Company / division: Verizon
Verizon-Yahoo Deal Closes (Jun 13, 2017)
Verizon Had $100bn Offer for Charter Rebuffed (Jun 1, 2017)
AT&T-Straight Path Deal Becomes Verizon-Straight Path Deal (May 11, 2017)
Verizon today announced its Q1 2017 results, and they completely explained the company’s unexpected and rapid reintroduction of unlimited wireless plans in the quarter. Before it reintroduced those plans, it was on a trajectory for by far the worst postpaid phone losses it’s ever seen, and even with the little bit of growth it saw after the launch, it still had its worst quarter ever by some margin. Tablets also shrank for the first time ever, which in turn led to the company’s first-ever postpaid net losses in a quarter. Churn was up, average revenue per account was down… this was a terrible quarter for Verizon, only salvaged partly by the unlimited launch. Q2 and the rest of the year should be quite a bit better, but it’s clear that Verizon has been suffering recently, most likely at the hands of both T-Mobile and Sprint, which has explicitly targeted it in its advertising. Outside the wireless business, things weren’t that much better – wireline revenues were fairly flat, while margins improved a little. But there’s really no growth driver in the business at the moment, as essentially every part of the business is flat or declining, though the whole thing is still highly profitable.
The FCC recently held an auction of spectrum to be freed up by broadcasters and made available for wireless services, in the 600MHz band, which is well suited to long-distance and in-building coverage. T-Mobile was the only wireless carrier among the big winners, with the two largest carriers having cleaned up in the previous auction, and a cash-constrained Sprint sitting this one out too (AT&T did win licenses worth $900 million, but T-Mobile spent $8 billion). The other big bidders were DISH, which spent nearly as much as T-Mobile ($6.2 billion), and Comcast, which recently announced its wireless service based on Verizon’s network but could eventually launch its own network. Though T-Mobile has always crowed about how much spectrum it has per customer, that was always more of a reflection of its smaller number of customers rather than a massive spectrum trove, and it lacked low-band spectrum. It has now made big strides in solving that problem, and plans to put at least some of that spectrum to work right away (though much of it will be unavailable for several years while the broadcasters go through the process of vacating it, with much of that unavailable spectrum covering the densest markets). It’s also worth noting that no phones in the US today support the 600MHz band – that support is likely to come early next year with a new Qualcomm modem, so even if T-Mobile does put a third or so of its new spectrum to work this year, it won’t do anyone any good until then. So, if you’re a US wireless customer today, none of this makes any difference for now, and it’ll only make much of a difference a year or several down the line if you’re a T-Mobile customer (or in limited cases an AT&T customer). Or as and when Comcast and DISH decide to put that spectrum to use.
Comcast Introduces Its Mobile Service (Apr 6, 2017)
Comcast today finally unveiled the wireless service it’s been working on for years off the back of a long-standing agreement to use the Verizon Wireless network as the underlying carrier. It should be a compelling offering for at least some customers, especially the premium 25% or so of its base to whom Comcast will offer preferential pricing. However, the unlimited offering caps out at 20GB per month before throttling kicks in, whereas the traditional carriers’ throttling kicks in at higher points and only in times of congestion, making Comcast’s unlimited in name only. WiFi is a major selling point from Comcast’s perspective, but I’m very skeptical that it’ll be a big part of users’ experience, given how few hotspots Comcast actually has in places where people spend time out of residential neighborhoods, and the fact that WiFi is often now slower rather than faster than LTE. Comcast is going to keep costs down by selling online and in its existing stores and marketing through existing channels, as well as keeping bad debt expense down by marketing to existing customers who pay their bills on time and offering only auto-billing on credit cards. Comcast will likely sell this service to up to 10% of its base in the next couple of years, which will be a nice boost to its revenues and profits, but will make only a tiny dent in the overall US wireless market – 10% penetration of its broadband base would be just 2.5 million customers, which is less than the number of new customers the big four carriers added last quarter alone.
EFF withdraws Verizon spyware claims – CNET (Mar 31, 2017)
This is an example of the hysteria we’re all being subjected to around the recent overturning of privacy rules regarding ISPs by the US Congress, and the dangerous places it can lead. The EFF, a consumer rights group particularly concerned with privacy, first wrote and then essentially entirely withdrew a post hyperventilating about a new app Verizon is testing on one obscure smartphone, once it gave Verizon a chance to respond and it provided an entirely reasonable response. In and of itself, this story isn’t that important, but it is symptomatic of a lot of the overblown rhetoric we’ve seen in the past week about carriers selling browser histories. The reality is that, because the new rules never actually went into effect, this week’s congressional action changed absolutely nothing from the status quo. And carriers no more have any intention of literally selling anyone’s browser history than Google or anyone else does – what they may do is use your browsing history to target advertising or their own products, just as Google, Facebook, and many other entities already do. Reasonable people can disagree on whether that’s a good thing or not, but it’s a fact of life for all of us already if we use these services. To pretend that what’s happened this week is the beginning of what EFF calls the privacy apocalypse is a total disservice to everyone involved, a form of crying wolf which is likely to make it much harder to get real attention onto real issues in the future.
