Charter’s CFO warns against BEAD regulations

BEAD

In some BEAD states, “regulations are not favorable to private investment or our investments,” the CFO said.

WASHINGTON, May 22, 2024 – Charter Communications’ top officials continue to raise concerns about the unruly regulations that could accompany grants under the $42.45 billion Broadband Equity, Access and Deployment program.

“The obstacle really is that I think some states may have (BEAD) rules that are not favorable to private investment or our investments,” Charter CFO Jessica Fischer he said Wednesday at the JP Morgan conference in Boston. “So there may be some limit to the total amount we invest based on our lack of willingness to bid in states where we won’t be able to get a return because the rules don’t favor it.”

With 30.5 million subscribers, Charter is the nation’s second-largest internet service provider. Charter knows the rural broadband market well after winning approximately $1.2 billion in federal grants in 2020 through the Federal Communications Commission’s Rural Digital Opportunity Fund. The company expects to complete construction of the RDOF by the end of 2026.

Last year, Charter’s CEO Christopher Winfrey told Wall Street analysts he was concerned about BEAD regulations that could force his company to leave some states.

“I want to reiterate and say very clearly that where state BEAD policies are not conducive to private investment, we will not participate in those states,” Winfrey said. Winfrey described BEAD funds tied to price controls and labor mandates as problematic.

CEO of AT&T John Stankey yesterday, he told the same JP Morgan event that he wouldn’t be surprised if the BEAD grants were tied to state requirements requiring ISPs to build open access networks, with multiple ISPs as network tenants. He said the model could work for network owners who want to maximize network utilization.

In her comments, Fischer said the BEAD program has a “now or never” quality to it, making it a unique opportunity to capitalize on.

“It’s either going to be us or someone else, so we still have a reason to pursue these BEAD compilations,” she said. – I think there will be a lot of them up for grabs.

Concerns about BEAD policies interrupted a hearing last week on Capitol Hill.

Republicans on the House Subcommittee on Communications and Technology bombarded the National Telecommunications and Information Administrator Alan Davidson with questions about whether the BEAD rules required states to regulate rates on low-cost plans for low-income households.

GOP lawmakers were concerned that rate regulation would not only violate the law but could discourage ISP participation in BEAD. Davidson insisted that while the BEAD Act required low-cost plans, NTIA gave states flexibility, with some states opting for specific prices and others opting for price ranges.