Will AT&T Capex Decline in 2019 or 2020?

Though many had feared runaway capex spending for 5G, more recent evidence suggests some mobile operators might not see a material increase in capex, even as 5G gets built. In fact, AT&T now says it could have lower capex in 2019 or 2020, in part because network virtualization now allows the firm to operate its network more efficiently.

But there are lots of other interesting ways AT&T might operate its platforms more efficiently. Consider the classic argument for upgrading all-copper telco networks to fiber to the home, fiber to the node or very high speed digital subscriber line networks: video entertainment.

At the risk of losing additional internet access market share, AT&T could hold or increase its linear video share by selling an OTT streaming service that can be bought by any household, bringing its own broadband.

To be sure, that risks the loss of, or inability to regain, millions of internet access accounts from cable and other competitors. But that might be a calculated risk AT&T is willing to take.

Consider that AT&T now gets 49 percent of its earnings from the mobile network; 18 percent from its content ownership interests; about 17 percent from enterprise services using the fixed network and about 15 percent from all consumer voice, internet and video subscription sources.

source: AT&T

Looking at the 15 percent of revenue AT&T earns from its consumer fixed network operations, AT&T earns 72 percent of revenue from entertainment video (largely from out of region), 17 percent from internet access and six percent from voice.

The point is that AT&T actually earns relatively little revenue from fixed network consumer internet and voice accounts. Likewise, AT&T earns relatively little linear video subscription revenue in region, on its own network.

Perhaps 3.7 million of AT&T’s total 24.5 million video connections are supplied using the U-verse fiber to node network, while nearly 21 million use the DirecTV satellite constellation.

FTTN or FTTH represent perhaps 17 million internet access connections out of 17.5 million total broadband accounts, and possibly 29 million passings, by about mid-year 2019.

Keep in mind that AT&T is going to transition its DirecTV satellite video service to an over-the-top streaming service that runs over any broadband network. So, in principle, AT&T does not “need” to upgrade its own fixed network access lines to sell linear video.

It could, in fact, sell the service to competitors operating in its own fixed network territories. So one way of quantifying the upside from new FTTH facilities is that if AT&T could boost its internet access share 20 percent to 30 percent in areas where it adds FTTH.

Whether that is sufficient to justify an FTTH build is the question, since voice is almost negligible and shrinking, while video arguably can be delivered OTT. That is how AT&T makes most of its linear video revenue already.

The other issue is whether alternative means would provide a better financial case, such as using fixed wireless or even mobile 5G to gain internet access account share.

The big takeaway is that AT&T’s business case for new FTTH is fairly narrow, given the potential upside from incremental revenue based mostly as gaining broadband share.

Data Consumption Will be Added to Speed and Cost as Drivers of Fixed Network Access Platforms

In the past, access platforms have been differentiated based on speed and cost per passing or cost per customer. Going forward, they might also have to be differentiated based on total bandwidth consumption, in addition to speed and cost per customer or cost per passing. 

In the past, hybrid fiber coax has proven more economical as a fixed network platform than fiber to the home. Fixed wireless has been more affordable than FTTH. But that changes as consumption increases, AT&T argues. 

And many service providers--including cable TV companies who have used HFC--concede that, eventually, FTTH becomes an affordable way to keep boosting speeds beyond multi-gigabit ranges. 

For AT&T, once sustained data consumption per user approaches 250 gigabytes per billing period, FTTH economics get progressively better, since FTTH costs less to continually upgrade for higher speeds. 

source: AT&T 

As always, that assumption is based on AT&T’s total cost structure, the scale of its operations, capital structure and business model. Other internet service providers might have different options, for a longer period of time. 

That is especially true for some firms such as T-Mobile and Verizon that have no realistic opportunities to install FTTH nationwide, and whose prospects in the home broadband market are based on use of fixed wireless. 

Consumer willingness to pay, plus consumption profiles, do vary quite a lot. So for some, the issue is which segments of the market can be served by wireless, and which require FTTH. 

For T-Mobile and Verizon, the issue is how well, and how long, fixed wireless and mobile access platforms can  keep growing speeds and capacity fast enough to continue serving half the market. 

For cable operators the choices are how long to keep enhancing the HFC platform and when the switch to FTTH makes financial sense. 

