CHTR - Charter Communications

[vince]

Cam, I dont know how much we actually need and what kind of bandwidth new applications will consume but you should take a look at what kind of speeds, amount of devices connected per home, and monthly household usage (in gigs) is happening.  Its growing exponentially with no signs of slowing and lots of executives close to the data believe that it has barely started.

[cameronfen]

Cam, I dont know how much we actually need and what kind of bandwidth new applications will consume but you should take a look at what kind of speeds, amount of devices connected per home, and monthly household usage (in gigs) is happening.  Its growing exponentially with no signs of slowing and lots of executives close to the data believe that it has barely started.

 

There is a difference between data usage and how much bandwidth you need.  Most of the new data you use, like IoT will have a limited effect on bandwidth consumption.  That is because they are continuously downloading/uploading small amounts of data, which causes the amount of data to be large, but will cause no discernable effect on speeds.  For example, you can with 1Gbps, if you are using it continuously at its max level, a household can download 324 terabytes of data a month.  That kind of data is enough to watch 462,000 hours a video a month (or 600+ hours of video every hour).  We won't get close to that much data usage for a long time, and no family hardly uses even a 100GB of data a month much less a terabyte.  This just gives you an idea of how much bandwidth every household actually has, but also my point is it doesn't really matter if you have IoT machines that continuously are uploading small amounts of data (you will never run out of data in that way), what really matters is how much data you use at your peak usage.  And at this point, we are running into diminishing returns of using more bandwidth per second as video quality is basically already as good as possible and there are limited other avenues to increase data per second (maybe AR or massive machine learning requiring video). 

[vince]

I am not necessarily disagreeing with you and will just put up a quote from Brian Roberts on 2nd qtr call that supports what I was pointing out.  "The increasing importance and value of broadband to our customers is clear. Our customers' median monthly data usage on our network now exceeds 150 gigabytes for the first time. Additionally, our xFi customers are connecting an average of 11 devices in the home over Wi-Fi daily".  This quote doesn't really prove anything but it does show that mgmt feels pressure to continue to improve the network.  Roberts in other parts of call and other cable Ceo's consistently stress how the consumer values and is demanding higher speeds and is willing to pay for it as well.  Cabo mgmt is doing market elasticity tests this year and the early results are remarkable.  Consumers want, need and are paying for higher speeds without negative effects on churn.  Chtr's mgmt claims that increasing the abilities of the network, from here, is a strong and durable advantage and that results up to now show very clear improvements in customer metrics whenever they take speeds up.  I guess my point is that customer behavior right now is not consistent with what you are printing.  I am not saying that your numbers are wrong and maybe demand will level off soon but every indication is that this is an amazing business and has a very long runway with incredible pricing power. 

[Liberty]

Bill Gates might not actually have said it, but the idea of "640K ought to be enough for anybody" repeats itself every few years.

 

It's a chicken and egg thing; once people have huge bandwidth/a new capability, new services tend to be created that use that bandwidth/capability and that couldn't have existed before.

 

I think there's currently a bunch of headroom in bandwidth for most people, but who knows where we'll be on that pendulum swing in a few years? And have people ever been rational about getting only what they need? How many people buy SUVs because "maybe someday I'll want to go off road or tow something" and they basically never do?

[cameronfen]

I guess I'll admit that I didn't expect the median data usage to be 150GB per household, but the argument regarding if you build it they will come is bunk.  We can download full length movies in a about a minute.  Video games with real world graphics and landmass the size of a small city can be downloaded in 30 mins.  If people will build bigger programs when we have bigger pipes why haven't they.  I remember when world of warcraft was like a 5Gb game when it first came out and it took like all night to download.  Now if a game takes all night to download it has to approach 500 GB.  Games just arent keeping pace with the biggest ones just under 100 GB. 

 

The idea that we just need extra bandwidth before someone innovates is a straw man imo.  We already have excess bandwidth and yet no one is building super VR systems which will tax all your bandwidth. 

 

My guess is cable cos are seeing people switch to faster internet because most people dont understand that faster speeds will effect them in marginal ways.  (I have no proof to back this up though).  Cable is basically a monopoly and so they have no incentive to educate people and just offer multiple tiers for the suckers who like having larger numbers than their peers.  But when you have competition, the first thing they will go after is there is no difference in UX.  Why did google fiber fail?  I think it was likely because other than the expense, having significantly faster internet didn't interest people when you have another party who is actively interested (and able to cut price further) in spreading this information. 

 

Edit:  I realize this post may come off as sounding defensive.  It's not my intention, just trying to provide a variant view (that I believe lol). 

