T-Mobile won the lion’s share of spectrum licenses in the latest Federal Communications Commission auction, helping it fill rural network gaps that evoked comparisons to Swiss cheese. T-Mobile’s winning bids totaled $304.3 million, letting it obtain 7,156 licenses out of 7,872 that were sold, the FCC announced yesterday.

T-Mobile’s licenses are spread across 2,724 counties (out of 3,143 total in the US). The second-highest bidder in dollar terms was PTI Pacifica, which spent $17.7 million on nine licenses in five counties. “With most of the available spectrum in the 2.5 GHz band located in rural areas, this auction provides vital spectrum resources to support wireless services in rural communities,” the FCC said.

The auction provided up to three blocks of spectrum, totaling 117.5MHz in each county. In terms of the number of licenses won, the second-place finisher was the North American Catholic Educational Programming Fund. Its winning bids totaled $7.8 million and cover 107 licenses in 84 counties.

There were 63 winning bidders overall, and the auction raised $427.8 million. Small entities and rural service providers were given discounts on the license costs. The 2.5 GHz spectrum was originally set aside for educational institutions but has been repurposed for commercial service.

T-Mobile network already big on 2.5 GHz

Mid-band spectrum such as 2.5 GHz has been good for boosting capacity and speeds over relatively large areas. While low-band spectrum is best at covering long distances and penetrating obstacles, there’s more spectrum available in the middle and upper bands. At the highest extreme, millimeter-wave spectrum provides the fastest speeds but has the smallest coverage areas.

T-Mobile already makes heavy use of 2.5 GHz spectrum in its 5G network. AT&T and Verizon use mid-band spectrum in the 3.7 GHz to 3.98 GHz range, which they’ve deployed more slowly than planned because airlines haven’t yet retrofitted or replaced all of the older airplane altimeters that can’t filter out transmissions from outside their allotted frequencies.

The new 2.5 GHz licenses are “flexible‐use geographic overlay licenses,” which means there are restrictions on use to protect carriers already operating in the spectrum. “With overlay licenses, licensees obtain the rights to geographic area licenses ‘overlaid’ on top of the existing incumbent licenses. As with an ordinary flexible-use license, the overlay licensee may operate anywhere within its geographic area, subject to protecting the licensed areas of incumbent licensees,” the FCC explains.

But that won’t present a problem for T-Mobile. As FierceWireless wrote in March after the FCC set the auction rules, the auction is “for ‘white spaces’ of the 2.5 GHz band where no one owns the spectrum. T-Mobile is particularly interested in Auction 108 because it already owns or leases much of the 2.5 GHz spectrum across the United States, and it wants to fill in the gaps in its coverage.”

T-Mobile to fix “Swiss cheese” network problem

2.5 GHz licenses were first distributed to educational institutions in the 1980s in “35-mile-radius circles” that “left oddly shaped white spaces where no one owns the spectrum,” FierceWireless explained. T-Mobile already had leases with schools around the country to use the licenses.

“T-Mobile is likely to be the major winner, as the auction will allow the company to fix the ‘Swiss cheese’ problem its 2.5 GHz network grid is known to suffer from,” New Street Research policy analyst Blair Levin wrote at the time.

Before the auction, AT&T and Verizon requested more information on the lease agreements to help them decide whether to bid. The FCC denied the request, saying that “adoption of proponents’ expanded disclosure requirement is beyond the bounds of the existing spectrum leasing rules and the Commission’s prior determinations supporting those disclosure requirements.”

AT&T didn’t buy any licenses in the auction. Verizon, listed under its “Cellco Partnership” name in the auction results, won 12 licenses in nine counties for $1.5 million.

https://arstechnica.com/?p=1877999

The two largest home Internet providers in the US both lost subscribers in the second quarter of 2022.

On Friday, Charter Communications reported a loss of 42,000 residential Internet customers, leaving it with 28,259,000 households buying Spectrum Internet service. Charter also gained 21,000 small and medium business (SMB) customers, bringing it up to 1,994,000 in that category.

Charter is the second biggest Internet provider after Comcast. Last week, Comcast reported a loss of 10,000 residential broadband customers, leaving it with 29,826,000 Internet-subscribing households. Comcast also gained 10,000 business broadband customers, giving it 2,337,000 business subscribers.

The subscriber losses are unusual. For Comcast, it was the first quarter ever in which it failed to gain broadband subscribers.

Charter had gained over 7 million home Internet customers since its 2016 purchase of Time Warner Cable turned it into the second biggest cable company with 20.7 million residential Internet subscribers at that time. Charter added more than 1.1 million home Internet customers in 2021 and another 164,000 in the first quarter of 2022.

Charter blames end of COVID subsidy program

Charter’s slowdown might have started earlier if not for the COVID-related Emergency Broadband Benefit (EBB) program, which provided $50-per-month subsidies for people with low incomes and those who lost income during the pandemic. Charter said it lost 59,000 residential and SMB subscribers in Q2 as a result of that program being replaced with the Affordable Connectivity Program (ACP), which offers $30 a month and has more restrictive eligibility requirements.

“During the second quarter, we added 38,000 Internet customers when excluding an unfavorable impact related to the discontinuation of the Emergency Broadband Benefit program and additional definitional requirements of the Affordable Connectivity Program,” Charter CEO Thomas Rutledge said in a call with analysts, according to a Seeking Alpha transcript.

Charter’s second quarter revenue was $13.6 billion, up 6.2 percent year over year. Net income was $1.5 billion, up 44.2 percent over the prior year’s second quarter.

Charter COO Christopher Winfrey said the company is confident that “Internet net adds will pick up again… our recipe for broadband growth has always been about being competitive and price-competitive in the marketplace.”

Charter pins hopes on new federal funding

Like Comcast, Charter seems to be having trouble adding subscribers, because it has already signed up just about everyone who wants its service and lives in a home within Charter’s network area. Comcast and Charter don’t compete against each other despite being the two biggest cable companies.

