Leading U.S. Broadband Providers Plan to Gobble up Competition in a Move That Will Transform the U.S. Broadband Market

May 2025 saw the U.S. broadband market shaken by two major deals. First came the announcement on May 16 that Charter Communications would pay US$34.5 billion to absorb Cox Communications. Within this figure, US$12.6 billion would be allocated for the settlement of Cox’s outstanding debt, US$4 billion would be a cash payment directly to the Cox family (the owners of Cox Communications), and the remaining $17.9 billion would be given to the Cox family in the form of shares in the merged entity, which will take the name of Cox Communications after the transaction closes (projected for mid-2027). The structure of this transaction has likely helped to expediate the deal (as shares are more readily available than cash), and also allows the Cox family to benefit from the claimed additional value the future restructured Cox Communications will create. Then, 5 days later on May 21, news broke that AT&T would purchase Lumen’s consumer fiber business for US$5.8 billion, with the deal expected to close in 1H 2026. Given the financial difficulties that Lumen has faced in recent years, with the company’s stock price on the day prior to the announcement just 27% what it was on the same date 4 years earlier, AT&T was able to negotiate a favorable price. These two acquisitions are set to bring major disruption to the U.S. broadband market, propelling Charter to become the largest Internet Service Provider (ISP) in the United States, and helping AT&T fend off competition from the fast-expanding Verizon. This ABI Insight first examines each of the two deals individually, analyzing the incentives and motivations behind the transactions, before moving on to assess how the acquisitions will transform the U.S. broadband market, and what the impact will be for the broader industry and consumers.  

We will begin our analysis with the first announced deal, the merger of Charter and Cox. These ISPs are the United States’ second and third largest cable broadband companies, respectively, behind the nation’s largest cable broadband provider (also the largest provider overall), Comcast. Cable is currently the most prevalent broadband access technology in the United States, with 65.2% of all fixed broadband subscriptions served via the technology, but it has been losing market share in recent years to the fast-expanding fiber and Fixed Wireless Access (FWA) technologies. Illustrating the rapid pace of change, fiber subscriptions in the United States have grown by 7.8 million over the past 2 years alone, while FWA subscribers have increased by more than 7.5 million over the same period. This growth has been enjoyed by fiber and FWA-first ISPs, including T-Mobile (its FWA subscribers jumped by 3.7 million between 1Q 2023 and 1Q 2025), Verizon (its FWA subscribers increased by 3.0 million over the same period), and AT&T (more on this company later). In contrast, the fortunes of the cable-first ISPs have been in the reverse. At Charter, broadband subscribers dropped by 0.5 million between 1Q 2025 and 1Q 2024. This decline was exceeded only by the largest cable broadband provider Comcast, which suffered a 0.6 million drop over the same period. Cox’s Internet subscribers have also witnessed a contraction, albeit at a slower rate, shrinking from 6.2 million in 1Q 2021 to 5.9 million in 1Q 2025. Yet, declining broadband subscribers are not the only metric keeping the management of these cable companies up at night, as all of them are also shredding cable pay TV subscribers at an accelerating rate. Notably, Charter Communications’ pay TV subscribers decreased from 15.5 million in 1Q 2021 to 12.2 million in 1Q 2025.

In this contracting market of a legacy technology, not only are new cable customers few and far between, but the cable broadband providers themselves, desperate to prevent future subscriber exodus, are doing everything they can to prevent customer churn. In such an environment the only realistic avenue for significant cable subscriber growth is through the acquisition of a rival—a strategy Charter has just put into action. With the gain of Cox’s 5.9 million subscribers, alongside the roughly 0.3 million from its Liberty Broadband acquisition (approved by shareholders in February 2025, expected to close around June 2027), Charter’s Internet subscriber base will reach of total of 36.2 million, surpassing Comcast’s current 31.6 million. Alongside the boost in the subscriber footprint, the merger has brought a meaningful expansion to Charter’s reach, as it will gain access to Cox’s cable network in regions where it previously lacked presence, including Las Vegas and Phoenix. Synergies between Charter and Cox’s business operations also promise to deliver considerable additional value through cost savings and the expansion of product lines across the combined networks and subscriber bases of both companies.

