The Sunday Brief

Connecting technology, telecommunications, and the internet

Value Creation – Long-term charts, Fab Five vs. Telco Top Five (March 28)

by | Mar 31, 2024 | TSB

Thursday’s closing prices represented the end to March and the first quarter (markets were closed on Friday). So far in 2024, the Fab Five have added $779 billion and the Telco Top Five $11 billion. Over the last week, gains for the Fab Five were muted, with three of them losing value. The Telco Top Five did better, with four of the five solidly positive (Charter was slightly positive for the week).

The big newsmaker this week was AT&T, announcing that they were introducing a nationwide fixed wireless product for business customers called AT&T Internet Air for Business (announcement here). Interestingly, the announcement describes a “premium” version of the product as follows:

“AT&T Internet Air for Business Premium is $100 plus fees and includes a higher level of priority for the first 250GB of data used in each billing period – a benefit when the network is busy5.”

Footnote 5 reads as follows:

5 250GB at Higher Priority Level: Plan includes a network-based quality of service (QoS) feature that assigns a higher priority level (as compared to the Standard plan) for your first 250GB of data traffic originating on and traveling over the AT&T-owned domestic network in each billing period  (excluding microcells, AT&T Wi-Fi service, and roaming partner networks).  If you exceed 250GB of data usage in a bill cycle, then for all data usage for the remainder of the bill cycle, AT&T may temporarily slow data speeds if the network is busy. Feature does not (a) prioritize data traffic ahead of all other data traffic (which may receive a similar or higher QoS), (b) provide priority access to available network resources, or (c) provide preemption capabilities.”

We read the footnote with great interest considering all of the back and forth occurring concerning the net neutrality concerns around network slicing (see the recent letter to the FCC here from the New America Open Technology Institute advocating that spectrum slicing be banned if it covers Broadband Internet Access Services or BIAS). We think that the distinction “ahead of all other data traffic” is particularly interesting in this context. Does a QoS construct that has existed for over a decade create by default a “pay to play” scheme if it carries BIAS?

Our thought (yet to be confirmed) is that the baseline product, which retails for $60/ month prior to any bundle discounts, is what is termed QCI 9, the lowest level of service available, while the 250GB referenced above is QCI 8. This would be the same data distinction between Verizon’s Visible and Verizon’s myPlan QCI levels. We think this product is going to and should be successful at the edges of the current broadband network over the short term, and a great backup option for fiber networks over the long term.

That was not the only news event for AT&T this week, however. On Saturday, AT&T announced that they had reset the passwords of 7.6 million current and 65.4 million former customers due to a data breach. Per this New York Times article (here), “the company said that “information varied by customer and account,” but that it may have included a person’s full name, email address, mailing address, phone number, Social Security number, date of birth, AT&T account number and passcode.” TechCrunch is reporting that one of the hackers reporting the incident has had access to this customer list for over three years. This is not good news for Ma Bell on the heels of the recent widespread network outage but it is unlikely to impact current or even 2024 earnings.

Finally, there was a relatively unnoticed announcement for NFL fans – ESPN article here. Comcast-owned streaming network Peacock is going to pick up the opening week game from Sao Paulo (to watch this game outside of the team local broadcast areas, you will need a Peacock subscription) and that Amazon would be picking up a Wild Card weekend playoff game (same provision as Peacock applies). Only one of the teams in the Sao Paulo game is known (the Philadelphia Eagles) and, given that Comcast shares their HQ with the Eagles, we would expect any negative reaction to the game to be minimized. Per last week’s Brief, this is yet another reason why Peacock Premium should be able ot be added to any Xfinity Mobile subscription at a steep discount.

File is below. Happy Easter! Thanks again for the many subscriber referrals!

1 Comment

  1. Ronald Fletcher

    As always, great intel from Jim!


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