[vince]

I dont really want to speculate why demand is growing faster than need (if in fact that is the case), but we are definitely on opposite sides on this one.  You think competition might cause speeds to flatline because consumers will focus more on price (I think thats what u meant) and realize they dont need more than 100 mb.  I think competition up to 100-150 (or potential competition) is what caused cable to up their speeds cause they knew from recent experience (and also from European market behavior) that consumers would value it and were confident they would get paid for it.  But what I have come to appreciate more recently, after thinking this thru over and over, is that cable can give 1 gig to everyone in their footprint, almost for free, at very low incremental cost.  And like I said, I am not really sure about the scientific numbers and you (Cam) bring up some good points but I will almost guarantee that if cable feels like they want to or have to give 1 gig and 300-500 is their best competition, their market share will increase from today's levels.  Cable execs wont say it but I have come to believe this is a major factor in their confidence. 

[jmp8822]

I dont really want to speculate why demand is growing faster than need (if in fact that is the case), but we are definitely on opposite sides on this one.  You think competition might cause speeds to flatline because consumers will focus more on price (I think thats what u meant) and realize they dont need more than 100 mb.  I think competition up to 100-150 (or potential competition) is what caused cable to up their speeds cause they knew from recent experience (and also from European market behavior) that consumers would value it and were confident they would get paid for it.  But what I have come to appreciate more recently, after thinking this thru over and over, is that cable can give 1 gig to everyone in their footprint, almost for free, at very low incremental cost.  And like I said, I am not really sure about the scientific numbers and you (Cam) bring up some good points but I will almost guarantee that if cable feels like they want to or have to give 1 gig and 300-500 is their best competition, their market share will increase from today's levels.  Cable execs wont say it but I have come to believe this is a major factor in their confidence.

 

I get what you're saying here with speeds being very low cost to upgrade, but doesn't the concept of having 'unlimited' seamless 300mb speed at your house and in most major cities (unknown how long this might take) for a similar price point trump having 1 gig?  Plus the concept of not needing a cable guy at my house ever again is appealing. I think the network effect of mobile carriers could tip the scales because no one is cancelling mobile service anytime soon, whereas fixed cable internet? Maybe. It seems if there is one that will be disrupted it is more likely cable internet, instead of a nationwide mobile/broadband company with strong network effects.

[Spekulatius]

I get what you're saying here with speeds being very low cost to upgrade, but doesn't the concept of having 'unlimited' seamless 300mb speed at your house and in most major cities (unknown how long this might take) for a similar price point trump having 1 gig?

 

It might, if it is reliable and the ping is good, Generally speaking, the ping on phones sucks and the speed vary a lot. In one spot you may be Ok, but you move a few meter and may have a very unsatisfactory connection. For the 5G to replace a good internet connection, the coverage and ping needs to be very good.

[cameronfen]

I dont really want to speculate why demand is growing faster than need (if in fact that is the case), but we are definitely on opposite sides on this one.  You think competition might cause speeds to flatline because consumers will focus more on price (I think thats what u meant) and realize they dont need more than 100 mb.  I think competition up to 100-150 (or potential competition) is what caused cable to up their speeds cause they knew from recent experience (and also from European market behavior) that consumers would value it and were confident they would get paid for it.  But what I have come to appreciate more recently, after thinking this thru over and over, is that cable can give 1 gig to everyone in their footprint, almost for free, at very low incremental cost.  And like I said, I am not really sure about the scientific numbers and you (Cam) bring up some good points but I will almost guarantee that if cable feels like they want to or have to give 1 gig and 300-500 is their best competition, their market share will increase from today's levels.  Cable execs wont say it but I have come to believe this is a major factor in their confidence.

 

Yeah your points are generally the weak points of my thesis I do concede.  For some reason cable with higher bandwidth consistently takes share from DSL providers in Europe, which I really do not have a counterpoint for, however, we are comparing 100 mbps to between 1 and 10gbps, when in Europe the average speed is like 15-25 mbps.  I guess that is my retort.  That being said from a personal point of view I side with jmp on what type of cable package I view as the best value to me, and I think many other consumers if properly educated will see it this way too. 

[vince]

JMP, I am posting a quote by Rutledge recently that helps answer ur question about how long it takes Verizon to bring that network.  "Now they've said they're going to do 30 million homes passed over a 10-year period, at 10 years will be 140 million homes in the country so that will be about 20% of the country, and we'll represent 8% of that. So over a 10-year period, they're planning to overbuild 8% of our footprint. And we can, to the extent that any of that's a me-too product, we'll have a more competitive environment there and we'll have to deal with it. But we'll be moving our network along during that 10-year period."  In addition, Charter just rolled out a product to compete with Verizon and it is across 100 percent of their footprint nationally (chtrs footprint).  At least with that info it looks like chtr is better positioned although admittedly they have to pay Verizon for that mvno. By the time there is enough coverage to compete with chtr, 300 will not be enough

[vince]

Cam, just from reading Lbtya's transcripts it looks like their speeds are higher average than anyone elses in the u.s.  i admit I dont know the average speed across Europe tho.

