected to several other requirements in the permit, including “unreasonable demands” for upgrades to local public, educational, and governmental (PEG) access channels and the building of “institutional networks (“I-Nets”) to local governmental and educational entities upon request and on non-market based terms”…
Comcast often refuses to extend its network to customers outside its existing service area unless the customers pay for Comcast’s construction costs, which can be tens of thousands of dollars.
Cable companies own the residential wireline broadband market and are increasing their lead over telephone companies, at least where the major players are involved. An analysis piece by Sean Buckley in FierceTelecom breaks out the subscriber numbers for the 15 biggest Internet service providers in the U.S., ranked by total subscriber count as of 30 June 2017. It shows big cable with a 64% to 36% market share advantage and positive net subscriber growth, while big telco is stuck in reverse.… More
It’s hard times for legacy telephone companies, at least the sort that have to rely on wireline – mostly copper – systems to serve customers. The plummeting share prices of Frontier Communications, CenturyLink and Windstream have gone where no telco has gone before. According to a story by Sean Buckley in FierceTelecom, that’s the conclusion of financial analysts at Cowen…
“Shares in the wireline [incumbent/rural carrier] space (CenturyLink, Frontier, Windstream) have endured the worst three consecutive quarters in industry history, with shares plummeting an average of -20% in 4Q16, -21% in 1Q17, and -24% in 2Q17 (we note another -5% in 3Q17 thus far), mostly from Frontier and Windstream as CenturyLink shares are being supported by the Level 3 acquisition,” Cowen said in a research note…
Overall, the three companies face the industry-wide challenge of balancing strategic service growth with ongoing legacy service declines and losing market share to cable operators.
Competition and a botched takeover of Verizon wireline systems in California, Texas and Florida are pushing Frontier Communications deeper into the red, as its customers cancel service. According to an article in the Wall Street Journal, via Morningstar.com, company executives have backed away from predictions that falling subscriber revenue would soon be on the way up…
Revenue has instead declined companywide for the past year. Frontier’s 2016 loss widened to $373 million from $196 million a year earlier.
The high desert community of Phelan, in San Bernardino County, will get gigabit class fiber to the home service. The California Public Utilities Commission voted four to one yesterday to approve a $28 million grant to Race Telecommunications, which will cover 60% of the cost of building the project. The single no came from commission president Michael Picker.
Only somewhat, because ORA has a track record of sporadically opposing grants for FTTH systems from the California Advanced Services Fund (CASF). However, its objections usually second guess design or budget decisions.… More
Gigafy Phelan is an ambitious attempt to extend FTTH service to 8,400 homes in California’s high desert region, in and around the town of Phelan.… More
Update: the CPUC delayed action on the Gigafy Phelan project, and rescheduled it for consideration at its 25 May 2107 meeting.
Frontier Communication’s request to the California Public Utilities Commission to squash a potential competitor is economically rational – it has a monopoly and wants to keep it – which is why it should be rejected. Utility regulators exist to moderate monopolist impulses, not turbocharge them. If the CPUC rejects a $29 million infrastructure grant request from Race Telecommunications for its Gigafy Phelan fiber to the premise project, it will be handing over effective broadband ownership of 8,000 San Bernardino County homes to Frontier, which in turn will redline 3,000 of them because they haven’t been blessed with federal subsidies.… More
