Cable Companies Now are ISPs First, AT&T Might Soon be a Video Provider First

Leichtman Research Group (LRG) says the largest U.S. cable TV operators now have more high speed access customers than they do video customers, according to  Bruce Leichtman, LRG president and principal analyst.

And, sometime in 2015, it is possible AT&T will have more fixed network video subscribers than high speed access or voice customers, if its acquisition of DirecTV is approved.

Those two potential facts speak volumes about the new shape of U.S. fixed network communications markets.

The largest U.S. cable TV companies now arguably are Internet service providers with substantial video and voice operations, while AT&T’s fixed networks segment might become a business driven by video entertainment, while it continues to have significant high speed access and voice operations.

In the second quarter of 2014, 17 of the largest cable and telephone providers in the United States, representing about 93 percent of customers in the whole market, acquired nearly 385,000 net additional high-speed Internet subscribers.

Significantly, the top cable companies accounted for 99 percent of the net broadband additions for the quarter, compared to the top telephone companies.

These top broadband providers now account for over 85.9 million subscribers -- with top cable companies having nearly 50.7 million broadband subscribers, and top telephone companies having over 35.2 million subscribers.

For the top cable providers (not including overbuilder WOW), the number of broadband subscribers exceeded the number of cable TV subscribers for the first time ever.

The top cable TV providers had  49,915,000 broadband subscribers at the end of the second quarter of  2014, compared to about 49,910,000 cable TV subscribers.

The top telephone companies added only about 2,000 net broadband subscribers in the second quarter of 2014. In large part, that is because Verizon and AT&T are losing digital subscriber line customers about as fast as they are adding U-verse or FiOS fiber access customers.

AT&T and Verizon added 627,000 FiOS or U-verse subscribers in the second quarter of 2014, with a net loss of 636,000 DSL subscribers,

Broadband Internet	Subscribers at End of 2Q 2014	Net Adds in 2Q 2014
Cable Companies
Comcast	21,271,000	203,000
Time Warner*	11,965,000	86,000
Charter	4,850,000	62,000
Cablevision	2,779,000	(9,000)
Suddenlink	1,103,300	200
Mediacom	987,000	3,000
WOW (WideOpenWest)**	769,600	12,900
Cable ONE	482,725	(1,443)
Other Major Private Cable Companies***	6,475,000	25,000
Total Top Cable	50,682,625	381,657
Telephone Companies
AT&T	16,448,000	(55,000)
Verizon	9,077,000	46,000
CenturyLink	6,055,000	(2,000)
Frontier^	1,900,500	27,500
Windstream	1,153,800	(16,600)
FairPoint	333,421	1,883
Cincinnati Bell	270,300	300
Total Top Telephone Companies	35,238,021	2,083
Total Broadband	85,920,646	383,740

Sources: The Companies and Leichtman Research Group, Inc.