[vince]

I dont really want to speculate why demand is growing faster than need (if in fact that is the case), but we are definitely on opposite sides on this one.  You think competition might cause speeds to flatline because consumers will focus more on price (I think thats what u meant) and realize they dont need more than 100 mb.  I think competition up to 100-150 (or potential competition) is what caused cable to up their speeds cause they knew from recent experience (and also from European market behavior) that consumers would value it and were confident they would get paid for it.  But what I have come to appreciate more recently, after thinking this thru over and over, is that cable can give 1 gig to everyone in their footprint, almost for free, at very low incremental cost.  And like I said, I am not really sure about the scientific numbers and you (Cam) bring up some good points but I will almost guarantee that if cable feels like they want to or have to give 1 gig and 300-500 is their best competition, their market share will increase from today's levels.  Cable execs wont say it but I have come to believe this is a major factor in their confidence.

 

 

 

 

I get what you're saying here with speeds being very low cost to upgrade, but doesn't the concept of having 'unlimited' seamless 300mb speed at your house and in most major cities (unknown how long this might take) for a similar price point trump having 1 gig?  Plus the concept of not needing a cable guy at my house ever again is appealing. I think the network effect of mobile carriers could tip the scales because no one is cancelling mobile service anytime soon, whereas fixed cable internet? Maybe. It seems if there is one that will be disrupted it is more likely cable internet, instead of a nationwide mobile/broadband company with strong network effects.

JMP, how can having unlimited seamless 300 mb at a similiar price trump 1 gig?  Even if the service was competitive mb for mb, (which is far from a sure thing because everyone knows that wireless gap in the network probably makes it less reliable under certain circumstances) its rather obvious that people will take the gig even if they cant recognize incremental benefit (such is human nature) and even if its priced slightly higher. 

[dwy000]

What if that 300Mb was not just at home but was also your wireless plan.  Instead of $70 for unlimited 4G and $80 for unlimited home fixed wireless, Verizon was to charge $130 for unlimited 300Mb+ service regardless of where you are?  The lines between home and wireless, everywhere screens and watching (or service) are blurring.  Verizon appears to be betting they can be your 1 broadband provider - everywhere.  That's a pretty appealing prospect (if and when it works) especially if that level of capacity more than covers your needs.  The Comcasts and Charters of the world cannot compete with that except as MVNO.  I assume that's why Verizon stopped the Fios build out and even sold off a good chunk of the network - they knew that with 5G they would be overbuilding their own overbuild.

 

Ultimately, the cablecos and wireless need to merge.  It's the same product.  Cableco's are faster but wireless companies are broader coverage.

[DooDiligence]

I dont really want to speculate why demand is growing faster than need (if in fact that is the case), but we are definitely on opposite sides on this one.  You think competition might cause speeds to flatline because consumers will focus more on price (I think thats what u meant) and realize they dont need more than 100 mb.  I think competition up to 100-150 (or potential competition) is what caused cable to up their speeds cause they knew from recent experience (and also from European market behavior) that consumers would value it and were confident they would get paid for it.  But what I have come to appreciate more recently, after thinking this thru over and over, is that cable can give 1 gig to everyone in their footprint, almost for free, at very low incremental cost.  And like I said, I am not really sure about the scientific numbers and you (Cam) bring up some good points but I will almost guarantee that if cable feels like they want to or have to give 1 gig and 300-500 is their best competition, their market share will increase from today's levels.  Cable execs wont say it but I have come to believe this is a major factor in their confidence.

 

I get what you're saying here with speeds being very low cost to upgrade, but doesn't the concept of having 'unlimited' seamless 300mb speed at your house and in most major cities (unknown how long this might take) for a similar price point trump having 1 gig?  Plus the concept of not needing a cable guy at my house ever again is appealing. I think the network effect of mobile carriers could tip the scales because no one is cancelling mobile service anytime soon, whereas fixed cable internet? Maybe. It seems if there is one that will be disrupted it is more likely cable internet, instead of a nationwide mobile/broadband company with strong network effects.

 

Vince already said this and here it is from the horses mouth.

 

https://www.multichannel.com/news/charters-rutledge-we-have-a-better-platform-to-deploy-5g-than-cellular

[jmp8822]

I dont really want to speculate why demand is growing faster than need (if in fact that is the case), but we are definitely on opposite sides on this one.  You think competition might cause speeds to flatline because consumers will focus more on price (I think thats what u meant) and realize they dont need more than 100 mb.  I think competition up to 100-150 (or potential competition) is what caused cable to up their speeds cause they knew from recent experience (and also from European market behavior) that consumers would value it and were confident they would get paid for it.  But what I have come to appreciate more recently, after thinking this thru over and over, is that cable can give 1 gig to everyone in their footprint, almost for free, at very low incremental cost.  And like I said, I am not really sure about the scientific numbers and you (Cam) bring up some good points but I will almost guarantee that if cable feels like they want to or have to give 1 gig and 300-500 is their best competition, their market share will increase from today's levels.  Cable execs wont say it but I have come to believe this is a major factor in their confidence.

