Putting an end to recent rumors, CommScope and ARRIS have announced that the former will be acquiring the latter, with the deal to close in early 2019. Both companies built themselves through a combination of internal developments and by making acquisitions; ARRIS with Pace, C-COR, Ruckus, a big piece of Motorola, Digeo, and others. While CommScope has not been particularly on the pay TV industry’s radar, the two companies appear to be a good fit for one another. As network suppliers, the solutions that they provide to the markets that they target are complementary to one another, which CommScope illustrates in their merger presentation of November 8 (see page 14).
So what about pay TV? Because of their solutions synergies, the two companies should be able to open new business opportunities for one another. ARRIS might see new opportunities in enterprises and private properties where CommScope offers fiber and LAN connectivity solutions and ARRIS adds TV CPE and Ruckus WiFi access. Similarly, CommScope could complement ARRIS (and former C-COR) solutions in operator accounts by adding fiber and copper connectivity and outside plant equipment. But the fact that this happened at all was intriguing to me: that ARRIS would build this formidable and comprehensive lineup of solutions – end-to-end, really – and then fold their hand.
You can argue that MediaKind (Ericsson’s to-be-completed-as-of-this-writing joint venture with One Media Partners) and Synamedia (Cisco’s recently consummated joint venture with Permira) have done the same thing, by spinning out “sub-optimally-performing” TV businesses into joint ventures. But while both Synamedia and MediaKind went out of their way to tell of their respective visions for the future at IBC in September, I didn’t get the same emotional connection from ARRIS.
But upon further reflection, it seems that ARRIS has been pulling back for some time. If you click down into individual units of ARRIS, I believe there have been some missed opportunities to stake out a leadership claim.
One could argue that ARRIS has been out there plugging away for Set-top Boxes, and devising new use-cases to keep the category alive. At IBC, I spent an hour with a senior ARRIS executive, and much of our conversation was about was about how screens are canvases. A valid and correct world-view, but a bit surprising since ARRIS discontinued the TV middleware and service delivery platform portions of the Elements software line after acquiring Pace. Not to mention the former Motorola Medios platform.
For another, their TV Security unit has three CAS (SecureMedia’s, and Latens/Pace’s – which overlap – plus Motorola’s/DigiCipher for cable and satellite), a DRM (SecureMedia’s), and a PKI service (Motorola’s). This gives ARRIS a comprehensive product-set and a strong set of technologies – but one in need of modernization. With the emergence of anti-piracy as a new market opportunity for video security (and one that all the security vendors are chasing, as opportunities for CAS and DRM flatten and dwindle), ARRIS has been silent – though it is entirely possible that it exists but simply hasn’t been announced.
There are opportunities, should the new company choose to pursue them. Outside of the Tier-1 operator category that ARRIS calls home, companies like Amino, MobiTV, Nordija, Minerva Networks and of course TiVo, are pursuing “infrastructure modernization” and “cap-and-grow” opportunities with Tier-2 and larger Tier-3 operators, and surely they wouldn’t be doing so unless they saw opportunities there. But because ARRIS sold Digeo/Moxi to Espial last year (now branded as Elevate Cloud), ARRIS had already pulled one foot out of that water. Ironic because platforms “-as-a-Service” have attracted such strong interest.
Other questions remain. For example, what about the ARRIS portion of the joint venture with ActiveVideo and Charter? What role, if any, will majority-owner-to-be Carlisle Group take?
Our story so far… We moved our office at the end of May, but our communications services were not established until mid-June.
At about 9am on June 14 – our re-scheduled installation date – I called CenturyLink to confirm the technician’s arrival time. “Between 10am and 12 noon,” I was assured. When I called again at about 3pm, they confirmed that a technician had in fact been dispatched. A few minutes later, the CenturyLink truck pulled up and I intercepted the technician as he was inspecting the side of the building. Expressing frustration with the state of the outside wiring, he said that the first installer and one of his colleagues had both taken early retirement, leaving just two installers for our area.
At that moment, a second CenturyLink truck pulled up, and as the two technicians conferred, I overheard that neither of them knew that the other one was coming, and that neither of them had the hardware they needed to complete my installation. Undaunted, the first technician dismissed the second one and sheepishly asked whether I would be here the next morning (Yes!), and then asked me to lead him to the indoor telecom patch panel was so he could complete his pre-installation inspection.
