Crown Castle Inc. (CCI) Earnings Call Transcript & Summary

Everybody, thank you so much for joining. We're really happy to have here again this year, Dan Schlanger, Chief Financial Officer for Crown Castle. Thank you, Dan, for joining us.

Thanks for having us, Dave.

A lot has happened in the last year. And I guess I want to start with something we were just talking about in the prior session about there's a lot of new faces in leadership positions in the tower industry. And Steve is one of them, your new CEO. Kind of maybe just at this juncture, what is Steve doing with the organization that's new and different and you'd like people to know?

Sure. I think -- so it started in April, and one of the things that the Board had talked about in choosing the CEO was that historically, they had, for the previous 2 CEOs, promoted the CFO into the role which gave the indication that it was more of a financially driven thought process than an operationally driven.

You do thought?

No. And they thought that this time around, it would be better to have somebody who had significant operating experience, particularly with regard to the tower business. Given that, that is where the majority of our cash flow and revenue and value resides, that having somebody who has a lot of experience there, they believe was important to driving the best outcome, most value for the stock. And they found Steven is that person, and he has come in and focused more on how to do things what the process is, how to get cost out, how to be as efficient as possible across the Board, more so than it has been the case previously. Obviously, it's a spectrum, it's not a point. It's not like somebody does only one thing, but he is more focused on operations and cost management, then was Jay, who is more focused on the strategic view of where we're going and the future of the business. And as we're in the middle of a strategic review, I think Steven has taken to kind of focusing on what is controllable, how do we do what we need to do now to set us up for the best possible outcome of that review. And what I have found very impressive about our workforce is that as you pointed out, there's been a lot of change at Crown Castle over the last 12 months. We -- almost 12 months ago, a little bit more, had a reduction in force that was related to the tower side of our business because we had a significant amount of tower activity and it came down. We then had -- including an interim, we had 3 CEOs within 4 months. And we have a strategic review and then we had a reduction in force in our -- the network side, the fiber side of our business based on some of the changes we had made as part of our operating review. That's a lot for any organization to go through. And yet, we gave guidance in October of last year. And other than the purposeful changes we've made based on making some different decisions around capital allocation and how that may impact our business, we have met all of that guidance which means that everybody has stayed extremely focused on making sure our customers are cared for making sure that we are doing things as efficiently as we can, controlling the cost structure of the business and performing such that we generate revenue growth that we thought we would need to in order to generate the AFFO per share that we had projected in our outlook. And the fact that all of that has happened, I think, is remarkable because it is a tremendous amount of change, and it's hard to run a business. And it's hard to run a business in good times, but when you add all the change to it, I think it's even harder. I think Steven has been very good at making sure everybody understands what the goals are near-term for us to be focused on and been very good about ensuring that nobody gets a feeling of, okay, this isn't a good place because of all this change. I think he's done a good job kind of calming the organization down -- this change. I think he's done a good job kind of calming the organization down the organization down as do Tony as our interim-CEO. So I think it's been a very positive transition and having somebody who is focused on how do you get better, how do you make sure the process is the best it can be. It's something that I think was very healthy for Crown Castle. And I think that as we go through the strategic review and ultimately figure out whatever that outcome is, those thought processes will be very good for generating value going forward.

So we'll get to the strategic review, and you can say you're not going to tell me anything in a bit.

I can just say that now.

No, no. That's...

I'm not going to tell you anything.

About a mid-conversation type of -- did...

Well, you can just not say. Okay.

But -- so look, I think that the thing that the tower investors see is the value that's inherent in the tower stocks reflective of the tower businesses, but at the same time, there's also kind of a lack of understanding such conviction that the carriers are going to quickly ramp up spending. And so people are trying to like sit back and consider -- look for green shoots. Do you see any green shoots in carrier spending and activity that gives you optimism about 2025 versus 2024?