 

I get what you're saying here with speeds being very low cost to upgrade, but doesn't the concept of having 'unlimited' seamless 300mb speed at your house and in most major cities (unknown how long this might take) for a similar price point trump having 1 gig?  Plus the concept of not needing a cable guy at my house ever again is appealing. I think the network effect of mobile carriers could tip the scales because no one is cancelling mobile service anytime soon, whereas fixed cable internet? Maybe. It seems if there is one that will be disrupted it is more likely cable internet, instead of a nationwide mobile/broadband company with strong network effects.

 

Vince already said this and here it is from the horses mouth.

 

https://www.multichannel.com/news/charters-rutledge-we-have-a-better-platform-to-deploy-5g-than-cellular

 

I would avoid gathering your news on risks to a business from a potentially disrupted company's CEO.  Could he be right? Of course, but I wouldn't take those quotes at face value. What would you expect him to say, we're toast? Verizon and AT&T are currently lighting up their 5G networks - cable cos?  Even if he is theoretically right, the "nationwide equivalent" network availability will eventually matter in my opinion. Verizon and AT&T are set up for this.

[jmp8822]

I dont really want to speculate why demand is growing faster than need (if in fact that is the case), but we are definitely on opposite sides on this one.  You think competition might cause speeds to flatline because consumers will focus more on price (I think thats what u meant) and realize they dont need more than 100 mb.  I think competition up to 100-150 (or potential competition) is what caused cable to up their speeds cause they knew from recent experience (and also from European market behavior) that consumers would value it and were confident they would get paid for it.  But what I have come to appreciate more recently, after thinking this thru over and over, is that cable can give 1 gig to everyone in their footprint, almost for free, at very low incremental cost.  And like I said, I am not really sure about the scientific numbers and you (Cam) bring up some good points but I will almost guarantee that if cable feels like they want to or have to give 1 gig and 300-500 is their best competition, their market share will increase from today's levels.  Cable execs wont say it but I have come to believe this is a major factor in their confidence.

 

 

 

 

I get what you're saying here with speeds being very low cost to upgrade, but doesn't the concept of having 'unlimited' seamless 300mb speed at your house and in most major cities (unknown how long this might take) for a similar price point trump having 1 gig?  Plus the concept of not needing a cable guy at my house ever again is appealing. I think the network effect of mobile carriers could tip the scales because no one is cancelling mobile service anytime soon, whereas fixed cable internet? Maybe. It seems if there is one that will be disrupted it is more likely cable internet, instead of a nationwide mobile/broadband company with strong network effects.

JMP, how can having unlimited seamless 300 mb at a similiar price trump 1 gig?  Even if the service was competitive mb for mb, (which is far from a sure thing because everyone knows that wireless gap in the network probably makes it less reliable under certain circumstances) its rather obvious that people will take the gig even if they cant recognize incremental benefit (such is human nature) and even if its priced slightly higher.

 

If you can stream 4K with 25mb, why would I personally use anything close to 300mb? I wouldn't.  My home internet currently is 70mb which greatly exceeds my needs of streaming two HD devices almost all the time and online games. You're right that several consumers will jump to higher speeds just because.  However, I don't think that is a competitive advantage at the high end for consumers.  An example that could be compared: my laptop has 500gb of hard drive space.  I could have bought a much larger hard drive for little added cost. Yet, almost all consumers aren't installing 4TB hard drives in their computers.  Why? That isn't a bottleneck anymore, even though it was for years.  I think we have reached a similar point with 300mb+ internet speeds.  So, what if people now care more about latency and ability to use 5G in other locations? 5G could be the winner there.

[walkie518]

I dont really want to speculate why demand is growing faster than need (if in fact that is the case), but we are definitely on opposite sides on this one.  You think competition might cause speeds to flatline because consumers will focus more on price (I think thats what u meant) and realize they dont need more than 100 mb.  I think competition up to 100-150 (or potential competition) is what caused cable to up their speeds cause they knew from recent experience (and also from European market behavior) that consumers would value it and were confident they would get paid for it.  But what I have come to appreciate more recently, after thinking this thru over and over, is that cable can give 1 gig to everyone in their footprint, almost for free, at very low incremental cost.  And like I said, I am not really sure about the scientific numbers and you (Cam) bring up some good points but I will almost guarantee that if cable feels like they want to or have to give 1 gig and 300-500 is their best competition, their market share will increase from today's levels.  Cable execs wont say it but I have come to believe this is a major factor in their confidence.

 

 

 

 

I get what you're saying here with speeds being very low cost to upgrade, but doesn't the concept of having 'unlimited' seamless 300mb speed at your house and in most major cities (unknown how long this might take) for a similar price point trump having 1 gig?  Plus the concept of not needing a cable guy at my house ever again is appealing. I think the network effect of mobile carriers could tip the scales because no one is cancelling mobile service anytime soon, whereas fixed cable internet? Maybe. It seems if there is one that will be disrupted it is more likely cable internet, instead of a nationwide mobile/broadband company with strong network effects.

