According to their research, cable companies have about 47.5 million broadband subscribers, while the remainder are with the phone companies. Cable companies added about 800,000 new subscribers, about 72 percent of the total for the month. The top two phone companies — AT&T and Verizon — saw a decline of 696,000 DSL accounts but added a total of 919,000 fiber subscribers. FIber-based broadband now accounts for about 40 percent of AT&T and Verizon’s total broadband customer base.

Bruce Leichtman, president and principal analyst for Leichtman Research Group, pointed out that typically the first quarter is better than the second and third quarters of the year, and “2013 began with another strong first quarter.” Net broadband additions in Q1 2013 were about 500,000 more than in Q4 2012, and that bodes well for rest of the year.

A resurgent housing market and stronger economy along with our growing need for speed and connectivity are the reasons why demand for U.S. broadband is booming. Here are some numbers to give you an idea as to who is winning and who is losing.

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For the last year Verizon has been trying to buy the unused Advanced Wireless Services (AWS) licenses of Comcast, Time Warner Cable, Bright House and Cox Communications, giving it a treasure trove of new airwaves for its future LTE expansion. But those companies aren’t just swapping cash for spectrum. They also revealed so-called joint-marketing agreements, essentially deals to resell each other’s wireline and wireless services.

The Justice Department is imposing a five-year limit on those joint-marketing agreements, after which they’re presumably subject to additional antitrust review. The other condition isn’t much of a condition at all: Verizon has agreed to not to resell cable’s residential services in areas where it offers its FiOS fiber-to-the-home network, which Verizon was never planning to do in the first place. While it’s getting killed by cable in territories where it only has pokey DSL, Verizon can compete head-to-head with cable in its FiOS markets.

Surprisingly, spectrum concessions seemed to be the deciding factor for the DOJ. Antitrust lawyers said that Verizon’s agreement to sell T-Mobile a portion of its AWS haul was a key factor. Here’s the statement from Acting Assistant Attorney General Joseph Wayland, who heads up the DOJ’s Antitrust Division:

“By limiting the scope and duration of the commercial agreements among Verizon and the cable companies while at the same time allowing Verizon and T-Mobile to proceed with their spectrum acquisitions, the department has provided the right remedy for competition and consumers. … The Antitrust Division’s enforcement action ensures that robust competition between Verizon and the cable companies continues now and in the future as technological change alters the telecommunications landscape.”

Update: Now the ball goes to the FCC, and it looks ready to approve the deal as well. Thursday morning FCC chairman Julius Genachowski said he would begin circulating a draft order recommending the transaction be approved. We could see a final decision in the coming weeks.

FCC Chairman Julius Genachowski

The commission — which has regulatory authority over the spectrum part of the deal, but not the joint-marketing agreements – is demanding concessions on data roaming, which Verizon has agreed to meet in an FCC filing. Verizon said it would sell access to its LTE network at “reasonable rates” to roaming partners. That should put rural carriers worried about being shut out of Big Red’s 4G network partially at ease, though I’m sure they would have much rather Verizon spelled out specific rates.

The FCC also won a concession that really wasn’t much of a concession. Verizon has agreed to begin deploying LTE on those AWS frequencies within three years and to reach 70 percent coverage in seven years. Considering that those airwaves have already sat idle for six years and that Verizon has claimed it desperately needs more spectrum to meet mobile broadband demand, Big Red doesn’t seem to be in that big of hurry.

Here’s an excerpt form Genachowski’s statement:

“Specifically, Verizon Wireless has undertaken an unprecedented divestiture of spectrum to one of its competitors, T-Mobile, and has committed to accelerate the build-out of its new spectrum and enhance its roaming obligations. In addition, the companies’ commercial agreements will be modified to, among other things, preserve Verizon’s incentives to build out FiOS, increase wireless competition, and ensure that the proposed IP venture is pro-consumer and that its products cannot be used in anti-competitive ways.

“Approval of the substantially modified transaction will promote the public interest and benefit consumers in several ways. By advancing U.S. leadership in 4G LTE deployment, the transaction marks another step in our effort to promote the U.S. innovation economy and make state-of-the-art broadband available to more people in more places. The transaction will preserve incentives for deployment and spur innovation while guarding against anti-competitive conduct. And vitally, it will put approximately 20 megahertz of prime spectrum—spectrum that has gone unused for too long—quickly to work across the country, benefiting consumers and the
marketplace.”

Image courtesy of Flickr user turtlemom4bacon.

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As we have previously reported – the decline of traditional DSL has created problems for phone companies, who are losing customers to cable broadband providers. Here are some other insights from the data they collected.

