U.S. Consumers Do Not Like Their ISPs. Price is Not the Issue

With the caveat that progress in terms of speed is improving very rapidly in the U.S. market, when adjusting for purchasing power parity, internet access in developed countries is not expensive. In this study of 2010 prices, developed country internet access costs were among the lowest in the world.

source: Researchgate

In 2016, that still was the case. Of a sampling of developed nations, adjusting for purchasing power, U.S. prices were among the lowest of the highlighted countries. But some studies show speeds and costs vary widely by city.

source: CTA

Still, for reasons I cannot explain (others might cite slow speeds, high prices, poor customer services, reliability) internet service providers consistently rank at the bottom of industries for customer satisfaction.

That did not change in 2018, apparently. ISPs as an industry “remain at the bottom of the ACSI rankings, unchanged at a score of 62” out of a possible score of 100.  

source: ACSI

Mediacom improved satisfaction most in 2018, with consumer satisfaction scores up six percent, in an industry whose scores were unchanged in 2018, compared to 2017. That is partly a reflection of its status as the ISP with the worse satisfaction scores in the ISP category.

DirecTV Defections Will Slow, as Customer Satisfaction is Rising

Even if satellite linear video subscriptions are declining faster than fixed network services, overall, satisfaction with one of the services--AT&T’s DirecTV--had consumer satisfaction scores that rose more than linear video service provided by any other service providers in the U.S. market over the last year.

AT&T’s satellite TV service, DirecTV, gained three percentage points to an ACSI score of 66, compared to an industry score of 62 on the American Customer Satisfaction Index. As likely has been the case for fixed network voice service customers, unhappy customers are deserting, but that also highlights that the remaining customers are more satisfied with their purchases than the departing customers.

source: ACSI

Over the past two years, 1.4 million DirecTV customers have defected and only the most loyal customers remain, ACSI says.

Among other linear video subscription TV providers, Verizon’s Fios takes second place, unchanged at 68, followed by Dish Network at 67. Altice’s Optimum service dropped two points to 61, falling behind both the industry average and the combined score of smaller providers (62).

Charter’s Spectrum is among the few gainers in the industry, up two points to 59. But Cox Communications dropped two percent.

Frontier Communications also improved its satisfaction scores two percent points,  to match Comcast’s Xfinity at 57. Altice’s Suddenlink fell five percent.

Customer satisfaction with subscription television service peaked in 2013 at a score of 68 on the American Customer Satisfaction Index’s 100-point scale.

The industry is now stagnant at an ACSI score of 62, tied with internet service providers for last place among all industries tracked by the ACSI, the organization says.

Fixed Network Internet Access is Among the Coming Battlefields

It is fair to say there remains much skepticism about the ability of 5G providers to take fixed network internet access market share. But count AT&T among those who believe this will be a material development.

“I do think, three to five years out, there is a crossover point where 5G passses home broadband, and 5G has better performance than fiber,” Randall Stephenson, AT&T CEO, has said.

Stephenson believes AT&T will have a truly nationwide “fiber speed” network, using either 5G or fiber, across the entire United States.

That would be historically unprecedented. The old monopoly AT&T had a nearly-ubiquitous copper network. But in the post-divestiture market, no tier-one service provider has been able to sell broadband to “nearly every U.S. household” at speeds representing optical fiber performance.

With AT&T, Verizon and also T-Mobile US all planning 5G fixed wireless efforts, the potential for disruption exists. It already appears that some optimistic forecasts of cable TV market share already are falling short, with telcos--especially AT&T and Verizon, already gaining share again.

The telco erosion is not completely over. But equilibrium is approaching. Fixed wireless could be quite destabilizing, in that regard.

It often is quite hard to envision fundamental changes in the connectivity business. Few of us really understood what it would mean when the internet emerged.

Few might have really understood what it meant to adopt internet protocol as the next-generation network of choice, and not the proposed asynchronous transfer mode (ATM) alternative.