Here’s where I reveal a guilty secret: prior to my move, and before I found out that I had been calling the “wrong” CenturyLink office to schedule install my new service, I placed a $100 deposit with CableCo to install phone and broadband service.
When the CableCo technician visited during the last week of May to pre-inspect my facilities, I showed him the access panels to both the outdoor and indoor wiring. Equipped with the knowledge he needed and making no further comments, he left. But when the “right” CenturyLink office was revealed to me, my sense of loyalty to the Telco industry led me to cancel CableCo’s installation and ask for my deposit back. I was beginning to regret that decision.
As the CenturyLink installer proceeded inside to complete his inspection, I asked whether he would mind whether I followed along to watch what he was doing – explaining to him that I was in the telecom industry and knowledgeable about the Mediaroom platform that CenturyLink uses for TV. Realizing that he was talking to a friend (sorta…), lots of revealing conversation ensued.
As he removed the cover to expose the indoor wiring patch panel, we saw that there was none – just a mass of wires. As he organized the wires into three pairs, he informed me not to expect an upgrade path to CenturyLink’s (advertised) 100mbps service. Having settled for 3mbps VDSL service in my previous office, I was ecstatic at the prospect of having 20mbps service at the new one. But then again, what if I did want to upgrade to 100mbps later?
To get 100mbps service, we needed four pairs of conductors from the Calix switch providing our service. The technician had seen this situation in our neighborhood before. Apparently, despite an agreement with the builders of our development to equip every subscriber with four pairs of wiring, the contractors engaged by the builders installed only three. To get to four-per-subscriber, new wiring would need to be installed for each subscriber, and capacities of the up-stream transport facilities would need to be re-evaluated, and possibly upgraded.
The agreement also apparently called for them to install patch panels, but as we saw, none were present. Meanwhile, CenturyLink had equipped this area to handle hundreds of subscribers, but CenturyLink’s actual subscriber-count was only about two dozen, partly due to this situation. Ceding the rest to CableCo (which doesn’t need four pairs to provide service).
To add insult to injury, the CenturyLink installers who had recently taken early retirement had been suspected of sabotaging new installations by stuffing small rocks into the wiring conduits alongside the buildings, so the wiring would not be accessible. If true – and perhaps they were just disgruntled short-timers – it made me wonder who they were really working for. Between possible sabotage, insufficient in-building wiring, and the lack of IT integration described earlier, the cards are stacked against any possibility that CenturyLink could do much better than it is doing.
It’s really a sad situation, and it would probably motivate the developer of this area to take some kind of legal action – if only they knew about it. Even if I have some of the details not-quite-right, I’ve been thinking about informing the development’s management of this situation. But how far would this information get within the developer’s organization, and will it motivate them to take action? And if so, against whom?
On Friday June 15, we had service. But one of the primary reasons we opted for CenturyLink service was to have line-powered phones in the event of power outage. Because CenturyLink has fiber-to-the-premises access here (not that I’m complaining), we could need a battery back-up to preserve service unless the nearest switch has its own. If we do need one, hopefully the charge for it is minimal.
Also on Friday I received a $100 refund check for the deposit I had made in May with CableCo for the service that we canceled before it was installed. I had forgotten.
At the end of May, tvstrategies moved its global headquarters, but our communications services were not to be active until mid-June. It’s the second time that CenturyLink failed at provisioning our basic telephone and broadband services. Our story…
Because we are in an area that occasionally loses electrical power, we need a land-line from the local telephone company. People forget that the CableCo provides phone service using Voice over IP. Which means that when you lose power, you lose your router, which in turn means you lose not only your broadband service but also your phone – which will be important when the Zombie Apocalypse strikes.
So before our move, rather than placing an order with CableCo, I called local incumbent Telco CenturyLink. Strangely, they couldn’t find our new address, asked me to identify the township and section from county land records (!) and instructed us to contact CenturyLink in Florida, 2,700 miles away.
Figuring that there had to be a better way, we contacted the management of our new development which gave us the number for the CenturyLink office that manages the area surrounding tvstrategies‘ new digs. They located us quickly and scheduled the installation for May 30th.
But why did this happen? Because although CenturyLink’s acquisition of Qwest Communications (previously US West, one of the seven regional operating companies that resulted from the 1984 break-up of the Bell System) was completed in 2011, the two companies had still not integrated their IT systems.
