Global Economic Intersection
Advertisement
  • Home
  • Economics
  • Finance
  • Politics
  • Investments
    • Invest in Amazon $250
  • Cryptocurrency
    • Best Bitcoin Accounts
    • Bitcoin Robot
      • Quantum AI
      • Bitcoin Era
      • Bitcoin Aussie System
      • Bitcoin Profit
      • Bitcoin Code
      • eKrona Cryptocurrency
      • Bitcoin Up
      • Bitcoin Prime
      • Yuan Pay Group
      • Immediate Profit
      • BitQH
      • Bitcoin Loophole
      • Crypto Boom
      • Bitcoin Treasure
      • Bitcoin Lucro
      • Bitcoin System
      • Oil Profit
      • The News Spy
      • Bitcoin Buyer
      • Bitcoin Inform
      • Immediate Edge
      • Bitcoin Evolution
      • Cryptohopper
      • Ethereum Trader
      • BitQL
      • Quantum Code
      • Bitcoin Revolution
      • British Trade Platform
      • British Bitcoin Profit
    • Bitcoin Reddit
    • Celebrities
      • Dr. Chris Brown Bitcoin
      • Teeka Tiwari Bitcoin
      • Russell Brand Bitcoin
      • Holly Willoughby Bitcoin
No Result
View All Result
  • Home
  • Economics
  • Finance
  • Politics
  • Investments
    • Invest in Amazon $250
  • Cryptocurrency
    • Best Bitcoin Accounts
    • Bitcoin Robot
      • Quantum AI
      • Bitcoin Era
      • Bitcoin Aussie System
      • Bitcoin Profit
      • Bitcoin Code
      • eKrona Cryptocurrency
      • Bitcoin Up
      • Bitcoin Prime
      • Yuan Pay Group
      • Immediate Profit
      • BitQH
      • Bitcoin Loophole
      • Crypto Boom
      • Bitcoin Treasure
      • Bitcoin Lucro
      • Bitcoin System
      • Oil Profit
      • The News Spy
      • Bitcoin Buyer
      • Bitcoin Inform
      • Immediate Edge
      • Bitcoin Evolution
      • Cryptohopper
      • Ethereum Trader
      • BitQL
      • Quantum Code
      • Bitcoin Revolution
      • British Trade Platform
      • British Bitcoin Profit
    • Bitcoin Reddit
    • Celebrities
      • Dr. Chris Brown Bitcoin
      • Teeka Tiwari Bitcoin
      • Russell Brand Bitcoin
      • Holly Willoughby Bitcoin
No Result
View All Result
Global Economic Intersection
No Result
View All Result

Should You Cancel Your Phone, TV and Internet Service Contracts?

admin by admin
March 17, 2015
in Uncategorized
0
0
SHARES
0
VIEWS
Share on FacebookShare on Twitter

And Should You Sell the Stocks?

by Elliott Morss, Morss Global Finance

Introduction

Chaos is too strong a term. But communication technologies are rapidly changing and significant regulatory changes are coming. And while humans get locked into habits, a growing number of Americans are opting out of their TV and landline phone contracts.

Cell phones are taking over. And it is increasingly apparent that traditional mechanisms for TV delivery are outdated: do you really need to be provided with 200+ TV channels when you only watch 7? This article explains what has happened and what you should do.

The History of TV Technologies: a Consumer’s Perspective

TV started in the late ’40’s with TV “ears” and “The Ed Sullivan Show”. Next came the roof antenna. In the late ’80’s, I purchased a 12′ satellite dish and then cable. In 2005, I bought a Slingbox that allowed me to watch my home TV channels from anywhere in the world. And the FCC reports: “By December 2011, there were more than 5300 systems serving approximately 60 million subscribers in more than 34,000 communities.” And today, Roku and Apple TV and other devices stream Internet to TV sets.

Background on the “Big 3” Communication Vehicles

Most US households communicate electronically via “Internet Service Providers (ISPs)” for three services: landline phones, TV, and Internet. Recently, cell phones have developed a huge market via separate contracts. Table 1 indicates there are now more cell phone contracts than landlines, and the latter continue to decline. There appear to be relatively few Internet contracts, but that is primarily because so many now get to the web via their cell phones.

