T-Mobile’s wireless TV future starts Sunday with wired internet technology from Layer3 TV, the Denver company it acquired 15 months ago.
The new TVision Home looks a lot like a traditional cable TV package, with up to 275 channels and a starting price of $90 a month (plus $10 for the required set-top box). But what it’s not like is the numerous streaming video options, such as Sling TV, because prospective customers must have wired broadband at home to use the T-Mobile’s service — and that’s sold separately.
“The Layer3 TV team in Colorado has been working side-by-side with the T-Mobile team since the acquisition to deliver today’s TVision Home solution. This is just the first step. Layer3 TV — now T-Mobile’s Home & Entertainment team — are, and continue to be, an integral part of the group delivering T-Mobile’s TV vision,” the company said in a statement to The Colorado Sun.
At launch the service is limited to the city of Longmont, plus Chicago, Dallas-Fort Worth, Los Angeles, New York, Philadelphia, San Francisco and Washington, D.C.
T-Mobile promises wider availability later this year but was mum on rollouts for Denver and the rest of Colorado. The company has hinted at having a TV service for smartphones based on the next generation of wireless technology. But the so-called 5G, which would be fast enough for home users to consider as an alternative to wired broadband, is unavailable, though T-Mobile hinted that with 5G, it could someday offer faster internet to rural customers.
TV over wireless 5G just isn’t here yet, but it’s coming, said Brett Sappington, a senior director of research at Parks Associates, which tracks the TV space.
“They’ve not explicitly stated their plans, but I can’t imagine a mobile company would get into this without it being mobile,” Sappington said. “It’s too early for 5G. … A lot of it is still in the lab and not in practice. But I think that’s what T-Mobile is planning on. If you’re going to get into the video business you’re not going to wait, but structure it and move it over to 5G when it deploys.”
A T-Mobile spokesman said the company plans to launch a mobile app “soon” for Android and iOS users to stream shows within the home.
As T-Mobile rolls out the service, it is attacking its satellite TV competitors by offering a $500 prepaid gift card to DirecTV and Dish Network customers to pay off early termination fees.
But with cable competitors, T-Mobile is signing agreements with some of them, including Comcast and Charter Spectrum to “make sure its TV service works smoothly,” according to USA Today. T-Mobile confirmed the agreements but said they vary by market.
T-Mobile TV customers must use a specific internet provider. For example, “NextLight (internet service) is the required broadband provider for the Longmont market,” said Joel Rushing, a T-Mobile spokesman.
That approach to its competitors would have raised eyebrows if net neutrality laws still existed. It’s uncertain how it will stand up to Colorado’s pending net neutrality law, which is headed for Gov. Jared Polis’ signature.
“It wouldn’t surprise me if part of the deal with Comcast is ‘We’re going to compete with you on the TV side but not the internet side,’” Sappington said. “And for Comcast, it’s not a bad deal. Broadband is far more profitable than video.”
TVision Home customers will also be able to use streaming apps, such as Netflix, link the set-top box to Alexa and Google assistants or add more TVs in the house for an extra $9.99 a month.
The official announcement called T-Mobile’s version of TV “significantly upgraded and rebranded Layer3 TV,” but it doesn’t explain what’s new.
For Longmont resident Dan More, who signed up for Layer3 when the service launched in his city two years ago, he felt there wasn’t enough new to justify his recent price hike.
“I’ve gone from an early user and somewhat of a supporter to within the last few days, I canceled my service. They jacked up my rates, and it’s T-Mobile’s doing,” said More, who had been paying $83 a month until T-Mobile raised the price to $107 this month. “…I hadn’t received any new services and no new box. It was obvious after awhile they were going to play games with me.”
(T-Mobile said that its $90 price includes a $9.99 discount for T-Mobile customers and, for a limited time, all new customers. But the service also charges $10 for the required set-top box, so a customer’s bill starts at around $100, excluding taxes. In the fine print, T-Mobile said taxes are 4% to 20%, which on a $100 bill would be an extra $4 to $20.)
More signed up for YouTube TV, which just raised its price to $50 a month. He said if it hadn’t been for the price hike, he’d still be a T-Mobile-Layer3 customer.
Layer3 has long separated itself from the rest of the new breed of TV providers.
T-Mobile TVision Home
Includes: Set-top box/DVR to record up to 400 hours of HD video
Channels: Between 150 to 275, including local networks, ESPN, HGTV and Disney Channel
Price: Starts at $100 a month plus $10 for set-top box. T-Mobile customers get a $9.99 discount (also offered to all for a limited time) for a total of $99.99 plus tax a month.
Requirements: Internet connection of at least 50 mbps
Extras: $10 per extra TV; premium channels like HBO and Showtime cost extra
The company left Boston for Denver in 2014 after qualifying for $2.9 million in state tax credits if it created 300 jobs. It planned to build a premium TV service with an all HD channel lineup, lots of sports and a concierge service of technicians who drive all-electric BMWs.
This was the opposite approach of cable TV providers, which were trying to minimize TV subscriber losses with cheaper “skinny bundles” containing fewer channels, and it was unlike streaming services like Sling, DirecTV Now and YouTube, all which priced themselves cheaper than cable, work with any sort of internet connection and did away with long-term contracts.
Layer3 teamed up with Longmont because the city built its own gigabit internet service called NextLight. Scott Rochat, with NextLight, said the two had a marketing agreement, which expired last year. No new agreement has been signed.
“They do use our fiber to provide their service because of NextLight’s high speed and solid reliability, but this is just one of a growing number of viewing options that our customers have. More and more people are choosing to cut the cord of traditional television offerings, and a fiber-optic connection like NextLight’s is perfectly positioned to help them do that,” Rochat said. “How each of those options performs is up to the service in question – we provide the highway, but they’re responsible for their own car.”
Besides Longmont, Layer3 ultimately offered TV service in Chicago, Dallas, Los Angeles and Washington, D.C. before T-Mobile snapped it up for $325 million in January 2018, according to a T-Mobile public filing. At the time, Layer3 employed 200 people in Denver.