reports
- Blair Levin
NSR Policy: The Interconnections of ACP, Spectrum, Title II, and the S...
In this weekend update, we reconsider our initial takes on several events last week and how they could be affected by events this week. Specifically, we look at the interplay of the FCC’s Title II Order, the Second Circuit opinion upholding New York State’s mandate for ISPs to offer low-income households a low-cost broadband offering, Senator Cantwell’s draft spectrum bill, and how all are affected by the end of ACP funding in the next few weeks.
- Jonathan Chaplin
Charter Model Update
This note focuses mostly on model changes. Please see separate notes reviewing results and on thoughts following the earnings call. We lowered broadband adds, revenue and EBITDA. We also expect leverage to approach 4.25x by the end of the year. This likely rules out further repurchases this year, unless EBITDA is stronger than we expect. No change to thesis, though we expect Broadband stocks to be challenged for at least next few quarters. Price target is $431 (+69%).
- Jonathan Chaplin
CHTR: quick thoughts following the call
What's new: in this note we cover the change to leverage and what it means for management’s confidence in the business, our evolving thoughts on broadband market growth, our outlook for 2Q24 for broadband adds, ARPU, and EBITDA, and thoughts on long-term pricing strategy.
- Jonathan Chaplin
CHTR 1Q24 Quick Take: Financial results in-line; subscribers soft
What's new: Revenue and EBITDA in-line; FCF low due to working capital drag (timing); subscriber metrics worse than expected. Leverage down very slightly, as expected. Investors will be very focused on what management says about leverage targets on the call. We don’t have a lot to add on results, at this stage. We touch briefly on the following: Broadband market growth Charter's broadband growth Broadband ARPU growth EBITDA growth FCF and Leverage Lumos overhang
Charter Communications Inc: 1 director
A director at Charter Communications Inc sold 40,803 shares at 288.350USD and the significance rating of the trade was 67/100. Is that information sufficient for you to make an investment decision? This report gives details of those trades and adds context and analysis to them such that you can judge whether these trading decisions are ones worth following. Included in the report is a detailed share price chart which plots discretionary trades by all the company's directors over the last two y...
- Jonathan Chaplin
Broadband market growth slower in 1Q24
Broadband industry growth slowed in 4Q23. We wondered, exiting the quarter, whether growth would level off or slow further in 1Q24. Based on the data we have collected so far, it appears that growth has slowed further, and possibly quite materially. We suspect slower growth will impact all operators, although for fiber, it should be partly offset by footprint expansion.
- Blair Levin
NSR Policy: Net Neutrality: It’s Back!
This week, we focus on the FCC’s upcoming Net Neutrality order, which is likely to be made public on Thursday and voted on April 25. The big picture is that the item will be approved on a 3-2 vote and largely resemble the 2015 order. As we have been in the past, we are skeptical that the rules will be material to the financial performance of the ISPs but there are a few interesting nuances to this iteration.
- Blair Levin
NSR Policy: FCC Dings Nexstar for Exceeding Ownership Limits but Real ...
Last week, the FCC ruled that Nexstar’s relationship with Mission Broadcasting’s WPIX in New York City violated its rules and the national broadcast ownership cap. In this note, we discuss how this decision reflects the priorities of the current FCC, but also broader themes related to the decline of linear television and upcoming changes to both the market and the video regulatory environment.
TMUS T-MOBILE US INC.
VZ VERIZON COMMUNICATIONS INC.
T AT&T INC.
SBGI SINCLAIR BROADCAST GROUP INC. CLASS A
NXST NEXSTAR MEDIA GROUP INC. CLASS A
GOOGL ALPHABET INC. CLASS A
DISH DISH NETWORK CORPORATION CLASS A
DIS WALT DISNEY COMPANY
CHTR CHARTER COMMUNICATIONS INC. CLASS A
AMZN AMAZON.COM INC.
FOX FOX CORPORATION CLASS B
WBD WARNER BROS. DISCOVERY INC.
- Blair Levin
NSR Policy: State of Play of BEAD
In 2024-25, one of the biggest events in the telecom sector will be how the federal government and states spend the $42.5 billion Congress appropriated for deployment to unserved and underserved locations as part of the BEAD program. In this Weekend Update, we provide a state of play on the program, including outlining the process going forward, the timing, the Fiber v. FWA debate, what has worked, what challenges lie ahead, the election impact (or lack thereof) and the quick take from the compa...