Charter is expanding its network into some new areas using money from the federal Rural Digital Opportunity Fund (RDOF) and other grant programs. Rutledge pointed out that, in addition to the RDOF and various state grant programs that have given Charter money, the US government’s $42 billion Broadband Equity, Access, and Deployment program “coming next year… will allow for additional construction, which we hope to bid on and be successful with.”

Although Charter is the only high-speed wireline provider in many parts of its territory, company executives said competition from fiber and fixed wireless played some role in the customer loss. Fixed wireless is still “relatively small. It’s not the major component of our quarterly performance, but it is a factor,” Rutledge said.

Charter also lost 240,000 residential TV customers and 265,000 residential voice customers in Q2. Average monthly revenue from residential subscribers rose from $113.28 to $116 in the second quarter. That includes broadband, TV, and landline phone service.

One bright spot for Charter is that it added 344,000 residential and SMB mobile subscribers, giving it 4.3 million mobile lines. “Our mobile business is growing at an extremely rapid pace,” Rutledge said. Charter offers mobile service using the Verizon Wireless network.

Disclosure: The Advance/Newhouse Partnership, which owns 12.4 percent of Charter, is part of Advance Publications. Advance Publications owns Condé Nast, which owns Ars Technica.

https://arstechnica.com/?p=1870680

It’s no surprise that cable companies charge lower prices for broadband when they face competition from fiber-to-the-home services. But an article yesterday by Stop the Cap provides a good example of how dramatically promotional prices for Charter’s Spectrum Internet service can vary from one street to the next.

In this example, Charter charges $20 more per month for slower speeds on the street where it faces no serious competition. When customers in two areas purchase the same speeds, the customer on the street without competition could have to pay $40 more per month and would have their promotional rates expire after only one year instead of two.

Stop the Cap said it examined promotional offers to new customers in the metro Rochester, New York, market, “where Spectrum faces token competition from Frontier’s slow speed DSL service” and more robust competition in limited areas from Greenlight Networks’ fiber service. Greenlight fiber is available in 23 percent of Rochester, while Charter cable is available to homes throughout the city, according to BroadbandNow. Greenlight prices start at $50 per month for 500Mbps.

“Charter’s offers are address-sensitive,” Stop the Cap founder Phillip Dampier wrote. “The cable company knows its competition and almost exactly where those competitors offer service. That is why the company asks for your service address before it quotes you pricing.”

Dampier found that Charter offers 200Mbps service for $50 a month “[i]n neighborhoods where Spectrum enjoys a broadband monopoly.” Charter charges $70 for 400Mbps service in those same competition-free neighborhoods.

But “[j]ust one street away, where Greenlight offers customers the option of gigabit speed over a fiber-to-the-home network, Spectrum’s promotional prices are quite different,” Dampier wrote. On the competitive street, Charter charges only $30 a month for the same 400Mbps service that costs $70 nearby. As previously noted, customers on the noncompetitive street have to pay $50 for 200Mbps.

“Spectrum does not even bother offering new customers its entry-level 200Mbps plan in areas where it has significant fiber competition,” Dampier noted, referring to the promotional offers that pop up when you type in an address. “For $20 less per month, you get double that speed.”

For gigabit-download service, Charter charges $90 a month on the competitive street versus $110 on the noncompetitive street. These are the base prices without fees and taxes. Stop the Cap’s article included these screenshots from Charter’s promotional offers:

Longer price guarantee on competitive street

Charter also offers to lock in the monthly rate for two years in the competitive area, compared to just one year in the noncompetitive area. Prices can rise dramatically once promotional deals expire, so locking in a price for 24 instead of 12 months ensures that customers on competitive streets save even more money in the long run.

And that’s not all. Charter “charges a hefty $199.99 compulsory installation fee for gigabit service in noncompetitive neighborhoods. Where fiber competition exists, sometimes just a street away, that installation fee plummets to just $49.99,” Dampier wrote.

He added:

Note similar pricing variability exists in Spectrum service areas around the country, with the most aggressively priced offers reserved for addresses also served by a fiber-to-the-home provider or multiple competitors (e.g., cable company, phone company, Google Fiber or other [competitor]). Current customers typically have to cancel existing service and sign up as a new customer to get these prices.

Cable-company pricing varies widely, so the price difference between competitive and noncompetitive areas may be lower elsewhere. But the price differences show how valuable competition is to broadband subscribers.

Greenlight charges $50 per month for 500Mbps service, $75 for 750Mbps, $100 for 1Gbps, and $200 for 2Gbps. The company charges a $100 installation fee. It doesn’t offer promotional prices, so there isn’t a big automatic price hike after a set period like there is with many major ISPs.

Charter says it uses a “common” pricing strategy

When contacted by Ars, Charter said that “Spectrum Internet retail prices, speeds, and features are consistent in each market—regardless of the competitive environment.” But “retail prices” are the standard rates customers pay after promotional rates expire. Stop the Cap showed that Charter’s promotional rates vary between competitive and noncompetitive areas.

Charter told Ars that its promotional offers are affected by several factors, including “location.”

“Any promotional offers available to new customers are time-limited and vary based on a number of factors, such as time of year, location and programming, or device opportunities, and testing different promotional offers concurrently is common in a subscription business,” Charter said.

This isn’t the first time we’ve written about major Internet providers offering lower prices in competitive areas. In 2015, we noted that AT&T was charging $40 more per month for gigabit service in cities without Google Fiber.

Charter has over 27 million residential Internet subscribers in 41 states, making it the second-largest home-Internet provider in the US after Comcast.

Charter far behind Greenlight on upload speed

Price isn’t the only factor that a customer might consider when choosing between Greenlight and Charter. As a fiber provider, Greenlight offers far higher upload speeds than Charter’s cable network.

Charter’s upload speeds max out at 35Mbps, while Greenlight’s start at 50Mbps. Greenlight currently lists upload speeds as being 10 percent of download speeds, so the 500Mbps-download plan has 50Mbps uploads, and the 2Gbps plan has 200Mbps uploads. But Greenlight plans to make its speeds symmetrical like other fiber providers do.

“In response to the COVID-19 pandemic, we are upgrading upload speeds for orders in Serviceable Greenlight Districts at no additional charge. Your upload speed will match your download speed (500/500, 750/750, 1000/1000, 2000/2000.),” the company’s website says.