When we gave guidance in October last year, we thought that we would get about 4.5% growth in 2024. And that's exactly where we have been thus far and what we continue to see going through the remainder of the year. That is to say in order to answer your question, we don't see any change or we would have announced some sort of change in that outlook. And looking into 2025, we'll give outlook again in January. But what we are encouraged by is that there is more conversation now from our carrier customers about their need to invest in the network than there has been in some period of time. What is difficult for us is always translating that discussion into what is going to happen for tower leasing. Because even in periods where they -- historical periods, as you know, announced what their wireless CapEx was, there was very little correlation between our wireless CapEx and our leasing activity because the timing of when something goes on a tower is different than the timing of when all the CapEx happens and sometimes it's faster and sometimes it's lower. So we haven't actually been able to pinpoint the actual -- the inflection points very well. But it does give us this kind of move towards more discussion around investing in the network, gives us confidence in our ability to grow the business over a longer-term which what we've talked about is through 2027, we think we'll get mid-single-digit growth. We think that that's still a very good estimate of what's going to happen for us, partly because all of the growth comes from our carrier customers investing more in the network and they're talking about investing more in the network. What has historically happened, as we've talked about, is that one driver of significant growth in tower market is a generational upgrade in the network technology. So going from 3G to 4G or 4G to 5G. And when we look back on the 4G cycle that we had 10, 15 years ago, and we look like -- we look at the 5G cycle we're going through now, there's a big wave and that way it kind of dissipates and we come down to kind of the natural level of spending. But all through that period, 5G has been more growth for us than 4G. And that gives us a lot of benefit to look forward and say, we feel good about where we are now and what the trajectory of the business will be over a long period of time, but I can't speak to a specific inflection point that will happen in any given period.

I think when you were here last year, we were talking about the -- we were talking, I think, at the time, it was around 5% growth was -- then later you guided to the 4.5%. But I think what you said at the time was that you had kind of 90% visibility into that 5% at the time. And that was informed by a combination of the conversations, as you say, with the carriers and the MLAs that you had. And the theory was that as you went further out the 90% -- the portion of the 90% that had -- that was informed by the MLAs would kind of fall and the portion that was informed by the conversations and actual activity levels would grow. So as we think about next year, do you have as high conviction based on the MLAs that you can grow this level or faster on a go-forward basis? Or is that conviction lower because the MLAs aren't as much there and the conversations are more a piece of it?

I doubt, I said what you just said.

Pretty sure you said.

Because we would have said 75% not 90%. And what we said was that over the course through 2027, 75% of our growth was contracted. I don't think I ever said that we thought that we had 90% conviction due to conversations. I really don't. I'll be happy to go back and look. If I did, I would hope -- I would tell my prior self not to do so. But that 75% still holds. And there's always going to be additional growth that we have over and above what we have contracted that comes from conversations with carrier customers as well as other customers, the kind of -- the customers outside the big 4 now that make up 20-ish percent of our growth at times or our revenue at times. And so I think what we can see is that there's always path to grow more than what we have contracted, and we have 75% of that 5% contractual, which is why we think that 5% still matters. We think it still is very much what we think will happen through 2027. And like I said, I feel enthusiastic about the conversations that our customers are talking about publicly. I mean, I heard Verizon talk earlier how they're saying, yes, we think we're going to increase the amount of investment in our business to take care of the demand that they're seeing on their network. And that is great for tower companies. And what has always been a good position for tower companies to be in and where we have grown substantially other than the generational upgrades, or when our customers have access to spectrum and when there is competition for network quality. And that's what it feels like is happening right now. And even what I heard from Verizon this morning was yes, we see we put a lot of C-band into our top tier market, the Tier 1 markets, but there are a whole bunch of other markets we need to go after at this point. That's great for us. And our peers as well. And it's all good things to have happened that give us the ability to say that through 2027, we feel good about our growth. What -- like I said, though, what is always difficult is to try to translate exactly those comments into the time period in which the leasing for us is going to happen, both because we have structured MLAs that may or may not allow us depending on what's going on, the specific activity to be monetized because we've monetized in this kind of general activity or because we just don't know when the timing will be. And what we think we've done a good job on in structuring our -- the agreements we have with our customers is that again when you look at the 5G cycle versus the 4G cycle, we've the low water marks are still higher in 5G. So we -- when things have slowed down, we're still growing more, 4.5% this year, is still better than it was at this general cycle in the 4G cycle, general time the 4G cycle. And the upside wasn't cut off. So we still grew very well when that 5G cycle ramped up in 2020, 2021, we grew 6%, 6.5%, which is more than what we did in 4G. So we think we've structured good agreements with our customers that allow us some protection on the downside without cutting off the upside, which gives us, again, conviction in what we think will happen over the next several years.

