Cable giant Charter is building hundreds of thousands of fiber passings this year

Charter Communications has talked a lot recently about its rural expansion plans.

The subject came up during its investor day in December, earnings in January and again this week as CFO Jessica Fischer touted the initiative during an investor conference. But what it hasn’t drawn attention to is the fact that most - if not all - of its planned rural passings will be delivered with fiber.

The operator originally announced its rural build plan in 2021 after the close of the Rural Digital Opportunity Fund (RDOF) auction. All told, it said it was planning to spend $5 billion – including $1.2 billion in RDOF subsidy money – to reach 1 million rural locations across 24 states over the coming years. Since that time, it has racked up hundreds of millions of dollars in additional grant money for rural builds in several states.

Fischer said on Tuesday that 120,000 of the 200,000 rural passings Charter added in 2022 were subsidized. She added it plans to step up the pace of its subsidized build to 300,000 locations in 2023. While it has been building around 15,000-20,000 new passings per month, she noted it is hoping to end the year at a rate of 30,000.

While she didn’t outright state what technology Charter is using for its rural builds, an operator representative told Fierce by email that all of its RDOF builds will be fiber-to-the-home. During Q4 2022 earnings, Fischer said the vast majority of its rural builds in 2023 will be RDOF projects.

Indeed, Charter bid at the 1 Gbps/500 Mbps service tier during the RDOF auction in 2020 and outright stated in a subsequent request to waive a small portion of its winning bids that it planned to meet its RDOF commitments using fiber-to-the-premise technology. And in January 2022, all of its winning bids were authorized for distribution to subsidiaries named “Charter Fiberlink.”

Rural areas aren’t the only place Charter is looking to deploy fiber. The operator has also indicated upgrades to its cable network will allow it use Remote-OLTs inside its cable nodes to selectively deploy fiber to top tier customers across its footprint in the future. That said, Fischer stressed Charter has no plans to overbuild its cable network with fiber.

Fellow cable giant Comcast is also eyeing fiber rollouts. Comcast Cable EVP and Chief Network Officer Elad Nafshi recently told Fierce fiber can make more sense in rural areas because it requires fewer active network components and less maintenance. Like Fischer, though, Nafshi said Comcast has no plans to overbuild its network with fiber.

Fischer noted Charter is achieving significant penetration and ARPU in its rural build territories. Specifically, she said it’s been able to hit around 40% penetration within 6 months after construction, with ARPU coming in over $100 as customers bundle voice, video and mobile service with their broadband connections.

Other subsidies

Of course, RDOF isn’t the only subsidy money Charter has won. Thus far in 2023, it has also secured grant wins in Georgia, Missouri, South Carolina and Florida, building on more than $334 million in grants it won in 2022.

The descriptions for its awards in Florida show Charter plans to use fiber for all 15 of its projects there, with several specifying the use of EPON technology. The award lists for the other states did not specify what technology was being used for each project.