Charter’s upload speeds start at only 4Mbps. Its 200Mbps download plan comes with 10Mbps upload speeds, and the 400Mbps download plan comes with 20Mbps upload speeds. You have to buy Charter’s gigabit-download plan to get its highest upload speeds of 35Mbps, slower than Greenlight’s lowest upload rate. Despite years of promising higher upload speeds through upgrades to cable’s DOCSIS standard, Charter and other cable companies still lag far behind fiber in upload capabilities.

Disclosure: The Advance/Newhouse Partnership, which owns 13 percent of Charter, is part of Advance Publications. Advance Publications owns Condé Nast, which owns Ars Technica.

https://arstechnica.com/?p=1768175

Charter Communications employees who have been on strike since 2017 are building an Internet service provider in New York City called “People’s Choice.”

“People’s Choice Communications is an employee-owned social enterprise launched by members of IBEW Local #3 to bridge the digital divide and help our neighbors get connected to the Internet during the COVID-19 pandemic,” the ISP’s website says. “We are the workers who built a large part of New York City’s Internet infrastructure in the first place. We built out [Charter] Spectrum’s cable system, until in 2017, the company pushed us out on strike by taking away our healthcare, retirement, and other benefits. It’s now the longest strike in US history.”

So far, People’s Choice says it has completed rooftop antenna installations at two schools in the Bronx and installed “hardline connections to wireless access points connecting 121 units” at housing for survivors of domestic violence who have disabilities.

A Gizmodo article said the system is equipped to offer minimum speeds of 25Mbps downstream and 3Mbps upstream, meeting a broadband standard that has been used by the Federal Communications Commission since 2015. “We have a big portion of most of the Bronx covered with our antenna,” IBEW Local #3 steward Troy Walcott told Gizmodo. “Now we have to go building by building to let people know we’re out there and start turning them on.”

“A few dozen Spectrum strikers have been actively involved in the installations, but Walcott expects that at least one hundred workers are waiting in the wings for the project to scale up,” the Gizmodo article said.

Filling broadband gaps

People interested in bringing broadband to their building can fill out a form. “We work in affordable housing, supportive housing, co-op housing, NYCHA [NYC Housing Authority], homeless shelters, and regular old apartment complexes,” the webpage notes.

“After we build out a network in your building, it transfers to cooperative ownership, so profits are returned to users,” the People’s Choice website says. “We are able to provide high-speed service in most cases for $10-$20/month. No more cable company ripping you off, and as an owner, you have a vote in policies like data privacy.”

People’s Choice is similar to the volunteer-run NYC Mesh project that has been building a wireless network for unserved people in the city the past few years.

Charter, which sells Internet access under the Spectrum brand name, became the second-largest cable company in the US when it bought Time Warner Cable in 2016. Charter wants customers to “pay more for less service because they have no other choice,” Walcott said, according to an article in Vice’s Motherboard section.

Walcott said the Charter employees were motivated by inaction both from Charter and politicians. “Having elected officials thank us quietly for our sacrifice but not say anything about our strike publicly motivated us. Seeing customers denied service during COVID because they had outstanding bills motivated us,” he said.

Turbulent times since Charter bought TWC

About 1,800 Charter workers began their strike in March 2017. Charter hired hundreds of replacement workers and tried to decertify the union, an attempt the union has been fighting at the National Labor Relations Board.

Last year, a New York City broadband plan said that nearly a third of households in the city “do not have a broadband connection at home” and that “more than 1.5 million New Yorkers have neither a mobile connection nor a home broadband connection.” Low-income residents were more likely to lack service, and areas with higher incomes benefited from more home-Internet competition.

In July 2018, the New York State Public Service Commission voted to revoke its approval of Charter’s purchase of Time Warner Cable, saying the company repeatedly failed to meet deadlines for broadband expansions that were required in exchange for merger approval. The commission ordered Charter to sell the former Time Warner Cable system in New York, but Charter avoided that fate by agreeing to more broadband deployment and a $12 million payment to be used by the state for expanding broadband to unserved and underserved homes.

Disclosure: The Advance/Newhouse Partnership, which owns 13 percent of Charter, is part of Advance Publications. Advance Publications owns Condé Nast, which owns Ars Technica.

https://arstechnica.com/?p=1757204

Charter Communications has withdrawn a petition seeking government permission to impose data caps on broadband users this year.

Unlike other ISPs, Charter is subject to the prohibition on data caps and overage fees until May 2023 because of seven-year conditions applied to its 2016 purchase of Time Warner Cable. In June 2020, Charter petitioned the Federal Communications Commission to let the condition expire two years early, on May 18, 2021.

FCC Chairman Ajit Pai sought public comment on the petition but never took final action, even though he had opposed the merger conditions when they were imposed by the Obama-era FCC. With Pai leaving the FCC upon President-elect Joe Biden’s inauguration tomorrow, Charter submitted a brief filing stating that it “respectfully withdraws its petition.”

“VICTORY”

“Hey hey! Charter just withdrew its despicable petition to start implementing data caps in the middle of a pandemic! That right there is what we call a VICTORY,” tweeted Dana Floberg, policy manager for consumer-advocacy group Free Press. The group previously urged the FCC to reject the petition, writing:

The COVID-19 pandemic has made it abundantly clear that unlimited home broadband connections are a necessary utility service. The evidence from April through June, when most ISPs suspended their caps, demonstrates that ISP data caps and overage fees are completely unnecessary abuses of market power. All networks performed well while their operators continued to earn high profit margins, as usage skyrocketed.

Charter is the second-biggest home-Internet provider in the US after Comcast and sells broadband service under the Spectrum brand name.

FCC switching to Democratic control

Charter’s latest FCC filing didn’t say why it withdrew the petition, but its request would have faced longer odds in the Biden administration with Democrats controlling the FCC. Pai’s departure will leave the FCC with a 2-2 split between Republicans and Democrats until a new commissioner is nominated by Biden and approved by the Senate. In the meantime, Biden is expected to promote one of the two current Democrats—Jessica Rosenworcel or Geoffrey Starks—to the chair position on at least an interim basis.

