Connectivity Chronicles #20240920

Telecom Market Analysis: Charter's New Service Commitment

Spectrum by Charter has announced significant changes to its customer offerings and service commitments. The company is introducing new and simplified pricing for bundled internet services, with 500 Mbps at $30/month and 1 Gbps at $40/month when combined with mobile or video services. These prices are guaranteed for up to three years with no annual contracts. Additionally, all current Spectrum Internet and Spectrum Internet Ultra customers will have their speeds automatically increased for free to 400 and 600 Mbps, respectively. Spectrum's new "customer commitment" focuses on four key areas: reliable connectivity, transparency, exceptional service, and continuous improvement. These changes come as Charter faces challenges like slowing broadband growth and cable TV defections.

Media Trend: Programmatic Power at Olympics

FreeWheel and NBCUniversal’s programmatic partnership for the 2024 Paris Summer Olympics and Paralympics marked a significant milestone in live event advertising. By leveraging advanced programmatic technology, NBCU was able to increase its advertiser base by 90%, resulting in record ad revenue. The event attracted a daily average viewership of 30.4 million, an 82% increase from the Tokyo Olympics, with 23.5 billion minutes of coverage streamed. This collaboration not only provided a seamless advertising experience but also demonstrated the potential of programmatic advertising in reaching diverse audiences and delivering high engagement. This approach allowed for a more dynamic and scalable advertising strategy, accommodating unexpected spikes in viewership and ensuring robust performance in a no-fail environment. The 2024 Olympics set new standards for live event advertising, showcasing how programmatic technology can enhance viewer experience and drive substantial revenue growth.

Telecom Spotlight: AT&T Strike Settlement

AT&T faced a significant labor dispute as 17,000 employees in nine southeastern states went on strike, with potential for additional strikes in California and Nevada. The Communications Workers of America (CWA) filed an unfair labor practice charge against AT&T, citing issues with bargaining practices. The strike coincided with Hurricane Francine, forcing AT&T to hire contractors for storm recovery. On September 16, 2024, CWA announced tentative agreements with AT&T Southeast and West, ending the 30-day strike. The new five-year contract includes a 19.3% wage increase for Southeast employees. The labor dispute highlighted ongoing tensions in the broadband industry regarding job quality and wages.

Media Update: DirecTV-Disney Deal Restored

DirecTV and Disney have announced a new carriage agreement that restores Disney’s full suite of networks, including ABC, ESPN, and Disney-branded channels, to DirecTV’s 11 million subscribers. This agreement, which is still being finalized, will also offer DirecTV customers access to Disney+, Hulu, and ESPN+ for free in select packages, and provide genre-specific options such as sports, entertainment, and kids & family. Additionally, DirecTV will distribute Disney’s upcoming ESPN direct-to-consumer streaming service at no extra cost. This collaboration aims to provide more flexible and tailored video experiences for customers.

Telecom Innovations: U.S. Wireless Data Surge

The CTIA's 2024 Annual Wireless Industry Survey reveals unprecedented growth in U.S. wireless data usage, with Americans consuming 100.1 trillion megabytes in 2023, a 36% increase from 2022. The surge in wireless usage is driven by rapid 5G adoption, now at 39% of all devices. The industry invested $30 billion in 2023, totaling $705 billion to date. Despite increased usage, wireless costs have fallen, with the average cost per megabyte at $0.002—97% less than a decade ago. 5G home broadband has become significant, representing 95% of net new broadband subscribers in the past two years. To meet demand, the U.S. has added 83,125 cell sites since 2018, but the industry faces challenges in accessing more licensed spectrum for ongoing innovation.

Media Spotlight: Runway Expands AI Access with API

Runway has introduced an API for its video-generating AI models, allowing developers and organizations to integrate these models into third-party platforms, apps, and services. The API, currently in limited access, features the Gen-3 Alpha Turbo model, which is a faster but slightly less capable version of Runway’s flagship model. This new offering aims to make advanced video production more accessible, enabling users to create high-quality videos with ease. The API is available in two plans, Build and Enterprise, and has already attracted interest from major companies like Omnicom. By providing a tool that simplifies the integration of advanced video production capabilities, Runway is positioning itself as a key player in the market. The API’s pricing model is designed to be flexible, with costs based on usage, making it accessible to a wide range of users. However, the company faces challenges, including legal questions about the training data used for its models and competition from other major players like OpenAI, Google, and Adobe.

Telecom Update: AT&T-Broadcom Legal Clash

AT&T is embroiled in a legal dispute with Broadcom over VMware software support. After acquiring VMware, Broadcom allegedly refused to honor AT&T's contract renewal, demanding hundreds of millions for bundled subscriptions. AT&T claims that Broadcom's actions jeopardize its services, particularly for government and public safety customers. Broadcom argues that these changes are part of a shift to a subscription model. The lawsuit highlights risks to AT&T's operations, including customer service centers for a million daily customers. Experts suggest the dispute may impact other software-as-a-service providers transitioning from hardware models. While some believe Broadcom would provide support in critical situations, others think AT&T might seek alternatives if Broadcom doesn't back down. This conflict underscores tensions in the industry as companies shift to subscription models, potentially imposing unwanted services on customers.

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