When Federal Communications Commission Chairman Ajit Pai lands in Texas on Tuesday to explore recovery plans after Hurricane Harvey, he'll find that cable and wireline telecom operators such as AT&T Inc. (T) and Comcast Corp. (CMCSA) are facing bigger challenges restoring services than wireless carriers.
"Wireline is going to be much more affected than wireless," Drexel Hamilton LLC analyst Barry Sine said of the storm's effects on communications systems.
"Towers are built for hurricane strength winds and that is a hurricane-prone area," Sine explained regarding the wireless infrastructure.
"You tend to put cell antenna on higher ground for better radio signal propagation," he said, noting that the elevation would protect towers from flooding. "You do tend to have power backups on site," he added.
In the 55 counties that make up the disaster area, 3.8% of the cell sites were out of service as of late-morning Thursday. That's an improvement from 4.2% on Wednesday and 4.7% the day before.
No county had more than 40% of its cell sites out of service. On Monday, Aransas, Calhoun and Refugio counties, northeast of Corpus Christi on the Texas close, had 95%, 74%, 85% of cell sites, respectively, were out.
Meanwhile, more than 270,000 cable and wireline subscribers had no service by late Thursday morning, up from 167,000 a day earlier.
Verizon Communications Inc.'s (VZ) experience with Hurricane Sandy in 2012 provides a reference point for rebuilding efforts. Moody's Investors Service analyst Mark Stodden noted that Verizon took a $1 billion charge for the 2012 super storm.
"AT&T is likely to be less impacted in Houston than Verizon was from Sandy," Stodden said in an email, since Verizon had operations in lower Manhattan that were particularly vulnerable.
"The old copper wire uses paper insulation wrapped around the wire," Sine explained. "That paper soaks up the water and ruins it permanently. Copper, when it get wet, corrodes."
The telecom made use of the disaster to replace aged infrastructure.
Meanwhile, here comes Irma.
"It took them about three months but they replaced all of that copper with fiber optic cable," Sine said. "When they came back up they had done their restoration all with fiber that is an asset now that will future-proof the network for the foreseeable future, certainly several more decades."
Frontier Communications Inc. (FTR) has operations in the area, Stodden noted, though it is difficult to quantify the storm's effect on the carrier.
For Comcast, Houston represents one of its larger territories, Macquarie Capital analyst Amy Yong wrote in a report, estimating that the company has more than 5000,000 customers. To boost connectivity during fiber repairs, Comcast has made WiFi hotspots throughout the region available to customers and non-subscribers.
The FCC's Pai may need more time to survey the damage from Harvey and come up with a plan to help network operators recover. On the positive side, he'll probably have cell coverage.
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