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January 6, 2014

FCC Report - Cable Sub Growth Dominates Fixed Internet Sector

As usual, the FCC's reports are never timely, but its recently released 9th Internet Access report has some data worth noting—like how cable is still the most popular form of fixed Internet and is expanding faster than other forms of fixed services. Well, at least that was the case for the 2nd half of last year, which is the period covered in the report.

There were 44.1mln cable connections with speeds of at least 4 Mbps down and 768 Kbps up (meeting FCC's definition of broadband) at the end of '12, up around 17% from the 1st half. Including telco and satellite ISPs, there were nearly 60mln fixed broadband connections, up from 53.1mln connections in the 1st half. Asymmetric DSL subscriptions, which accounted for the majority of DSL connections, grew just 1% to hit 11.6mln while fiber-to-the-premises connections were up around 7% to top 6mln.

However, it's a completely different story when wireless is included in the mix. Of the 129mln total broadband connections (including fixed and mobile) by year-end '12, cable accounted for 34.4% vs wireless' share of nearly 50%. And coinciding with the wireless cord-cutting trend, mobile broadband subscriptions (WiFi not included) jumped from just over 43mln in the 1st half of '12 to more than 63mln by year-end. That's a staggering 48% increase.

Meanwhile, the report, which looked at connections across states, found MA (served by providers like Charter, Verizon FiOS and Comcast) had the highest percentage of fixed broadband subscriptions (77%), followed by NJ at 76% and NH at 73%. At the bottom of the list was Mississippi with only 24% of HHs subscribing to broadband. California had the most number of cable connections, followed by NY and FL. The next report looking at Internet access during the 1st half of '13 is expected in the summer.

Research firm IHS said cable connections have grown by an average of 600K connections every quarter for the last 2 years, while DSL has shrunk by 0.3% each quarter for the last 2 years, attributing part of the trend to Verizon's aggressive migration to fiber networks from DSL. Of all the fixed broadband providers, Comcast had the largest portion of the pie at the end of the 1st half of '13 with more than 1/5 market share, according to data from IHS. It's followed by AT&T and Time Warner Cable, with Verizon and CenturyLink rounding out the top 5.

Yet amid retrans disputes and telco competition, cable overall saw slowing growth in broadband additions in 3Q, adding 517K subs (down from 671K in the year-ago period). And broadband sub growth overall has slowed in the 1st 3 quarters of '13, with the 17 largest cable and telecom providers adding some 1.9mln subs (vs 2.15mln) a year earlier, according to Leichtman Research data.

EDITOR'S NOTE: This story originally appeared in CableFAX Daily. Go here to subscribe.







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