Nor, prior to mobility’s transformative adoption globally, would most of us have imagined that mobile networks would succeed where all prior attempts to provide communications to everyone globally could actually be accomplished.

In perhaps similar ways, it is hard to imagine any future time when Wi-Fi is not the choice for local area network connectivity, or when fixed networks are not the best choice for high-bandwidth communications.

source: ITU

But it also is clear that mobile revenue growth is slowing. It is fair enough to note that big revenue growth slowdowns can lead to huge shifts of business strategy, as mobility once shifted global service provider attention from fixed to mobile services, and from long distance revenues to mobile subscriptions.

Likewise, fixed network revenue opportunities also shifted from subscriptions for voice to internet access.

source: STL Partners

The traditional response always has been to try and take market share away from other providers. That accounts for cable TV operator attacks on business connectivity market share, and the earlier entry into voice services.

“Taking market share” also accounts for telco movement into entertainment video distribution and content asset ownership.

Among the new battlegrounds is internet access, for consumers and businesses, which could see a shift of share from fixed to mobile providers.

Cell Phones, Cell Towers and Human Safety

Are cell phones and cell towers “safe?” Yes, but It is a question that seems to recur. The issue is non-ionizing radiation, electromagnetic energy in the radio regions used by AM and FM radio, TV broadcasts, generated around power lines, Wi-Fi, cable TV, which uses radio waves in the copper portions of plant, and cell phones.

Non-ionizing radiation differs from ionizing radiation in the way it acts on materials like air, water, and living tissue, according to the Centers for Disease Control.

“Unlike x-rays and other forms of ionizing radiation, non-ionizing radiation does not have enough energy to remove electrons from atoms and molecules,” CDC says. Non-ionizing radiation can heat substances, as does a microwave oven.

The issue is whether the levels of non-ionizing radiation people encounter using communication devices (TVs, phones, radios) is a cause for concern.

source: Wikipedia

The answer is rather simple: “To date, no adverse health effects have been established as being caused by mobile phone use,” says the World Health Organization. That might be worth reiterating, in light of concern in some quarters about whether 5G is “safe.” Keep in mind that power levels for cell phones and even cell towers are low.

Consider that a cell tower radio emits energy 100 to 5,000 times lower than a TV transmitter, for example. Some liken the power level to that of a light bulb.

Still, if you really are concerned about the possible health effects of using mobile phones, use them less. Text instead of holding the phone against your head and talking.

Radio signals weaken (attenuate) logarithmically, by powers of 10, so the power levels decay quite rapidly.

Basically, doubling the distance of a receiver from a transmitter means that the strength of the signal at that new location is 50 percent  of its previous value. Just three meters from the antenna, a cell tower radio’s power density has dropped by an order of magnitude (10 times).

At 10 meters--perhaps to the base of the tower, power density is down two orders of magnitude. At 500 meters, a distance a human is using the signals, power density has dropped six orders of magnitude.

source: Professor Girish Kumar

Using the internet on a smartphone, for example, puts the device a much-safer distance away from one’s head, in case your worry is possible health effects to the brain, as the phone is both a transmitter and a receiver.

Keep in mind that the phone is a low-energy transmitter. So power levels drop sharply with distance, even the distance of your arm, as is the case even for cell tower radios.

Workers who climb cell towers, radio or TV transmission towers do have to take precautions against the high power levels emitted by such radios, as do other workers in close proximity  to transmitters.

Physical objects also affect signal decay. Even for the low and middle-frequency radio signals used by cell phones, an office wall can reduce signals by 75 percent. A concrete wall can reduce signals by 94 percent. So physical barriers matter.

To be sure, it might always be difficult, if not impossible, to determine long-term effects, as the sources of low level non-ionizing radiation occur naturally, from the sun, as well as from use of consumer devices. There simply is no way to conduct controlled experiments.

It might be good advice to recall that all technology use carries some risk, and that there always are ways to reduce risk, to obtain benefits.

80% of Results from 20% of Actions: Happens all the Time

It really is surprising how often a Pareto distribution--the “80/20 rule--appears in business life, or in life, generally. Basically, the theorem states that 80 percent of results come from 20 percent of the actions.