Besides banning data caps, the FCC-imposed merger conditions also prohibited Charter from charging large online video streaming services for network interconnection. The conditions were imposed under then-FCC Chairman Tom Wheeler to prevent Charter from using its enhanced market power against online video providers that offer service over Charter’s broadband network.

But the free-interconnection requirement was nullified by the US Court of Appeals for the District of Columbia Circuit in August. The Pai-led FCC did not defend the merits of the merger condition in court, paving the way for that ruling. The ruling did not affect the data-cap ban.

Despite imposing the conditions for seven years, the Wheeler FCC’s 2016 merger order said Charter could petition for the conditions to be lifted after five years.

Charter claimed users like plans with data caps

After filing its petition to the FCC last year, Charter said it had no intention of imposing data caps. “Once the conditions expire, Charter will weigh the options as we would any business decision but is currently not even considering implementing data caps or charging for interconnection and has no plan to do so,” the company told Ars at the time. “What Charter seeks is a level playing field so that we can continue to grow and provide superior service to our customers across the country.”

But as the proceeding moved on, Charter claimed in an FCC filing that broadband users enjoy having Internet plans with data caps. “[T]he marketplace currently shows that broadband service plans incorporating data caps or other usage-based pricing mechanisms are often popular when the limits are sufficiently high to satisfy the vast majority of users,” Charter told the FCC, months before withdrawing the petition.

When asked why it withdrew the petition today, a Charter spokesperson noted that the merger conditions have already been partially overturned in court. Charter also told Ars it wants to assure customers that their unlimited data is not going away:

In light of the ongoing severity of the global pandemic and its effects on our customers, we want to offer them the assurance that they will continue to benefit from unlimited access to broadband and the accompanying financial certainty it provides during these trying times, and therefore have withdrawn our petition.

Charter has not taken advantage of the court ruling to impose interconnection fees. “We have no plans at this time to charge interconnection fees,” the Charter spokesperson told Ars.

The FCC today issued a public notice acknowledging Charter’s withdrawal of the petition. “Pursuant to the terms of the Order approving the merger, all conditions that remain in effect will expire on May 18, 2023, seven years from the Closing Date of the transaction,” the FCC said.

Disclosure: The Advance/Newhouse Partnership, which owns 13 percent of Charter, is part of Advance Publications. Advance Publications owns Condé Nast, which owns Ars Technica.

https://arstechnica.com/?p=1736113

T-Mobile US CEO Mike Sievert yesterday fired back at AT&T and Verizon, saying the carriers’ complaints about T-Mobile obtaining more spectrum licenses show that they are afraid of competition.

“The duopolists are scrambling to block this new competition any way they can… Suddenly in the unfamiliar position of not having a dominant stranglehold on the wireless market, and preferring not to meet the competitive challenge in the marketplace, AT&T and Verizon are urging the FCC to slow T-Mobile down and choke off our ability to compete fairly for added radio spectrum,” Sievert wrote in a blog post.

As we wrote Monday, Verizon and AT&T have urged the Federal Communications Commission to impose limits on T-Mobile’s ability to obtain more spectrum licenses. AT&T complained that T-Mobile’s acquisition of Sprint allowed it to amass “an unprecedented concentration of spectrum.”

Verizon in August petitioned the FCC to reconsider its acceptance of a new lease that would give T-Mobile another 10MHz to 30MHz of spectrum in the 600MHz band in 204 counties. But “the main event,” according to Sievert, is the FCC’s upcoming C-band spectrum auction in December, which will distribute 280MHz of spectrum in the 3.7–3.98GHz band.

“Anticipated to raise many billions of dollars for American taxpayers, the C-band is the largest pool of new spectrum expected any time in the near future,” Sievert wrote. “The results of the auction will shape market competition and network advancement in the US for years to come.”

Verizon told the FCC that “T-Mobile already holds licenses for 311MHz of low- and mid-band spectrum nationwide,” more than AT&T and Verizon combined and well above the FCC’s 250MHz “spectrum screen.” The FCC uses this spectrum screen as one data point in its public-interest analyses, but the 250MHz screen isn’t a hard-and-fast limit, and T-Mobile says it should be allowed to purchase more spectrum licenses.

Sievert pointed out that Verizon has more spectrum than T-Mobile when including high-band spectrum that isn’t counted in the FCC’s screen:

Citing the “spectrum screen”, AT&T and Verizon would like to keep T-Mobile out of the bidding or at least put a damper on our ability to aggressively bid against them in this important auction, so that they can run the table unchecked. The “spectrum screen” was put in place years ago with good intention and broad support including from T-Mobile—to help ensure competition in the market when spectrum supply was limited—but is now being cited by AT&T and Verizon for reasons entirely opposite to this intention. And importantly, the “spectrum screen” pre-dates, and therefore ignores, certain 5G spectrum where Verizon already dominates. In fact, Verizon holds massive spectrum (far more than T-Mobile’s entire portfolio of low, mid-, and high-band spectrum) in the “millimeter wave” bands, which are the cornerstone of their 5G strategy and which are not subject to the “spectrum screen”.

Verizon has the most spectrum of any US carrier “by far” but “has the anti-competitive instincts and sheer audacity to complain that a much smaller T-Mobile has too much,” Sievert wrote. “After holding massive spectrum advantages over T-Mobile and others for decades, Verizon and AT&T just can’t stand the idea of anyone else being ahead of them or having a fair shot in an auction where they plan to use their financial might to do what they have always done—dominate.”

Sievert also wrote that the 600MHz spectrum T-Mobile is leasing was previously controlled by AT&T. “AT&T had won at auction the spectrum that Columbia Capital is now leasing to T-Mobile and—guess what—AT&T decided it didn’t want it and sold it to Columbia,” Sievert wrote. “Verizon, the ringleader in opposing this lease, never bothered to even show up and bid for any 600MHz spectrum. In short, we have AT&T and Verizon seeking to block T-Mobile from using spectrum that AT&T decided to jettison, and Verizon had no interest in pursuing. Now both companies are seeking to block T-Mobile from putting this spectrum to use for the benefit of American consumers.”

