Cable One’s Exposure to Possible ACP Sunset Minimal

Nov 03, 2023

By Ted Hearn

Washington, D.C., Nov. 3 ­– A federal program designed to keep Internet access affordable for millions of Americans is scheduled to run out funding by next April, raising concerns that the absence of new money could worsen the digital divide.

Cable One, a Phoenix-based Internet Service Providers (ISP) with 959,000 residential subscribers in 24 states, does not think that it will see many customers drop service if the Affordable Connectivity Program (ACP) run by the Federal Communications Commission is not renewed by Congress.

“We only have 35,000 (ACP) customers,” Cable One CEO Julie Laulis said on a wide-ranging call with Wall Street analysts Thursday afternoon. She said ACP enrollment was “teeny tiny” compared to the overall size of the company’s Internet subscriber base.

“So even if [ACP] goes away, our number of customers is minimal. And I think they'll still be customers. Maybe they'll downgrade, but I think they'll still be customers,” Laulis said.

About 20 million Americans have enrolled in the ACP, which offers a $30 discount on a monthly Internet plan. Last week, President Biden asked Congress for $6 billion to extend ACP through December 2024.

On other topics, Laulis said that her company is not feeling the effects of competition from fixed wireless Internet service offered by T-Mobile, Verizon and AT&T. In the last quarter, T-Mobile added 557,000 fixed wireless access customers and Verizon added 384,000.

AT&T has so far accumulated 25,000 fixed wireless customers under the Internet Air brand. Meanwhile, Comcast lost 18,000 Internet customers, while Charter gained 63,000, though lower than expected.

“Industry reports on mobile fixed wireless indicate that net adds may have peaked. As previously indicated, we have not experienced a material impact to our customer churn due to mobile fixed wireless competition,” Laulis said, adding that she believes Cable One has a superior technology that should fend off fixed wireless over the long term.

Comcast and Charter have built strong mobile wireless divisions through network leasing deals with Verizon. Comcast added 294,000 wireless subscribers last quarter, while Charter gained 594,000.

But Cable One CFO Todd Koetje said his company has not decided to initiate mobile plans to bundle with wireline broadband.

“…Nothing right now that says economically or from a customer demand perspective that that’s a product we have to have,” Koetje said.

Laulis mentioned that Cable One ran a short promotion that began in September that offered eligible customers an Internet access plan of 100 megabits per second (mbps) for $25 a month.

“We were overwhelmed. Our phones were ringing off the hook,” she said, adding the promotion ended in October.