Since my old office was in former Qwest territory and the new one is in a territory that was once part of CenturyLink’s predecessor CenturyTel, it meant that CenturyLink had no way to coordinate the relocation of our services – which should have been a simple of entering a new address on an admin screen. Instead, our new address was invisible to them, and therefore didn’t exist.
But there’s more. A CenturyLink installer came out on May 30, poked around for a few minutes and informed us that they had to do some digging. Even though there is a FTTH pedestal on the property, literally 20 feet from the door. So yes, CenturyLink does in fact serve the neighborhood (or, in Telco/Cable jargon, “the buildings are passed”), but even the responsible office can’t seem to see whether or not the individual buildings are actually connected without a site visit.
CableCo, on the other hand, also passes all these buildings – and knows where their lines are. They are also good at incenting new subscribers with “triple play” service (TV, broadband access and telephone together). To provide the TV portion of the triple play, CenturyLink offers AT&T’s DirecTV, since they are no longer promoting their own Mediaroom-based Prism TV service.
When I asked the CenturyLink installer how long it would be (“Days? Weeks? Months?), he said “probably a week – someone will get back to you.” After he left, I saw that he had left the door open for the network interface box on the side of our building. I rolled up the exposed wiring by hand, stuffed it onto the box, and closed the door.
After several days of no contact, I called CenturyLink in Gig Harbor again and was informed that our installation would happen on June 14. I called them again on the Monday prior to installation to re-confirm, and was assured it was still on.
I’m glad I had the foresight to add cellular/LTE compatibility for my iPad – as a mobile hot spot, it serves to connect our computers and other sundry devices to the outside world. But the cellular signal is marginal here, and we sometimes lose the connection.
June 14th couldn’t come soon enough. Click for what happened next…
We all know about ‘Over the Top,’ where an online video provider circumvents or disintermediates a pay TV operator (while using the operator’s own network to deliver said video). Then there’s ‘TV Everywhere,’ in which pay TV content providers require users to associate themselves with their pay TV subscriptions or, no play.
Through the Middle
A third online video service model is where a pay TV operator enters into a relationship with an OTT provider or online aggregator and exposes the online service within its pay TV experience. In other words, not OTT or TVE, but “through the middle,” or “TTM.”
At first, it sounds like a gimmick – some kind of desperation move by the pay TV provider to give frustrated subscribers one more reason not to cut the cord. But let’s look a little further…
TTM: A little background
In March 2014, the Danish broadband provider Waoo! introduced Netflix from within its pay TV user interface, through the middle. Here’s a demo video (in Danish).
This is enabled through the integration of software from Netflix, Nordija and Airties, which are Waoo!’s TV middleware and set-top box suppliers, respectively.
DISH embraced TTM too
In December 2014, DISH Network introduced Netflix integration as well. DISH’s implementation is different from Waoo!’s. While Waoo! dedicated a button to Netflix in its main menu, DISH placed Netflix within the electronic program guide, which made Netflix “just another channel.”
So now, I can access Netflix using the same method of access as DISH uses for video on demand.
TTM’s not a gimmick
Again, I thought “it’s a gimmick.” Until I decided to try it. If you own a streaming video player, you’ve probably been through a drill that goes something like this:
- Turn on the TV set (using either the pay TV STB remote or the TV set’s own remote)
- Locate the streaming video player’s remote, press the button to activate it
- Locate your TV set’s remote, and change the input from your pay TV set-top box, to the streaming video player
- Navigate the video player’s menus to the Netflix application, and activate the app
- Navigate the Netflix thumbnails, using up/down/right/left on the streaming player’s remote, or locate the search field and use the text search character matrix.
- Watch videos on Netflix
- Grab the TV’s remote and switch the input back to your pay TV set-top box
- (…At which point, we’ve used at least two different user interfaces – that of your streaming player and Netflix.’ Plus, perhaps, the TV set’s own UI – and as many as three different remote controls)
- (…At which point, my wife asks me to call someone for technical support – but who?)
Compare this classic early-adopter experience with DISH’s TTM experience
- Turn on the TV, using the DISH remote
- Bring up the EPG and navigate to Channel 370
- Press the center button to enter Netflix.
- The Netflix user experience takes over (DISH can’t be held responsible for Netflix’ unusable search and recommendation capabilities)
- Hit Cancel, Cancel, Cancel… to back out of Netflix and return to DISH
- (…at which point we used one remote control and two UIs: that of DISH and that of Netflix)
The first time you access Netflix via the DISH EPG, you must enter your Netflix ID and passcode. Any subsequent use of Netflix goes right from the EPG to Netflix, with no login needed.
