Charter CFO Warns About BEAD Regulations


Some states have BEAD ‘rules that are not conducive to private investment or to our investment,’ said chief financial officer.

Ted Hearn Charter CFO Warns About BEAD Regulations Photo of Charter Chief Financial Officer Jessica Fischer

WASHINGTON, May 22, 2024 – Top officials at Charter Communications continue to voice concerns about wayward regulations that could accompany grants under the $42.45 billion Broadband Equity, Access, and Deployment program.

“The impediment really is I think some states, it appears, could have [BEAD] rules that are not conducive to private investment or to our investment,” Charter Chief Financial Officer Jessica Fischer said Wednesday at the J.P. Morgan conference in Boston. “And so there could be some limitation to the total amount we invest that’s related to our lack of willingness to bid in states where we won’t be able to get the returns because the rules aren’t conducive to it.”

With 30.5 million subscribers, Charter is the second largest Internet Service Provider in the country. Charter knows the rural broadband market well after winning about $1.2 billion in federal subsidies in 2020 under the Federal Communications Commission’s Rural Digital Opportunity Fund. The company expects to complete its RDOF builds by the end of 2026.

Last year, Charter CEO Christopher Winfrey told Wall Street analysts he was concerned about BEAD rules that could force his company to skip some states.

“I want to reiterate and be very clear that where state BEAD rules are not conducive to private investment, we will not participate in those states,” Winfrey said. Winfrey has referred to BEAD funds tied to price controls and labor mandates as being problematic.

AT&T CEO John Stankey yesterday said at the same J.P. Morgan event that he would not be surprised if BEAD grants came with state requirements that ISPs build open access networks, with multiple ISPs as network tenants. He said the model could work for network owners looking to maximize network usage.

In her comments, Fischer said the BEAD program has a now-or-never quality that made it unique opportunity for Charter to seize.

“Either it will be us or it will be someone else, and so we continue to have reason to go after those BEAD builds,” she said. “I think that there’ll be a good amount of them available for us to get.”

Concerns about BEAD rules punctuated a hearing last week on Capitol Hill.

Republicans on the House Subcommittee on Communications and Technology peppered National Telecommunications and Information Administrator Alan Davidson with questions on whether the BEAD rules were requiring states to regulate the rates of low-cost plans for low-income households.

The GOP lawmakers were concerned that rate regulation not only violated the law but could deter ISP participation in BEAD. Davidson insisted that while the BEAD law requires low-cost plans, NTIA has given states flexibility, with some states opting for specific prices and others for price ranges.