Charter Moving Fast on CBRS

MSO tests wireless tech plans to use it for offloading MVNO traffic, edging out to rural areas
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In recent months, cable industry analysts have gushed at the wireless convergence possibilities potentially wrought for operators using the Citizens Broadband Radio Service (CBRS) spectrum.

Charter has talked of using CBRS technology to offload Spectrum Mobile data traffic from the wireless network it leases from Verizon. 

Charter has talked of using CBRS technology to offload Spectrum Mobile data traffic from the wireless network it leases from Verizon. 

For Charter Communications, that future isn’t necessarily here. But the check is certainly in the mail, with the No. 2 U.S. operator now openly discussing its plans to use CBRS technology to offload mobile data traffic from its mobile virtual network operator (MVNO) arrangement with Verizon, as well as for establishing fixed wireless services in rural areas its hybrid fiber coaxial network can’t reach.

In fact, Charter’s ongoing tests seem to be going so well that chairman and CEO Tom Rutledge told equity analysts during the company’s third-quarter earnings call that the operator might bid on private CBRS spectrum at auction next year to augment the free spectrum it’s been conducting tests with.

“We haven’t determined that, but we’re looking at it closely,” Rutledge said. “We’re uniquely positioned to take advantage of wireline and wireless network convergence over time with our fully distributed wireline network.”

Fixed Wireless Play

Speaking at last month’s SCTE-ISBE Cable-Tec Expo in New Orleans, Craig Cowden, Charter senior vice president of wireless, said the operator could deploy triple-play fixed wireless services based on CBRS in rural areas, possibly as soon as the end of 2020.

Charter is currently conducting tests in rural North Carolina in which CBRS is being used to set up private LTE fixed-wireless networks in areas out of the reach of the operator’s HFC network.

The technology could come in handy for Charter in states like New York, with which it has made merger-based agreements with regulators to extend broadband access.

With the Federal Communications Commission having just approved initial commercial deployment of CBRS, Charter is looking to deliver the minimum broadband speed specifications in rural areas — 25 Megabits per second downstream and 3 Mbps upstream — while also offering customers in the newly claimed fixed wireless terrain triple-play services.

Simultaneously, Charter is testing the use of CBRS spectrum in New York and Los Angeles as a means of making its mobile service more profitable. Both Charter and Comcast have mobile virtual network operator (MVNO) deals with Verizon Communications to lease use of the No. 1 U.S. wireless operator’s LTE cellular network.

Charter chairman and CEO Tom Rutledge 

Charter chairman and CEO Tom Rutledge 

Charter added 294,000 mobile lines in the third quarter, while narrowing its losses in the quarter on the Spectrum Mobile service to $145 million. Still, given the usage costs of the Verizon network, analysts have been bearish on both Spectrum Mobile and Comcast’s Xfinity Mobile.

“It should be clear by this point that the current [MVNO] deal is a money loser for the cable operators; it’s not profitable and it likely never will be,” MoffettNathanson analyst Craig Moffett wrote in a note to investors over the summer.

Comcast, which is also testing CBRS usage, at least has the ability to offload some of that expensive MVNO usage via its 19,000 WiFi hotspots. But Charter only has around 500,000 WiFi hotspots.

Charter, however, envisions a future in which it toggles customers, equipped with dual-SIM handsets, seamlessly between the leased Verizon LTE network to its own CBRS-based wireless network, which in turn would use Charter’s DOCSIS 3.1 network for backhaul.

“We see targeted opportunities for mobile offload,” Cowden said. “Our data shows that something like 85% of outdoor mobile traffic takes place in 15% of geographic locations.”

‘Infrastructure-Based’ Agreement

Under the scenarios being tested, Charter could deploy strand-mounted small cells and create its own wireless networks that would use CBRS spectrum. Charter would create an “infrastructure-based” MVNO, similar to what Altice USA is establishing with its Sprint MVNO deal.

“We’ve talked about dual SIM technology opportunities and the testing that we’ve done, and we’re quite optimistic about the capability of that strategy,” Rutledge said. “We’re quite optimistic about the ability to make select investments in areas where traffic dictates in such a way as to move services that we pay rent for on to our own platform and that opportunity already exists with WiFi and a significant number of our customers.”

Under this scenario, analysts find the Comcast and Charter MVNO deals far more compelling “If they can offload anything close to half the cost of monthly service onto their own network, it would be a game-changer,” Moffett said in a note to investors. “In essence, they would be bifurcating the network into two buckets.”

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