Fight to continue ahead of auction

The dueling statements suggest that the carrier battle will continue in the months ahead as the C-band auction draws near. “If T-Mobile participates in the auction, the Commission will almost certainly be forced to contend—for the first time—with the situation of applying its spectrum screen (and post-auction case-by-case review) to an acquisition of licenses by an applicant whose holdings already exceed the screen by a wide margin,” AT&T said in its FCC filing last week.

The spectrum screen is likely to be raised from 250Mhz to 345MHz after the auction to account for increased availability of licenses, AT&T said. T-Mobile already has more than 345MHz in some parts of the US, and there are “many other” US markets where T-Mobile would exceed 345MHz if it wins any spectrum in the auction, AT&T said.

The auction is scheduled to begin on December 8, and preliminary “short-form” applications were due yesterday. The FCC will review the applications and then release a list of bidders.

https://arstechnica.com/?p=1709145

AT&T and Verizon are worried about T-Mobile’s vast spectrum holdings and have asked the Federal Communications Commission to impose limits on the carrier’s ability to obtain more spectrum licenses. Verizon kicked things off in August when it petitioned the FCC to reconsider its acceptance of a new lease that would give T-Mobile another 10MHz to 30MHz of spectrum in the 600MHz band in 204 counties. AT&T followed that up on Friday with a filing that supports many of the points made in Verizon’s petition.

T-Mobile was once the smallest of four national carriers and complained that it didn’t have enough low-band spectrum to match AT&T and Verizon’s superior coverage. But T-Mobile surged past Sprint in recent years and then bought the company, making T-Mobile one of three big nationwide carriers along with AT&T and Verizon. T-Mobile also bolstered its low-band spectrum holdings by dominating a 600MHz auction in 2017.

“The combination of Sprint and T-Mobile has resulted in an unprecedented concentration of spectrum in the hands of one carrier,” AT&T wrote in its filing to the FCC on Friday. “In fact, the combined company exceeds the Commission’s spectrum screen, often by a wide margin, in Cellular Market Areas representing 82 percent of the US population, including all major markets.”

T-Mobile’s large spectrum holdings demand “changes in how the Commission addresses additional acquisitions of spectrum by that carrier,” AT&T said in another part of the filing. AT&T also posted a blog on the topic, saying that “Additional spectrum leases with Dish will cause T-Mobile to exceed the 250MHz screen by as much as 136MHz.”

FCC must explain itself, AT&T says

The FCC’s spectrum screen is not a hard-and-fast limit but, rather, one data point the FCC uses in its public-interest analyses. T-Mobile’s new leases in the 600MHz band are with entities called Channel 51 License Company and LB License Co, which do not provide any service over the spectrum.

Even without the pending transactions, Verizon told the FCC that “T-Mobile already holds licenses for 311MHz of low- and mid-band spectrum nationwide. That is more than the low- and mid-band spectrum licensed to Verizon and AT&T combined.” Verizon said there is “a high likelihood” of competitive harms being caused by T-Mobile acquiring more spectrum, and it urged the FCC to “reject the arrangements or require T-Mobile to take action to mitigate those harms, including requiring spectrum divestitures.”

Officially, AT&T said it “takes no position on whether T-Mobile’s lease applications were properly accepted by the FCC,” but the company said that the FCC “should provide an explanation of why it permitted T-Mobile to further exceed the spectrum screen.”

“The Commission’s failure to issue a written order in a transaction allowing spectrum aggregation in excess of the screen to this degree is highly unusual… Moreover, without a written order explaining its analysis, there is no evidence that the Commission has carefully attempted to evaluate the potential for competitive harm,” AT&T wrote.

T-Mobile says Verizon is “disingenuous”

T-Mobile opposed Verizon’s position in an August filing. “Verizon does not even try to demonstrate any harm to itself from the 600MHz spectrum leases—a requirement for petitioners who did not participate in an earlier stage of the proceeding,” T-Mobile wrote. “As a company that elected not to participate in the Commission’s 600MHz auction and currently touts its massive millimeter-wave spectrum holdings as support for 5G superiority, it is simply disingenuous for Verizon to now complain that T-Mobile’s addition of 600MHz spectrum to its portfolio is somehow anticompetitive.”

T-Mobile also said its expanded spectrum holdings will boost competition for home-Internet service, “as T-Mobile plans to use the leased spectrum to offer sorely needed in-home wireless broadband in competition with Verizon—particularly in rural areas.”

Verizon had complained about T-Mobile’s large holdings of low- and mid-band spectrum in big cities including Los Angeles, Chicago, San Francisco, Baltimore, Philadelphia, Boston, Dallas, Houston, and Atlanta. T-Mobile countered that Verizon actually has more spectrum overall in each of those cities when counting the high-band (millimeter-wave) spectrum Verizon uses in its 5G network. But as we’ve covered in numerous articles, millimeter-wave signals don’t travel far and are easily blocked by walls and other obstacles, resulting in Verizon having a sparse 5G footprint. Recent tests by OpenSignal found that T-Mobile has significantly more 5G coverage than its rivals.

https://arstechnica.com/?p=1708362

Charter can charge Netflix and other online video streaming services for network interconnection despite a merger condition prohibiting the practice, a federal appeals court ruled today.

The ruling by the US Court of Appeals for the District of Columbia Circuit overturns two merger conditions that the Obama administration imposed on Charter when it bought Time Warner Cable and Bright House Networks in 2016. The FCC under Chairman Ajit Pai did not defend the merits of the merger conditions in court, paving the way for today’s ruling. The case was decided in a 2-1 vote by a panel of three DC Circuit judges.

The lawsuit against the FCC seeking to overturn Charter merger conditions was filed by the Competitive Enterprise Institute (CEI), a free-market think tank, and four Charter users who claim they were harmed by the conditions. The FCC unsuccessfully challenged the suing parties’ standing to sue, and it did not mount a legal defense of the conditions themselves.