• Top cable companies added about 330,000 subscribers. In the second quarter of 2011, they had added 271,000 new subscribers.
• The top telephone companies lost about 70,000 subscribers versus a gain of about 80,000 in 2Q 2011. AT&T and Verizon had fewer net broadband adds in Q2 2012 than in any previous quarter in the past eleven years
• AT&T and Verizon added 669,000 fiber subscribers in the quarter (via U-verse and FiOS) and had a net loss of 763,000 DSL subscribers.
• Comcast now has 18.74 million broadband subscribers, making it the biggest broadband provider in the US.

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Thankfully, the Federal Communication Commission started collecting data to help consumers (and the agency) see if consumers get what they pay for when it comes to broadband. And for the most part, they do. The accuracy of an ISP’s advertised speeds are just one measurement of broadband quality offered in the FCC’s latest report. So check out the charts below to see how your ISP fares.

The FCC uses a variety of tests to get this information, including sending out routers to households that report back speed and packet quality information (I’m one of the test homes). It first reported this data last August as part of an effort to improve the type and quality of data it had about U.S. broadband providers. The most recent report, released Thursday, involves a lot of FCC chest-thumping about how its measurements have improved service to consumers over the last year.

But here’s what really matters to consumers. How good is your provider? In general, fiber-to-the-home services such as Verizon FiOS performed closest to or above advertised speeds and had the lowest latency, followed by cable and then DSL providers. Latency is a measure of how long a packet takes to traverse the network, and it matters for services such as voice calling over IP lines, gaming and video streaming.

Here are providers with the best peak and average download speeds.

Note that in the above chart the peak and average speeds are fairly closely aligned. This means that network congestion at peak times isn’t really causing a problem for consumers when it comes to speed.

Here’s how those same providers fare on peak and average upload speeds.

The report also takes a look at data consumption and when people consume it. Generally during the 8-10PM block is when the FCC saw providers fall below their advertised speeds, presumably as their networks became more congested. Some ISPs have more even speeds than others, indicating that they may have less reliable ways of handling congestion.

The report has plenty of great information, such as the quality of service broken down by speed tiers as well as a chart indicating that as you give people faster speeds they tend to consume more data. That may be obvious, but it’s always nice to have numbers that can back this information up. And it’s even nicer to see areas such as advertised speed improve over the previous year when the FCC began collecting the data. Shining light on broadband performance does improve it.

Speedometer photo provided by Nathan E Photography.

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The growing popularity of connected TVs and efforts to build interactive programs will drive the next wave of broadband demand. That future and the continued growth of devices in the home are all reasons that Verizon has launched a 300 Mbps broadband tier and will continue pushing the speeds on its fiber-to-the-home network.

Last month Verizon said it would offer speeds of 300 Mbps to consumers in its fiber to the home footprint and earlier this week it revealed that those who are interested better be prepared to shell out $210 per month. That’s pricey but it’s not like superfast broadband tiers don’t cost a lost when they first hit the market. Recall that Comcast’s 50 Mbps service cost $150 per month when it arrived back in 2008. It’s now $100.

Verizon has changed up its pricing and speed tier names with this refresh, but beyond the pricing the most interesting bits from this announcement came from the conversation I had with Heather McDavitt, director of consumer product management at Verizon, on the current consumer demand for broadband. McDavitt explained why the 300 Mbps tier doesn’t come as a part of a bundle. The answer is both that those customers probably are more interested in streaming, but also that Verizon isn’t sure what customers will want at that speed and price range.

She says that about 55 percent of Verizon FiOS customers now would take the 50 or 75 Mbps speed option with a mere 15 percent taking the 150 Mbps tier. That means that 70 percent of the FiOS customer base is buyingwill buy a broadband service that was considered top of the line a mere five years ago (prior to the new speed tiers, 63 percent of Verizon customers purchased speeds above 25 Mbps.). Sure, fiber to the home is the premium broadband service one can get, so it stands to reason that customers who choose it may be earlier adopters or intentionally heavy broadband users. But it also shows how far we have come in terms of our home broadband demand.

There are several reasons for this, but it boils down to the presence of more devices in the home and streaming video. Other dynamics such as whether or not folks are gamers or work from home also comes into play, but across the board it’s the rise in Netflix subscriptions, YouTube videos and family members toting smart phones, tablets, perhaps while watching content on a connected TV. If there are four people consuming media with a tablet in one hand and their eye on the TV, your home requires a fat connection.

