Charter CEO flags RDOF build challenges, teases next mobile moves

Charter Spectrum broadband
A workforce shortage is one of the hurdles Charter could face as it aims to push broadband to more rural markets. (Charter Communications)

Charter Communications CEO Tom Rutledge warned the operator expects to face a range of challenges as it presses ahead with subsidized broadband buildouts in rural areas and hinted at forthcoming mobile moves related to spectrum and pricing.

In December 2020, Charter won $1.2 billion in Phase I of the Federal Communications Commission’s Rural Digital Opportunity Fund (RDOF) auction to fuel broadband deployments across 24 states.

Speaking at a MoffetNathanson investor conference today, Rutledge stressed the size of the undertaking, and he noted the rural nature of the markets it is set to cover will make construction harder.

“Physically getting it done is a big deal,” he said. “Getting a labor force in the markets where we’re going to be is going to be difficult. The skillsets don’t exist. Clearing the poles and getting make-ready done is actually a big deal because the utility companies that exist in the rural areas don’t have the staff or the capabilities to get the work done. And so, it’s going to take time to build it out.”

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Rutledge added Charter believes “there are some things that we can do to, from a regulatory perspective, to make it go faster. And we’re promoting those ideas with regard to clearing poles and doing make-ready ourselves…but I can’t overemphasize how much of a big project this is. It’s physically large, and it’s capital intensive.”

Capacity boost

The CEO recently said Charter didn’t yet feel the need to upgrade to symmetrical broadband capabilities, stating its existing capacity was sufficient. But he noted during the MoffettNathanson conference the operator has plenty of tools to boost bandwidth should the need arise.

Specifically, he explained the DOCSIS 3.1 technology currently in use on its network “has the capacity of going up to a larger downstream capacity and upstream capacity.” This could be done via an amplifier upgrade without requiring expensive changes to the “hard parts” of the network, he said.

“You could do an electronic upgrade at a relatively low cost and get multi-gig downstream speeds and a gig upstream or possibly more, and you’d have enormous capacity for years to come,” Rutledge explained.

He added it also has the option to upgrade to DOCSIS 4.0 in future, which he noted would provide both full duplex and expanded spectrum capabilities. These could be applied together, incrementally or as needed to meet the needs of specific applications, he said.

“We have the pathway, we think, to continuously stay competitive, state of the art and to do that at a relatively lower capital cost than our competition,” Rutledge stated.

Wireless

Turning to wireless, Rutledge teased two forthcoming moves, one related to its pricing strategy and one tied to its previously stated plans to leverage 3.5 GHz (CBRS) spectrum to offload traffic from MVNO partner Verizon’s network to its own.

Responding to a question about rival Comcast’s recent move to slash pricing for multi-line wireless accounts, Rutledge said “we’ve considered similar pricing mechanisms, and we will be driving price going forward.” The CEO added he didn’t want to give away when and how exactly it will change pricing, but “in the end we’ll have less expensive mobile products than most people.”

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On deploying CBRS spectrum for wireless offload, Rutledge said “we know where the traffic is already so we know where to put the CBRS radios to get the maximum offload capability.”

He added “we are building out our first market by the end of this year, and putting it into a practical model. Meaning we know where the traffic is, now we want to make sure we know how to make it all work and move the traffic appropriately, and then we’ll start to roll it out.”