Table 1. – US Communication Customers by Vehicle (1,000)

Sources: Phone Data (households) – Centers for Disease Control,
TV and Internet (contracts) – Leichtman Research Group

One more point on cell phones: we associate them with cell “towers”. But keep in mind that towers provide only the final link to/from the cell user. Like TV and the Internet, most cell phone traffic quickly moves from tower reception to cables. The following picture indicates the leading global cable provider companies, as measured by the quantity of “transited Internet provider space.”


Source: Dyn Research

Some of these companies are both carriers and providers to end users while others are just carriers. For example, Cogent manages over 57,900 route miles of intercity fiber and more than 27,400 metro fiber miles. It provides service to over 190 major markets and interconnect with over 5,130 other networks. But it is only an intermediary between providers with “end use” customers.

Table 2 provides data on ISP Internet contracts. The numbers continue to grow for all providers.

Table 2. – Internet Contracts by Leading Providers

Source: Leichtman Research Group

The story for TV contracts is quite different. As Table 3 indicates, it has started to decline.

Table 3. – TV Contracts by Leading Providers

Source: Leichtman Research Group

Now, while the decline is small, the so-called “cord-cutters” (those who have canceled their TV contracts) and “cord-neverings” (those who have never had TV contracts). The question of where this is all going much-discussed within the industry. The Sandvine Company has done some interesting research on what is happening. It defines “cord-cutters” as the group streaming the most audio and video via the Internet (top 15th percentile). Their steaming share of this group is extremely high – 72% of the total. Sandvine estimates this group watches roughly 100 hours of video per month via the Internet. It is reasonable to assume that many in this group do not have TV contracts but are watching TV via the web. In addition, this group probably plays video games online, a rapidly growing user of bandwidth.

Broadband Use

Broadband use is measured in two ways: by what is being sent (upstream) and by what is being received (downstream). These data are presented in Table 4. Netflix’s heavy use of broadband is notable. While not on this list, video games are “climbing up the charts.” For example, the video game live streaming service Twitch.TV (1.35%) now accounts for more traffic in the US than HBO GO (1.24%).

Table 4. – Top 10 Peak Period Applications – North America

Source: Sandvine

What WILL “Net Neutrality” Mean?

In earlier times, the meaning of “net neutrality” was pretty straight forward – everyone on the Internet was treated equally, e.g., nobody could pay more to get faster service. But times have changed, and the FCC decided it needed to regulate ISPs. So it recently “redefined” ISPs as common carriers (like telephone companies). Then came its 400-page “new regs.” report. One thing is certain: there will be litigation and lots of it.

To give some sense of what is happening – Netflix dominance. The “spirit” of net neutrality is that all are treated equal – that no company can pay a carrier extra for “special services”. But can a carrier charge a company, such as Netflix, more for a huge amount of Broadband use? For example, we just learned that Netflix has agreed to pay Comcast “extra” for its heavy bandwidth use. Is this special treatment? A second example: Many cable and DSL providers considering implementing “usage based billing”. In North America, the top 1% of subscribers who make the heaviest use of the network’s upstream resources account for 47% of total upstream traffic. The comparable downstream users account for 12% of downstream bytes. At the opposite end of the usage spectrum, the network’s lightest 50% of users account for only 7% of total monthly traffic.

Will the FCC view such charges as a violation of net neutrality? Timothy Lee, who writes about Communication for the Washington Post, thinks so:

“Network neutrality advocates are going to have to go back to the drawing board…. Another [example of new issues comes from a dispute between the backbone provider Cogent and Verizon. Netflix is a Cogent customer. Surging Netflix traffic has been overwhelming the links between Cogent and Verizon. Cogent has asked for those links to be upgraded, but according to Cogent, Verizon has demanded payment for upgrading the links.”

Lee goes on:

“…in a world where Netflix and Yahoo connect directly to residential ISPs, every Internet company will have its own separate “pipe”. And policing whether different pipes are equally good is a much harder problem than requiring that all of the traffic in a single pipe be treated the same. If it wanted to ensure a level playing field, the FCC would be forced to become intimately involved in interconnection disputes, overseeing who Verizon interconnects with, how fast the connections are….”

