Mergers & Acquisitions WiFi Wireless

FCC highlights scale of Charter’s WiFi ambition

In report on its approval of Charter’s dual cableco acquisition, telecoms regulator says ‘new Charter’ will offer 300,000 hotspots and homespots

Charter Communications’ $66bn acquisition of fellow US cablecos Time Warner Cable (TWC) and Bright House Networks is likely to result in a new, enlarged wireless operator, harnessing huge numbers of WiFi hotspots and homespots to compete with Comcast’s similar strategy – and potentially to disrupt the mobile carriers. In its acquisition proposal, Charter pledged to build 300,000 WiFi hotspots within four years of the closing of the transaction, and now the FCC, in its report on the deal, is indicating the scale of the plan’s impact.

France’s Free Mobile is a clear example of how a wireline triple play provider can use the cost efficiencies of WiFi, backhauled by home and enterprise lines, to reduce the costs of a full quad play and undercut the MNOs. In justifying its approval of the Charter deal, US regulator FCC acknowledged that the combined entity was likely to pursue a wireless plan, by expanding public WiFi and possibly through an MVNO deal.

In a lengthy document, the regulator outlined how WiFi could be used by the merged cable giant to create challenges for the MNOs. Charter, TWC and Bright House “contend that the transaction would enable New Charter to be a new entrant in the mobile wireless market by offering mobile products through increased WiFi deployment, the deployment of licensed spectrum or a mobile virtual network operator (MVNO) arrangement – and likely through some combination of these,” the FCC wrote.

As part of the acquisition proposal it filed last year, Charter pledged to build 300,000 public Wi-Fi hotspots within four years of the closing of the transaction. Bright House has deployed 53,000 publicly available WiFi access points “mounted either at outdoor locations or indoors at the premises of small-to-medium businesses,” the FCC said.

TWC has also been building out WiFi, and both companies are members of the Cable WiFi alliance, a group formed by several cablecos, also including Comcast, Cox and Cablevision, in 2012 to support roaming between their respective hotspots. Charter was not part of that group and has been less aggressive about WiFi, though it has deployed an undisclosed number of hotspots in small-to-medium business locations in the St. Louis market.

The deal creates the nation’s second largest cable operator with 24m customers, and it now only requires regulatory approval from the California Public Utilities Commission, which could be forthcoming within days.

Comcast, still the cable market leader, has said it will activate its MVNO agreement with Verizon this year and is likely to test new services in the second half of the year – probably WiFi-first, with the Verizon LTE network providing connectivity when WiFi is out of range. Comcast said this week that it was experiencing a dramatic increase in traffic on its Xfinity-branded WiFi network – 445.8m gigabytes last year, up from 74.8m in 2014 and 6.9m in 2013. Xfinity WiFi users engage in an average of 150 sessions per month, and connect an average of two devices per person. That means, the firm says, that it handles 9% of all the mobile data traffic offloaded to WiFi networks in the US – which puts it in a strong negotiating position when it comes to discuss MVNO deals and other relationships with the MNOs.

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