Cable One officially announced its investment in fixed wireless internet service provider Nextlink today, formalizing news that Cable One CFO Steven Cochran previewed on the company’s second quarter earnings call earlier this month. The Cable One Nextlink deal gives Cable One a 10% ownership in Nextlink.
Nextlink was the biggest winner in the 2018 Connect America Fund CAF II auction, winning $281 million to cover some of the costs of bringing broadband to unserved rural areas in Texas and several other states. Although today’s press release doesn’t specify the dollar amount that Cable One invested, Cochran reportedly said on the earnings call that it was $27.2 million.
The Nextlink investment is one of two key investments Cable One has made in CAF II winners. Another big winner was Wisper ISP, which won $220 million in the auction, and which is now 40% owned by Cable One. Wisper is also a fixed wireless provider. Cable One reportedly paid $25.3 million for its share of Wisper.
Cable One Nextlink Deal
In today’s press release about the Cable One Nextlink deal, Nextlink CEO Bill Baker said Cable One’s investment will “add more momentum to our plans to deliver affordable, high-quality internet service to additional areas and households across the central United States.”
He added that “Our expansion plans relative to the Federal Communications Commission’s Connect America Fund Phase II program are on track, and this investment reflects that.”
Despite the word “Cable” in its name, Cable One has de-emphasized video in recent years to focus primarily on providing broadband service to more than 900,000 customers in 21 states under the Sparklight brand. Potentially the company might be eyeing opportunities to use fixed wireless to serve customers in more remote areas lying outside its existing service areas.
Cable One isn’t the only company to take an interest in big CAF II winners. Nextlink and Wisper both attracted the attention of Microsoft after their big wins, when both joined the Microsoft Airband initiative to help bring broadband to unserved areas of multiple U.S. states.