New Street Research analyst Jonathan Chaplin says that cable operators will have a lot of opportunity to snag Broadband Equity, Access and Deployment (BEAD) funds for locations that are out of their existing footprints but proximate to those footprints.
In a research note today, Chaplin delineated three areas out of their existing footprints that will be most ripe for them.
The first area will be locations that are unserved that are near their existing footprints, and where there’s no other internet service provider nearby.
“Cable companies may be competing with ILECs that also have infrastructure close by,” wrote Chaplin. “The larger cable operators should be well positioned, given ready access to capital and a strong track record of successfully deploying fiber in rural markets.”
The second area will be locations that are officially unserved, according to the FCC’s definition, but where there is an existing internet service provider. “These are locations with an ISP providing less than 25/3 Mbps that are also near existing cable plant,” wrote Chaplin.
And the third area with good opportunity for cable will be underserved locations with an ISP providing more than 25/3 Mbps but less than 100/20 Mbps that are also near existing cable plant.
Chaplin said the ILECs will have an advantage when competing for these locations, since their upgrade costs should be lower than having to build from scratch. "Though cable will offer a compelling alternative in these markets too,” he wrote.
New Street crunched available FCC data to estimate that there are about 8.7 million unserved Broadband Serviceable Locations (BSLs) in the U.S. and 3.8 million underserved locations. The total of 12.4 million BSLs convert to 14.3 million homes and businesses.
Competition among cable operators
The big cable operators have not traditionally competed against each other because their footprints don’t overlap. And even though they may compete against each other for BEAD funds, their footprints likely will remain separate.
The CEO of ACA Connects Grant Spellmeyer recently told Fierce Wireless that the vast majority of ACA members are interested in applying for BEAD funds. He said BEAD was “dominating everything that’s going on from the ACA perspective. I have a lot of members interested in using the money to expand and upgrade service.”
RELATED: MVNOs, BEAD to be hot topics at 2023 Independent Show
New Street Research policy analyst Blair Levin recently told Fierce, “Cable players have not entered each other's territories and I don't think that will change.”