So I guess there's a couple of events. You mentioned one, so Verizon is going to have some sort of event or announcement to kind of elaborate on what their next phase of fixed wireless access will look like when they kind of move C-band out to the tertiary markets -- finish the secondary and move to the tertiary market. So we're going to have T-Mobile later this month, have Capital Markets Day talking about probably all the great things they want to do with their network. Are these conversations or these events, are they contemplated in the MLA? Or are these kinds of events, the upside that you're speaking about?

It depends on the agreement, and it's a bit of both. But I think we -- over a long enough period of time, we understand what the value is of our tower space. And we get compensated for that value. We monetize that value. And I think you can see that somewhat in we have 1 peer SBA who does much more -- much less MLA, much less of a pricing structure and more by the amendment pricing structure. And we have American Tower and we who do much more long-term agreements where the pricing structure is more evened out than specifically tied to an amendment. But if you look over a long enough period of time, the growth is fairly similar. And I said this earlier today, it's something that I believe [indiscernible] said, which was whether you do an MLA or whether you do per amendment pricing is kind of like whether you like chocolate or vanilla, ice cream is good. And whether you like chocolate or whether you like vanilla, it's still good. Whether we get paid a la carte or whether we get paid in more holistic agreements, it's all good because that driver of demand is still there. We still get paid when our customers spend on their network. And therefore, we think that cutting off the risk profile is beneficial through an MLA, not capping the upside. But of course, there's going to be some activity in there that is already put into the cutting off the risk profile that allows our customers more visibility into their cost structure, which is why they do it. So we can't monetize everything, but it's going to be a combination of the 2 things we're talking.

I'll -- I imagine that during the strategic review process, it's probably hard to engage in conversations inorganically. But to the extent that you just monitor the marketplace, I was asking your peer earlier about the inorganic opportunity domestically for towers. Is it -- we've heard it's kind of like the private market valuations are very high. The public market valuations are low and never the twain shall meet. Is that kind of a basic?

Yes. Actually, the answer is yes. The private market valuations are high. I believe the public valuations are low. They are certainly low in comparison to private market valuations. I don't understand it. It was one of the things that surprised me when I first got into this role, was somebody said that to me it just doesn't -- it doesn't make capital market sense. Yes, you get control, but no, you don't have any liquidity. The fact that there's a huge disparity between the private market multiple and public market multiple doesn't make sense from just how capital should be allocated because you take much less -- much more liquidity risk, even though you have operational control. It just doesn't make sense to me why it would happen. And I've never been able to make a huge amount of sense of it. And I think that my best explanation at this point is public markets have a harder time valuing long-term growth than private markets do. And public markets look for the next 2 years of growth, not the next 20 years of growth. And when you start talking about growth that's beyond 5 years, which a lot of the tower valuation is, I think private market investors are willing to give more credit for that growth than our public market investors. As the best the explanation I can come up with. But it is still true, it has been true. I don't think it will ever not be true from my experience. Like I've talked to people in this business forever. It's always been true that private market multiples are higher. And I think people have made money. So what I think that says is that towers are undervalued.

That's a good jumping off point to talk about fiber. What's the latest on the strategic review?

There's nothing that I can speak to here. If there was something even to speak to, we would have press released anything specific.

You can do it after you tell us.

I could. There will be a lot of angry people. It will be my last conversation.

No, CEO...

