U.S. Cable Market Broadband Competitive Overview. Chris Lammers ICTC2015 October 28, 2015

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5 Broadband Only Households Increasing Large HSD gains have been accompanied by the emergence of broadband-only homes in the last two years. Based on publicly available cable, telco and DBS data and SNL Kagan s proprietary models, we estimate that the U.S. counted 10.9 million wireline broadband-only homes at the end of Cable Television 5 Laboratories, Inc All Rights Reserved. 5

8 Broadband Market Share Cable broadband is clearly benefiting from having a superior, faster and more widely available service than telcos, whose footprint is not only more geographically limited, but also still heavily tilted toward slower DSL connections. Cable Television 8 Laboratories, Inc All Rights Reserved. Across the top 95% of broadband providers in the U.S. 8

10 OOKLA Net Index Top 50 Countries OOKLA July 5, Cable Television Cable Television Laboratories, Laboratories, Inc Inc. All Rights All Reserved. Rights Reserved. 10

13 Major FTTH Announcements Comcast expanding 2 Gbps broadband service in Houston, Utah, Colorado and Washington this summer. Gigabit Pro will be delivered via a fiber-to-the-home connection. May 22, 2015 Los Angeles to issue gigabit broadband RFP June 11, 2015 Verizon s 5G tests show it to be faster than Google Fiber, could launch as early as 2017 Sept 08, 2015 Aug 2014 Jan 2015 May 2015 Jun 2015 Sept 2015 CenturyLink expands its gigabit service to 16 cities, delivering broadband speeds up to 1 gigabit per second August 5, 2014 US Internet has launched what it asserts is the world's first 10 Gbps broadband access offering in Minneapolis, MN. The company will charge its residential and small business customers $399 a month for the service. January 5, Cable Television Cable Television Laboratories, Laboratories, Inc Inc. All Rights Reserved. All Rights Reserved. CenturyLink CenturyLink is launching symmetrical gigabit fiber service to SMB customers in parts of Iowa, Idaho, North Carolina, Ohio and Wisconsin and expanding its availability in nine of the 12 states where CenturyLink initially deployed gigabit fiber for business customers In a June 8 FCC filing, AT&T detailed its voluntary post-merger commitments saying it intends to roll out gigabit broadband to 2M additional homes within 4 years as a result of the merger, all without subsidizing the efforts with Connect America Fund money. 13

16 CenturyLink Gigabit FTTH Footprint 16 CenturyLink now offers gigabit Internet service to residential and small business customers in parts of 17 states and, by the end of 2015, should have more than 700,000 households across the country enabled with fiber-to-thehome (FTTH) technology capable of uploading and downloading information at speeds up to 1 Gbps. CenturyLink extended gigabit fiber service to additional small and midsized businesses (SMBs) located near the company's fiber network backbone or in fiber-fed multi-tenant unit office buildings, resulting in gigabit service being available to nearly 490,000 SMBs Cable Television Cable Television Laboratories, Laboratories, Inc Inc. All Rights All Reserved. Rights Reserved. 16

17 CenturyLink 1 Gig Broadband 1/1 Gbps service offer 1 year agreement; early termination fee up to $200 Prices revert to standard rates after 6 months Plan not subject to excessive use policy Differential pricing across markets IPTV service is available separately 17 Cable Television Cable Television Laboratories, Laboratories, Inc Inc. All Rights All Reserved. Rights Reserved. 17

18 AT&T U-verse with GigaPower 300/300 Mbps initially Upgraded to 1 Gbps announced 13 October TB cap, $10/50 GB, $30 maximum overage 1-year agreement; early termination fee of $180 After 24 months standard rates apply Pricing same as Google Fiber if subscriber accepts AT&T Internet Preferences With AT&T Internet Preferences, you allow us to use your web browsing activity (where you go on the web) to provide you with more relevant offers and advertising." Opt out option reverting standard rates July Cable Television Cable Television Laboratories, Laboratories, Inc Inc. All Rights All Reserved. Rights Reserved. 18