AT&T passes about 57 million homes and considers about 50 million of those locations suitable--eventually--for FTTH. But that still leaves seven million locations where FTTH might not make sense. By 2025, AT&T expects to pass about 30 million consumer locations using FTTH, a bit less than 53 percent of total home locations. 

But even AT&T, which focuses on fiber for business customers, will see fixed wireless growth. AT&T cash flow from fixed network business customers is expected to rely heavily on cash flow from FTTx and fixed wireless services.

Changes in U.S. FTTH Demand and Supply Sides

There are several reasons--both supply side and demand side--why U.S. “fiber to home” business models appear to have changed. 

Perhaps oddly, fundamental demand for home broadband, though higher than ever, also provides less of the revenue to build the networks.

As important as the fiber-to-home business is, it is responsible for less than 10 percent of AT&T revenues. In the fourth quarter of 2022, for example, mobility drove nearly 69 percent of total revenue. 

In the fourth quarter of 2022. AT&T earned $31.3 billion. Mobility generated $21.5 billion of that amount. The fixed networks business generated $8.8 billion. Consumer fixed network services generated $3.3 billion or so. 

Of course, not all contestants are similarly situated. For many competitive internet service providers, revenue does largely depend almost exclusively on home broadband. Again oddly, revenue potential for such ISPs also seems to have declined. 

Where designers once assumed FTTH per-customer home revenue in triple digits ($130, for example), they now assume revenue in the $50 to $70 a month range. That might seem to eviscerate the business case, if network costs are in the $800 range with additional costs to connect actual customers in the $600 to $725 range, with take rates ranging from 20 percent up to about 40 percent. 

Only a firm with low overhead can make money sustainably at 20 percent adoption rates. For larger firms, adoption in the 40-percent range is likely required. At a high level, AT&T has been saying FTTH payback models work at $50 a month ARPU and penetration of 50 percent, though revenue from targeted newbuilds now exceed those figures, AT&T says. 

It is one thing for a smaller ISP to contemplate building an FTTH network and sustaining itself solely on such revenues. It is quite another matter for a dominant firm in a local area (Comcast, Charter, AT&T, Verizon, Lumen, Frontier, Brightspeed). 

Strategic concerns also matter, however. Even if the fixed networks business generates 10 percent of total revenue, that revenue still matters. Without the FTTH upgrade, AT&T risks losing that revenue and profit margin and cash flow contribution. 

In other words, even if never stated so starkly, unless the FTTH upgrade is made, AT&T and others risk losing their fixed networks business to competitors. 

At the same time, though harder to quantify, the payback model for deep-fiber networks can come in other ways. If small cell mobile networks require deep fiber networks, then business value comes also from the value of the backhaul network. So “fiber to the tower” and “fiber to the radio site” become elements of the payback model. 

Fiber access networks also support the business customer revenue stream. For AT&T, fourth quarter 2022 fixed networks business revenue was $5.6 billion, or about 18 percent of total revenue. So “fiber to the business” arguably drives almost twice the revenue as home broadband does, for AT&T. 

In other words, the same network supporting home broadband also contributes to support of the mobility business and business customer revenue streams. 

All that makes for a more-complicated payback analysis for any sizable contestant with dominant mobile revenues. Though the home broadband payback has to be there, the value of what we used to call “FTTH” has to be justified in other ways. 

Smaller ISPs might be able to justify an FTTH network on the basis of home broadband services alone, with 20 percent take rates. It is not so clear a large dominant service provider can hope to do so unless it can reach 40 percent or higher take rates, assuming revenue per account in the $50 to $70 range. 

And even when it does so, total deep fiber network value can hinge on other value contributions. 

Still, there are additional considerations. Supply side support from the federal government can reduce the cost of rural networks builds by 20 percent to 30 percent, which aids the payback model. 

Joint ventures of various types provide similar benefits, at the cost of possibly further reducing net revenue upside. 

And though it is an indirect input, many private equity firms are willing to invest in deep fiber projects with a rather simple formula: buy assets at a five times to six times revenue multiple and upgrade with FTTH to produce an asset selling at 10 times to 11 times revenue multiples. 

Demand side drivers also have changed a bit as well, beyond the “need” for internet access. 

The Affordable Connectivity Program provides a $30 a month subsidy for low-income buyers. That subsidy can be used to buy basic or faster services, and increases demand for internet access. 

