Philip Cusick: Thanks, John.
Operator: Our next question will come from the line of Michael Rollins of Citi. Please go ahead.
Michael Rollins: Hi. Good morning. Just curious if you can give us an update on your longer-term thoughts of where you want to see your fiber and broadband footprint relative to your historic ILEC footprint? And how you’re thinking about the programs such as [indiscernible] and ACP influencing those longer-term aspirations?
John Stankey: Michael. Good morning. So look, we’ve done an awful lot of work, and we have a pretty good line of sight. And I’ve used this characterization before, and I don’t think it’s a whole lot different. It will vary state by state, but there is an easy business case to be made on reinvestment in infrastructure around, call it, two-third of the footprint. And typically, when you get into outside plant investment, the way the cycle typically starts as a new technology comes out or a new architecture you see the first third as being attractive, and that kind of starts the process. And as you get up the learning curve and technology scales and prices come down and the market matures, you end up getting to a point where the second third starts to look very attractive and you end up investing and going through.
And then, it really depends market by market. Sometimes it’s the final third that becomes the question around whether or not there is merit for investment. And sometimes, it’s the final 20%, somewhere in that range. And I think that’s effectively where we’re going to be into your question, that’s where the issue of subsidy will play out. We’ve been pretty specific in our analysis of looking at, I’ll call it, that final third. I’m generalizing grossly. But I’ll call it that final third of saying where is it that we think we would like to try to be really competitive and build that infrastructure out because it’s strategically injects the position that other areas that we serve or we think the growth characteristics of that market will be good over time or we have a good existing base of customers or it’s complementary to our wireless business.
There’s a lot of different parameters we look at, but we have a point of view on where we think we’d like to compete for that. And we intend to go into the process and lean into that and try to compete. That doesn’t mean we’re going to win it. I expect there’ll be others that look at some markets and there’ll be places where we’re interested and somebody else is interested. We try to be informed in thinking about how other competitors might think about those markets, given how they line up to their footprint and where they have business interest. And hopefully, we’ll be an informed bidder and will be successful, and we’ll be able to put a compelling case moving forward. I feel like we have a lot of tools at our disposal to be very competitive in the process.
And I’ve talked about what those are. We have a lot that we can do in terms of our presence in communities. We’ve got great labor constructs. We’ve been working with our vendors on a lot of US and American-based content. In our infrastructure and equipment, we’re putting out a fantastic technology that people view as being superior and better. So I think we’re going to be very competitive in the places we want to be competitive, but it remains to be seen how much of that we win. I would then go ahead and tell you, my expectation is, this process is going to unfold in 2024. Awards probably are going to be not the types of things that you’re going to see impact 2024’s business. We’ll be in the regulatory process and bidding. I would expect when we start thinking about what we win and where we have success, you will see us incorporate those conclusions into our 2025 and beyond kind of view of the business.