19 AT&T GigaPower Expansion Overlap with many areas under consideration by Google Fiber AT&T's U-verse footprint expansion is the primary driver of the segment's growth in the near term. The telco announced its plan to expand its U- verse GigaPower service from 13 markets as of midyear 2015 to a total of 25 markets nationwide. SNL Kagan. July 2015 AT&T EXPANDS GIGAPOWER TO CHICAGO, ATLANTA, NASHVILLE, MIAMI AND FT. LAUDERDALE 30-SEP Cable Television Cable Television Laboratories, Laboratories, Inc Inc. All Rights All Reserved. Rights Reserved. 19

20 Verizon FiOS 20 Cable Television Cable Television Laboratories, Laboratories, Inc Inc. All Rights All Reserved. Rights Reserved. 20

21 Verizon FiOS As of Jan 2015, Verizon FiOS announced it would increase customer upload speeds to match download speeds for new and existing customers. 500/100 Mbps service tier introduced in July 2013 $214/month standalone as a standalone service The three highest service tiers (150/150, 300/300, and 500/500 Mbps) require a connection using Gigabit Passive Optical Network (GPON) Verizon has indicated that the vast majority of their network has access to GPON, but not all GPON sites have 500/500 Mbps availability yet GPON capability of up to 2.5/1.25 Gbps can continue to support faster offerings of 1+ Gbps Cable Television Laboratories, Inc All Rights Reserved. CJCON_002PZ2_005_014&AID= &PID= &SID=VerizonCable_CJ 21

24 Comcast Gigabit Pro Gigabit Pro service offers speeds of a maximum of 2 Gbps. This service is available in certain areas of Atlanta, Chicago, Houston, and Miami, among other places. Comcast expects its Gigabit Pro service to reach 18 million households by the end of Cable Television Cable Television Laboratories, Laboratories, Inc Inc. All Rights All Reserved. Rights Reserved. 24

25 Suddenlink Operation Gigaspeed SUDDENLINK S GIGASPEED REACHES PARTS OF TEXAS, MISSOURI AND NORTH CAROLINA 25 Cable Television Cable Television Laboratories, Laboratories, Inc Inc. All Rights All Reserved. Rights Reserved. 25

26 Gigabit Services Overlay U.S Cable Television Cable Television Laboratories, Laboratories, Inc Inc. All Rights All Reserved. Rights Reserved. 26

27 Cable s Multi-Gbps Technologies Despite numerous announcements, the breadth of FTTH coverage and associated 1 Gbps offers remains relatively low and will grow slowly DOCSIS 3.0 can provide speeds approaching 1 Gbps (32 bonded channels) DOCSIS 3.1 Where FTTH-based competition exists, DOCSIS 3.1 capabilities can support offers comparable to 2.5/1.2 Gbps GPON 1 st generation DOCSIS 3.1 can provide up to ~ 4 Gbps of downstream capacity and 1.5 Gbps of upstream capacity Second generation DOCSIS 3.1 will be able to take advantage of the full HFC spectrum, supporting up to 10 Gbps of capacity this creates general parity with 10G PON downstream speeds Requires plant investment to free up sufficient spectrum and improve performance characteristics 27 Cable Television Cable Television Laboratories, Laboratories, Inc Inc. All Rights All Reserved. Rights Reserved. 27

29 Wireless Technologies 3G 4G LTE-A 5G 29 Cable Television Cable Television Laboratories, Laboratories, Inc Inc. All Rights All Reserved. Rights Reserved. 29

30 Wireless Technologies LTE-Advanced 100 megabits per second when a user moves through the network at high speeds 1 gigabit per second when the user is in a fixed position Fully Internet Protocol packet-switched network 5G Up to 20 Gbps Final requirements specified by ITU in October PyeongChang Winter Olympic Games (trials) Tokyo Summer Games in 2020 Implementation in 2020 Verizon in 2017? 30 Cable Television Cable Television Laboratories, Laboratories, Inc Inc. All Rights All Reserved. Rights Reserved. 30