Has someone already decided that TTM is too good to be true?
I was initially motivated to write this article because Zatz Not Funny published a report that the YouTube and Amazon apps were being removed from the TiVo Series 2 and Series 3 DVRs, as of April 15. Sure enough, TiVo confirms this. Because the apps reside on the TiVo box, this is really another version of Through the Middle.
I immediately jumped to the conclusion that Amazon and YouTube were starting to get choosy about their distribution channels – and that TTM might just be a fleeting phenomenon as different content providers contend against one another to be the one on top. Or as my wife’s dad used to say: “If it’s any good, they’ll stop making it!”
As it turns out, the moves by Amazon and YouTube are simply because the TiVo 2- and 3-Series are old, and the app developers made the choice not to support them anymore. In fact, video apps from Amazon, YouTube, Hulu Plus, Netflix, Vudu (and others) are all key selling points for TiVo’s current Roamio DVR, and surely these video providers must appreciate having access to TiVo’s subscribers.
Not long ago, an industry friend of mine told me that Netflix had been in a pay TV operator’s EPG, but had pulled out. But the reason that Netflix and the pay TV provider went their separate ways was because Netflix wanted more control over the user experience.
So, these weren’t cases of competitive wrangling or channel conflict at all. One was about discontinuing support for old devices, and the other was about a content provider trying to maintain its look and feel across any device environment.
TTM is BoBW
Pay TV operators that integrate their services with TiVo can choose whether or not to expose TiVo’s OTT apps through the middle, but that’s also another story. In those cases, the pay TV operator is calling the shots, which brings us full circle back to the debate as to whether OTT is a threat or an opportunity for operators.
In the end, I view ‘Through the Middle’ is BoBW (the Best of Both Worlds) as a consumer retention tool for pay TV. But I think it’s more because of the added convenience, and it’s a tacit admission by pay TV operators that OTT can be a friend and isn’t a threat.
[ Side note: This topic takes us into a whole 'nother discussion about where the pay TV provider's user experience leaves off, and where the OTT (TTM) provider's UEx takes over. I promise an article about this soon. ]
It’s an easy trap to fall into: to be so distracted by goings-on in what have traditionally been the world’s largest pay TV and online video markets that we miss what’s going on in the rest of the world.
Case in point is India. Five to ten years ago, it was easy to dismiss India as a yet-to-emerge market for pay TV. There was a vague assumption that IP video might succeed over mobile, but not anytime soon. And because per-subscriber revenue is so low, the conventional wisdom among infrastructure providers was that India wasn’t particularly worth their attention anyway.
Fast forward to the present day: India’s TV and online video industries are super-active, white-hot. Last summer, Hong Kong-based Media Partners Asia estimated that pay TV in India would grow at a 11% per year through 2018, driven by rising ARPU.
Just during the first calendar quarter of 2015 alone:
- India’s Ministry of Information and Broadcasting issued operating licenses to 11 TV operators between November 2014 and January 2015, and then another 11 between January and early March. In that short period, it represents about 15 percent of the total number of operators in the country (153 total, as of March 10)
- Operators are adding new TV channels at a rapid pace. Tata Sky announced that its move to MPEG-4 is making room for 20 new channels. The same operator launched 4K set-top boxes early in 2015.
- Outside media companies see India as a new market opportunity for their programming. Turner announced the launch of its Toonami channel with five operators in February. Online video provider Hungama.com is adding Disney and Marvel content.
- New online video providers are also coming on the scene. Viral Fever launched on online movie service, while Culture Machine, which distributes content over YouTube, raised US18M to fund its network of 400 India-based media brands and independent content providers.
- Graphic India raised about U$3M from the Asian investment arm of Chernin Media, which is also noteworthy because Chernin has a content partnership with AT&T (my guess is that this could help fuel a future AT&T ‘International’ content offering in the US).
- New operators and broadcasters are also raising money: One operator, Ortel Communications, raised INR1.75B (about US$28M) in March. India-based Zee Media is offering 108M shares in its IPO, and is launching its &TV service in the UK in combination with the trivia app QuizUP on April 6.
- New video advertising networks are coming on the scene, with launches by Komli Media and Seventynine, which offers an in-app advertising platform and advertising SDK for mobile video.