As one example, 80 percent of sales come from 20 percent of clients, or 80 percent of wealth is owned by 20 percent of the people.

source: Steemit

Pareto distributions seem to occur widely in the natural world.

In customer service — 80 percent of your problems are going to come from 20 percent of your customers, and 80 percent of your profits are going to come from 20 percent of your customers

In management — 80 percent of your value is going to be created by 20 percent of your employees, and 80 percent of your problems are going to come from 20 percent of your employees (not necessarily the same 20 percent

In computer science — fixing 20 percent of your most common bugs will fix 80 percent of your errors and crashes

In mobile gaming — 80 percent of your in-game purchases are going to be made by 20 percent of your users

In website management — 80 percent of your traffic is going to come during 20 percent of your uptime,
and 80 percent of your traffic will route to 20 percent of your page

In construction — 80 percent of your injuries are going to come from 20 percent of your hazards

In sports — 80 percent of your wins are going to come from 20 percent of your competitors
or teams

In weight loss and muscle gain, 80 percent of your results are going to come from 20 percent of
your exercises

In user experience — 20 percent of the features of your product or service will be used by users
80 percent of the time

This analysis of the economics of automated vehicles for taxi service, versus conventional driven vehicles, also illustrates the Pareto distribution. Well over 80 percent of the impact comes from less than 20 percent of the vehicles in the fleet.

source: Ashley Nunes, Kristen Hernandez

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The 80/20 Rule (Pareto Distribution) is Found Everywhere in Business

U.S. Fixed Network Internet Access Business Reaching Equilibrium?

The U.S. fixed network internet access business seems to be reaching an equilibrium state, as telco share losses are slowing dramatically.

At the end of the first quarter of  2019, cable TV operators had a 66 percent market share; telcos 34 percent. At the end of the first quarter of 2017, cable share was 63 percent; telco share 37 percent.

Significantly, most of the losses have been at CenturyLink, Frontier and Windstream, not AT&T and Verizon, which have in recent years held their own, not gaining much share but, importantly, not losing share, either.

But losses at CenturyLink, Frontier and Windstream have moderated.

Broadband Providers	Subscribers at end of 1Q 2019	Net Adds in 1Q 2019
Cable Companies
Comcast	27,597,000	375,000
Charter	25,687,000	428,000
Cox*	5,100,000	40,000
Altice	4,155,000	36,900
Mediacom	1,288,000	24,000
WOW (WideOpenWest)	765,900	6,300
Cable ONE	678,385	15,311
Total Top Cable	65,271,285	925,511
Phone Companies
AT&T	15,737,000	36,000
Verizon	6,973,000	12,000
CenturyLink^	4,806,000	(6,000)
Frontier	3,697,000	(38,000)
Windstream	1,032,400	11,400
Consolidated	780,720	1,750
Cincinnati Bell^^	426,700	1,100
Total Top Telco	33,452,820	18,250
Total Top Broadband	98,724,105	943,761

source: Leichtman Research

So the big issue now is whether 5G, mobile or fixed, will disrupt the market equilibrium. And, if so, when that could happen.

“I do think, three to five years out, there is a crossover point where 5G passses home broadband, and 5G has better performance than fiber,” Randall Stephenson, AT&T CEO, has said.

Some will remain skeptical, but Stephenson believes AT&T will have a truly nationwide “fiber speed” network, using either 5G or fiber, across the entire United States.

That would be historically unprecedented. The old monopoly AT&T had a nearly-ubiquitous copper network. But in the post-divestiture market, no tier-one service provider has been able to sell broadband to “nearly every U.S. household” at speeds representing optical fiber performance.

With AT&T, Verizon and also T-Mobile US all planning 5G fixed wireless efforts, the potential for disruption exists. It already appears that some optimistic forecasts of cable TV market share already are falling short. The telco erosion is not completely over. But equilibrium is approaching. Fixed wireless could be quite destabilizing, in that regard.