And so what we will do is we’ll focus our investments on the states that allow us to retain flexibility to run the business, properly respond to market demand and ultimately, earn a healthy return. So, that’s our focus. And so it’s very difficult to forecast what, if any, BEAD investments will occur at this stage. And it’s going to take us some time, I think, to figure that out as well as everybody else for that matter. So, we’re not unique.
Jessica Fischer: And as we have said all along in rural, we’ve been extremely disciplined from a financial perspective and looking at the specific passing that we’re bidding on to make sure that we’re comfortable that it will generate financial returns and all things factor into that, including the limitations that you have under the regulatory environment.
Stefan Anninger: Thanks Vijay. Thank you. We’ll take our next question please.
Operator: Our next question will come from Phil Cusick with JPMorgan. You may unmute and ask question.
Phil Cusick: Thank you. I guess a couple of follow-ups. Jessica, I heard your comment, on October customer addition drag, do you think it’s still a reasonable goal for 2023 to add more broadband subs year-over-year? And if not, do you think 4Q of last year is a reasonable proxy for this year? I know you love guidance. And then second, as I’m thinking about your cost commentary as well as maybe some revenue pick up, what is the outlook for EBITDA acceleration from here? We’ve talked about EBITDA accelerating in the back half, but I’m also thinking about what your Disney content costs are going to do for the fourth quarter. Just how should we think about that from here? Thank you.
Chris Winfrey: Phil, on the — let me take the customer one. The — our goal has been to increase net adds for Internet year-over-year. I think given some of what we’ve seen just in early October for the reasons that we talked about before, I think it would require a very successful November and December. So I think we’re going to be hard-pressed to hit that. I think the underlying trends in the business we’ve talked about where that sets us up for 2024. And so we’re really optimistic about that. But I think it requires a pretty — a very healthy November and December in order to achieve what was our original goal.
Jessica Fischer: On the EBITDA side, so thinking about what the components are, as you go into Q4 and next year, in Q4, you do still have an advertising headwind and actually the most significant advertising headwind of the year because of political advertising. But as you go into next year, then that turns around where you’re back in a political year and you have the benefit of political advertising. As I said earlier, we’ve sort of lapped the last of our 2022 labor adjustments as at the end of Q3. So I think the trajectory from a cost perspective on cost to serve and sales and marketing is — it gives — you have easier comps and you have growing efficiencies sort of going into next year. In the fourth quarter, we’ll start gaining revenue from the mobile free line roll-off.
It’s relatively small inside of Q4, but the impact builds as you go through next year. So we expect to have a good tailwind from that. And then we continue to expect to have just overall efficiency from our 10-year investments across the business. So, as we said, I think that we recognized that EBITDA was challenged in 2023, by both the investments that we’re making, doing it in a nonpolitical year. But as we get into Q4 and going into next year, our expectation is that we’ve pushed through most of that headwind and that we’ll be in a better position.
Phil Cusick: Thanks very much.
Stefan Anninger: Thanks, Phil. Luke, we’ll take our next question, please.
Operator: Our next question will come from Steven Cahall with Wells Fargo. Your line is open.
Steven Cahall: Thank you. So, you said that some of your initial Spectrum One roll-to-pay results were a little better than expected. Could you just expand on the tools you’re employing to drive those retention rates? And what kind of targets you might have in mind for the Spectrum One mobile roll-to-pay as we think about how that retention could look going forward? And is it right to assume that it’s about 300,000 lines per quarter that are up for grabs? And then additionally, we’ve received a lot of questions on the ACP program and what it means for Charter. Could you maybe just help us frame how you see that exposure? Do you think you require any contingency plans in case there’s any changes to the political outlook for that? And is there a lot of overlap between ACP customers and Spectrum One customers? Or is that quite a different customer set? Thank you very much.
Chris Winfrey: I’ll do my best to answer as much of that as I can. The mobile retention, we’re not having to do much of anything at all, simply because these lines are being actively used. They have similar port in rates to what we have elsewhere. They also have similar — nearly similar device purchase rate. So they are real customers, they are looking very much like any other existing customer. When they roll tier from a $0 price point for the first line, many of them are paying for a second line. But they go from a first line at $0 to $30, and that product is the fastest mobile product in the country, and it’s providing it at the lowest rate relative to that speed. So, at $30, you can’t replicate that mobile product anywhere else in the country that’s producing that speed.
And then all-in, when you think about it from a convergence standpoint, it’s a product that has a structural advantage that’s difficult for anyone else to replicate. So, we do have some small tactics around the edge that we can do to retain customers under different circumstances, but that’s not being heavily used at this point, simply because it’s sticking. On ACP, for the benefit of the broader audience, that’s the affordable connectivity program. This program, federal program, it’s brought Internet connectivity to customers who really wouldn’t have access to broadband otherwise. And — it’s also allow existing customers who would have been coming in and out of the broadband marketplace really given the affordability issues, to remain connected consistently.
So, I think we think it’s been a really effective program. We’re proud to be the largest ACP provider in the country. Just this week, I understand the White House has asked Congress to authorize more money for ACP earlier. And I hope that Congress will fund it before running out next year. Now, you asked the question, what happens to the extent it’s not funded? Just as I mentioned, most of these customers receive — that received ACP support today were Internet customers before the program was founded. We have low-income broadband programs that existed before ACP began and because of the value we provide in that connectivity, I do think that we’ll continue to retain these customers. We have ways where they’re moving them into the lower speed products that we have to be able to save the money more importantly, if you think about the mobile build the vast majority of these customers have inside their home, we can save them hundreds or even thousands of dollars every year, even though ACP disappeared simply by moving them over to our mobile.
