Here’s What is Troubling Cable Companies
The age of unlimited data couldn’t last forever, not even for residential connections. Comcast (NASDAQ:CMCSA) is introducing broadband plans with monthly data thresholds between 300GB and 600GB. After a three-strike grace period, customers will be fined $10 for every additional 50GB they use. Comcast is rolling this model out in Tucson, Arizona, after having launched a similar plan in Nashville, Tennessee. Some customers are unhappy about the data caps. Comcast also hit a 52-week high on September 21.
Verizon (NYSE:VZ) Fios CFO Fran Shammo said the company would not reach its 150,000 to 170,000 subscriber growth target in the third quarter. “We probably pulled back a little too much on promotion,” he said at a Goldman Sachs investor conference. Verizon is expected to meet its subscriber growth target in the fourth quarter. Verizon Fios has resisted the data cap schemes being implemented by other companies like Comcast, Time Warner Cable (NYSE:TWC) and AT&T (NYSE:T).
AT&T is still trying to figure out what to do with millions of DSL users who haven’t upgraded to cable. AT&T lawyers and lobbyists are arguing in favor of abandoning the no longer valuable assets, but the company’s solution may be closer to Verizon’s answer to a similar problem: shut down as much as they can get away with, and hope new services like LTE fill in the gaps in rural areas. AT&T is unable to flee from coverage obligations because of commitments involved with taking government subsidies.
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