And of course, infrastructure providers are striking while the iron is hot:
- Verimatrix announced a video security win with Vuclip, a mobile VOD service available in India, Southeast Asia, and the Middle East
- Ericsson, Cisco, and Elemental Technologies all announced operator wins for their 4K-capable video encoding platforms
- Cisco also announced a win for its Videoscape multiscreen service delivery platform, with DTT operator Videocon 2dh.
- Companies like Micromax are introducing Android-based 4K/UHD TVs in India, although consumer uptake for 4K in India is likely to be sluggish.
- Amagi is winning deals with video content providers for its Cloudport cloud-based online video system
- Technicolor is considering making video technology acquisitions in the country.
- Home-grown infrastructure providers are emerging. New Delhi-based Chrome Data has announced an anti-piracy service to fight cable signal theft. Multivert India has partnered with Video Propulsion to offer low-cost headend equipment.
In short, the entire video industry ecosystem is thriving there.
If nothing else, this situation has prompted me adjust my perception as to which pay TV market might be the biggest one right now. If not from a revenue perspective, then at least in terms of opportunity and potential.
This article owes a major tip of the hat to NexTV India.
DISH Network used the 2015 CES conference both as a review of recent announcements and as a launch pad for the new; in three areas: new content offerings, new equipment, and a new user experience. Some of it was evolutionary, and some of it pace-setting. Here’s a recap of my tour of DISH at CES.
Online video to the TV
First there were a number of content announcements. Because it was announced just before the pending holiday break, many had missed DISH’s December 17 announcement that Netflix has been integrated into the DISH Hopper home media gateway as a TV app; one of the first US pay TV operators to do so. DISH also announced a Vevo music video TV app.
TV video online
DISH’s biggest CES news was its new Sling TV service, which will be available later this year. Sling TV is a stand-alone online TV service designed expressly for Millennials, the 18-35 audience that the pay TV industry will increasingly be depending upon to sustain the business as today’s pay TV households age and gradually disengage from premium programming. No traditional satellite TV subscription required.
Rather than being cord-cutters, Millennials tend to be “cord-nevers” who feel that they can get all the video programming they need from other sources without subscribing to pay TV in the first place. Others of that demographic ‘hitch-hike’ on their family’s pay TV plan, despite having households of their own. So to characterize Millennials as “cord-cutters” isn’t fully accurate. DISH hopes to attract this demographic where others have failed.
DISH is carrying forward the traditional multi-tiered pay TV content model into this online offering, with a bit of an a-la-carte twist. The $20/month base offering consists of programming from The Walt Disney Company (ESPN and ABC), Turner (CNN, Cartoon Network and TBS) and Scripps Networks Interactive (The Food Channel, HGTV, and the Travel Channel). Announced add-on packs include a Kids Extra (Disney Junior, Disney XD, Boomerang, Baby TV and Duck TV) and a News & Info Extra (HLN, Cooking Channel, DIY and Bloomberg), for $5/month each.
Missing are DVR functionality and regionally-tailored live sports, local programming, and linear programming from TV networks other than ABC and ESPN. It isn’t perfect but it’s a promising start that is gated by content rights, not by technology.
This offering was just a matter of time in coming. Last year, DISH began to offer an international TV programming service online, called DISH World. DISH officials at CES confirmed that DISH World was essentially the Beta for Sling TV. DISH acquired online video technology pioneer Move Networks several years ago, and uses the Move software in both services.
DISH announced a 4K version of the Joey client set-top box, which later received an Editors Choice award from Reviewed.com, a USA Today division that was an official media partner with the Consumer Electronics Association, the host of CES. In picture-in-picture mode, the 4K Joey delivers two simultaneous HD-quality pictures. For DISH customers that don’t have a 4K TV, the existing Joey remains available.
New user experience
DISH was also demonstrating a new TV user interface for the Hopper, which includes a new Home screen, a Mini-guide, Favorites, and Recommendations (using TiVo’s Digitalsmiths platform) . Users will be able to see what’s ‘On Now,’ ‘On Later,’ and recommended content. Search will be across all TV content, plus VEVO. DISH is also adding a Netflix-like “choose uer profile” interface, first to the DISH Anywhere (available as a mobile app or via browser), and later, to the Hopper itself.
Another part of the new user experience is a new remote control for the Hopper with Sling home media gateway. In addition to having buttons, there’s a track pad and speech recognition. Touch and speech have become part of the autonomic nervous system of smartphone users, and DISH acknowledges that reality. The speech recognition is from Rovi’s Veveo subsidiary, with a back-end from Nuance.
