And we have to continue to focus on how can we expand that penetration. And as Julie, was outlining, it’s not just about price, but price will be a tool in certain areas, where we feel it’s most appropriate. But, the video decline is your core contributor to where the EBITDA weakness is. But again, as you see margins increasing this quarter, our highest margin products continue to be the healthiest. As it relates to the spending, I wouldn’t say it’s in a response to a tougher environment. It’s really as a result of how proactive we’ve been in investing in these markets. 4.0 architecture is basically complete, until the actives are generally available, but we’ve been spending considerably in that. We did bring forward some discounted equipment.
We did accelerate some projects related to, the government programs that we’re going to be funding those for the next 15 years. So, that was in, for the most part, some of the incremental investment, and throughout 2023, even 2022, when you think about the proactive network investments, but then some of the, I’ll call it, pull-forward into Q4. But, the go-forward is because of how proactive we’ve been in investing in the network.
Julia M. Laulis: And I might add, capital expenditures have been going down for two years. So in 2024, that’ll just make year three. So, it’s not something new that is being introduced. This is a trend. This is where we’ve been going. I would also note that we’re pretty well known amongst our peers for being pretty good at continuous improvement as it relates to being cost effective. I think you see that in part by our margins. And that is going to continue and ramp up. And we are having a full court press on integrations in ‘24 as well. So, bringing all the family of brands that are not yet Sparklight into the Sparklight brand and getting them on our platforms and just a tremendous amount of operational work going on by amazing teams in ‘24 that will help us on that side of the business as well. And since I’ve been with the company, which is almost 25 years now, our focus has been on free cash flow, and it’s going to continue to be.
Steven Cahall: Great. Thank you.
Operator: And we do have our last question from Brandon Nispel with KeyBanc Capital Markets. Your line is open.
Brandon Nispel: Okay. Great. Most of mine have been addressed. But, I was wondering if, on ARPU, I was wondering if you could quantify one-time impacts this quarter. I think you mentioned two things, removing data caps and providing unlimited data. So, I was hoping you could quantify in terms of the impact on HSD ARPU. And then, on your website, on the Sparklight page, there’s a one gig service for $39.95 for 18 months. And, historically, you guys have not been as promotional on the front book and especially not for that period of time. So, I was hoping you could talk about, one, what the reception has been and two good decision behind putting that as sort of the lead product? Thanks.
Julia M. Laulis: Okay. Let’s see ARPU. Well, yes. So, I breaking down what happened to ARPU in the fourth quarter, which is what I think you’re asking for Brandon.
Brandon Nispel: Yes.
Julia M. Laulis: Yes. Okay. So, the majority of the decrease came from promos and discounts with a piece of it coming from rate and the sort of shifting back of data, if you will. So, new customers that come on in certain markets yet data unlimited data included in their package rates. Package rates have stayed the same in those markets but they’re getting unlimited and sort of a perk, if you will, where we used to have data guidelines, and that would result in fees to us. So, if you’re a new customer in those markets, you don’t have that anymore. The $39.95, I’m trying to look and see what mark, it is literally one size does not fit all every almost every market or every segment within a market has some element of variable pricing.
So, if our normal rates are still 70, 80, 90 for 300, 600 a gig. You could see promos in the marketplace. But generally speaking, a promo for a gig would be $69.95 or $70. So, if you’re looking at a rate of $39, you’re looking at a market that is I’m trying to find one. Oh, let’s see. Do you know what market you looked at? Because that would be
Brandon Nispel: Just Sparklight.com.
Julia M. Laulis: Yes.
Brandon Nispel: The [indiscernible] page.
Julia M. Laulis: Yes. We would have had to had a market, ZIP code, I think. But there are markets where we are offering that, and those are hyper competitive marketplaces. And we’re driving gig selling and we believe that in the future we’ll be able to monetize that, more. But the other piece of that is the sell in, that in part is to get the phone to ring, right. In those markets, we might actually have a multi-gig product that we could upsell on unless we’re getting some of them.
Brandon Nispel: If I could follow-up, you mentioned 80% of your customers you’re selling is at 300 megs or above. What type of intake ARPUs are you seeing with the service? And then I wanted to ask about ACP since you mentioned, I think it grew quite a bit sequentially. I think last quarter you mentioned you had 35,000 customers on ACP. Now it’s 50,000. So that implies sort of the base core customers was down quite a bit this quarter. So hoping you could help unpack that a little bit? Thanks.
Todd M. Koetje: Yes. Hey, Brandon, on the ACP side, it’s a little bit north 35,000, but now it’s a little south of 50,000. I think important to note that it’s less than 10,000 that are in the fully funded category there, where they’re in that kind of baseline pricing and packaging that effectively provides them with free Internet. And that’s probably more, I would call it, susceptible customer base, but we’re already working with all of those customers in terms of what that transition will look like assuming that the program does go away.
Julia M. Laulis: Yes. The majority of the customers were our customers before they signed up for ACP. So, they used ACP to increase the tier of service that they received and so again we can go and look at what they’re paying now and what their usage is now. And make sure that we position them nicely into something that that they can afford. And I’m going to have to get back with you, Brandon. I don’t think I know that ARPU of our selling for the fourth quarter off the top of my head.
Todd M. Koetje: Well, we don’t disclose that anyway.
Julia M. Laulis: And there you go.
Brandon Nispel: Thanks for taking the questions.
Todd M. Koetje: You’re welcome.
Operator: There are no further questions at this time. Ms. Laulis, I turn the call back over to you.
Julia M. Laulis: Thank you, Desiree. So before closing, I would like to again thank our associates for their insights, ideas, and efforts, which make the difference in our pursuit of market share growth. Thank you everyone for your time and attention today. We appreciate your continued support and interest in Cable One.
Operator: Ladies and gentlemen, this concludes today’s conference call. You may now disconnect.