Well, I don't think CFO either. So anyway, these processes take some time because they are complicated. Figuring out what to do is hard. We have had -- one of the inputs that I think of when thinking about what is the right outcome for us. The way I would say the right outcome is we need to generate the most value for our investors that we possibly can. One of the inputs into figuring that out, though, is what do our investors want and what do they think. And if I get in a room with 5 investors, it is rare that I would get less than 3 opinions on that point. In addition, the investor feedback changes over time, as well it should. If investors thought the same thing they did every year, then they would never be good investors, right? Things change, therefore, opinions change, investment profiles change and investment decisions ultimately change. And what we have seen is that not only is there a difference of opinion among investors, there's a difference of opinion with an investor over time. And that adds the complexity of what does it mean to drive value because if one person thinks I'm going to use numbers that don't matter here, so you don't make anything. And if we were to sell something for $8 dollar and somebody was really excited about it or sell something for $4 and something was mad about it. Did we drive value is really in the eye of the beholder. And that's part of what makes these things somewhat difficult is how do you make sure that you're driving the best value you possibly can. And I know from all the conversations we've had, is that our Board is informed and engaged. And they are looking at everything they know how to look at and they're doing an exceptional job of keeping engaged in this conversation that we're having. And they're going to make a good decision. The difficulty is going to be -- some of the investors would behold it as not a good decision. That's just the way it is, whatever it may be, because we've gotten so many different inputs at that point. And I think that's part of what's adding to the complexity of the conversation. Because the -- I think as the Board has said, they are looking at basically all the options that we could look at, whether it's a sale or all or a portion or one piece of the business or not. Those are all on the table, and I think those are all things that they need to consider.

Let me ask this question. Is -- are the fiber -- is the fiber services and the small cell businesses divisible either physically or virtually from each other?

So I think the answer that is absolutely they are -- separating the businesses operationally can happen. I think the question underlying the strategic review is whether it should happen. That's a much more difficult conversation. But can we separate the businesses? Like can we have people who operate this business and people who operate this business, absolutely. No doubt about it. I do think that -- again, just because it can doesn't mean it should.

Do you -- or does Crown believe that these 2 businesses are more valuable together than apart. Because my recollection was that there was always -- frankly, I don't know, I'm going to exaggerate, but it always seemed like there was an apology as Jay was buying all these businesses in fiber because he's like, "Look, I got to buy the fiber business in order to get where I want to go on the small cell business. It was a necessary evil. It wasn't, hey, I love the fiber services business, and I can't wait to have a knock and salespeople and 10% churn. That was never what Crown was interested in, right? And so it kind of seems to me that it's the obvious answer is that the 2 businesses -- the fiber services business if it's gotten the small cell business to where it needs to be is no longer necessary part of it. Would you disagree with that?

Disagree will be way too strong in the term. I would say that to me, the argument just made -- had some incongruity to it, which is you say that we got into the fiber business because it was necessary to do the small cell business well. But now that we have the small cell business where we want it to be, then we don't need this other thing. It isn't because like there was some point in time where the small cell business will have been to -- will have been matured enough that it can then stand on its own. That was never the issue. We never bought fiber businesses so that we could add heft to the small cell business. We bought fiber businesses because the fiber that we targeted was the fiber we thought was necessary and would be necessary for small cells in the future. So we aimed at the top markets in the U.S. We aimed at high-density fiber meeting lots of strands. We aimed at high or high density fiber meeting under lots of streets and high capacity fiber meeting lots of strands. We passed on a bunch of fiber that was sold in the period because they didn't have those characteristics. Those characteristics still hold true. The underlying asset of the fiber is utilized for both small cells and enterprises.

Well, I agree. And if you agree, though, that they're divisible from each other. Again, you didn't -- you had 0 fiber and then you bought a fiber services business, so you can get to the Crown Castle small cell business. Now that you have a Crown Castle small cell business that uses some of the fiber. The rest of the fiber services business, which was bought only to get you to the Crown Castle small cell business is no longer necessary, correct?

Yes. So we had a small cell business before we did any of that. So the termination wasn't that we needed the Fiber Solutions business in order to be in small cells, the determination was that we could generate a better return if we had them together. And if -- because it's the same asset if you're passing this building because we built small cells down [ 6th Avenue ]. Why not build into that building and get more revenue? You've already spent the money on the capital -- all the money on the fiber and that's where the capital went so generate more return out of that same asset. That was the theory behind it. Not that somehow we bought all this fiber that was necessary only for small cells, and then we can get rid of everything else. Whether that theory is true, is a question. So whether it is true that we have added revenue and added return is a question. We get that question all the time from our investors. Part of what spurred our strategic review. So it is not that we -- like I said, it's not that we got to a place that the small cell business is now established, and we don't need this other thing. We had that before we bought Fiber Solutions businesses. We had a small cell business that was established and doing quite well. We thought this would accelerate both this Fiber Solutions business and the small cell business and generate better returns for our shareholders. That is exactly the question we're trying to answer. I don't think it is nearly as clear cut as what you said at all that we are now at a point where they can be separated and nothing bad happens or that they have to be together and everything good happens. We are at a point where we need to assess all of those outcomes and figure out which one generates the most value. And I think there are really good reasons why all of these businesses stay together. That's why we got into them in the first place. I think there are very good reasons why they may not. But that is exactly the point of a strategic review is trying to figure out which configuration generates the most value. And I could easily see that some investors would say, "I am a tower investor. That is what I want to invest in. I do not want access to these other things." I could also see somebody say, "I'm a tower investor, and I like the fact that you have growth that is differentiated from your other tower peers." So I don't think anything is as clear cut as what you just made it out to be. That was when I meant there was a little incongruity to your statement is that it's not either or black and white. It is -- the reason we are in this review is because there is no clear cut. This is absolutely the answer. So the question is what do we do to generate the most value. And we're going to do everything we can to make sure we answer that question well.