In some cases, that means new FTTH facilities benefit both from 20 percent to 30 percent lower build costs, plus $30 a month in consumption subsidies for lower-income households. All those are new elements in payback models that improve the business case on both demand and supply sides.

AT&T FTTH Gains Seem Mostly Upgrades by Existing Customers

What impact is AT&T fiber-to-home having on company internet access accounts. Well, it is, as they say, “complicated.” For two decades or more, when a telco replaces copper access lines with optical fiber, it sees two types of changes.

Copper-based accounts go down, while optical accounts go up. Perhaps most of the change is simply existing customers switching from copper to fiber access services, for little net gain in total accounts.

That seems to be happening with AT&T FTTH accounts as well. According to Moffett Nathanson, AT&T achieved 57 percent growth rates for its FTTH services over the past year. But total broadband accounts have not grown at the same rate.

“Despite the dramatic growth at AT&T Fiber, AT&T’s broader IP broadband category has posted only modest subscriber gains over the past year,” the firm says.

The logical explanation is that existing customers have been upgrading to the new FTTH service, and dropping their former copper or fiber-to-node service. That also would make sense if AT&T conducted the sort of marketing campaigns cable operators do when introducing a new service: target existing customers first.

Over time, as those conversions reach an end, AT&T is likely to switch to targeting non-subscribers. Only after a few years of that activity will we be able to assess how well AT&T’s FTTH program has been in potentially taking market share from cable operators.

Fixed Wireless or Mobile Access are the Best Ways U.S. Telcos Can Gain Home Broadband Share

Fixed wireless is not a new platform for internet service providers. It has been common in many rural areas for wireless ISPs, using unlicensed spectrum and point-to-point or point-to-multipoint networks. But many argue fixed wireless will be a more-common platform for a wider range of service providers in the 5G.

There are a few good reasons. First of all, use of huge amounts of new millimeter wave spectrum, open source radio technology and the relatively high cost of fiber-to-home networks in highly-competitive markets make 5G fixed wireless more attractive.

For starters, the initially installed cost of fixed wireless--even before 5G and millimeter wave spectrum availability--is lower than fiber to home, by a substantial margin. That is true for both the cost of passing a location as well as connecting a location.

source: Siklu 

There is more. One crucial business model issue is the amount of stranded assets when deploying any new cabled network in a market where there is robust competition. To use an example, in a market where a cable company has 70-percent market share and a telco has 30 percent market share, a new FTTH network might still mean stranded assets (no customer attached) of at least 65 percent, assuming the telco can gain about five points of market share. 

In other words, in highly-competitive markets where a competent competitor already has 70 percent of the installed base, fixed wireless might offer the only hope of remaining competitive, as the cost of FTTH might never prove sustainable. 

Verizon’s FiOS FTTH network, even after years of marketing, topped out at about 40 percent take rates until perhaps 2018, when take rates broke above 40 percent. Keep in mind FiOS was introduced in 2005. 

AT&T’s FTTH adoption rates seem to have been historically lower, at about 25 percent, though AT&T execs hope they eventually can boost those rates to somewhere in the 40-percent range over time (where FTTH is available). AT&T execs have sometimes said they believe they can reach 50-percent take rates. Some of us highly doubt that. 

With cable operators having 70 percent of the installed base, typically leading in bandwidth and offered speeds, and with the next generation of cable modem service already being developed, to supply more symmetrical service at 10 Gbps, it does not seem that even FTTH is going to change the value proposition. 

Essentially, FTTH only allows a telco to play catch up. So long as cable operators keep investing to maintain their lead, it seems unlikely FTTH will allow telcos to leapfrog the competition. Keep in mind that cable operators have been the U.S. broadband access market leaders since at least 1999. 

The FTTH business case, for consumer customers, now seems irreparably damaged. But that is why AT&T, T-Mobile and Verizon are so focused on ways to use 5G and future networks to challenge all cabled networks as platforms for internet access. In the U.S. market, it may no longer be possible for at-scale FTTH to compete sustainably with cable operator services.

That includes using fixed wireless or even standard mobile access instead of FTTH. Though it might not have been so clear 20 years ago, once cable operator hybrid fiber coax emerged as a platform for consumer internet access, even FTTH was not going to be enough for telcos to remain highly competitive. In recent years, all net gains in accounts have been garnered by cable companies.

What are Cash Flow Implications of an AT&T Sale of DirecTV?

