President/CEO Chris Winfrey attributed the broadband challenges to the low activity environment as well as elevated competition and fewer low-income connects from the discontinuation of the FCC’s Affordable Connectivity Program. First quarter revenue came in at $13.7 billion, rising 0.2% YOY thanks to residential mobile service revenue growth of 37.8% and residential internet revenue growth of 1.9%.

Charter plans to offer a partial subsidy to ACP customers in May. The FCC is providing a partial credit of $14 with the funding the program it has left, and Charter is upping that discount to customers to $15 to round up and make things more clear for customers.

Winfrey said the ACP shutdown will certainly have a negative internet customer growth impact on everyone, including Charter, and that’s going to happen during a seasonal second quarter and likely extend into the third quarter as providers manage any non-pay activity. He said the stickiness of those customers depends on a lot of factors, including retention offers. Charter is offering a free mobile line for all ACP customers, a deal that Winfrey said will save customers as much if not more money on a monthly basis than the subsidy offered through ACP.

“In terms of specifics, this event is unprecedented. In almost 30 years of cable, I haven’t seen anything like this before,” Winfrey said. “But in the end, I’m really confident we’re going to manage through successfully. It will be a one-time event, both on subscribers and maybe initial suppression of ARPU, but it’s not going to impact our long-term growth potential.”

Senators Ed Markey (D-MA), Bernie Sanders (I-VT), Elizabeth Warren (D-MA), Ron Wyden (D-OR) and Laphonza Butler (D-CA) want to see more providers follow Charter’s lead and go even a step further. They sent a letter to NCTA President/CEO Michael Powell and CTIA President/CEO Meredith Attwell Baker asking the association leaders to encourage their member companies to ensure that ACP subscribers receive a $30 benefit in May. The lawmakers hope NCTA and CTIA members will cover that $16 shortfall from the original $30 subsidy to help customers through the transition.

“Given that the $14.2 billion in ACP benefits ultimately flowed back to ACP providers, covering the $16 payment in May is a small investment in saving the program that can demonstrate your members’ commitment to closing the digital divide,” the letter said.

Spectrum Mobile continues to gain momentum with the addition of 486,000 mobile lines in the quarter, and overall mobile churn fell YOY and sequentially. Customers who signed up for Spectrum One in 1Q23 reached their promotional roll-off period this quarter, but CFO Jessica Fischer said that did not drive incremental internet churn. In fact, the converged offering is driving higher mobile sales and longer customer lifetimes.

Video customers declined by 405,000. Winfrey said the video churn rate is relatively consistent and he is not necessarily seeing any notable negative contributing factors to the decline of video. Instead, he sees this quarter as a result of lower internet sales opportunities offering less opportunities to attach video combined with a programming cost increase pass-through that came inside of the first quarter.

“I do think as we add more bundling of these DTCs in a hybrid linear model over time, I think we have the ability to stem a lot of the churn and actually add back to both the gross addition side coming from potentially new calls coming in, but also a higher attach rate to internet, primarily as we provide more value into the package which offsets the significant programming cost increases that we’ve been forced to pass through,” Winfrey said. Charter expects its hybrid DTC linear model to be fully deployed next year.

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