So I guess 2 follow-ups on that. One would be is doing nothing an option?

I think everything is an option because, again, we want to generate value. I can't speak to the likelihood of different options. That is something that is a board-level decision that while I have some opinions about my opinions ultimately don't matter.

So private market valuations and towers inform a view that Crown Castle sees itself is undervalued. Are the private market potential buyers for these assets, not that it's exclusively private potential buyers using publicly traded fiber valuations against you in their negotiations? Or they -- are you agreeing on private market valuations that inform the conversation?

I would just suffice it to say we're all very informed.

Okay. You know the private market valuations, they know the public market valuations and we're fighting on that.

I can say that anything that you know we know.

Okay. I think that's actually a fair statement.

I mean about valuations and things like -- I mean, we see everything you see. And so it would be hard to say that we don't know what's going on in the market.

One of the aspects of the operational review was kind of taking a new look at the return thresholds for the small cell business. It used to be a starting yield of, I think, 6% to 7% and that went to double digits with the second co-tenant and then up into the higher teens, I guess, in the -- for the third co-tenant. And now you've kind of raised that hurdle. Is that purely a function of interest rates? Or is that a function of something else?

It's a function of a few things, but interest rates is one of them. So our cost of capital went up and we think requiring higher returns is prudent in a higher cost of capital environment. But it is not the only input. We also -- like we were talking about earlier, we were focused as our investment thesis to build out as much fiber as we could in the right markets that we believe would lead to where small cells were going to be and therefore, our ability to co-locate on fiber we already had. So we were building out to connect new buildings, new small cells that are well away from our existing fiber, something we would call anchor build or greenfield, whatever it called but that was the 6% to 7% yield you were talking about, like something new. With the idea that over time, we would lease up that new fiber with additional small cells and generate good returns, as you pointed out. We're doing the same thing on our -- with the fiber solutions side of our business, where we were building out to new buildings that were not exactly connected to our current fiber. What we determined was through the operational side of our strategic and operating review, which happened kind of the early edges of it, where we had consultants come talk to us about what the markets were and what our appropriate market share would be and where we could compete well. We determined that there was sufficient demand near our fiber to generate good growth without having to spend the money to go reach out to those new locations. So what we have done is we've incorporating both higher interest rates and a view of the market to say we have done enough of that build in our past to open up enough of an opportunity that we can still grow our business efficiently to generate good returns but do in turn even better returns because we don't have the capital involved in building out the greenfield. So what we've done is limited our focus more towards on net -- near-net, both on our fiber solutions and small cell businesses. So that we are building less new build, which should lead to lower capital and higher returns. What we believe will ultimately happen is we can grow our fiber solutions businesses around 3% a year, which is what we have said and what kind of first half of the year has been. And we believe we can grow our small business double digits on a revenue basis on an annual growth basis, while constraining the capital more than we have done in the past because we don't need to build all out right now. We don't see the demand coming fast enough that it's necessary. So part of that operational review solidified our view that this new way of operating could lead to both good growth and better returns. And because we have been questioned enough by our investor base, and I think rightfully so, about what the returns have been moving towards higher returns was a good thing, always a good thing. But there was a justified reason that we were doing the things we're doing before, too, because we saw this big market opportunity that we thought we could take advantage of if we build out to it. We just now see that we can take a pause on that and build out. We think that there will, hopefully, in the future, be more of those opportunities. But right now, we can take a pause on that build out and focus on harvesting all of the business that we basically built into for the last 10 years. And we think there's a tremendous amount of growth and return that will be available to us by doing so. It led to a significant reduction in capital, not a huge reduction in growth and what ultimately led to a reduction in the people we needed because when you reduce capital, reduce the people that are building stuff. So all of that happened earlier this year. I would say it has gone as well as we could have expected it to have gone. What I said earlier holds true. The fact that we're performing in line with our plans that we made in October last year is somewhat remarkable to me. I think that's something that we are proud of. Our employees should be proud of it. And we think that this new way of doing business allows us to generate everything we want to right now which is we think it will be the highest value-generating course regardless of the outcome of [ strategic area ].

