Charter splashes some details on its fiber build outs across 24 states for RDOF

Charter
Buoyed by RDOF auction funds it won last month, Charter plans to invest $5 billion on building out its fiber for faster broadband speeds across rural areas in 24 states. (Charter Communications)

With the RDOF quiet period ending on Friday, Charter is spilling some details on its multi-year rural broadband deployment plans across 24 states that will be fueled by a $5 billion investment.

The $5 billion investment is partially offset by the $1.2 billion that Charter won during the Federal Communication Commission's Rural Digital Opportunity Fund (RDOF) reverse auction, the results of which were announced early last month.

The RDOF program alone will drive a 15% increase in Charter's network mileage coverage while expanding its service to more than 1 million previously unserved businesses and homes across the 24-states, which were the most in the auction, that were awarded to Charter by the FCC.

The states are: Alabama, California, Florida, Georgia, Illinois, Indiana, Kentucky, Louisiana, Massachusetts, Michigan, Missouri, New Hampshire, New Mexico, North Carolina, Ohio, Oregon, Pennsylvania, South Carolina, Tennessee, Texas, Vermont, Virginia, Washington, and Wisconsin.

The faster speeds will enable Charter customers to better engage in remote learning, work-from-home and telemedicine services, among other applications that require high bandwidth and low-latency connectivity. The faster broadband speeds will also benefit business and other organizations in the rural areas that have been hamstrung by slower speeds over the years.

Charter noted it would be providing the faster speeds with no data caps, modem fees or annual contracts in place. In addition to faster broadband, Charter will also be able to pitch its mobile voice, VoIP voice and TV services or bundles to more customers across the rural areas.

In addition to the RDOF funds, Charter has also landed numerous state broadband grants for building out its network. Along with the privately-funded expansions and state grants, the RDOF build out gives Charter the opportunity to expand its subscriber base across a large chunk of the U.S.

RELATED: Charter scores big in Phase I of the FCC's RDOF auction for rural broadband builds

On past earnings calls and during investor conferences, Charter CEO Tom Rutledge has said the cable operator was building out its presence in rural areas as part of an overall plan to reach more subscribers with its services, and that RDOF was one element of that plan.

The first phase of RDOF targets census blocks that are wholly unserved with fixed broadband at speeds of at least 25 Mbps down and 3 Mbps up. With its fiber build out in rural areas, Charter said Monday it was would offer 1Gbps broadband access to the newly served customer locations with starting speeds of 200 Mbps.

Charter said the prep work for its rural broadband built out was already underway, and that it planned on expanding its existing construction organization in order to focus on deploying the new fiber. Charter plans to hire 2,000 employees and contractors to support its RDOF and rural broadband built outs.

While Charter focused on fiber in Monday's press release, it could tap into other broadband technologies as well to reach unserved rural areas.

"It will be interesting to see the split between fiber and fixed wireless technologies used to support these unserved areas, as Charter has been committed to both technologies," said Dell'Oro Group's Jeff Heynen, vice president for broadband access and home networking, in a Monday morning email to FierceTelecom. "In general, we are expecting to see an uptick this year in cable remote OLT deployments for FTTH this year and next, as part of both greenfield and overbuild scenarios. We assume some of these deployments will be for RDOF-related projects, such as Charter’s."

Rutledge previously acknowledged that the rural expansion could lead to more competition against T-Mobile's 5G fixed wireless broadband service across rural areas.

RELATED: Charter's broadband additions slow down in the fourth quarter

In last week's earnings report, Charter's broadband subscriber additions in the fourth quarter were slightly down when compared to the previous quarter. For the quarter, Charter added 246,000 broadband subscribers, which includes residential and SBM customers. That was down by 93,000 when compared to the last year's fourth quarter and from the 537,000 net adds in the previous quarter.

Charter flags pole permitting process

While touting its rural broadband deployments to potential investors, Charter also noted in Monday's press release that the timing of those deployments were dependent on utility pole permitting and "make ready" processes. With fewer homes and businesses across rural areas, Charter said it would need to access to multiple poles for every home passed. In some instances, Charter will be sharing those poles with telcos and other broadband service providers.

"The more cooperation we have with the pole owners and utility companies, the faster we can connect these communities with high-speed internet services," Rutledge said in a statement. "We look forward to working with local municipalities, electric cooperatives, and investor-owned utilities to ensure that permits are obtained in a timely, fair and cost-effective fashion."