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Through its satellite Internet service, Amazon plans to pursue federal broadband subsidies in Louisiana. That makes the company 'the enemy of every broadband provider out there,' said Calix's CEO.
Amazon is applying for federal funding for broadband Internet providers. And that, according to the CEO of equipment supplier Calix, shows that Amazon is "the wolf in sheep's clothing."
"They are applying for BEAD to compete with all of our customers," said Calix CEO Michael Weening during his company's quarterly conference call this week. Amazon, Weening said, is "the enemy of every broadband provider out there."
BEAD is the Biden administration's Broadband Equity Access and Deployment program, and it's designed to funnel $42.45 billion through US states for broadband networks in rural areas. Amazon was recently listed among the 35 companies approved by the state of Louisiana to compete for BEAD dollars.
Weening explained that the broadband industry is at a crossroads. He said each network operator must now decide whether they'll remain a legacy provider, competing only on the speed of their connections, or if they'll become a "broadband experience provider," or BEP.
"Our mission remains aligned to those choosing the BEP path as we contribute to their success by enabling their teams to simplify their operations, subscriber engagement and services, innovate for their consumer, business and municipal subscribers and grow their value for members, investors and the communities they serve," according to Calix's shareholder letter this week.
The BEAD wakeup call
Weening, Calix's CEO, pointed to Amazon's ongoing encroachment into the broadband industry as a threat to legacy Internet providers that compete on connection speeds alone. He specifically pointed to Amazon's acquisition of home mesh router maker Eero in 2019 as the first signal that the company would become an enemy of Calix's customers.
Now, though, Amazon plans to provide Internet services directly to end users through its Project Kuiper satellite Internet gambit. And like SpaceX's rival Starlink satellite Internet service, Amazon's Project Kuiper will also compete against the likes of established broadband Internet providers like AT&T, Verizon and Charter Communications for BEAD funding.
"It should be a wake-up call for every customer out there that if they're not transitioning from a dumb network operator – who actually has one go-to-market, which is speed – into a full experience provider for the entire community, they're missing an opportunity," Weening said.
Louisiana, for its part, has been at the forefront of the BEAD program. It was the first state in the country to receive approval from the NTIA for its full initial proposal for funding. That unlocked the state's access to its $1.3 billion BEAD allotment and allowed Louisiana to start selecting companies to receive funding for networks in rural areas. Other states receiving large amounts of BEAD funding include Texas, California and Missouri.
Weening said he expects US network operators to begin receiving BEAD funding later next year. He also said he doesn't expect the outcome of the US presidential election to affect the program.
Amazon's trajectory into broadband
Amazon of course is a massive company that provides everything from cloud services to e-commerce offerings.
In recent years, the company's various lines of business have increasingly stretched into the telecom sector. For example, the Amazon Sidewalk network uses LoRa, Bluetooth and other technologies to create Internet of things (IoT) connections for various Amazon gadgets. And Amazon's Private 5G offering allows large and small businesses to set up their own custom wireless networks.
But Amazon's Project Kuiper promises to supercharge such offerings by providing high-speed Internet connections anywhere. The company hopes to begin offering commercial Internet services – stationary connections to its dedicated receivers – starting later in 2025. Amazon ultimately hopes to operate more than 3,000 satellites for the service.
Amazon's Project Kuiper's technology and business model closely mirrors that of SpaceX's Starlink. Already, Starlink's broadband Internet service counts around 4 million customers – those using its stationary receivers – across more than 6,000 satellites.
Calix, meanwhile, sells platforms and managed services – including its Calix Cloud, Revenue EDGE and Intelligent Access EDGE – that can gather, analyze and apply machine learning to network operators for real-time insights. "Our customers utilize these insights to simplify network operations, marketing and customer support and innovate for their customers, business and municipal subscribers by delivering a growing portfolio of SmartLife managed services and experiences," the company explained in a recent SEC filing.
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