Cable providers rate poorly on both customer service and pricing, but thanks to their speedy broadband service, they have so far managed to score more customers than the phone companies, according to a survey out today from research firm CFI Group. The survey, which quizzed 1,318 households online at the end of June, measured consumer satisfaction with telecommunications providers.

The research showed that while cable providers were getting more customers for the time being, telecommunications firms have a chance to win subscribers back as they roll out faster broadband services, IPTV and even wireless bundles. The research also underlined the demise of landlines (1.6 million gone for AT&T and Verizon in the last year), and customer dissatisfaction with slower DSL offerings from telecommunications carriers (nearly 70 percent of net broadband additions went to cable in the second quarter of 2008).

The phone guys even lose out on bundled services. Of the 60 percent of users surveyed who had a bundled service plan (usually a combination of voice, video and data), only 31 percent purchased their bundles from a telecommunications firm. The remaining 69 percent bought their bundles from a cable provider, but that doesn’t mean they like it; twice as many consumers would actually prefer to bundle communications services with a phone company as with a cable company.

This could be a case of the grass being greener, but I do think IP services built on faster fiber-to-the-home networks like Verizon’s FiOS service, could beat cable. I’m less convinced that AT&T’s fiber-to-the-node strategy will be as compelling, since the speeds are more comparable to today’s cable speeds.

source: CFI Group

I received an emailed press release from Comcast this morning about their plans to work with Vonage to address “the reasonable network management of Internet services” that left me a tad confused. Comcast had already admitted to massaging P2P traffic, sparking an online uproar that resulted in the company backing down and announcing plans to use different kinds of network management techniques. (They massaged P2P traffic by either delaying or blocking P2P packets outright, which caused BitTorrent-type services to degrade.)

In an attempt to uncover the real reason behind the release, I called a Comcast spokeswoman and asked her if this was an exclusive deal with Vonage, and if any money was changing hands. She said that the agreement doesn’t preclude others from working with Comcast, that in fact it’s working with a variety of companies and groups. And no, there is no money changing hands.

Still, the press release kept nagging at me. And it wasn’t until I read Cynthia Brumfield’s post (Welcome back, Cynthia, from your blog vacation) that I realized Comcast might have unknowingly admitted to messing with Vonage’s VoIP traffic.

What’s interesting and surprising is that Vonage is not based on P2P technology, unlike Skype and other competitive VoIP providers. So this effort by Comcast, which extends to a seemingly unrelated “over-the-top” technology seems, well, out of the blue. Has Vonage had problems with Comcast causing problems for its customers, problems that stemmed not from the same kind of packet reset technology that spurred the initial controversy?

Well I don’t know about recently, but some two years ago a lot people complained about Vonage’s service quality on Comcast. Comcast, of course, denied that it was blocking Vonage traffic.

That was then. However, the fact that the two companies are announcing a new working relationship has me wondering if Comcast was messing with Vonage’s calls all along — you know, as part of its “network management.”

The economic downturn, in particular the housing market slump, that has been pressuring U.S. telecom operators now seems to be extending to cable operators as well. After enjoying nearly eight quarters of solid growth, it looks like the U.S. cable telephony business is slowing down.

The proverbial canary in the coal mine sounded the alarm yesterday. ARRIS, which makes hardware for cable operators, lowered its second-quarter forecast for both profits and revenues. Management blamed maturing cable telephony deployments and a slow housing market on the reduced demand for cable telephony services.

I think both are valid points. First, cable voice has become pervasive. You can now call your cable operator and get a fixed line connection without worrying if they actually offer voice service in your market. (Whether you’re happy with them, however, is a different story altogether.) So it’s hardly a surprise that the demand for equipment would slow down.

As we’ve previously noted, cable VoIP has been on a tear. At the end of the first quarter, Comcast had 5.1 million customers, while Time Warner Cable had 3.17 million, followed by Cox’s 2.46 million, Cablevision’s 1.68 million and Charter’s 1.08 million. Many of these subscribers came at the expense of telephone companies. Telegeography estimated that there were about 16.3 million VoIP households at the end of the first quarter of this year.

The cable companies benefited from the previous surge in new housing starts, which led to spectacular growth in their broadband and voice telephony businesses and in turn, made it easier for people to switch away from telephone companies. A slowdown in this business is only natural. In fact, I wouldn’t be surprised if large cable companies saw a sharp slowdown in broadband growth as well.

The real question is, just how big will the slowdown be? With the second-quarter earnings season just getting underway, it won’t take long to find out.

Despite all the troubles with VoIP service providers such as SunRocket and Vonage, VoIP as a technology seems to be doing quite well in the U.S., according to data from Telegeography. As of the end of March, there were 16.3 million consumer VoIP lines, or about 13.8 percent of U.S. households, and 27 percent of households with broadband lines installed.

It’s hardly a surprise, as a lot new additions are coming from people buying triple-play services from cable companies. As of the end of the first quarter of 2008, here’s how the cable VoIP data broke down:

* Comcast: 5.1 million
* TimeWarner: 3.17 million
* Cox: 2.46 million
* Cablevision: 1.68 million
* Charter: 1.08 million

Cynthia Brumfield puts the total VoIP lines shared by the top nine cable providers at just over 14 million. The cable guys added about 1.3 million new subscribers. Most of them are refugees of phone companies who are losing customers by the day, as we have previously noted on more than one occasion.

The guys at Telegeography say that since the start of 2007, the three regional Bell Rperating Companies (RBOCs) — AT&T, Verizon and Qwest — have lost 17.3 million residential telephone lines, while VoIP service providers have gained 14.4 million new customers. Nearly 80 percent have come from cable companies.

So all the noise, anger and finger-pointing at Comcast’s cheap traffic tricks didn’t impact its broadband business. The company just reported a decent enough first quarter, but what got my attention: It now has 14.1 million high-speed subscribers, compared to 13.6 million at the end of 2007. That translates to about 500,000 new subscribers. Given how broadband sales have slowed down for DSL providers (but not for FTTH services), this is pretty significant. Karl on DSL Reports is taking a glass-half-full approach to the earnings but writes that things are slowing down. Seems like extra speeds are helping push the revenues as well, according to the company:

The strong subscriber and revenue growth in the first quarter of 2008 benefited from the introduction of additional promotional offers and speed tiers, including Comcast’s BLAST and Performance Plus services (8Mbps or higher service) and Comcast’s Economy Internet service (768Kbps service).

Another astonishing number: Comcast added 639,000 Comcast Digital Voice (CDV) customers during the first quarter — penetration reached 12 percent or 5.1 million customers with revenues of about $587 million in the first quarter of 2008. Time Warner Cable also posted a similar kind of growth, adding 280,000 phone customers and 304,000 high-speed customers in the first quarter. In comparison, the phone companies keep losing landline customers. No wonder phone companies are worried.