Should You Give Up Your TV Contract?

I return to the question posed at the beginning of this article. Consider my (quite typical) TV uses. I regularly watch 7 TV channels for news, sports and entertainment. I also have a Roku and an Apple TV hooked up to different TVs so I can stream from the Web. Can I get all I need from the Web? Some channels stream directly from the Web. And even if they do not, one can access some past shows from the Web. But there are very few channels that allow you to stream live content unless it is from your current TV provider. My guess is that in return for payments from the ISPs, content providers are not allowed to offer their content via the Web. The only exception I have found is CBS – the CBS network’s shows are available live for $5.99 per month. In short, most content prodders will only offer what I have been able to get via Slingbox since 2005 – all the TV that I get through my current TV provider.

The Dish Network is trying something slightly different. In January, it launched “Sling TV, a stripped down” 16 channel package for $20 monthly. And you can pay to add additional channels. Undoubtedly, more changes are coming. But for now, I am not going to give up my TV contract to save $70 monthly. It is just too easy to turn on my TV and click on a channel. However, I will continue to call my ISP every two months and threaten to cancel my TV contract. It works well as a way to get my monthly payments reduced.

Investment Implications

The technologies in the communication industry are continually changing and set of new regulations will shortly be imposed. How likely is it that anyone will be able to anticipate what will happen next? Not very. For example, I cannot imagine the FCC will allow the merger of Comcast and Time Warner to go through: it would clearly reduce competition. But one should not underestimate their lobbying arms in DC. Open Secrets reports that the Communications Industry spent $381 million lobbying in DC last year.

For the record, Table 5 presents the price/earnings ratio for some of the leading communications companies. For reasons discussed above, I will not be investing in them in the foreseeable future.

Table 5. – Price Earnings Ratios for Selected Communications Companies

Previous Post

The Costs Of Cutting “Food Stamps”

Next Post

Crime Pays – Could It Offer Students More Than an MBA?

Related Posts

US Institutions Account For 85% Of Bitcoin Acquisition In ‘Very Positive Sign’ – Matrixport
Economics

US Institutions Account For 85% Of Bitcoin Acquisition In ‘Very Positive Sign’ – Matrixport

by John Wanguba
January 28, 2023
U.S. Tackles Google Online Ad Business Monopoly In Latest Big Tech Lawsuit
Business

U.S. Tackles Google Online Ad Business Monopoly In Latest Big Tech Lawsuit

by John Wanguba
January 28, 2023
Tesla Plans $3.6B Nevada Expansion To Produce Semi Truck, Battery Cells
Business

Tesla Plans $3.6B Nevada Expansion To Produce Semi Truck, Battery Cells

by John Wanguba
January 28, 2023
Fed Policy Aiming To Align Bank Oversight Might Restrict Crypto Activities By State Banks
Business

Fed Policy Aiming To Align Bank Oversight Might Restrict Crypto Activities By State Banks

by John Wanguba
January 28, 2023
Microsoft Cloud Business Keeps Profits Flowing In Challenging Times
Business

Microsoft Cloud Business Keeps Profits Flowing In Challenging Times

by John Wanguba
January 27, 2023
Next Post

Crime Pays – Could It Offer Students More Than an MBA?

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Browse by Category

  • Business
  • Econ Intersect News
  • Economics
  • Finance
  • Politics
  • Uncategorized

Browse by Tags

adoption altcoins banking banks Binance Bitcoin Bitcoin adoption Bitcoin market Bitcoin mining blockchain BTC business China crypto crypto adoption cryptocurrency crypto exchange crypto market crypto regulation decentralized finance DeFi Elon Musk ETH Ethereum Europe finance FTX inflation investment market analysis markets Metaverse mining NFT nonfungible tokens oil market price analysis recession regulation Russia technology Tesla the UK the US Twitter

