Charter Going Gig-Happy in 2018

Joining the Gigabit Parade, Charter Communications aims to ramp up its deployments of DOCSIS 3.1 this year, spreading the multi-gig-enabling technology far and wide as part of its ambitious capital upgrade program.

Charter Communications Inc. , the second-largest cable and broadband provider in the US, revealed last week on its fourth-quarter earnings call that it plans to roll out D3.1 across its 50-million-home footprint by year's end. Using that technology, it will offer its new Spectrum Internet Gig service (actually 940 Mbit/s downstream) nationwide by the close of the year, joining such MSO peers as Comcast Corp. (Nasdaq: CMCSA, CMCSK), Cox Communications Inc. , Mediacom Communications Corp. , WideOpenWest Holdings LLC (WOW) and Cable One Inc. .

Charter, which just started rolling out DOCSIS 3.1 in December, has deployed the technology and corresponding Spectrum Internet Gig service in eight markets so far, including, New York City, Austin, Charlotte, Cincinnati, Kansas City. Oahu, Raleigh/Durham and San Antonio. It now offers 1-Gig service to 9 million homes and businesses in those markets, or nearly 20% of its total footprint.

Besides rolling out DOCSIS 3.1 and 1-Gig service, Charter has also begun boosting its minimum downstream speed to 200 Mbit/s in about 18% of its footprint, including its Hawaii, New York, Austin and Charlotte systems again, at no additional cost to new and existing Spectrum Internet customers. The MSO, which closed last year with 22.5 million residential broadband subscribers, now offers minimum speeds of at least 100 Mbit/s to 99% of its footprint, up from 50% last June.

However, Charter won't yet commit to making 200Mbit/s minimum broadband speeds available in all its markets. On the Q4 earnings call, Charter Chairman & CEO Tom Rutledge cited such "logistical" and "operational" issues as cable modem transfers and the MSO's continuing all-digital upgrades as key factors in that decision. (See Charter Sees High Capex Peaking .)

"We have some plans to take that up further this year," Rutledge said. But, because of the logistical and operational issues, "we haven't decided how fast we're going to go with that and how far we'll roll that out entirely this year."

In addition, Charter has begun deploying its Wave 2 WiFi router, which offers faster speeds and better propagation and reliability throughout the home. Specifically, the advanced wireless gateway is designed to support the company's 1-Gig rollouts.

Rutledge and Charter CFO Christopher Winfrey credited the cableco's accelerated rollout of DOCSIS 3.1 upgrades and 1-Gig service in large part to the huge corporate tax cut that Congress enacted late last year and the FCC's dismantling of federal net neutrality rules. They said they began boosting the acceleration drive last year, as well as boosting capex and hiring more workers, when the prospects for both started brightening.

"Anticipating greater regulatory certainty was a key factor in accelerating our DOCSIS 3.1 deployment, including Spectrum Gig and increasing minimum Internet speeds in a number of markets for Spectrum customers," Winfrey said. "Lower taxes and higher regulatory certainty also create better incentives for new construction and more rural broadband deployment, which will utilize our deep fiber and anticipated wireless capabilities."

However, Charter actually started spending much more heavily on capex, DOCSIS 3.1 upgrades and its workforce well before the new tax bill and net neutrality repeal ever happened. In reality, the ambitious build-up started nearly a year ago.

These developments come as Charter continues to expand its broadband customer base. In the fourth quarter, the MSO reported netting 263,000 residential broadband subs, which, while down from an impressive 357,000 net additions a year earlier, is still nothing to sneeze at. For the full year, Charter added about 1.2 million broadband subs, boosting its customer base by over 5%.

— Alan Breznick, Cable/Video Practice Leader, >Light Reading

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