AT&T is phasing out the U-verse TV service
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I can't think of another marketing campaign that's been quite so aggressive.
It was amusing as I didn't know att bought directtv and I keep up on tech events. I probably filed it under "dinosaurs mating" and ignored it.
I can't imagine directtv internet access being that fast and it probably suffers from a lot of latency.
I wasn't there but I'm going to assume they're pushing it hard.
They could spend a bunch of money building it and then the local cable co will just offer a lower speed, but still very useable, for less money. And almost everyone takes that deal.
Verizon Fios is struggling to get 40% of the potential subscribers to actually sign up. That means 60%+ of people are willingly using comcast or time warner over Fios.
Very few people are willing to upgrade their internet connection beyond whats needed for basic internet service.
It is profitable (Verizon is steadily making money on fiber network, unlike their copper one). Fiber optic network maintenance is just significantly cheaper as Verizon admitted multiple times.
The trick also is long term perspective. With common TV gradually dying out, more and more people switch to Internet video. Which means that owners of extensive networks won't lose business - they'll only get more. So investing in better networks is a good investment. But it's long term. And most these telco execs can't think long term anymore. Previous Verizon CEO was from the their landline division, and he invested in fiber all the way. But once he was replaced with wireless execs, things changed for the worse.
> Very few people are willing to upgrade their internet connection beyond whats needed for basic internet service.
If someone offered those people something comparable to Google Fiber, they would switch. Verizon can do it. They just don't want to.
I see it exactly the opposite. Fios was built with the assumption that you can not only sell internet, but also TV service for another 30-60 dollars of revenue.
With tv service going over the internet, the ISPs are going to have a hell of a time getting that much revenue back. They can try and charge for usage (like comcast) but it's going to hard. This is why Verizon fought like hell to avoid net neutrality. They wanted options for trying to skim off the top of tv service.
So Fios might be making modest profits now, it probably won't be in 5-10 years.
Even if it won't be that much, with pure Internet they'll make enough profit, since Internet usage will only grow. And you don't need caps for it. Some resort to caps simply to rip people off, it has nothing to do with recovering expenses. Also, gutting TV they'll avoid paying retransmission fees and such.
> So Fios might be making modest profits now, it probably won't be in 5-10 years.
I expect the opposite.
TV brings in way more revenue than the content costs. If you look at a cable co like charter, which doesn't have its own content arm, they'd be deeply in the red if they got rid of TV revenues even accounting for the decrease in programming expenses.
It does, but it doesn't mean that Internet service alone can't be profitable. One has to improve the network however. No one likes overpriced and capped low bandwidth connection.
People don't want wired Internet without TV, or at least not enough to pay very much for it. People in the HN bubble don't really get that. I live in a building where I've got a rock-solid 50/20 FiOS connection with amazing pings that never goes down. But in Baltimore Verizon doesn't have a cable license, so it's just Internet (which is fine, because I'm a cord-cutter).
I also have the option of Comcast, which struggles with Netflix during prime-time, for twice as much money. When I first got FiOS installed, the installer was surprised to find out that the ONT on my floor wasn't even configured, because none of the ~50 units on that floor had ever subscribed to FiOS. Everyone subscribes to Comcast, because they want TV.
Why not if they can get video through that very network? When video services will go through the network, to get to them people will need access to the network first. Which means network owners won't lose any business.
> Everyone subscribes to Comcast, because they want TV.
FiOS isn't the best example since they actually don't try to compete much on the network side of things despite using good technology. Where is their gigabit for affordable prices? Where is their IPv6? Even Comcast already has the later. They simply don't put any priority on it as I said. Their mind is busy with wireless toys.
> Nobody in the industry operating at scale is showing that in their economics.
It will come out with time. With regular TV drying up and moving all to the Internet.
The telcos are in a managed descent on all of the wiring that could easily deliver Internet. It is too fucking expensive to maintain. So the telcos are instead focusing on acquiring spectrum and hoping to deliver broadband over wireless.
But companies like Google, MSFT & others are interfering with all of the spectrum moves of the carriers because they are (reasonably) concerned about WIFI interference that affects their product strategies.
So how will this play out? Carriers will need the spectrum to deliver the Internet people want, but non-carriers are going to fight to prevent them from acquiring that spectrum.
I think we have a problem where the conflict over spectrum peaks specifically because of the rotting copper plant. It is a very slowly percolating crisis.
On the spectrum issue, I suspect we'll see some old users kicked out for wasting space that could enable economical growth in the billions (and indeed net states billions directly, through auctions).
They instead handed out wireless gsm devices that could be plugged into your household phone lines and supply "land line" service. This of course (since GSM is lossy), meant fax machines and many other land line data devices stopped working. ATT didn't care.
[1] http://money.cnn.com/2013/07/22/technology/verizon-wireless-...
When you see the telephone wires on the polls, those are big bundles of pairs that terminate in your neighborhood and your CO. Generally, there are more pairs delivered to your neighborhood than are needed. This is because a short can be difficult to access, so it is helpful to have excess capacity to simply switch the connection for a home to a different pair.
But the years of declining land line use and revenues have resulted in cutbacks of folks who do cable repair.
When the phone was the only network we had and when long distance calls had electrons flowing directly over thousands of miles of a dedicated circuit, you could justify the cost of repair. But without that, all you have is "switch to a new pair. Hopefully one exists. Move on as quickly as possible to the next customer."
It isn't a line of bs. Keep in mind that those phone wires you are looking at are not one super long run of pairs from C.O. to the neighborhood. It's many, many splaced together segments, with varying cable swaps between the c.o. and the destination that can be hard to undo. The historical availability of the network leads people to take its existence for granted.