Once the transaction is completed (in mid-2027), the restructured Cox Communications will be one of only two large cable broadband ISPs in the United States, cementing the cable broadband ISP duopoly in the market. Indeed, it is likely that the remaining cable broadband competitors, which have just a fraction of Comcast’s and the future Cox Communications’ subscriber base, will also become the target of acquisitions in the near future. As well as solidifying the dominance of the new Cox Communications in the cable broadband market, it will also give the new company the scale and the reach necessary to better compete with the fast-growing non-cable competitors, such as AT&T and Verizon.

Speaking of those non-cable competitors, the largest (and third largest ISP overall), AT&T, is the acquiring party of the second deal that this article analyzes. As mentioned above, AT&T has witnessed rapid subscriber growth in recent years, increasing from 0.3 million Year-over-Year (YoY) to reach 14.1 million in 1Q 2024. While impressive, AT&T’s growth is outshined by the nation’s 4th largest ISP, Verizon, with its subscribers leaping 35%, 35%, and 16% YoY in 2025, 2024, and 2023, respectively. Verizon’s fortunes in recent years have been thanks to the breakneck growth of the ISP’s FWA subscribers, which now constitute 38% of its entire 12.6 million subscriber base. This dwarfs AT&T’s current 0.8 million FWA subscribers, a number that Verizon passed back in mid-2022, and that the nation’s largest FWA ISP, T-Mobile, surpassed in late 2021. Yet, Verizon’s FWA successes have not caused it to neglect its other growth engine, fiber, and in 2H 2024 the company announced that it would acquire for US$20 billion the nation’s third largest fiber ISP (behind AT&T and Verizon), Frontier, in the process capturing its 2.2 million fiber subscribers. Verizon’s current 7.2 million fiber subscribers alongside Frontier’s 2.2 million would put the combined entity’s number within a hair’s breadth of AT&T’s current 9.6 million fiber subscribers. Given that fiber is the bedrock of AT&T’s growth strategy, with the technology now representing 68.0% of its current 14.1 million subscribers (a percentage up from 55.0% in 1Q 2023), AT&T’s strategy with the Lumen purchase appears to be to double-down on fiber and to fiercely defend its position as the market’s leading fiber ISP.

Gaining Lumen’s 1.1 million fiber subscribers would boost AT&T’s fiber subscriber base by approximately 12% to 10.7 million (based on 1Q 2025 figures, although both Lumen’s and AT&T’s subscriber bases may shift before the transaction closes in 1H 2026). This would help extend AT&T’s lead in fiber and put some much needed space between it and the fast-rising Verizon, but it is likely not the existing subscribers alone that incentivized AT&T’s purchase. Lumen’s fiber penetration rate (the percentage of fiber homes passed that are subscribers) is just 26%, far below AT&T’s current 40%, and less than half of Charter’s 53% for its cable network. We can assume that AT&T believes that by absorbing Lumen’s network into its own and rolling out its products and services on the new lines, AT&T will be able to swiftly realize greater subscriber adoption on Lumen’s assets. Furthermore, by adding Lumen’s network of 4.3 million fiber homes passed, AT&T can enlarge its fiber footprint (currently 23.8 million) by 18% overnight, reaching 28.8 million. This will enable AT&T to leapfrog the combined Verizon and Frontier footprint of 25 million. At the same time, Lumen’s assets will help expediate AT&T’s attainment of its target of 60 million fiber locations by 2030, a number that far exceeds Verizon’s target of 30 million fiber passings by 2028, with the ultimate goal of reaching 35 million to 40 million at an unspecified date in the future. Thus, whereas the Charter/Cox merger can be viewed as a defensive attempt to create the scale necessary for cable to better compete with emerging fiber and FWA offerings, the AT&T/Lumen merger is more about AT&T securing future fiber growth opportunities and preventing Verizon from supplanting its current fiber dominance.