JMP, how can having unlimited seamless 300 mb at a similiar price trump 1 gig?  Even if the service was competitive mb for mb, (which is far from a sure thing because everyone knows that wireless gap in the network probably makes it less reliable under certain circumstances) its rather obvious that people will take the gig even if they cant recognize incremental benefit (such is human nature) and even if its priced slightly higher.

 

If you can stream 4K with 25mb, why would I personally use anything close to 300mb? I wouldn't.  My home internet currently is 70mb which greatly exceeds my needs of streaming two HD devices almost all the time and online games. You're right that several consumers will jump to higher speeds just because.  However, I don't think that is a competitive advantage at the high end for consumers.  An example that could be compared: my laptop has 500gb of hard drive space.  I could have bought a much larger hard drive for little added cost. Yet, almost all consumers aren't installing 4TB hard drives in their computers.  Why? That isn't a bottleneck anymore, even though it was for years.  I think we have reached a similar point with 300mb+ internet speeds.  So, what if people now care more about latency and ability to use 5G in other locations? 5G could be the winner there.

Assuming Rutledge is forthright with the 80% mobile usage being in the house, which seems credible, do you believe that consumers are going to change habits? 

 

Will AT&T or Verizon disallow customers from connecting to the internet via a wifi router b/c the wireless carriers don't want to run over Charter's pipes?

 

I think it's more likely the MVNO makes Charter more valuable to Verizon (as an acquisition target) than the other way around....

[jmp8822]

I dont really want to speculate why demand is growing faster than need (if in fact that is the case), but we are definitely on opposite sides on this one.  You think competition might cause speeds to flatline because consumers will focus more on price (I think thats what u meant) and realize they dont need more than 100 mb.  I think competition up to 100-150 (or potential competition) is what caused cable to up their speeds cause they knew from recent experience (and also from European market behavior) that consumers would value it and were confident they would get paid for it.  But what I have come to appreciate more recently, after thinking this thru over and over, is that cable can give 1 gig to everyone in their footprint, almost for free, at very low incremental cost.  And like I said, I am not really sure about the scientific numbers and you (Cam) bring up some good points but I will almost guarantee that if cable feels like they want to or have to give 1 gig and 300-500 is their best competition, their market share will increase from today's levels.  Cable execs wont say it but I have come to believe this is a major factor in their confidence.

 

 

 

 

I get what you're saying here with speeds being very low cost to upgrade, but doesn't the concept of having 'unlimited' seamless 300mb speed at your house and in most major cities (unknown how long this might take) for a similar price point trump having 1 gig?  Plus the concept of not needing a cable guy at my house ever again is appealing. I think the network effect of mobile carriers could tip the scales because no one is cancelling mobile service anytime soon, whereas fixed cable internet? Maybe. It seems if there is one that will be disrupted it is more likely cable internet, instead of a nationwide mobile/broadband company with strong network effects.

JMP, how can having unlimited seamless 300 mb at a similiar price trump 1 gig?  Even if the service was competitive mb for mb, (which is far from a sure thing because everyone knows that wireless gap in the network probably makes it less reliable under certain circumstances) its rather obvious that people will take the gig even if they cant recognize incremental benefit (such is human nature) and even if its priced slightly higher.

 

If you can stream 4K with 25mb, why would I personally use anything close to 300mb? I wouldn't.  My home internet currently is 70mb which greatly exceeds my needs of streaming two HD devices almost all the time and online games. You're right that several consumers will jump to higher speeds just because.  However, I don't think that is a competitive advantage at the high end for consumers.  An example that could be compared: my laptop has 500gb of hard drive space.  I could have bought a much larger hard drive for little added cost. Yet, almost all consumers aren't installing 4TB hard drives in their computers.  Why? That isn't a bottleneck anymore, even though it was for years.  I think we have reached a similar point with 300mb+ internet speeds.  So, what if people now care more about latency and ability to use 5G in other locations? 5G could be the winner there.

Assuming Rutledge is forthright with the 80% mobile usage being in the house, which seems credible, do you believe that consumers are going to change habits? 

 

Will AT&T or Verizon disallow customers from connecting to the internet via a wifi router b/c the wireless carriers don't want to run over Charter's pipes?

 

I think it's more likely the MVNO makes Charter more valuable to Verizon (as an acquisition target) than the other way around....

 

MVNO is a total commodity business.  There are dozens and dozens - and Charter will/does not offer the best price for MVNO.  If I can switch to Verizon for 5G and it is available at my house for the same price, why wouldn't you switch and get rid of cable internet? I get the availability of all 5G networks nationwide (as they come online), plus it is entirely wireless at my house, with much lower latency.  It seems like a no brainer unless you are downloading 20 4K movies per day to your hard drive and need 1gbps. 