DISH will also be supporting high-quality whole-home music via the Hopper and the Joey, and have access to content from IHeartRadio, TuneIn and Pandora, as well as their own music libraries via their home networks. DISH will be pushing the enabling software to the Hopper “sometime this summer.” An integration with Sonos wireless home music systems is also coming later this year.
If you want to watch your recording of The Adventures of Sherlock Holmes, you have to scroll down to the “T”s for “The.” Not the “A”s for “Adventures,” as I highlighted with the yellow box. It’s tedious to scroll all the way down to the “Ts” to watch something that starts with an “A.” Why not sequence by the first significant word in the title?
Obligatory miscellaneous distraction
In the middle of my booth tour, an impatient late-middle-aged ‘gentleman’ inserted himself between us, blurting out “Fox News! Fox News!,” then walking away mumbling about politics; apparently expecting the DISH executive to resolve the DISH-Fox carriage dispute that began on December 20, right then and there. It would take another week for that to happen.
If I had any single take-away from all of this, it’s that DISH has a clear view toward the future. The company realizes that it can’t bend new consumers to the old ways of pay TV, and instead, is taking steps to meet these consumers more on their own terms. They also realize that today’s mobile consumers aren’t going to be tied to any single access network, given the availability of LTE and wireline broadband (to say nothing of DISH’s multiple wireless spectrum acquisitions in recent years, and DISH said nothing).
Secondarily, Sling TV reinforces my existing belief that “online TV” will probably look a lot like “regular pay TV” as it matures. The content sources may be different – and multiple – but the entire bill might come to resemble what today’s consumers pay for DISH Network, Comcast or AT&T U-verse. Start with the base $20 for Sling TV, and $5/each for the add-on packs. Then add Netflix, Hulu, direct-to-consumer services from HBO and CBS, plus live TV (however that may happen, given what happened with Aereo), and it all adds up from the consumer perspective. We seem to be headed toward a world that embraces both bundling and a-la-carte.
What’s wrong with this picture is that consumers have to deal with a multitude of user experiences, instead of just one. Someone will eventually succeed in creating single user experience across all pay and online sources. It has to be someone that’s separate from the vested interests of each individual content and service provider. There are a number of third party TV Remote Control apps, but none of them quite nail it.
Competition is coming
It will be interesting to see how well DISH fares against emerging competition from Sony, HBO, CBS, DirecTV (especially if the AT&T acquisition goes through), and Verizon, which shrugged off DISH’s Sling TV announcement, despite that it shut down Redbox Instant last year.
My Bottom line
DISH has taken the old adage of retail to heart: location, location, location, while taking away any excuses not to take services from them. I think DISH is more pre-disposed to a world view of ‘virtual subscribers’ because satellite operators don’t have a direct physical connection (over a wire) with them.
At the time of announcement this week, the only two major devices not supported by Sling TV were Apple TV and the Chromecast. If that’s not enough, consumers can opt for the full pay TV experience and the Hopper’s Slingbox technology, to can get the content that online video offerings lack. Maybe that’s DISH’s real strategy: to use Sling TV as the teaser to get Millennials on to the full Hopper-based pay TV offering.
I also look forward to trying out the new user experience and remote control when they become available.
During the CES conference, Cisco Systems hosted an analyst reception, showcasing Charter Communications, a major US cable TV operator that is one of Cisco’s customers. I came away quite impressed with Charter’s new IP-hybrid HD TV set top box.
The WorldBox and its underlying Spectrum software stack provides a re-usable, portable platform which provides an alternative basis for IP-based multiscreen services. Charter’s offering is more akin to the DVB hybrids from European operators than it is to the US cable industry establishment’s reference software platform, the RDK.
Over the weekend, AT&T announced its intentions to acquire satellite TV operator DirecTV. Should the deal pass regulatory muster and go through, it will create an operator with about 26 million pay TV subscribers, plus 17 million broadband subs, 11 million phone subscribers and 100 million wireless customers. As a merged entity, AT&T becomes a national pay TV provider, with immediate access to TV subscribers outside its fixed-line (U-verse) territory. That’s just in North America. DirecTV has about 18 million TV subs in Latin America as well. All told, this would make AT&T the largest pay TV provider in the US (and in the Western Hemisphere).