Given that the future Cox Communications when (assuming everything goes smoothly) it emerges in mid-2027 will be operating a predominantly cable network, the natural first question is how will the merger impact the rollout of the next DOCSIS standard, DOCSIS 4.0? While both Charter and Cox have already committed to upgrading to DOCSIS 4.0 (as has Comcast), Charter’s target completion date for the technology’s deployment has been pushed back several times. In 1Q 2024 the original 2025 date was revised to 2026, and in 4Q 2024 it was postponed further until 2027. While delays in equipment certification and recovery following Hurricane Helene in September 2024 are understandable reasons for the revised schedule, it is highly likely that the complications surrounding the integration of Cox into Charter will act to further slow the rollout. Notably, there are many inconsistencies in their approaches to DOCSIS, including that fact that Charter is using a high-split DOCSIS architecture, whereas COX is close to completing a mid-split DOCSIS architecture implementation. Divergence between each of the ISPs’ Customer Premises Equipment (CPE) designs and capabilities is another challenge that could prove to be a major headache. The merged entity can either invest significant time and money into addressing these discrepancies, or it could try to work around them, settling for two separate networks instead, an option that would add significantly to the resources required for network management and maintenance. Either choice would appear to run counter to the claimed “cost synergies” of the merger.

Any further delays to DOCSIS 4.0 would prove to be a major challenge for the future Cox Communications, because the 5 Gigabits per Second (Gbps) upstream, 1 Gbps downstream performance capabilities of the existing DOCSIS 3.1 equipment in Charter and Cox’s networks are unable to compete with the fiber networks operated by AT&T, with its 10 Gigabit Symmetrical Passive Optical Network (XGS-PON) infrastructure that can offer symmetrical 10 Gbps speeds. The 10 Gbps download and 6 Gbps upload speeds of DOCSIS 4.0 promise to help narrow the gap between DOCSIS and fiber, but for every additional day DOCSIS 4.0 is delayed, more customers will choose to finally jump ship from cable and sign up for fiber.

Then there is the question of the future of DOCSIS itself. There are those who are bullish on the technology’s future, with several proposals for the next advancements to DOCSIS, to be named either DOCSIS 4.1 or DOCSIS 5.0. Yet, even if the theoretical enhancements were possible and implemented, most in the industry consider it unrealistic to expect anything above 10 Gbps symmetrical, which in the long term will be unable to compete with the future 25G-PON and 50G-PON fiber technologies developed by Nokia and Broadcom. Regardless, this assumes that the market for DOCSIS continues to exist after DOCSIS 4.0. Outside of Comcast, Charter, and Cox, few ISPs in the United States or abroad are proceeding with DOCSIS 4.0 upgrades, due to the large investments required for the upgrades and uncertainties over the technology’s future prospects. Instead, they are opting for the DOCSIS 3.1+ alternative, which extracts the maximum performance possible out of DOCSIS 3.1 to help achieve 8 Gbps downstream and 1.5 Gbps upstream. For these ISPs, DOCSIS 3.1+ will most likely be the end of the road for DOCSIS, and instead of pumping further money into their legacy cable networks, they will divert the money into the latest fiber infrastructure so they can future-proof their network and remain competitive. Given the fading relevance of DOCSIS, retaining their scale becomes even more vital for comcast and Charter/Cox, because if they shrink to a size where their orders alone are not sufficient to underpin the DOCSIS ecosystem, then it will cease to exist.

One method for the cable ISPs Comcast and Charter/Cox to retain their scale is for them to make further acquisitions of the remaining cable broadband providers, such as Optimum or Mediacom. This strategy not only helps shore up their own subscriber base, but also helps protect the broader cable ecosystem (necessary for the survival of DOCSIS), as it removes the potential that the smaller cable provider converts its cable network to a fiber one. With competition in the fiber ISP market heating up, fiber ISPs, especially AT&T and Verizon, are likely to also be weighing further acquisitions. Scooping up smaller, in many cases regional fiber providers such as Ting or Greenlight Networks, provides them a shortcut to reaching their fiber footprint targets, and enables them to enact economies of scale across their networks.