US broadband could undergo a major transformation in priorities in 2021. Rural infrastructure builds had been expected to continue as a priority, as they were under the Trump administration, but it is now being suggested that the FCC could pivot from encouraging rural infrastructure roll-outs, to focusing on how to make Internet services more affordable for lower income households.
‘Build the networks and they will come’ is a mantra of the wired and wireless industries, yet this strategy fundamentally does little to close the digital divide. Cost over count could therefore be a key agenda under acting FCC chair Jessica Rosenworcel, at a time when ISPs need careful monitoring as data caps creep in.
Cableco Charter Communications is among the top US operators plunging money back into high speed networks after a prosperous year for its Internet business, gaining over 2.2m subscribers in 2020 to reach 28.9m in total. Charter has earmarked $5bn for rural network infrastructure build outs to reach 1.1m new premises across 24 states, having been buoyed by the $1.2bn Charter received from the Rural Digital Opportunity Fund (RDOF).
Charter has made sure to let existing Internet subscribers know they aren’t being left behind, with investments planned to improve data throughput and latency with DOCSIS 3.1 technology, which the operator says still provides a long runway to improve its product set. DOCSIS 4.0 upgrades are also planned for this year to provide even greater capacity.
WiFi upgrades have also been swept in recently at Charter, improving the quality of in-home connectivity with a new WiFi 6 router, which is currently only available in one Charter market but plans to be made available in “nearly all” markets by mid-2021.
Notably, following in Comcast’s footsteps as Charter often likes to do, the cableco rolled out companion WiFi Pods from Plume in Q4 2020 to improve WiFi reception in the home. These mesh access points interoperate with Charter’s existing Advanced In-Home WiFi service for managing and optimizing the wireless networks, which Charter says has now been launched across more than 65% of its footprint and rising.
Charter claims to have spent over $35bn on its network and infrastructure since the close of the Bright House/Time Warner transactions in 2016, investments which showed up in its 2020 performance. At the time of this deal being approved, there were serious reservations about the consolidatory effect it would have on US broadband. A few years and a pandemic later, Charter has used these assets to throw down the gauntlet by investing in areas of the country and in areas of technology where AT&T and Verizon have refused to go.
Meanwhile, Comcast is being even more secretive about its network plans, instead reorganizing its Cable Networks and Broadcast Television divisions by merging them into its video streaming platform Peacock – in a structure designed to drive long term cost efficiencies and revenue opportunities.
Comcast Cable CEO Dave Watson hyped up having access to the country’s best fixed network infrastructure, as well as its ongoing work to improve WiFi, where Plume again plays an important role. Watson also mentioned targeted wireless infrastructure as the third layer in Comcast’s network roadmap, which the operator might use to supplement the Verizon network and go after the high dense usage areas.
Cable Networks is still Comcast’s biggest bread winner and biggest EBITDA driver, but going forwards the subscription and advertising revenue streams will be blended into one business – across Broadcast, Cable and Peacock. Comcast will therefore be selling it to advertisers as one platform, and so it will become more difficult to distinguish between the Cable Networks performance and performance in the TV business.
As the operator has evolved to become 70% broadband-centric, Comcast believes this restructuring will benefit growth of the business over time, which is true if it means veiling over underperforming business areas.
Comcast CEO Brian Roberts did have a few messages for the new administration. “Our view is obviously strongly felt that the long-standing light touch regulation has worked since President Clinton created that classification and reduces regulatory risk for investors and allowed the company to invest more and have paid dividends unbelievably well during Covid. We were never asked to down raise any services, and content providers and consumers really benefited. That wasn’t universally the case around the globe, with different broadband regimes. But we do believe in the neutrality and how we’re not going to discriminate, block, throttle and some of the other principles that we’ve committed to.”