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Charter Exploring Targeted 'High-Split' Upstream Upgrades

Charter Communications has shed a bit more light on its future "high-split" upgrades that will beef up the amount of capacity dedicated to the upstream on today's DOCSIS 3.1 networks and, down the road, on its future DOCSIS 4.0 networks.

But Charter will likely take a targeted approach to a high-split, Chris Winfrey, Charter's chief financial officer, said Monday at the BofA Securities 2021 Media, Communications & Entertainment Conference.

"We will invest in high-split … in markets where we think it's attractive to do so, and maybe as a bridge to transition to DOCSIS 4.0," he said.

A high-split could be used to enhance upstream capacity in today's DOCSIS 3.1 networks as well as in future DOCSIS 4.0 networks. Rather than limiting upstream capacity to the spectrum range of 5MHz-42MHz, as it is in many North American DOCSIS networks today, a high-split would increase that range to 5MHz-204MHz. That would put an operator in position to deliver speeds up to 1 Gbit/s in the upstream via their widely deployed hybrid fiber/coax (HFC) networks.

Winfrey likened high-split upgrades to "up and coming expenditures" that could be done in parallel with developments tied to DOCSIS 4.0. "Over a five-year period, I think the cost to do that high-split is really very small amounts of incremental dollars," he said, holding that it offers a "pretty attractive" approach to upgrading the network.

He also said it's not yet clear when Charter might later "flip the switch" and go with DOCSIS 4.0. Charter, Winfrey added, is also building out fiber-to-the-premises in some markets, particularly in rural areas, and noted that there might also be opportunities to deploy fiber overlays in some portions of the network currently served by DOCSIS/HFC.

"We're going to have a variety of technologies and tools available to us," Winfrey said. "It will really be dictated based on competition and product needs."

The blending of the wired and wireless worlds

Bigger picture, Winfrey said Charter's focus is to expand its general broadband subscriber base and to use Spectrum Mobile to provide a broader set of "connectivity" that spans both wired and wireless. The lines between the two, particularly in Charter's case, are blending together, he said.

Charter, Winfrey said, remains "highly underpenetrated" with broadband – about 30 million high-speed Internet customers across 54 million homes passed. Of that broadband sub total, about 2 million also get mobile service from Charter, which ended Q2 2021 with 2.94 million mobile lines in service.

The opportunity, he added, is to grow that 30 million figure and to "significantly" expand the mobile piece. "As those products converge … the connectivity service that you have really becomes less distinguished between multiple products," Winfrey noted.

Winfrey also reiterated that, at its high point, Charter's fixed line voice product was penetrated to more than half of its broadband customers. He suggested that perhaps this feat could be repeated with mobile, which Charter currently sells only to customers who get broadband service from the cable operator.

"The other way to think about it is, in five years or ten years from now, is it really a separate product, or a connectivity service?" he said. "I would argue that's the environment we're heading into."

Winfrey also offered a small update on Charter's plans to deploy CBRS-based networks using both unlicensed and licensed spectrum. Charter plans to build a CBRS network in one market in the back half of 2021, but has yet to identify it.

Charter's multi-year CBRS network deployment will largely focus on high-traffic areas where it can get the best return on investment.

"We'll pick up the pace, but we're not in a rush," he said of Charter's CBRS-facing plans. "We're going to make sure that we get it right, and we'll go where the economics dictate that we go and how far we go, meaning how low of a density does it make sense to go."

The resulting CBRS network will help Charter offload some of its MVNO costs to Verizon and, in some cases, enable Charter to use fixed wireless to reach some segments of the market.

Winfrey also dropped another hint that Charter is working on new multi-line pricing and packaging for Spectrum Mobile that takes advantage of its revised MVNO agreement with Verizon.

He said it's unlikely that Charter would replicate what Comcast introduced in April, but relayed that the company is finalizing some "system changes" that would enable Charter to offer multi-line pricing and to implement other strategic pricing changes "in a more nimble way."


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