As for when Verizon might raise the threshold again, McDavitt isn’t sure. “Netflix and streaming is really pushing the need right now and with tablets and touch screens and how [customers] are interacting with them and putting demand on their networks” just taking off, you can see why Verizon introduced the 300 Mbps package.

But because Verizon has installed a fiber to the home network, it has the headroom to boost speeds on its network — after all it’s testing 10 gigabit connections in its labs.

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AT&T U-verse High Speed Internet delivered a first-quarter net gain of 718,000 subscribers to reach a total of 5.9 million, more than offsetting losses from DSL. Overall, AT&T added 103,000 wireline broadband connections. About 45 percent of consumers have a broadband plan delivering speeds up to 6 Mbps or higher versus 35 percent in the year-ago quarter.

The net addition of 103,000 broadband subscribers is an improvement from the fourth quarter of 2011 (ended December 31) when the company saw a net decline of 49,000 in total broadband subscribers.   AT&T lost close to 615,000 classic DSL connections during the first quarter of 2012. In the fourth quarter of 2011, AT&T lost about 636,000 connections.

With more people using broadband to access all sorts of bandwidth-consuming services such as Spotify, Netflix and MLB games, it is pretty clear that the classic DSL isn’t enough. The change in demand patterns is reflective of that. For U-Verse, AT&T uses a combination of fiber-to-the-node technology  to deliver video, voice and data service.

That said, I think that AT&T is not really interested in pushing standalone wireline broadband services. Instead it wants to  focus on either the triple-play packages (voice, video and data) or the the more lucrative mobile business — much like Verizon. Why deal with net neutrality and fight for caps, when you can charge an arm and a leg for LTE?

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Verizon is putting fat Cisco CRS-3 routers in Atlanta, Boston, Chicago, Dallas, Los Angeles, New York and Seattle. The new gear, which will be deployed in the first half of 2012, can move up to 322 terabits per second — enough to download the entire printed collection of the Library of Congress in one second. These mammoth machines will be part of Verizon’s upgrade to its core FiOS network and will help deliver more bandwidth to homes, for data centers in the respective cities, to cell towers for mobile backhaul and wherever else Verizon needs it. It will also play a role in Verizon’s network evolution strategy to IPv6, the new Internet addressing system.

This represents an opportunity for players such as Ciena, which is providing equipment for the D.C. network as well as for ADTRAN and private companies such as Zayo and Allied Fiber. Unlike the telecommunications boom of the late ’90s, the investment here seems to be matching up with real demand. Of course, I doubt we would have made it this far without all of that investment and dark fiber to kick things off in terms of building bandwidth-heavy applications.

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The company has also said that it will not extend a trial it had been running with DirectTV since last year — although this will not be because of the agreement that it signed with Comcast (NSDQ: CMCSA), Time Warner Cable (NYSE: TWC) and Bright House Networks and is now awaiting approval from regulators.

The cable deal will not only give Verizon a significant lift in wireless spectrum assets — SpectrumCo, the cable JV, will be handing over 122 spectrum licenses for advanced wireless services, which cover 259 million POPs — but it will also allow the carrier the chance to bundle its wireless services with pay-TV operations that extend far beyond the current footprint of the company’s FiOS fiber-optic network.

At the UBS Media and Communications Conference this week, McAdam noted that as a result of this, it would no longer have a need to aim for a costly build out fiber-optic connection into all homes after it reaches a target of about 18 million. “We are going to build out what we said and not any more,” he told the conference (via transcript on Verizon’s site).

Meanwhile, the company also looks to be ending another venture, but it is apparently unconnected to the cable deal: the company is concluding a trial that it started last year with DirectTV offering TV, satellite and broadband access via an LTE receiver on the satellite dish. “The trials are done because the trials were scheduled to be done. This is not linked in any way at all,” a spokesperson told FierceWireless today.

McAdam played down the idea of how, exactly, it would push innovation on its FiOS service while at the same time reselling services from its competitors:

“This obviously, as you can imagine, was the topic of deep discussion with Comcast and Time (NYSE: TWX) Warner,” he told the audience at the UBS conference. “The theory is, though, that all boats will rise, so FiOS will not be disadvantaged in any way. If I put my Verizon hat on, we think that the FiOS platform is the strongest platform and each partner can take the core product and do some innovation on top of that if they choose to…FiOS will have a bunch of very good products that will come that, frankly — and come faster than it would have come if we tried to do it on our own.”

Verizon has been the subject of speculation this week over whether it would be launching a streamed service that would compete with the likes of Netflix (NSDQ: NFLX). Some have suggested that it could partner with Netflix competitor Redbox on the project.

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