One question some of us have about any sale by AT&T of its DirecTV asset is the impact on free cash flow, which might have been as much as 13 percent of total cash flow, or possibly more, by some accounts 

In late 2019 DirecTV was said to be spinning off about $4 billion in annual cash flow, which seems low to me, but appears to be about right. In the first full year of ownership, DirecTV likely produced $12 billion of free cash flow.

Some speculate that AT&T could retain a minority interest in the business, and some of the cash flow. The point is that the cash flow implications of selling DirecTV are far less than would have been the case five years ago, when it appears the cash flow was three times higher.

Aside from the need for high cash flow to help pay down debt, the company also requires high cash flow to pay its dividends. Though not a popular position, the DirecTV acquisition made sense to me as the only viable way to add so much cash flow so fast. 

Some had suggested the alternative of investing the capital in fiber to home facilities, but I never understood how cash flow could be boosted fast enough that way. Some might argue a massive diversion of capital to FTTH would not have recovered cost of capital, much less begun generating significant new cash flows within a year. 

When DirecTV was acquired by AT&T, it would have been easy to find detractors arguing that AT&T should have spent that money investing in fiber to home infrastructure. The new story is hat AT&T should not have done so, as the asset is wasting away. 

So what should AT&T have done with $67 billion, assuming a 4.6 percent cost of capital? Cost of capital is the annualized return a borrower or equity issuer (paying a dividend) incurs simply to cover the cost of borrowing.

In AT&T’s case, the breakeven rate is 4.6 percent, which is the cost of borrowing itself. To earn an actual return, AT&T has to generate new revenue above 4.6 percent.

Assume that for logistical reasons, AT&T really can only build about three million locations each year, gets a 25-percent initial take rate, spends $700 to pass a location and then $500 to activate a customer location. Assume account revenue is $80 a month.

AT&T would spend about $2.1 billion to build three million new FTTH locations. At a 25-percent initial take rate, AT&T spends about $525 million to provide service to new accounts. So annual cost is about $2.65 billion, to earn about $720 million in new revenue (not all of which is incremental, as some of the new FTTH customers are upgrading from DSL).

The simple point is that building three million new FTTH locations per year, and selling $80 in services to a quarter of those locations, immediately,  does not recover the cost of capital.

So as controversial as the DirecTV buy might be, it at least had the advantage of throwing off cash flow. It is unclear whether the alternative of a big new FTTH build would have done even that well. At the time AT&T made the acquisition, DirecTV likely was throwing off something like

AT&T is Still in the Content Business, Just in a Different Way

One key question some might have had about the spin out of DirecTV assets was the impact on AT&T cash flow. That was the reason DirecTV was purchased in the first place, and cash flow generation matters mightily to AT&T.  Also, there were few other major transactions AT&T could have made without regulatory opposition. 

The acquisition, in other words, was the fastest way to add free cash flow, of the alternatives available to AT&T at the time. So what else could AT&T have done with $67 billion--what it spent on DirecTV--assuming a 4.6 percent cost of capital? 

Cost of capital is the annualized return a borrower or equity issuer (paying a dividend) incurs simply to cover the cost of borrowing.

In AT&T’s case, the breakeven rate is 4.6 percent, which is the cost of borrowing itself. To earn an actual return, AT&T has to generate new revenue above 4.6 percent.

First of all, AT&T would not have borrowed $67 billion if it needed to add about three million new fiber to home locations per year. Assume that was all incremental capital, above and beyond what AT&T normally spends for new and rehab access facilities.

Assume that for logistical reasons, AT&T really can only build about three million locations each year, gets a 25-percent initial take rate, spends $700 to pass a location and then $500 to activate a customer location. Assume account revenue is $80 a month.

AT&T would spend about $2.1 billion to build three million new FTTH locations. At a 25-percent initial take rate, AT&T spends about $525 million to provide service to new accounts. So annual cost is about $2.65 billion, to earn about $720 million in new revenue (not all of which is incremental, as some of the new FTTH customers are upgrading from DSL).

The simple point is that building three million new FTTH locations per year, and selling $80 in services to a quarter of those locations, immediately,  does not recover the cost of capital.

The DirecTV acquisition, on the other hand, boosted AT&T cash flow about 40 percent.