 

The out of the house angle to me also is underrated. Think of business travelers in a hotel where 5G cells are nearby - you could stream 4K just like your home internet with no congestion.  No more hotel logins for terrible internet connections.  There are many reasons 5G can add lots of extra value with a network-effect.  The cable companies as far as I can tell are already several steps behind, if they expect people to sign up for their nationwide 5G service.

[undervalued]

I dont really want to speculate why demand is growing faster than need (if in fact that is the case), but we are definitely on opposite sides on this one.  You think competition might cause speeds to flatline because consumers will focus more on price (I think thats what u meant) and realize they dont need more than 100 mb.  I think competition up to 100-150 (or potential competition) is what caused cable to up their speeds cause they knew from recent experience (and also from European market behavior) that consumers would value it and were confident they would get paid for it.  But what I have come to appreciate more recently, after thinking this thru over and over, is that cable can give 1 gig to everyone in their footprint, almost for free, at very low incremental cost.  And like I said, I am not really sure about the scientific numbers and you (Cam) bring up some good points but I will almost guarantee that if cable feels like they want to or have to give 1 gig and 300-500 is their best competition, their market share will increase from today's levels.  Cable execs wont say it but I have come to believe this is a major factor in their confidence.

 

 

 

 

I get what you're saying here with speeds being very low cost to upgrade, but doesn't the concept of having 'unlimited' seamless 300mb speed at your house and in most major cities (unknown how long this might take) for a similar price point trump having 1 gig?  Plus the concept of not needing a cable guy at my house ever again is appealing. I think the network effect of mobile carriers could tip the scales because no one is cancelling mobile service anytime soon, whereas fixed cable internet? Maybe. It seems if there is one that will be disrupted it is more likely cable internet, instead of a nationwide mobile/broadband company with strong network effects.

JMP, how can having unlimited seamless 300 mb at a similiar price trump 1 gig?  Even if the service was competitive mb for mb, (which is far from a sure thing because everyone knows that wireless gap in the network probably makes it less reliable under certain circumstances) its rather obvious that people will take the gig even if they cant recognize incremental benefit (such is human nature) and even if its priced slightly higher.

 

If you can stream 4K with 25mb, why would I personally use anything close to 300mb? I wouldn't.  My home internet currently is 70mb which greatly exceeds my needs of streaming two HD devices almost all the time and online games. You're right that several consumers will jump to higher speeds just because.  However, I don't think that is a competitive advantage at the high end for consumers.  An example that could be compared: my laptop has 500gb of hard drive space.  I could have bought a much larger hard drive for little added cost. Yet, almost all consumers aren't installing 4TB hard drives in their computers.  Why? That isn't a bottleneck anymore, even though it was for years.  I think we have reached a similar point with 300mb+ internet speeds.  So, what if people now care more about latency and ability to use 5G in other locations? 5G could be the winner there.

Assuming Rutledge is forthright with the 80% mobile usage being in the house, which seems credible, do you believe that consumers are going to change habits? 

 

Will AT&T or Verizon disallow customers from connecting to the internet via a wifi router b/c the wireless carriers don't want to run over Charter's pipes?

 

I think it's more likely the MVNO makes Charter more valuable to Verizon (as an acquisition target) than the other way around....

 

MVNO is a total commodity business.  There are dozens and dozens - and Charter will/does not offer the best price for MVNO.  If I can switch to Verizon for 5G and it is available at my house for the same price, why wouldn't you switch and get rid of cable internet? I get the availability of all 5G networks nationwide (as they come online), plus it is entirely wireless at my house, with much lower latency.  It seems like a no brainer unless you are downloading 20 4K movies per day to your hard drive and need 1gbps. 

 

The out of the house angle to me also is underrated. Think of business travelers in a hotel where 5G cells are nearby - you could stream 4K just like your home internet with no congestion.  No more hotel logins for terrible internet connections.  There are many reasons 5G can add lots of extra value with a network-effect.  The cable companies as far as I can tell are already several steps behind, if they expect people to sign up for their nationwide 5G service.

 

You can't win an argument against speed because as faster speed become available, the faster technologies will take advantage of it. Faster is always better in this case. I can also see the argument against CHTR with people cutting cable to single service provider VZ. Why would you pay two bills mobile provider and cable provider when you can combine the two and save at least $50 ($50 and $70 for me) when your 5G speed is good enough for their needs? I don't have the fastest internet because I am unwilling to pay more than what I need. People will cut them for sure if they can use their 5G for everything they need, in the house and outside the house.

 

FYI, I am invested in CHTR.

[Munger_Disciple]

MVNO is a total commodity business.

 

Cable Co's MVNO is not a commodity business. They have a deep wired network with hundreds of thousands of access points both inside and outside the home. Thus they can offload lots of mobile traffic (especially video) to their Wifi access points. A commodity MVNO provider cannot do that.

