Just an hour or so after the FCC released the news that Charter was the biggest winner in the Rural Digital Opportunity Fund (RDOF) auction, measured by locations, Charter Chairman and CEO Tom Rutledge offered some insight on the Charter rural strategy during an online investor conference.
Charter was awarded over a billion dollars through a reverse auction to cover some of the costs of bringing high-speed broadband to rural areas in 24 states that currently lack such service.
Although a quiet period prevented him from commenting on the RDOF win specifically, Rutledge’s comments offered insight on why the company is pursuing rural broadband so aggressively. The upshot, as Rutledge put it, is “we think it’s good for us financially to extend our broadband network to as many people as possible.”
As Charter has expanded its footprint, about 30% of that expansion has been in rural areas, where the company has been deploying fiber-to-the-home, but also has been eyeing fixed wireless.
Charter’s rural expansion played a role in the company’s surprising recent gains in video subscribers at a time when some other multi-play providers lost video customers. Some of Charter’s new video customers were in rural areas to which Charter brought broadband and who switched to Charter not only for broadband but also for video.
Some of these customers previously purchased from a satellite video provider, according to Rutledge.
“We’ve pulled broadband growth from all sorts of places and shifted share toward us,” Rutledge observed.
Charter Rural Plans
The RDOF funding could go a long way toward fueling Charter’s future expansion plans. Charter’s win calls for the company to bring service to over one million rural locations where high-speed broadband is not currently available.
Rutledge’s comments today suggest Charter may pursue additional rural service subsidies moving forward.
Rural expansion will be made possible by working with federal, state and local authorities to get access to poles and rights of way – and with those and with “proper subsidies,” the company will be able to “get it done,” Rutledge said.
“By working with regulatory authorities, we can expand our network and have a bigger footprint,” he said.
Rutledge made his comments at the UBS Global TMT Virtual Conference.