Of course, DirecTV is a high-value target for content reasons as well: particularly its exclusivity for NFL Sunday Ticket. Some major AT&T suppliers must also be taking notice. For one, AT&T has based its TV service on Microsoft Mediaroom, which Ericsson bought last year. DirecTV uses NDS TV security and middleware, and NDS is now owned by Cisco. So, two TV infrastructure leaders that also both happen to be incumbent network suppliers to AT&T.
But there’s also a bigger picture: while a combined Comcast-TWC results in a triple-play provider, DirecTV adds to AT&T’s existing quad-play advantage. Without offerings that compete against AT&T wireless and DirecTV, Comcast will remain a local carrier within its own cable TV service territory; even with Time Warner Cable. To serve any devices – mobile or fixed – outside of its territory, Comcast will remain an OTT player. (Note: TWC is partnered with Verizon Wireless – but it’s anyone’s guess as to how Verizon might treat ‘foreign’ video providers over its mobile network in the future).
The expiration of Net Neutrality was certainly a strategic consideration for both AT&T and Comcast. One of AT&T’s terms in the proposed DirecTV acquisition is to place a three-year expiration date on its commitment to the FCC’s current version of Net Neutrality. This is interesting, given that DirecTV is a satellite operator with no Internet access network of its own. My own guess is that this is really a pre-emptive move to keep Comcast from having (or making Comcast pay for) equal access to AT&T mobile subscribers; for video delivered to smartphones, tablets or the Connected Car.
And Comcast doesn’t really have an answer to that. Even if Comcast were to let its own Net Neutrality commitment expire in 2018 (which is the year specified in the terms for its NBC Universal acquisition), that will only be within Comcast’s own network. Comcast would have little power over mobile carriers which, by then, will be perfectly able to parachute right into the thick of Comcast territory, to deliver high quality pay TV over LTE mobile access. This places Comcast at the ultimate disadvantage, even with TWC, because it can’t do the same in a U-verse territory. All the more reason to keep Net Neutrality principles in place.
By missing out on DirecTV now, and by not bidding for Sprint last year, Comcast missed two strategic opportunities to reach subscribers that don’t depend on fixed lines, at a time when mobility arguably represents the biggest single opportunity in telecom. Not quite so much to see here after all.
But the competition will really get interesting when DISH finally launches a national LTE service, using all that spectrum that they’ve acquired in recent years. Or, even more interesting if DISH were to acquire T-Mobile as well.
In the wake of my long debacle to get new voice and broadband services from CenturyLink, detailed in my five-part article, I was reminded that many consumers in the US are still served by what, in effect, are telecommunications monopolies.
Even though large operators (often backed by legal disclaimers) say that there is plenty of competition in local markets, my own reality was to have no viable alternative for fixed voice and data communications services. With no competitor looking over CenturyLink’s shoulder, I was virtually forced to beg for service for more than a week. And I must settle for 3 megabit broadband access.
It isn’t this bad for most consumers
Fortunately, the competitive landscape is different for most consumers. In most local markets, at least in metropolitan areas, they can choose from among at least two fixed-line providers: their local phone company and the local cable operator. In some cases, there are additional alternative private – and even public (municipality- and public utility-based) – broadband providers. Rather than pleading, those lucky consumers can simply change providers without too much sacrifice.
As for pay TV, even though most areas have only one cable operator, all of them face competition from two strong satellite TV competitors: DISH and DirecTV. Plus now, Telco IPTV is a full-fledged competitor to cable and satellite, and direct-to-consumer (OTT) distribution brings a steadily-increasing range pay TV and local broadcast programming. I’m sure that this level of competition motivates at least most of them to improve continually.
On the mobile side, the US has four national cellular carriers – AT&T, Verizon, Sprint and T-Mobile - and the healthy competitive battle among those ensures that, if one of them provides doesn’t reach or provides inadequate services, there are others to choose from.
Stay tuned for the next battlegrounds
So, the battle among service providers in the physical world is well engaged. Now, all eyes should turn to the FCC, as it fights to reassert authority over the ongoing consolidation of the media industry, and Net Neutrality. Whether or not operators like Comcast and Verizon are purposely degrading service for content that they don’t originate or profit from themselves are two sides of the same coin.
But those are stories for a different day. (Ed: As it turned out, it was a story for the next day.)
Furthermore, Centurylink wasn’t done with me either.