The last time I made the kind of long distance calls that funded these network was over 15 years ago.
It is indeed a problem. I don't know how closely ATT is still connected with the government, but I know they (ATT) didn't pay to run copper all over America and now that it has rotted, something needs to be done.
Wireless is not an option and even if you can get decent burst speeds, the random lag and jitter makes it a no go for anything critical or business related.
I live on the backside of what used to be a small town (< 15k population). Now at a population of 40k+. No joke, there have been several housing additions built behind us in the last 5 years with a combined value of over $500,000,000. There is fiber and cabling running up and down our street to supply TWC and Uverse to these new additions. Yet the only thing our street got from it was ATT upgraded the DSLAM so now we can get 6mbs uverse dsl (I'm at 6k feet) instead of the old 3mbs adsl.
That used to be fine, but as I get more and more connected devices, and work strictly from home, 6mbs isn't cutting it. Right now I am looking at getting a second 6mbs connection and load balancing on my router, but ATT tells me I can't have more than one modem per address.
I was one of them. I cancelled my U-verse TV service a few months ago. They did all they could to lose my business. I had a price quote in writing and they refused to honor it. I've dealt with some bad companies in the past, including several pre-reform credit card companies, but I've never encountered one that was so in-your-face about it. Even when I called to cancel, when they tried to keep me as a customer, they weren't willing to say "Yeah, we quoted you a price in writing, so we'll refund the overcharge."
> "To realize the many benefits of our DirecTV acquisition, we are leading our video marketing approach with DirecTV," said Brad Burns, an AT&T spokesman. "However, our first priority is to listen to our customers and meet their needs, and if we determine a customer will be better served with the U-verse product, we offer attractive and compelling options."
What really surprised me, though, was that DirecTV was actually growing. I thought there was a trend towards watching TV shows via the internet and away from traditional cable/satellite.
DirecTV is probably largely cannibalizing other traditional cable/satellite (AT&T has been very heavily promoting it and offering big incentives since they purchased it); there's nothing inconsistent between DirecTV growing while the overall cable/satellite market is shrinking.
Plus I bet the future of satellite TV is "satellite" over the internet. I had DirectTV's NFL sunday ticket this past season.
SlingTV is already doing it. IF I were DirectTV I'd get into that game yesterday.
No, we haven't been told it's inevitable, as it is highly evitable with tracking and controlled descent. Eventually we'll be able to shoot down space junk with frickin laser beams ("ablate" it) and it will be a complete nonissue.
They're throwing away a ton of potential here. Satellite TV, in its current form, is not the answer.
We pay for U-Verse TV, but solely as an account login for online streaming services. I haven't turned on the DVR in over 6 months.
Verizon installs FIOS (fiber to the house) and rips out your copper network. ATT runs fiber to the pole and leaves your copper network.
If ATT can't make it with the copper as the last step, I wonder if Verizon will continue to invest in fiber?
Given some of the deals they're offering, I see why. I live in a FiOS area and was eager to get it... until I realized that RCN offered 330 Mbs down for substantially less: http://www.rcn.com/330. FiOS is symmetrical, which is nice, but RCN is about $50 per month cheaper compared to FiOS, and upload speeds are not of critical importance to me. FiOS also has lower latency, but, again, the price delta is large.
My impression is also that Verizon makes money off FiOS, just not as much as it would like, but some searching hasn't brought up any good data on it.
That's not true. FiOS is actually pretty profitable for them (this data is public). It's pretty much the only thing that is profitable there. Their copper networks are not proftiable. The reason they don't want to invest in it is the conflict of interests and shortsighted stupidity of their current top management. They want to spend money on wireless, from which they expect to get more profit margins short term. Investing in landline networks is a longer term investment and they simply can't think in such categories anymore.
I don't even understand your point about long-term investment. The future of computing is mobile, and wired networks are the real long-term investment?
I can look it up.
> The future of computing is mobile
Landline networks aren't going anywhere, and yes - their usage will only grow. When wireless networks will compare to them in capability, pricing and etc. you can say that they are a replacement. So far there is no indication that it will ever happen.
The capability that people want is mobility, which wireline does not offer them. That's why people pay $150 cell phone bills but would balk at paying a $150 wired internet bill. Verizon and AT&T diverting capital investment to wireless is literally just giving customers what they want.
Only in part. Since they at the same time neglect their landline services which a lot of customers want as well (especially those who are stuck on DSL and etc.). As I said, it's a simple conflict of interests. They can make money on both, but wireless brings them more fast profit, so they neglect landline altogether.
Wireline’s revenues decreased $0.2 billion, or 2.3%, and $0.6 billion, or 2.2%, respectively, during the three and nine months ended September 30, 2015, compared to the similar periods in 2014, primarily as a result of declines in Global Enterprise, partially offset by __higher Mass Markets revenues driven by fios services__.
Mass Markets revenues increased $0.1 billion, or 1.8%, and $0.4 billion, or 2.6%, respectively, during the three and nine months ended September 30, 2015, compared to the similar periods in 2014, __primarily due to the expansion of fios services__ (voice, internet and video), including our fios Quantum offerings, as well as changes in our pricing strategies, partially offset by the continued decline of local exchange revenues.
http://verizon.api.edgar-online.com/EFX_dll/EdgarPro.dll?Fet...
FiOS is profitable.
[1] This is not a proper ROIC calculation, but close enough.
To bring a counter example to shortsighted approach - Google Fiber are actively building their network out, and they don't plan to make it unprofitable. But their plans are long term, complete opposite of what Verizon are doing. Or rather similar to what Verizon were doing before McAdam became CEO and stopped FiOS expansion.