After Bleeding TV Subscribers For Years, Cable Giants Now Losing Broadband Customers To Home 5G, Community-Owned Fiber

For much of the last decade, cable giants like Comcast (Xfinity) and Charter (Spectrum) have been protected from TV cord cutting" by one simple fact: they enjoyed a monopoly over broadband access across vast swaths of the U.S. That monopoly means that if a customer ditched traditional TV, Comcast or Charter could recoup any losses simply by charging captive customers even more for broadband.

But there are signs that's changing too, and not for the better if you're Comcast and Charter. Growing competition from stuff like 5G home connections and community broadband fiber builds (buoyed by a historic influx of infrastructure subsidies) means that cable companies are starting to see broadband customers head for the exits as well.

SNL Kagan and Bloomberg Intelligence predict the cable sector is poised to lose 480,000 broadband customers during the third quarter, which would be the worst quarterly decline for the sector in history:

The risk to cable is unlikely to ease anytime soon," Bloomberg Intelligence analyst Geetha Ranganathan wrote in an Oct. 10 note. Verizon Communications Inc., T-Mobile US Inc. and AT&T Inc. are expected to report they added more than 900,000 broadband customers in the third quarter, including wireless home service and fiber, according to according to estimates compiled by Bloomberg."

This Reuters breakdown mostly focuses on the popularity of residential 5G connections, which wireless companies are selling at discounted rates to slurp up customers. The growth may not last; 5G connections are inherently going to be less reliable and more congested (especially in rural markets with less fiber backhaul) as more subscribers sign up.

The Reuters article completely forgets to mention that the infrastructure bill is poised to throw $42.5 billion in new subsidies at deploying fiber. And while a lot of that will go to cable giants for expansion, a lot of it is also going to be headed to municipal fiber builds, cooperatives, city-owned utilities, and other community-owned alternatives to big cable."

Once customers get a taste of affordable (usually around $70 a month) gigabit fiber with no sneaky usage caps, contracts, or hidden fees - they don't tend to be eager to head back to Comcast. Such networks saw a big explosion during the COVID lockdowns, which painfully highlighted the shortcomings of slow, spotty, expensive, and capped broadband access.

That said, Comcast and Charter still enjoy a monopoly across huge swaths of the U.S., so they're not likely to go extinct any time soon. And they broadly enjoy a well-lobbied congress and captured regulators, eager to protect them from competition and accountability. Still, it's lovely to see them facing some kind of meaningful competition after decades of downright apathy.