 

To be sure, the linear video business deteriorated faster than AT&T expected. Still, to the extent that triple play still made strategic sense at the time, the deal allowed AT&T to claim a major position there without the time and expense of upgrading its copper fixed network to achieve such a position. 

AT&T said as part of its second quarter 2021 results that the company expected lower revenues by $9 billion; cash flow (EBITDA) lower by $1 billion and free cash flow lower by about $1 billion. AT&T also received about $7 billion in cash as part of the transaction. 

The now separated asset still means AT&T gets a 70 percent share of DirecTV cash flow and revenue, plus equity value upside. That answers the question. 

Assuming the primary use of free cash is payouts to the owners, rather than heavy reinvestment in the business, AT&T continues to receive the great bulk of cash flow value. Widely viewed now as a “mistake,” in large part because of the debt burden, the DirecTV acquisition still was a reasonable bet on boosting free cash flow immediately. 

Even now, after spinning out the asset, DirecTV offers AT&T most of the cash flow, though de-consolidating the asset, raising cash to pay down debt, and freeing up management time for other work.

Big Change for AT&T FTTH Payback Model?

The economics of fiber to the home infrastructure have never been easy, in the United States or anywhere else. But the business case is quite different now than two decades ago. Consider the metrics AT&T CEO John Stankey mentioned at the UBS Global TMT Conference. 

Talking about the pace of FTTH deployment in the consumer market, Stankey said “we've turned the corner in the consumer space on EBITDA growth,” elaborating that “we're watching those returns improve every quarter.”

And Stankey expects even better payback models as AT&T scales its FTTH deployment and revamps its operating cost structure. 

“When we can get into that space with customers that are paying us $50-plus a month and we're splitting share in that market, that's a good place for us to be over the long haul,” said Stankey. 

There are two key elements there: broadband market share very close to 50 percent and average revenue per location in the $50 a month range. The former would be a historic shift in market share and installed base. The latter is important because it shows the lower payback threshold. 

A couple of decades ago, the payback would have assumed something more on the level of $130 to $150 worth of monthly revenue from a consumer customer location, driven by the triple-play bundle of voice, internet access and linear video. 

The actual penetration rate was complicated, as there were a mix of single product, dual-play and triple-play accounts, each with different ARPUs. For AT&T, the road ahead remains a bit complex, but will be anchored in broadband. 

The FTTH payback decision would seem to be based on at least $50 a month for internet access as the base case, with a mix of customers buying voice, streaming or linear video products that will be non-consolidated items provided by Discovery Warner-Media, with AT&T receiving about 71 percent of the free cash flow. That might represent about $8 billion in annual free cash flow for AT&T, as its share of the proceeds from Discovery Warner-Media. 

The big change is the strategy. Essentially, the FTTH payback is anchored by internet access of perhaps $50 per location, with adoption close to 50 percent, and aided by voice and video entertainment contributions at lower levels. 

That is a huge assumption change from two decades ago, when revenues in the $130 to $150 per month range were assumed to be necessary. To be sure, AT&T also has get close to half the consumer broadband services market, in terms of installed base. 

But AT&T executives seem quite encouraged by trends they have seen in the latest rounds of FTTH builds.

FTTH or Time Warner? It Is Not a Close Call

Would AT&T have generated more incremental revenue if it had not bought Time Warner, and instead had plowed that capital into a massive fiber to home upgrade?

The numbers suggest AT&T made a better choice buying Time Warner.

AT&T spent $85 billion to acquire Time Warner, with an immediate quarterly revenue boost of $8.2 billion. Were AT&T able to invest in fiber to home and then take an incremental five percent share of market everywhere it operates, is perhaps $2.2 billion in annual revenues, assuming $50 a month in gross revenue, or about $180 million a month in incremental revenue.

It is not clear how much upside exists for AT&T, in terms of fixed network internet access revenue, even if it were to dramatically extend its FTTH footprint, but you might argue that the best case for AT&T, for a massive upgrade of its consumer access network, is about 10 percent upside in terms of consumer market share, facing cable operators already leading the market in accounts and speed, with a clear road map for additional speed increases that easily match anything AT&T might propose, and arguably at less cost.

So here’s one take on the alternatives of buying Time Warner or using that capital instead to expand the AT&T FTTH profile. Consider the incremental revenue generated from each alternative.