This is the last part of a 5-part article that contrasted two very different customer service experiences; one with TV provider DISH Network, and the other with the local incumbent Telco, CenturyLink. The DISH experience was one of the best customer service experiences I have had in some time. CenturyLink was a nightmare. The story starts here. Part 2 is here, Part 3 is here, and Part 4 is here.
Somebody up there must have decided that I had had enough
While I was waiting for Emily from CenturyLink to call back (who never did), I decided to call the number from the “customer satisfaction” message that had been left for me on Sunday. True to form, it landed in the Philippines. But instead of going through the previous pattern, I immediately asked the agent to transfer me to an agent in the United States, which she did.
This time, the call was answered by an agent named Lori, who, after I asked, revealed that she in fact was able to read my history of support attempts on her console. I told her that I expected resolution during this call, and since there must have been a lot for her to read, I gave her a short summary of the procedings to date anyway. After two times on hold, she told me that Internet service was now associated with both my residential and business lines, and asked me to switch the jacks outside.
Of course, to switch jacks, I realized I would lose this call, so I asked her to give me her direct line. She did so, and assured me that she would answer the phone. So I switched the jacks outside and prayed. First I called the residential line from the business line, and it rang on the right phone. I called the business line from the residential phone, and the right phone rang. I had Internet service in my office. In short, everything was finally right. I then called Lori to tell her that everything was finally in order, and thanked her for whatever she may have done.
I asked Lori to send me a customer service feedback form, told her that she was my hero for the day, and told her I would give her top marks for resolving all of this. However, the promised feedback form never came. Who knows whether the “right” services were a result of my calls with Emily on Thursday, or Lori on Monday. Also, I’m half expecting to be billed double for Internet access, since it was now associated with both of my voice lines. But after a week of drama, I was thankful to have my services.
Not only that, but my broadband access has gone from 700-something kilobits per second to the three megabits that (in fairness) the CenturyLink rep I spoke with on January 14 had said my line tested for. Still, it’s far cry from the 40mbps that CenturyLink advertises in my local market.
Why did this have to be so expensive, to CenturyLink and to me?
In the aftermath of this debacle, I could only sit in wonderment. Why, in 2014, couldn’t this have been better managed? I was not CenturyLink’s first broadband customer. Why a major Telco can’t seem to provide a consistent single view of their customer through any service rep’s console puzzles me. Some reps saw my history and some did not. Also, why could some customer service agents see what other parts of their operation were doing, while others could not – forcing them to place the customer on hold to call around the company manually? Since the agents in the Philippines couldn’t help, why weren’t they better trained? Why did so many people have to be involved? And all of this just to resolve what might even have been an order-entry mistake!
If you’re a Telco, you know that call-center support costs just a fraction of the $250-$500 per incident for a site visit. Accordingly, it’s easy to see why CenturyLink doesn’t send technicians onsite to activate new services. But they should darn well better make sure that their internal support, troubleshooting and escalation processes work flawlessly before confounding innocent consumers. They also should make sure that nobody tries to sell wiring that isn’t necessary (the home was wired just fine two weeks ago before we moved in), and make sure that the instructions that arrive with the DSL modem don’t reference a defunct company or a CD-ROM that isn’t in the package. It all takes relentless attention to detail and frequent process testing, neither of which were evident to me.
My other observation was of how utterly unconcerned most of the CenturyLink reps were, about providing an acceptable customer experience. They just worked there. Nearly all of the burden to resolve this issue was placed on me, and I had to do all the critical thinking. I was fortunate to finally reach two people – Emily and Lori, probably by the luck of the draw – that were actually able to help. But to get to them, I had to bypass CenturyLink’s first line of defense: their outsourced call center. I also had to bypass a representative that was hoping to book an $85/hour home wiring appointment which, in retrospect, and as common sense dictated, was never necessary.
One can’t fault that a company the size of CenturyLink must put a huge focus on cost-reduction, but my own experience showed how cost-cutting can backfire. My many (many) calls, without resolution, were probably more costly than CenturyLink’s model would hope for. And in addition to the poor use of my time, it put me out of business for several days – which was very expensive to me.
CenturyLink must and can do better.
I promised a number of people at CenturyLink that I would publish this series of articles, which hopefully speak for themselves. Meanwhile, I’m looking forward to reviewing DISH’s new Hopper with Sling and its other associated new product offerings.
By the way, another DSL modem arrived from CenturyLink yesterday. I’m not exactly sure what to do with it, and fear the consequences of calling them to find out.
On to my closing thoughts