Though Charter did not file this lawsuit, the ISP separately asked the FCC to let the network-interconnection condition and a condition prohibiting data caps expire on May 18, 2021, two years earlier than scheduled. Today’s court’s ruling seems to render Charter’s petition moot as far as the network-interconnection condition goes, but the court ruling did not overturn the data-cap prohibition.

Charter is the second biggest cable company in the US after Comcast and offers service in 41 states under the Spectrum brand name.

ISPs extract payments from online video

The Obama-era FCC required Charter to provide free interconnection to large online providers until 2023. The condition was intended to prevent business disputes that have a history of harming consumer-broadband performance when companies refuse to pay fees demanded by ISPs.

“Many interconnection agreements are made between broadband Internet providers and ‘edge providers’ such as Netflix—i.e., those who provide content to consumers through the Internet,” today’s ruling noted. “Since broadband providers allow edge providers to reach their subscribers, the broadband providers often can extract payments from edge providers. The disputed condition prohibits New Charter [the post-merger entity] from doing so.”

The CEI lawsuit argued that requiring Charter to forgo revenue from interconnection agreements caused Charter to increase broadband prices after the merger. Of course, Charter could have simply pocketed extra interconnection revenue and still raised Internet prices, as it faces little competition from other high-speed broadband providers in its cable territory. But DC Circuit judges agreed with the plaintiffs’ argument:

To begin, the condition plainly caused New Charter to forgo revenue from edge providers. Before the merger, Time Warner, the largest broadband provider among the merging companies, raised substantial revenue from paid interconnection agreements. So did Bright House. But the merger condition prohibits New Charter from using those same revenue sources.

It is also clear that the consumers’ bills increased shortly after the merger. Before the merger, France and Haywood [two of the lawsuit filers] subscribed to Bright House’s broadband service, and Frank subscribed to Time Warner’s. Shortly after, New Charter raised their monthly bills: France’s bill increased about 20 percent, from $84 to $101, Haywood’s about 40 percent, from $51 to $71; and Frank’s about 5 percent, from $75.99 to $79.99.

“Small financial injury” enough to prove standing

The case turned largely on the question of whether the consumers who sued had standing to challenge the conditions. Even if other factors besides interconnection contributed to the price increases, “the subscribers need not show that prohibiting paid interconnection agreements caused the entirety of the price increases, or even that it caused price increases of some specific amount,” judges wrote. “For standing purposes, even a small financial injury is enough, and the consumers have shown a substantial likelihood that their bills are higher because of the prohibition on paid interconnection agreements.”

The lawsuit targeted four merger conditions, and judges ruled that the plaintiffs had standing to challenge two of them: the interconnection-payment ban and a condition requiring Charter to offer a discount Internet service to people with low incomes. The litigants have standing to challenge the discount-service condition based on the argument that a low-income service causes higher prices for other consumers, the judges found.

With the consumers’ having standing to challenge those two conditions, the FCC’s refusal to defend the conditions on their merits made the judges’ decision easier. Judges wrote that they “need not resolve” all the thorny questions of the case because “there is a simpler ground of decision. The lawfulness of the interconnection and discounted-services conditions are properly before us, yet the FCC declined to defend them on the merits. The agency’s only explanation for doing so was its view that we cannot reach the merits. Having lost on that question, the FCC has no further line of defense.” The two conditions are “vacate[d] given the FCC’s refusal to defend on the merits,” the judges wrote.

The low-income condition required Charter to offer 30Mbps broadband service for no more than $14.99 in service fees and no more than $5 in router rental fees each month, and to enroll at least 525,000 qualifying low-income households by May 2020. Charter complied with the condition with its Spectrum Internet Assist program, which is similar to a low-income program offered by Time Warner Cable before the merger. Under the merger condition, Charter was allowed to raise the base price to $17.99 a month last year. Charter hasn’t announced any plans to stop offering the low-income service.

The judges rejected the lawsuit’s challenge to the data-cap condition, writing that “there is scant evidence that New Charter would offer usage-based pricing if allowed to do so.” The judges also rejected the challenge to a requirement that Charter extend its network to 2 million additional homes and businesses, saying that “New Charter already has built much of the required infrastructure, and its sunk costs in doing so cannot be recovered.” The litigants “offer no reason to think that New Charter will abandon the project if now allowed to,” and “no reason to think that if New Charter were to abandon the project at this late date, thus ensuring a wasted investment, the decision to do so would somehow lower the prices for its broadband customers,” the judges wrote.

“Prices go up because of mergers”

Charter told the FCC in a filing that it doesn’t “currently” plan to impose data caps or charge video providers for interconnection, but the company wants the prohibitions lifted because they “put Charter at a competitive disadvantage” and “forc[e] Charter to run its network based on arbitrary merger conditions instead of market conditions.” Charter’s filing also claimed that broadband plans with data caps are “often popular” with consumers.

We contacted Charter about the court decision today and will update this article if we get a response.

Matt Wood, VP of policy at consumer-advocacy group Free Press, said in response to the court decision that “prices go up because of mergers, not the tame conditions imposed on them. That’s the whole point of taking out competitors and concentrating power.”

Wood pointed to a Free Press filing to the FCC that he said shows “Charter was delivering better value and getting better financial results for itself than any other big wired ISP. So the notion that either Charter or its customers have suffered from the conditions is a joke, as is any claim by the litigants that unconditioned mergers and monopolies are somehow better for people.”

Disclosure: The Advance/Newhouse Partnership, which owns 13 percent of Charter, is part of Advance Publications. Advance Publications owns Condé Nast, which owns Ars Technica.

https://arstechnica.com/?p=1699205

Nonprofits and local politicians are lining up to support a Charter Communications petition that would let the ISP impose data caps on broadband users and seek interconnection payments from large online-video providers.

Charter filed the petition with the Federal Communications Commission last month, asking the FCC to eliminate merger conditions applied to its 2016 purchase of Time Warner Cable two years early. If Charter’s petition is granted, the company would be able to impose data caps on its Spectrum broadband service and charge network-interconnection fees to video providers after May 18, 2021, instead of in May 2023 as scheduled.