Assume first that U.S. telcos could take 10 percent more market share from cable TV suppliers. Incremental revenue might then be less than $4.4 billion annually. Consider that AT&T has footprint covering perhaps 69 percent of U.S. homes. So make the incremental revenue for AT&T $3 billion, or $250 million per month.

Also, it would take some years before that degree of new FTTH assets could be put into place. Over any three-month period, AT&T might expect incremental revenue ranging from $540 million to $750 million per quarter, the former figure representing five percent share gain, the latter representing 10 percent share gain.

Neither comes close to the $8.2 billion per quarter AT&T picked up from the Time Warner acquisition.

Verizon has different strategic issues, compared to its main fixed network competitors.

Significantly, Verizon has a small geographic footprint, compared to any of its main fixed network competitors. Verizon homes passed might number 27 million. Comcast has (can actually sell service to ) about 57 million homes passed. Charter Communications has some 50 million homes passed.

AT&T’s fixed network represents perhaps 62 million U.S. homes passed.

Assume there are 138.6 million U.S. housing units, of which perhap 92 percent are occupied (including roughly seven to eight percent of rental units and two percent of homes). That suggests a potential base of 128 million housing units, including rooms rented in homes or apartments, that could buy services from a fixed network supplier.

That implies Verizon has the ability to sell to about 21 percent of homes; Comcast can sell to 45 percent; AT&T can market to 48 percent of occupied homes; while Charter can sell to 39 percent of U.S. occupied homes.

The point is that Verizon has more to gain than AT&T, Comcast or Charter from investing in internet access outside its traditional geography.

In principle, Verizon faces the same issue as does AT&T when weighing alternative uses of scarce capital.

As it deploys 5G fixed wireless, there are two key issues: how much market share and revenue can Verizon gain, and what else might Verizon have done with its investment capital? It all depends on one’s assumptions.

Some argue that, over seven years, Verizon might gain only 11 percent to 18 percent share in markets where it can sell 5G fixed wireless. Verizon believes it will do better, and some believe a 20-percent share is feasible. Verizon itself predicts it can get about 23 percent share, as a minimum, over seven years, representing about 6.3 million accounts.

Assume Verizon fixed wireless gross revenue is about $60 per account (a blend of the $50 from Verizon mobile customers and $70 from non-customers). Assume annual revenue of perhaps $720.

Assume Verizon spends about $800 per location on 5G fixed wireless infrastructure (radios, backhaul, spectrum costs), even if those same assets can be used to support other users and applications.

At 20 percent take rates, that implies a per-subscriber network cost of perhaps $4000.

Assume a cost of perhaps $300, over time,  to turn up service to accounts. That implies a rough break even in months. Assume total capex investment of perhaps $4300 per account. At $720 annual revenue, that implies breakeven on invested capital in six years.

But assume half the cost of the capital investment also supports revenue generation from other users and use cases (mobility, business users, internet of things). In that case the fixed wireless capex is perhaps $$2150 per customer, and breakeven on capex is a bit more than three years, assuming the only revenue upside is internet access revenue.

Logically, one would have to add churn reduction in some cases, and so the lifetime value of a customer; incremental advertising opportunities; some possible upside from voice services or wholesale revenue. None of that is easy to quantify with precision.

The point is that potential return might fall well within a framework of payback in three years.

Whether that is a “good” investment or not depends on what else might have been generated from other capital deployments.

Over a seven-year period, Verizon might have committed $13 billion in capex to generate revenue from six million fixed wireless accounts (about $1.85 billion per year). It is hard to image any alternative use of capital at that level that would result in annual revenues of $4.3 billion in internet access revenues alone.

It is in fact quite hard to create a brand new business generating as much as $1 billion a year in incremental revenues, under the best of conditions.

source: ITU

So, back to the importance of video revenues, as difficult as the Time Warner debt burden might be, the renamed Warner Media already generates $32 billion in annual incremental new revenue for AT&T. Virtually nobody other than its competitors is likely happy about the new $55 billion worth of new debt AT&T has acquired.

Still, the issue is what else AT&T could have done with $55 billion that would immediately create $32 billion in new revenues. Personally, I cannot think of another transaction that would have produced that much new revenue, immediately.

AT&T could have spent that money on fiber to home upgrades, to perhaps gain five percent to 10 percent additional market share in the consumer internet access market, in region, over perhaps five to seven years. The upside, even at 10 percent share gain, does not approach the Warner Media contribution.