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September 9, 2020
DOCSIS 4.0 will put cable operators in position to introduce multi-gigabit speeds on their widely-deployed hybrid fiber/coax (HFC) networks, but Charter Communications doesn't expect to pull the trigger on D4.0 upgrades anytime soon.
"We'll continue to develop the path for DOCSIS 4.0, but … there's no rush," Chris Winfrey, Charter's CFO, said today at the Bank of America 2020 Media, Communications & Entertainment Conference. "There's still a lot to be excited about DOCSIS 3.1. It's relatively untapped in terms of the throughout it can give us."
Charter wrapped most of its DOCSIS 3.1 network deployment in the fall of 2018, and is using that platform to deliver entry-level downstream speeds of 200 Mbit/s and up to 1 Gbit/s on the high end. Winfrey doesn't expect any of Charter's spending in the area of D4.0 to be material this year or in 2021.
CableLabs issued the DOCSIS 4.0 specs earlier this year and cable network and modem suppliers are now starting to build the products. The first D4.0 modem prototypes could emerge sometime in 2021. Even as those elements are developed, it's expected that cable operators will start to seed the network with new D4.0-compliant passive and active devices in preparation for a full DOCSIS 4.0 upgrade – and the expansion of spectrum up to 1.8GHz – further down the road.
Winfrey doesn't expect the extensible and flexible nature of DOCSIS 4.0 to break the bank when Charter is ready to proceed.
"We'll make sure it's a normal cycle as opposed to a Big Bang upgrade," he said. "I don't think it will dramatically change our capital intensity profile."
Broadband surge aiding Charter's pay-TV growth
While other cable operators and telcos continue to shed pay-TV subs, Charter bucked the trend in Q2 2020 by adding 102,000 residential video customers in the period. Winfrey attributed most of that activity to Charter's recent, massive surge in broadband subscriber additions – 842,000 in Q2 alone.
"The biggest driver to our video performance relative to the marketplace is that we sold a boatload of broadband," Winfrey said. "When you sell that many broadband connections, there's a lot of video attached that goes along with that – both through the regular expanded basic as well as the streaming packages that we have. There's a sell-in that takes place as a result of just more sales transactions for connectivity."
Winfrey stressed that Charter doesn't expect that trend to last forever as the US pay-TV market continues its general decline, but remains confident that Charter will be able to outperform its peers and competitors.
"What matters the most to us is having a competitive video product that is very supportive of the broadband sales and retention," he said. "Because there's very little profitability left in the video business for us, it doesn't really matter if we're in a net-loss situation with video. What really matters is that we have a competitive video product that supports the other connectivity services, including broadband but also mobile ... and how all of those work together."
— Jeff Baumgartner, Senior Editor, Light Reading
Senior Editor, Light Reading
Baumgartner also served as Site Editor for Light Reading Cable from 2007-2013. In between his two stints at Light Reading, he led tech coverage for Multichannel News and was a regular contributor to Broadcasting + Cable. Baumgartner was named to the 2018 class of the Cable TV Pioneers.
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