Archives

  • January 2023
  • December 2022
  • November 2022
  • October 2022
  • September 2022
  • August 2022
  • July 2022
  • June 2022
  • May 2022
  • April 2022
  • March 2022
  • February 2022
  • January 2022
  • December 2021
  • November 2021
  • October 2021
  • September 2021
  • August 2021
  • July 2021
  • June 2021
  • May 2021
  • April 2021
  • March 2021
  • February 2021
  • January 2021
  • December 2020
  • November 2020
  • October 2020
  • September 2020
  • August 2020
  • July 2020
  • June 2020
  • May 2020
  • April 2020
  • March 2020
  • February 2020
  • January 2020
  • December 2019
  • November 2019
  • October 2019
  • September 2019
  • August 2019
  • July 2019
  • June 2019
  • May 2019
  • April 2019
  • March 2019
  • February 2019
  • January 2019
  • December 2018
  • November 2018
  • October 2018
  • September 2018
  • August 2018
  • July 2018
  • June 2018
  • May 2018
  • April 2018
  • March 2018
  • February 2018
  • January 2018
  • December 2017
  • November 2017
  • October 2017
  • September 2017
  • August 2017
  • July 2017
  • June 2017
  • May 2017
  • April 2017
  • March 2017
  • February 2017
  • January 2017
  • December 2016
  • November 2016
  • October 2016
  • September 2016
  • August 2016
  • July 2016
  • June 2016
  • May 2016
  • April 2016
  • March 2016
  • February 2016
  • January 2016
  • December 2015
  • November 2015
  • October 2015
  • September 2015
  • August 2015
  • July 2015
  • June 2015
  • May 2015
  • April 2015
  • March 2015
  • February 2015
  • January 2015
  • December 2014
  • November 2014
  • October 2014
  • September 2014
  • August 2014
  • July 2014
  • June 2014
  • May 2014
  • April 2014
  • March 2014
  • February 2014
  • January 2014
  • December 2013
  • November 2013
  • October 2013
  • September 2013
  • August 2013
  • July 2013
  • June 2013
  • May 2013
  • April 2013
  • March 2013
  • February 2013
  • January 2013
  • December 2012
  • November 2012
  • October 2012
  • September 2012
  • August 2012
  • July 2012
  • June 2012
  • May 2012
  • April 2012
  • March 2012
  • February 2012
  • January 2012
  • December 2011
  • November 2011
  • October 2011
  • September 2011
  • August 2011
  • July 2011
  • June 2011
  • May 2011
  • April 2011
  • March 2011
  • February 2011
  • January 2011
  • December 2010
  • August 2010
  • August 2009

Categories

  • Business
  • Econ Intersect News
  • Economics
  • Finance
  • Politics
  • Uncategorized
Global Economic Intersection

After nearly 11 years of 24/7/365 operation, Global Economic Intersection co-founders Steven Hansen and John Lounsbury are retiring. The new owner, a global media company in London, is in the process of completing the set-up of Global Economic Intersection files in their system and publishing platform. The official website ownership transfer took place on 24 August.

Categories

  • Business
  • Econ Intersect News
  • Economics
  • Finance
  • Politics
  • Uncategorized

Recent Posts

  • US Institutions Account For 85% Of Bitcoin Acquisition In ‘Very Positive Sign’ – Matrixport
  • U.S. Tackles Google Online Ad Business Monopoly In Latest Big Tech Lawsuit
  • Tesla Plans $3.6B Nevada Expansion To Produce Semi Truck, Battery Cells

© Copyright 2021 EconIntersect - Economic news, analysis and opinion.

No Result
View All Result
  • Home
  • Contact Us
  • Bitcoin Robot
    • Bitcoin Profit
    • Bitcoin Code
    • Quantum AI
    • eKrona Cryptocurrency
    • Bitcoin Up
    • Bitcoin Prime
    • Yuan Pay Group
    • Immediate Profit
    • BitIQ
    • Bitcoin Loophole
    • Crypto Boom
    • Bitcoin Era
    • Bitcoin Treasure
    • Bitcoin Lucro
    • Bitcoin System
    • Oil Profit
    • The News Spy
    • British Bitcoin Profit
    • Bitcoin Trader
  • Bitcoin Reddit

© Copyright 2021 EconIntersect - Economic news, analysis and opinion.

en English
ar Arabicbg Bulgarianda Danishnl Dutchen Englishfi Finnishfr Frenchde Germanel Greekit Italianja Japaneselv Latvianno Norwegianpl Polishpt Portuguesero Romanianes Spanishsv Swedish