It feels like we’re starting to reach something of a tipping point with pay TV providers readying stripped-down streaming versions of their services, with DISH and DirecTV/AT&T already in the market, and Comcast and now Verizon said to be prepping their own versions. It sounds like Verizon’s is going to be much like what we’ve seen so far, in other words a poor substitute for traditional pay TV and most likely something focused on a subset of mostly cable channels for a much smaller monthly fee. What I’m still far more interested in is one of these services that actually offers a more classic channel lineup including broadcast networks but uses the far lower cost of delivery to price it more aggressively. For now, these services are of limited utility for those looking to move to more modern interfaces but keep many of the channels they’re used to.
CTIA, which is the industry association that represents the largest US wireless carriers, is arguing before the FCC that it shouldn’t be subjected to new rules on sharing data it collects on its users. The carriers have argued that Google and other online service providers aren’t subject to the same rules (those companies are regulated primarily by the FTC rather than the FCC) and so for consistency’s sake the carriers should be treated the same way. This is really about a technical definition of the word “sensitive” – clearly the kind of data being talked about here is indeed enormously sensitive, but the real question is how disclosure of that data is regulated. This matters because, for example, AT&T as a fiber broadband carrier in certain parts of the country has offered a service discount for customers who consent to tracking of their web browsing history and so on, something which it argues Google does all the time without explicitly asking for users’ permission to do. What the carriers are arguing here is that it should be allowed to continue to do this kind of thing without having to ask users to opt in first. The carriers look likely to win given the current hands-off policy stance of the FCC, which means more erosion of user privacy for users, but the proper approach would be for the FTC and FCC to work together to craft a set of consistent rules that would apply to all players that get access to similar data, rather than each regulating in a vacuum.
via Ars Technica
US Charges Russian FSB Officers and Their Criminal Conspirators for Hacking Yahoo and Millions of Email Accounts (Mar 15, 2017)
The stories that broke immediately before this press conference and announcement from the US DoJ suggested only that Russian nationals were involved, but the formal announcement makes clear that these were Russian agents and not just citizen hackers. That’s a good reminder that state-sponsored attacks are among the biggest things all online service companies have to worry about in our day and age, whether the state behind the hacking is Russia, China, North Korea, or some other country. Yes, ordinary hackers will still try and occasionally succeed in breaching these systems, but state sponsorship can put massively more resourced behind a hack like this and often have more success. That, in turn, raises the bar for companies vulnerable to this kind of hacking in terms of their security defenses, but should also make users think about what information they’re entrusting to these systems.
1 million NYC homes can’t get Verizon FiOS, so the city just sued Verizon – Ars Technica (Mar 14, 2017)
This is a long-running dispute between Verizon and the city of New York over whether or not Verizon has lived up to a 2008 agreement that required it to “pass” all the households in NYC by 2014. Verizon says it has done so, because the definition of passing a building is to run fiber close enough that it could be hooked up to homes if building owners give permission, while the city is arguing that passing means actually hooking up the homes. The disconnect here is that most of New York is made up of apartment buildings where landlords and not tenants get to determine whether or not a telco or cable company can run fiber into the building to connect individual apartments. In many cases, landlords have existing exclusive agreements with another provider or simply don’t want the disruption of a new fiber build, so they resist. Verizon says it can’t be held responsible for not providing fiber in those situations and has asked the city to help persuade landlords to open up their buildings. The reality is likely somewhere in the middle – yes, Verizon has struggled to get landlords to agree to Fios installations, but it probably also hasn’t tried as hard as it might and likely also has some other buildings where it could hook up service but hasn’t. This is the flip side of the AT&T story I covered the other day – either cities don’t require any specific commitment to connect households and then there are complaints about favoring wealthier neighborhoods, or they do extract those commitments and then end up fighting over whether they’ve been met.
via Ars Technica
After escaping net neutrality probe, Verizon expands data cap exemptions – Ars Technica (Mar 11, 2017)
Given the new administration’s openness to zero rating and its stated intentions to pare back net neutrality regulations, it shouldn’t be at all surprising that Verizon is now exempting its Fios video traffic from data caps on Verizon Wireless smartphones. AT&T has used zero rating of its various TV services as a hook for customers for some time now, and although Verizon has done the same with its Go90 service, that has tiny user numbers and likely had very little impact on customer acquisition. Zero rating Fios creates a much bigger incentive – it has 4.7 million TV subscribers, of whom perhaps a third might be Verizon Wireless customers already. Video really feels like the big battleground in wireless at this point, with AT&T and Verizon now favoring their own video services, while T-Mobile uses its BingeOn program to zero rate all video. Sprint is the only provider without a meaningful equivalent at this point, and instead focuses on its overall unlimited data approach.
via Ars Technica