- Jonathan Chaplin
Fiber to the Future – Broadband Trends; Infrastructure Wars; New ILEC ...
We just wrapped up the second day of the BCG and NSR Fiber to the Future Conference. The second day featured discussions with over 30 companies including Altice USA, AT&T, BT Group, Charter, Dycom, Deutsche Telekom, Frontier, Goldman Sachs, Liberty Global, Lumen, Recon Analytics, Shentel, TDS Telecom, Tillman Global, Tucows, and Verizon.
- Jonathan Chaplin
ACP Part VI: Updating forecast for risks to the broadband businesses
We combined the results of three recent surveys to update our estimates for the loss of broadband subscribers, revenue, and EBITDA if ACP is not renewed (we still hope it will be renewed, though odds not great.) The impact could be material for Charter, though not nearly as bad as some fear. It should be immaterial for the other companies we track.
- Blair Levin
NSR Policy: FCC Bulk Billing Order
In this weekend update, we look at an upcoming FCC order that, unlike some more heavily publicized orders, could have a more material impact on our sector. The upcoming order, which proposes to ban bulk billing, is part of a broader Administration effort to constrain fees the Administration regards as unfair or anticompetitive. This issue arises in the context of the FCC, over several decades, evaluating how to create competition in Multiple Tenant Environments (MTEs), but the issues here are d...
- Blair Levin
NSR Policy: ACP Increases Supporters, Not Odds
In this Weekend Update, we start by analyzing the latest DC machinations regarding the future, if any, of the Affordable Connectivity Program (ACP), including: - Why the over 500% increase in the number of co-sponsors for an ACP extension bill is not indicative of an increase in support; - How the March letters to ACP customers might provide some early indications of what will happen in May and June if funding expires; and - How the calvary of an ACP and USF reform bill is over the horizon but t...
- Jonathan Chaplin
CHTR Quick Hit: Lowering 1Q24 Repurchase Estimate
Advance/Newhouse filed its latest Charter ownership disclosure today. The buyback amount was lower than our expectation for the second month this quarter. As such, we are lowering our 1Q24 share repurchase estimate but keeping our EBITDA estimate unchanged.
- Blair Levin
NSR Policy: Congressional Signals on ACP and Tax Bill
In this Weekend Update, we focus on the signs that Congress provided this past week on two issues that directly affect the finances of ISPs: the future of ACP and taxes. As to the ACP, we discuss how extension proponents apparently failed in efforts to include an ACP extension appropriation in the recently adopted short-term budget compromise. That should surprise no one but it indicates that an extension remains an uphill struggle. Still, that possibility remains on the table but there will be ...
TMUS T-MOBILE US INC.
VZ VERIZON COMMUNICATIONS INC.
T AT&T INC.
GOOGL ALPHABET INC. CLASS A
FB FACEBOOK INC. CLASS A
DISH DISH NETWORK CORPORATION CLASS A
CHTR CHARTER COMMUNICATIONS INC. CLASS A
AMZN AMAZON.COM INC.
MSFT MICROSOFT CORPORATION
APPL APPLE INC - APPL - US
- Jonathan Chaplin
ACP Part V: FCC releases survey results
The FCC released a survey that included more than 5,000 ACP households today. The FCC repeated the mistake of prior surveys by asking whether households were new to broadband with ACP as opposed to subscribers that are new to broadband with one of the subsidy programs that followed the pandemic (stimulus checks; EBB; ACP). They also asked the important question, which is “what will you do when ACP ends”. Our quick analysis here focuses mostly on the social costs of ACP going away. We will ...
- Jonathan Chaplin
CHTR & ATUS Quick take: thoughts on merger rumor
Bloomberg is reporting that Charter is working with advisors to explore an acquisition of Altice. We are taking the story seriously, though we believe that Altice’s leverage and operational challenges make a deal difficult. We think there are very limited circumstances under which a deal would be feasible. Our quick thoughts in this brief note.
- Jonathan Chaplin
ACP Part IV: Evolving thoughts on the impact on the broadband market
We conducted a survey of 1000+ ACP recipients and, while processing the (surprising) results, we realized that we had framed the issue poorly. ACP may be far more important to low-income households than we previously realized. We are in the process of running a new survey that will determine the risk to the carriers if ACP is terminated. This note, which is aimed more at policy makers than investors, focuses on the impact that subsidy programs in general have had on getting households connect...
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