ACA Connects and the National Content & Technology Cooperative (NCTC) are hosting their annual Independent Show from July 30 – August 2 in Minneapolis. And this year’s show promises conversations on more topics than usual. In addition to the traditional discussions relevant to cable TV companies, the operator attendees will also discuss their interest in becoming mobile virtual network operators (MVNOs) as well as their desire to tap Broadband Equity, Access and Deployment (BEAD) funds.
In fact, NCTC CEO Lou Borrelli said the members that come to the show include not only traditional cable operators but also broadband providers, municipal co-ops and electric co-ops.
“Over the years there has been more of what the cable guys would call overbuilders,” said Borrelli. Many of these companies originally joined because they offered a video product, but then they evolved to broadband providers.
He said that today the “traditional cable guys” are outnumbered among NCTC and ACA members. And their joint membership counts more than 40 million broadband customers.
Although ACA and NCTC don’t name their member organizations, a look at their boards of directors gives some hints. For instance, ACA has board members from Vexus Fiber and Astound Broadband. And NCTC’s board includes representatives from two electric companies: the Electric Power Board of Chattanooga and Conway Corp.
One big topic that’s new to the Independent Show is wireless. In April, NCTC announced it had signed a deal with AT&T to provide its members with a white-label MVNO service.
As smaller operators have observed the success that Comcast and Charter are having with their MVNOs, they apparently want to get in on the same action.
When NCTC announced its white-label MVNO offering, it predicted that an initial batch of nearly 50 NCTC members would launch wireless service via the MVNO deal on June 1.
That didn’t happen.
Borrelli said the original group of operators expressing interest in being MVNOs was roughly 50, but that number “is well north of that now.” He said, “We were optimistic about June, but all the integration in addition to the legalese and reseller agreements took a lot longer that we thought. My expectation is we might squeeze a company or two to launch by the show.”
He expects many more MVNOs to launch from September onward.
In addition to working with AT&T, NCTC is also working with the mobile virtual network enabler (MVNE) Reach Next.
“The members who launch an MVNO through the NCTC will have both of those entities as partners,” said Borrelli. “For smaller guys there’s sort of an easy-button approach. All the onboarding is pretty-well laid out.”
Larger operators may want “to accept arbitrage and do some of the lifting to potentially make more margin,” he said.
He explained that they may want to buy wireless capacity by the gig and “play the arbitrage as to how you price it and take on the risk.” In this way they could make more money from their MVNO, or not.
There are three panels at the Independent Show related to MVNOs. One of them is for members only prior to the start of the official event.
Unlike wireless operators whose executives are precluded from talking to each other behind closed doors because of laws against collusion, cable operators have always held private events. This hasn’t been a problem because they have operated in their own territories without competing against each other.
But that could be changing with their interest in MVNOs and also their interest in competing for BEAD funds to roll out fiber to new locations.
In regard to the private MVNO event, Borrelli said, “To be specific, nobody talks about pricing or anything that would be anti-competitive. That’s why we manage the size and attendees.”
This week the National Telecommunications and Information Administration (NTIA) announced the amount of funding each U.S. state and territory will receive from the $42.5 billion BEAD program.
Asked which members of ACA and NCTC are interested in applying for BEAD funds, ACA Connects CEO Grant Spellmeyer said, “The better question is: who isn’t?”
He said, “It’s dominating everything that’s going on from the ACA perspective. I have a lot of members interested in using the money to expand and upgrade service.”
Interestingly, cable operators have always fought “overbuilding” especially when municipalities have wanted to build new high-speed broadband networks in cable’s footprint. Their argument has always been that taxpayer money shouldn’t be used to compete with their private investments.
But now, cable and other broadband providers want to access taxpayer money themselves. Spellmeyer said, “I think the concern is sending government money to places where that will be used to undercut the investments and service offerings of people who built on their own dime.”
But he said there will also be areas where ACA members compete for BEAD funds to raise the speed thresholds inside their own footprints, “and in effect they will be overbuilding themselves.”
“They’re going to have to win a competitive process and convince the government that’s the best use of the money,” he said.
So, the old arguments against overbuilding are likely to get a bit fuzzy.
Before overbuilding fights happen, however, the NTIA wants to prioritize funding for unserved locations. In these locales all bidders will be competing to build greenfield infrastructure.
Borrelli said, “I’m not predicting that there’s going to be massive overbuilding. Many of our members do compete against each other. It’s not like we’re afraid of competition.”
ACA Connects and NCTC expect more than 1,000 attendees to their show in late August.