Charter expects to charge the same price for broadband service in RDOF-funded areas as in metro areas, said Charter CEO Tom Rutledge in a discussion about Charter RDOF plans at an investor conference today. The company was tentatively awarded over $1 billion to cover some of the costs of deploying broadband to unserved rural areas through the Rural Digital Opportunity Fund (RDOF) program.
Although the company would have been allowed to use what Rutledge called a “two-tiered” pricing approach, he said, “I’m not sure how practical that is from a marketing perspective or an operating perspective and we don’t need a different price to make the economics work. When we bid in the RDOF process, our bid assumed that we would be charging the same rate as we charge elsewhere.”
Rutledge said Charter participated in the RDOF auction for two reasons.
The company saw an opportunity to create customers in places where they don’t exist today. And the company felt it had an obligation to help in efforts to make broadband available to all Americans.
“We want to contribute to that effort but we also [want to gain] a customer relationship that has value both to the customer and to us,” he said.
Charter RDOF Plans
Charter currently has three quarters of a million miles of infrastructure and will see that increase by 120,000 miles when its RDOF buildout is completed, a process that will span eight years, Rutledge said. Ultimately, RDOF locations will comprise 2% of Charter’s total passings.
The company expects some challenges along the way.
Rutledge noted, for example, that getting a labor force with the appropriate skills will be difficult in some markets. He also noted that, in some markets, the company plans to use utility pole infrastructure but that some utility companies don’t have sufficient staff to get the work done promptly.
Charter has urged regulators to allow the company to clear poles and do make-ready themselves to expedite the process, Rutledge noted.
“I can’t overemphasize how much of a big project this is,” he said.
CBRS Could Play a Role
Rutledge also sees the spectrum that Charter won in the CBRS auction playing a role in supporting rural opportunities.
An important function of that spectrum will be to minimize the need for Charter to rely on its wholesale agreement with Verizon to support the Charter mobile offering, but in addition the spectrum will be a “line extender,” Rutledge said.
He noted, for example, that CBRS spectrum could be used on farms to extend the reach of a broadband connection.
Rutledge made his comments in a question-and-answer session at the MoffettNathanson Media & Communications Summit.