 

Verizon is contractually obligated to provide its network to Charter and Comcast for MVNO as a part of wireless spectrum sales by cable companies to Verizon in the past. If it were not for that, I am pretty sure Verizon would not be providing access to their mobile network to cable cos.

 

[walkie518]

I dont really want to speculate why demand is growing faster than need (if in fact that is the case), but we are definitely on opposite sides on this one.  You think competition might cause speeds to flatline because consumers will focus more on price (I think thats what u meant) and realize they dont need more than 100 mb.  I think competition up to 100-150 (or potential competition) is what caused cable to up their speeds cause they knew from recent experience (and also from European market behavior) that consumers would value it and were confident they would get paid for it.  But what I have come to appreciate more recently, after thinking this thru over and over, is that cable can give 1 gig to everyone in their footprint, almost for free, at very low incremental cost.  And like I said, I am not really sure about the scientific numbers and you (Cam) bring up some good points but I will almost guarantee that if cable feels like they want to or have to give 1 gig and 300-500 is their best competition, their market share will increase from today's levels.  Cable execs wont say it but I have come to believe this is a major factor in their confidence.

 

 

 

 

I get what you're saying here with speeds being very low cost to upgrade, but doesn't the concept of having 'unlimited' seamless 300mb speed at your house and in most major cities (unknown how long this might take) for a similar price point trump having 1 gig?  Plus the concept of not needing a cable guy at my house ever again is appealing. I think the network effect of mobile carriers could tip the scales because no one is cancelling mobile service anytime soon, whereas fixed cable internet? Maybe. It seems if there is one that will be disrupted it is more likely cable internet, instead of a nationwide mobile/broadband company with strong network effects.

JMP, how can having unlimited seamless 300 mb at a similiar price trump 1 gig?  Even if the service was competitive mb for mb, (which is far from a sure thing because everyone knows that wireless gap in the network probably makes it less reliable under certain circumstances) its rather obvious that people will take the gig even if they cant recognize incremental benefit (such is human nature) and even if its priced slightly higher.

 

If you can stream 4K with 25mb, why would I personally use anything close to 300mb? I wouldn't.  My home internet currently is 70mb which greatly exceeds my needs of streaming two HD devices almost all the time and online games. You're right that several consumers will jump to higher speeds just because.  However, I don't think that is a competitive advantage at the high end for consumers.  An example that could be compared: my laptop has 500gb of hard drive space.  I could have bought a much larger hard drive for little added cost. Yet, almost all consumers aren't installing 4TB hard drives in their computers.  Why? That isn't a bottleneck anymore, even though it was for years.  I think we have reached a similar point with 300mb+ internet speeds.  So, what if people now care more about latency and ability to use 5G in other locations? 5G could be the winner there.

Assuming Rutledge is forthright with the 80% mobile usage being in the house, which seems credible, do you believe that consumers are going to change habits? 

 

Will AT&T or Verizon disallow customers from connecting to the internet via a wifi router b/c the wireless carriers don't want to run over Charter's pipes?

 

I think it's more likely the MVNO makes Charter more valuable to Verizon (as an acquisition target) than the other way around....

 

MVNO is a total commodity business.  There are dozens and dozens - and Charter will/does not offer the best price for MVNO.  If I can switch to Verizon for 5G and it is available at my house for the same price, why wouldn't you switch and get rid of cable internet? I get the availability of all 5G networks nationwide (as they come online), plus it is entirely wireless at my house, with much lower latency.  It seems like a no brainer unless you are downloading 20 4K movies per day to your hard drive and need 1gbps. 

 

The out of the house angle to me also is underrated. Think of business travelers in a hotel where 5G cells are nearby - you could stream 4K just like your home internet with no congestion.  No more hotel logins for terrible internet connections.  There are many reasons 5G can add lots of extra value with a network-effect.  The cable companies as far as I can tell are already several steps behind, if they expect people to sign up for their nationwide 5G service.

Given what you may be doing today, true 5G service may make it seem appealing to make the switch, but this disregards developments in multiplexing as well as how demand will change with changes in the nature of supply. 

 

Once 5G is ready and there are 5G devices available to consumers in scale, content for those networks will upgrade to make use of all the good things that come with faster speeds.  When there are more lanes in the highway, they get used.

[cameronfen]

Cam, just from reading Lbtya's transcripts it looks like their speeds are higher average than anyone elses in the u.s.  i admit I dont know the average speed across Europe tho.

