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Cable Technology Feature Article

August 14, 2012

Sometimes 'Facts' are Not 'Truthful'

By Gary Kim, Contributing Editor

Sometimes “facts” are “untruthful.” A case in point is the current status of U.S. cable and telco high speed access customer net additions. To be sure, it is the case that legacy services of all types are under pressure from replacement products.

DirecTV (News - Alert) had never lost customers, on a net basis, ever, until the second quarter of 2012. Cable companies have been losing video customers for about 16 consecutive quarters.

And now it appears U.S. telcos might have lost digital subscriber line customers, on a net basis, for the first time. That’s a “fact” that might not be the “truth” of the matter, though.

The eight largest American phone companies collectively lost 70,000 net DSL subscribers between April and June 2012. That “fact” does not necessarily represent the truth of the matter, though.

AT&T (News - Alert) lost 96,000 net DSL customers, while the other seven on average added a few thousand each. Even looking narrowly at “DSL” connections, seven of eight U.S. telcos noted actually gained customers.

During that same period, the top four public cable ISPs, including industry giant Comcast, reported a gain of 290,000 subscribers, AP reports.

But if you really look at the numbers, AT&T and Verizon (News - Alert) added about 687,000 net high speed access customers who were buying U-verse or FiOS products. In other words, AT&T and Verizon added more high speed access customers than the cable companies did.

So the “fact” that telcos lost high speed customers using DSL is correct, but wrong, and untruthful. Verizon, AT&T and presumably some other telcos are switching customers from legacy DSL connections to faster fiber-reinforced access methods.

There is a huge nuance here, and it appears AP missed it. AT&T U-verse high speed Internet experienced a second-quarter net gain of 553,000 subscribers to reach a total of 6.5 million, helping offset the losses from DSL.

In other words, legacy DSL is losing consumer favor. But U-verse and Verizon's FiOS (News - Alert) are growing. So the cable lead in high speed access is not necessarily as stark as it might at first appear. You might even question whether the cable lead, though perhaps directionally “true,” was fully accurate in this case.

You might also argue that AT&T and Verizon are intentionally trying to lose DSL customers in favor of U-verse and FioS customers. Verizon, for example, added a net 134,000 FioS high speed Internet customer during the second quarter.

The point is that the facts of DSL losses, while accurate as far as they go, do not include the net additions of U-verse and FiOS customers. Both AT&T and Verizon have faced the problem, for some time, of “losing” DSL customers who switch to fiber-reinforced service.

Don’t get confused by facts that actually do not present a truthful picture.


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Edited by Brooke Neuman

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