But it’s sales force and adding some people that can drive mid-market and enterprise where the customers’ locations are. But we’ll continue to partner, we have great partnerships with Charter, Cox, many others, and we’ll continue to do that. It’s not really an infrastructure moment. And in terms of wireless, it’s a very important part of business services and it’s – clearly, this phase is centered on SMB and we’re getting going on that. We’ve picked up the pace on that. It’s not a major driver yet in overall mobile activity at this point, but we expect that pace to pick up. That is an important one for us. And let me – just one last point, if I could, Brett. While you’re talking about business services, I’d be remiss if I didn’t thank Bill Stemper as he transitions to Chairman Emeritus.
Bill has been a spectacular teammate and driver of this business over a long stretch, really. And one of the great things that Bill did is build a world class team. I think they’ve set the bar in terms of performance. We continue to do that. And part of that team is a wonderful executive, Ed Zimmerman, who has now taken over the – running business services for us, so congratulations to both. Operator: Our next question is coming from John Hodulik from UBS.
John Hodulik: Two, if I could. First of all, and maybe for Dave, can I just get your thoughts on the Charter approach to the Disney renewal? Do you see Comcast heading in that direction, or do you see benefits for the industry and for linear TV if the industry does move in that direction? And then following up on some of your comments on the broadband side, you guys are rolling out DOCSIS 4.0, you’re starting to sign up customers. I guess, one, could you just update us on the timing of that rollout? And two, do you see it more as an ARPU opportunity or a sub opportunity, subscriber growth opportunity? I guess lastly on that, you said there’s more competition at the low end of the broadband market. Is there any way you could quantify either Comcast’s exposure to the low end or how big the low end of the market in broadband is? Thanks.
David Watson: I think Mike and Brian talked about Charter Disney, so that to me – I think that is the – they provided the point of view. From my perspective, I think every situation is unique. I think we are in a very unique position because of the platform that we have and the fact that we are in the streaming business as a company, that we have great relationships with content providers and we have a way of figuring things out. But it will be case by case as they come up and we’ll see – but a big part of it, one of the things we talked about is value, value of the content and how that model evolves, we’ll figure it out. But I think we are in a good position to be a bridge builder as we go, consider each one of these options in the marketplace.
In terms of the network and DOCSIS, let me give you a sense, John, where we’re at. So we’re about 30% in terms of mid-splits and really focused on this seamless integration that connects HFC to fiber. And we’ll be at 40% next year. So – and then we started – you’ve seen the announcement and we talked about the deployment of DOCSIS 4.0 [Technical Difficulty] and so we’re going to continue to drive the mid-split upgrade areas. DOCSIS 4.0 follows that mid-split trajectory. And that is our focus, continued focus is just providing leadership of where the market’s going. The reason why, to answer your question, in terms of where do we see the benefits, it’s that point, that the market is going to continue, whether it’s the sports discussion we talked about earlier, as more and more things start to perhaps go to streaming, there will be more simultaneous contention at peak moments and we’re in a great position with the networks.
So having that, the ability to have faster speeds, ubiquitous network coverage at scale, the most efficient network and effectively delivering, we’ve got [Technical Difficulty] customers that are 1 gig today, 70% of our customers are 400 megabits or higher, and we see where things are going. So I think the answer is both. I think, over time, it’s customer relationship as it’s going to become increasingly harder for some of the competition to keep up in terms of – they have to make network trade-offs in fixed wireless, in particular, and so that to me is both rate and volume. And on – the last point is just on the lower end, it was a lot of activity in the lower end. We did respond in the first quarter but made adjustments for the second half, so that – I talked about that.
Brian Roberts: I would just say on the Charter and Disney, what I think it was in sort of the first question I answered, we think there’s a – echo what Dave said, not one size fits all, very glad, happy for both companies that they figured something out. Good for consumers. Each situation is slightly different. What I think is important for us is finding a way to help our customers have a great network, aggregate that content, and have access to the great content, and I think we’re really well positioned to do that and we’re looking forward to executing upon that. Operator: Thank you. Next question is coming from Jonathan Chaplin from New Street. Your line is now live.
Jonathan Chaplin: Maybe for Dave, just a small question following on from Phil’s. In terms of the CBRS trials, is the benefit that you’re seeing there that you’re sort of more enthusiastic about primarily on the cost side from being able to off-load traffic, or is there a product benefit as well? And then with the sale of the 600 megahertz spectrum, does that sort of suggest that you’re not really interested in owning any spectrum besides 600 megahertz, or was there some sort of something – sorry, besides CBRS, was there something specific about 600 megahertz in the portfolio that you had that made it non-strategic? And then if you can give us just a quick update on where your sort of average usage is on broadband, that would be helpful as well. Thanks.
David Watson: So in terms of CBRS, it’s what I said before that we’re in position – it’s an option for us. We’re in a good position and we like our – where we’re at with our current deal, the MVNO, capital light approach, everything that we talked about is consistent. But we’ve always been very interested – and the benefit of CBRS is on the cost side, and that if you have – again, 3% of your geographic footprint that’s delivering 60% of the traffic, that’s a good option and if we can figure out how to do that. So we’re – that’s what’s really driving it. And – but we’ve always been very focused on how to build a better overall wireless experience. We have I think great Wi-Fi capability in addition to CBRS if that’s something we want to do.
But the key for CBRS is that we just want to be in position and doing it without a massive amount of CapEx to be able to deliver that smaller geographic area. And in regards to 600 megahertz, it’s just a – it was an opportunity to get value for areas of the country outside of our areas and it just made sense to – it was a good transaction for us and not something that we’re going to build outside of our footprint. Operator: Our final question today is coming from Steven Cahall from Wells Fargo. Your line is now live.
Steven Cahall: So just first on the residential broadband ARPU, wondering if you could unpack a little bit of the sequential change? I know the big components are double play going to single play from cord cutting as well as just tiering and pricing, so with a little bit of slowdown sequentially. Should we attribute a lot of that to the slowdown in video losses that you saw, or anything else going on in there? And then, Brian, you talked a lot about how effectively you’ve deleveraged the balance sheet, taking down by a full turn over the last couple of years. Also that a lot of your competitors, especially on the media side, are going to be more challenged. So I know you’ll be disciplined in anything that you do, but as you look ahead and think about competing against some companies that aren’t challenged, like Netflix and Apple and Amazon, how do you think about some of the availability of some of those distressed content creators that might be out there at some future point?
Thank you.
David Watson: Let me start, Steven. This is Dave. The biggest driver in terms of ARPU was that, the first half of the year, our focus – we did make adjustments in that first part of the year about being a little bit more aggressive in the lower end. This resulted in a mix shift among new customers that were coming on and this caused the deceleration in ARPU growth from where we were before at 4.5% to 3.9%. The 3.9% is still very strong ARPU growth and consistent with our planning and what we were talking about. So that was really the biggest driver. Some certainly benefit over time to a little bit better performance in the video business with NOW TV, which is beginning to pick up the pace. So pleased with that. But it was mostly that refinement of the lower end offers, and you’re not going to see that, by the way, that level of deceleration from Q3 to Q4 as we made those adjustments. So that – it’s mostly the tier mix change that I talked about.