 

I know this discussion moves like 3 pages a day but if you are still interested: https://en.wikipedia.org/wiki/List_of_countries_by_Internet_connection_speeds

[vince]

What if that 300Mb was not just at home but was also your wireless plan.  Instead of $70 for unlimited 4G and $80 for unlimited home fixed wireless, Verizon was to charge $130 for unlimited 300Mb+ service regardless of where you are?  The lines between home and wireless, everywhere screens and watching (or service) are blurring.  Verizon appears to be betting they can be your 1 broadband provider - everywhere.  That's a pretty appealing prospect (if and when it works) especially if that level of capacity more than covers your needs.  The Comcasts and Charters of the world cannot compete with that except as MVNO.  I assume that's why Verizon stopped the Fios build out and even sold off a good chunk of the network - they knew that with 5G they would be overbuilding their own overbuild.

 

Ultimately, the cablecos and wireless need to merge.  It's the same product.  Cableco's are faster but wireless companies are broader coverage.

I am posting a recent quote by chtr's cfo.  When he mentions $45 he means thats what it costs for unlimited mobile data. "

Expanding the broadband Internet terminal penetration that I mentioned before, I know you and I spoke about it last night, but if you take a typical customer in the U.S., assume they have 2 lines, it's going to be about $130, $150 that they're paying for their cellular service today. If one of those users is a heavy user and one of them is a light user, we can offer them, in most cases, a better network. We can offer them a service that's going to be $45, plus for 2 gigs times $14 so $28, so $73, we can offer them a better service at a much lower price. If you then add our rack rate Internet pricing for 200 megabits per second at $65, which has access to WiFi in the home, WiFi outside the home, WiFi in businesses, then in that scenario we're doing, what's that, $73 plus $65, $138. I can potentially save them money, put them on a better network, give them much better usage of their phone because they're no longer constrained to 20 gigs. They get essentially real unlimited usage on their phone now because they have access to all the WiFi. That's a dramatic improvement in their Internet connectivity and a significant savings and a better service, both on their LTE network as well as on their in-home WiFi, which didn't exist in that case before. So I think we're going to drive a lot of incremental cable and connectivity sales along the way. Will that drive through and lift video and potentially fixed line phone? Maybe, but the biggest and most important point for us is to drive Internet sales"

So chtr has a mobile product across their whole footprint ALREADY up and running that in some ways is better than Verizons (no data caps) and will save the customer real money in a product that they must have. Do u really think Verizon can offer unlimited with no data caps to all their customers? No chance.  And this is no small advantage.  Verizon's response, 5g, is an inferior product when it comes to reliability and is going to take 10 years (they said this publicly) to overbuild a small percentage of chtr's footprint.  And realize that they will not get anywhere near 100% penetration of that 8%, inertia is alive and well in cable land.  How about small business and enterprise customers?  Cable has been rapidly taking share from telecoms for years (please dont continue telling me what u would do, this is what is already happening) in B to B because they have a superior product at a lower cost.  But you know what else they have?  Nationwide coverage where the cable companies cooperate (they are cooperating on mobile as well) that I'm sure everyone can appreciate how big of an advantage that is when you are serving enterprises with multiple locations nationally.  Is 5G an answer to that? I dont see any telecoms cooperating to defeat cable which would be very difficult anyway because of how much time and capital it is gonna take.  I will admit that whenever I hear of any product that could potentially compete with cable it scares the crap out of me.  But any rational person has to admit that at this point in time cable has some serious competitive advantages.  Also notable is the fact that cable probably has an easier and cheaper path to its own 5G. 

  It is no secret that Verizon started this push to 5G AFTER they realized that buying their broadband network, via Charter, wasnt  going to be any cheaper. Lastly, I agree that there will be mobile-fixed consolidation, I just think it will be on terms very favorable to cable

[Spekulatius]

Also how likely is it that Verizon wireless, who has been the price leader in wireless is actually committed to executing a plan that will cost them tenth of billions in Capex, obsoletes their broadband business and reduces their ARPU in their wireless business? Makes no sense and ergo isn’t likely to happen. If VZW can indeed change fifer seamless unlimited broadband for 300MB/sec without device restrictions they for sure won’t do that for $50/ month. right now they charge a customer about $80/ month for broadband and probably $70/month for wireless and you think they are stupid enough to offer a better service for  1/3 of the price. If that were true one needs to short everything , including the debt of all telecom and cable cos.

[cameronfen]

I think currently broadband in combination with MVNO is as good as it gets.  However if Charter takes too much share (they might not as most MVNOs don't have that much luck even with the same reception), how difficult would it be for Congress to say no to telecos who say its unfair they have to rent their assets out to cable companies, but cable is allowed a monopoly on fiber assets.  Even though the plan Charter has is a good one right now, the future whether its 10 years or longer is wireless broadband.  It's just cheaper in terms of CapEx and upgrade cycle than fixed line (much of the improvement in if necessary will come in increase compression and software efficiency to transmit the signal rather than digging up wires and putting new ones in).  We don't need massive bandwidth so far and so the lower bandwidth will be okay (but I guess google with google fiber disagrees).  If Verizon doesn't cannibalize its broadband business another teleco without significant cable assets like t-mobile or sprint or AT&T will eventually move into the spot.