With the FCC seeking public comment, the docket is overwhelmingly filled with consumers urging the commission to oppose Charter’s request for permission to limit consumers’ data usage and charge data-overage fees. “In this age of Internet communication, data caps are an unscrupulous way to gouge money from clients, many of whom do not have alternative Internet sources. This is unacceptable,” one person wrote in a sentiment echoed by hundreds of other Internet users who wrote to the FCC in the past few weeks.

But alongside the angry users of Spectrum Internet service are a number of politicians and charities urging the FCC to grant the petition. Charter has donated to these nonprofits and politicians, and it has apparently made a big outreach effort to get their public support for the petition. Many of the letters to the FCC echo Charter’s argument that it shouldn’t be treated differently from other Internet providers that don’t face such conditions—even though Charter willingly agreed to them in order to secure approval for a merger that made it the second-largest ISP in the United States after Comcast. The letters from nonprofits and politicians ignore the negative impact data caps would have on broadband customers.

The letters continue a years-long trend in which ISPs have been donating to charities and receiving their support in lobbying campaigns to complete mergers and eliminate consumer-protection regulations.

Charter told Ars last month that it doesn’t “currently” plan to impose data caps or change its interconnection policy. Instead, it merely seeks “a level playing field so that we can continue to grow and provide superior service to our customers across the country.” But if Charter had zero intention of imposing data caps or changing its interconnection policies, there would be no reason to spearhead a big lobbying effort involving charities and politicians.

Charter’s petition likely has a good chance at the Republican-majority FCC. FCC Chairman Ajit Pai voted against the conditions when they were imposed in 2016 under then-FCC Chairman Tom Wheeler, an Obama nominee. The FCC conditions were designed to prevent Charter from hindering online video providers that compete against the company’s cable TV service. Any FCC order that lifts the merger conditions two years early would likely cite arguments from the various filings supporting Charter’s case. May 18, 2021 is the earliest date on which the conditions can be eliminated under the original terms of the merger approval.

Nonprofits are ready for data caps

FCC filings submitted by charities and community groups discuss the donations Charter gave them. The Boys & Girls Club of Harlem told the FCC it received a $35,000 grant from Charter this year for a learning lab and that “we are happy to support Charter as they seek to sunset two merger conditions—one on data caps and usage-based pricing and the other on interconnection.”

The Boys & Girls Club of the West Valley in Canoga Park, California, told the FCC that Charter gave 10 Samsung Galaxy tablets to the club and that “it only seems fair to level the playing field for Charter so they can have the same opportunities to grow as companies similar to them.” Other Boys & Girls Club chapters supporting Charter after getting donations include ones in Fremont County, Colorado; Schenectady, New York (which received a $75,000 donation); and Niagara Falls in New York.

A US Veterans Corps filing in support of Charter’s petition notes that the ISP “is a major supporter of our Operation Coming Home initiative, which provides new homes to troops who have been injured or families of fallen in combat operations.” The veterans group said it is “happy to endorse their effort at the Federal Communications Commission (FCC) to remove two conditions from the merger.”

The Marshfield Clinic Health System in Wisconsin told the FCC of Charter’s involvement in fundraising efforts and its provision of Internet service to clinics.

“Most of our facilities rely on a single provider for Internet and telecommunications needs: Charter Communications. That is why I am writing today to support Charter’s recent petition to have its merger conditions sunset,” the health system’s Chief External Affairs Officer Ryan Natzke wrote. “I believe Charter should receive the same treatment as other providers, and I support a fair foundation for them in the marketplace,” Natzke wrote later in the same letter.

From New York to California

The YWCA of Syracuse and Onondaga County in New York told the FCC that it got $20,000 from Charter “to help with our computer lab and summer program” and that “we support their request to the FCC to sunset their merger conditions.”

Charter’s petition got support from the Albany, New York, branch of the NAACP, which told the FCC that it received a $10,000 grant from Charter to support a youth mentoring program. The group noted that the COVID-19 pandemic has been especially difficult on children who lack home-Internet access, adding that eliminating the merger conditions “will allow [Charter] to continue and enhance their efforts to bridge the digital divide in minority and low-income communities.”

Other community groups that supported Charter’s petition after receiving donations from the ISP include the Child Development Center of Natrona County in Wyoming; the California Latino Leadership Institute; Literacy Rochester in New York; and St. Louis Arc.

About 30 chambers of commerce are also supporting Charter’s request at the FCC.

Regarding its connection to local charities, Charter told Ars in a statement, “Our business is inherently local and we are committed to improving the communities we serve and impacting lives where our customers and employees live and work. These efforts include long-term relationships with local leaders and philanthropies, programs focused on engagement, philanthropic and in-kind support, and employee volunteerism. We are proud to support these important efforts and all they do to enhance the lives of millions each year.”

Politicians make Charter’s case

Now let’s take a look at state lawmakers who support Charter. Bryan Hughes, a Republican state senator in Texas, told the FCC that “Charter is a good corporate citizen” and “need[s] to be on a level playing field with their fellow providers” in order to continue “invest[ing] in our communities.” Charter is one of Hughes’ top donors, having given $12,500 in the current election cycle, according to campaign-finance tracker Vote Smart.

State Sen. Richard Funke, a Republican in New York who received $11,000 from Charter, told the FCC that there has been “no effort by Charter to stifle online video distributors” and that “I am confident that the previous conditions laid out by the FCC can officially be rolled back in May of 2021.”

State Sen. Dan Quick, a Nebraska Democrat who got $3,500 from Charter, told the FCC that he “fully support[s] a level playing field for Charter so it can operate the same as all other providers and continue to deliver critical services to American businesses and families.”

State Rep. Dan Zwonitzer, a Republican in Wyoming, urged the FCC to eliminate the merger conditions “so good corporate citizens like Charter can continue investing in communities like mine.” Zwonitzer received $300 from Charter.

The National Black Caucus of State Legislators, which represents more than 700 legislators, said it “is pleased to support the sunset of the two remaining merger conditions.” Charter has supported Black communities with diverse hiring and programming as well as “a $10 million investment to support Black and other minority-owned small businesses in underserved communities,” the letter to the FCC said. The letter was written by Caucus President Gilda Cobb-Hunter, a Democratic state representative in South Carolina. All eight members of the group’s executive committee are Democrats.

Other state lawmakers who received donations from Charter and supported the petition include State Sen. Affie Ellis, a Wyoming Republican who received $200 from Charter; State Rep. William Sutton, a Kansas Republican who received $500 from Charter; and State Sen. Dee Brown, a Republican in Montana who received $170 from Charter. Brown told the FCC that the merger conditions “are no longer necessary” because “there is sufficient competition” between cable TV and online video providers.

Charter has opponents, including Mass. AG

Charter customers are not the only ones opposing the petition to eliminate merger conditions. The petition received opposition from the Writers Guild of America, West, which said that “Charter has a history of bad-faith behavior regarding merger conditions” and pointed to Charter’s failure to comply with broadband-deployment requirements imposed by New York State. In that case, Charter agreed to pay $12 million toward new broadband deployments in a deal that gave the ISP an extra year to comply with the original requirements.

Newsmax and Entertainment Studio Networks also opposed the Charter petition.

Massachusetts Attorney General Maura Healey told the FCC that granting Charter’s request would go against the public interest because of the pandemic, increasing use of broadband, and “Charter’s position as the sole fixed-broadband provider in almost all of its Massachusetts territories.”

“It would be somewhat perverse if less than a year from now—when Massachusetts residents may very well still be relying on broadband to maintain all aspects of their lives—Charter imposes data caps or pricing models on captive customers that dramatically increase the price of broadband for the average household,” Healey wrote.

Advocacy groups Public Knowledge and the Sports Fans Coalition opposed Charter’s petition as well. The FCC found during the 2016 merger review that Charter had “incentive and ability to restrict its customers’ ability to access competing video services,” and Charter has provided no evidence that this has changed, the groups said. “Charter has the incentive and ability to restrict its customers from accessing the online video services of their choice, charging them more if they do so through the discriminatory application of data caps, and through causing OVDs [online video distributors] to raise their rates to consumers by charging them access fees,” the groups said.

The first round of public comments on Charter’s petition expired on July 22, and reply comments are due by August 6. Comments can be filed on the docket by clicking “New Filing” or “Express.”

Disclosure: The Advance/Newhouse Partnership, which owns 13 percent of Charter, is part of Advance Publications. Advance Publications owns Condé Nast, which owns Ars Technica.

https://arstechnica.com/?p=1695073

Charter Communications is raising the “Broadcast TV” fee it imposes on cable plans from $13.50 to $16.45 a month starting in August, Stop the Cap reported.

Charter says the Broadcast TV fee covers the amount it pays broadcast television stations (e.g. affiliates of CBS, NBC, ABC, and Fox) for the right to carry their channels. But for consumers, it is essentially a hidden fee because Charter’s advertised TV prices don’t include it.

Charter has raised the fee repeatedly—it stood at $9.95 in early 2019 before a series of price increases. At $16.45 a month, the fee will cost customers an additional $197.40 per year. Charter sells TV, broadband, and phone service under its Spectrum brand name and is the second largest cable company in the US after Comcast.

Charter imposes a smaller Broadcast TV fee on its streaming TV plans, but is raising that charge from $6 to $8.95 a month, Stop the Cap wrote. Charter is also raising the base price of its TV service. “Spectrum’s most popular TV Select package is expected to increase $1.50/month to $73.99/month,” Stop the Cap wrote. “Customers on a promotional pricing plan will not see this rate increase until their promotional pricing expires.”

Charter confirms increase

A Charter spokesperson confirmed the Broadcast TV and TV Select price increases when contacted by Ars today. The Broadcast TV fee change will apparently apply even to customers who are on promotional deals that lock in a price for a set amount of time. Charter told us that promotional prices apply to the “package price,” which “will not change until the end of their promotional period.” But Charter said that the “Broadcast TV Service Charge is separate from the TV package price,” so it can go up regardless of whether a customer is still on a promotional deal.

Charter’s statement to Ars said that “programmers annually raise programming fees to deliver the same content, leading to higher costs across the entire industry. The increase we are passing through to viewers is a direct result of these rising programming costs.”

Comcast’s Broadcast TV fee is $14.95 a month.

No discounts for lack of live sports yet

Cable customers haven’t gotten discounts for sports channels even though major sports leagues suspended play over the past few months during the coronavirus pandemic. As we explained in a previous story, whether consumers get refunds will depend on negotiations involving cable companies, sports leagues, and broadcasters.

Charter reiterated to us today that it “will pass through [to customers] any rebates we receive from the loss of live sports during COVID-19.”

Charter does not charge a Regional Sports Network fee, while companies including Comcast, AT&T-owned DirecTV, and Verizon charge both the Broadcast TV and sports fees. Sports costs are simply part of the package with Charter instead of being put into a separate fee, and it isn’t clear how big any pandemic-related refunds will be.

Charter faces another lawsuit over hidden fee

Charter has faced lawsuits alleging that the Broadcast TV fee is misleading. A class-action lawsuit filed in May 2020 against Charter in US District Court for the District of Connecticut says:

Across all its advertising channels, Charter consistently and prominently advertises a flat, fixed monthly rate for its television service and cable service packages which include television service.

For years, Charter has not disclosed that it actually increases those promised fixed monthly rates through multiple schemes. Among other omissions, Charter does not fully or accurately disclose the existence or amount of its Broadcast TV Surcharge prior to sign-up, and does not disclose that it periodically increases that surcharge (and thus customers’ monthly rates) at its discretion.

Charter customer-service reps have falsely told customers who call to complain “that the Surcharge is a tax or government fee,” the lawsuit said. The lawsuit points out that “[a]ny costs Charter pays to carry local channels are part of the inherent cost of Charter’s business of providing television services.” The Broadcast TV charge is thus “a way for Charter to charge more per month for its basic service without having to advertise the actual, higher price,” the lawsuit said.

Disclosure: The Advance/Newhouse Partnership, which owns 13 percent of Charter, is part of Advance Publications. Advance Publications owns Condé Nast, which owns Ars Technica.

https://arstechnica.com/?p=1690817