One of the things that has come up in conversation has been the carriers and their appetite for self-perform is you're not in every market. And so there's going to be a lot of markets where the carriers have no choice but to self-perform. But in the markets where you are is self-perform an obstacle to achieving multi-tenant returns? Or has it become more of a challenge as time has passed?

It has not become more of a challenge this time as past. I think there's the answer to your question, I think is somewhat of course, if one of our customers self-performed, it takes away the ability for us to put that customer in that same location on our -- if we had a system on our system. I think that is true. I don't believe that happens more now than it has in the past in our small cell experience. We've been in the small cell business a long time. There was a time at which Verizon spoke about never using an outsource provider ever again. Obviously, that has relaxed because they use us. So I don't think it is worse. I don't think that the issue you're talking about is worse, where self-performed eats into colocation. We believe that we can make good money with 2 tenants. Like you said, low double-digit returns is a good -- it's over and above our cost of capital. And as any company, if you can invest money for return that's over and above your cost of capital, you're making money. And we believe there will be plenty of markets where we get 3 tenants. And what has been true for us is that even more than in the tower business, the second tenant can be the same customer because the densification can happen on a small cell business where they had 2 nodes in a location, all of that capacity has been utilized by us using our phones in that area. They need to add another node, same customer, new tenant on the same system.

There's no amendments in...

Right. There's no amendment. It's just a new contract. That, I think, gives us a lot of confidence that there is good value to be made in the small cell business. I've always been -- I've been -- sorry, I've been relatively bullish on the small cell business because I believe the amount of demand that is going to be placed on the network is too high to only utilize towers to supply that demand. I think the questions have been more, can you make a return on when is it going to happen? The can you make a return we're trying to address with, "hey, we're going to show you we can make a return on some level by pulling back some of the anchor build and we're showing you what can happen when we lease up to much like the tower business maturation process." And the timeframe has been probably one of our bigger issues in that the amount of spectrum that came to market from 2020 to 2022 in the U.S. was huge. It was more than the amount of spectrum that had been come to market in the previous history of the wireless industry. And that spectrum got deployed on towers, which pushed out the timing of small cells, which happened at a time where people were already somewhat skeptical. And I think that also led to our strategic review, is the timing going to work really well for our current investor base. And I think it's important to note that just because we may make a decision that may separate the businesses doesn't mean that we don't believe in the business. It just may mean that we believe that it can be better harvested by somebody else. And I think that is for us, the question of how much colocation is available is really a question of demand. Do we believe there will be sufficient demand through the markets that we already have small cell systems that would drive incremental small cells on our -- or on their systems. And my belief of that, the answer is yes because we see it in the large markets, that towers are not sufficient. That's why small cells already exist. And if they already exist, they're not going to be taken out because that capacity is necessary. The only thing that's going to be more network congestion means more small cells in those markets. We see that occurring over time. I think the question is when and to what extent and those are the types of things we're trying to get through now.

So on the strategic review, just kind of wrapping up, presumably, there's a capital allocation question about that as well. If we keep this business, how much do we spend on it? If we don't, what do we spend on it? There's a lot of questions about whether the dividend is part of that calculation. Is it...

Yes. I think any time any company talks about capital allocation, it's a combination of investment leverage dividend. Those are all capital allocation discussions. And so yes, the dividend would be part of any discussion. I think the difficulty in trying to address the underlying question of what happens is that we don't know what's going to happen. So it's impossible to speak to a hypothetical, if this what then because this is not happening. So I think until we have more clarity on the future business that we will be, it's hard to say anything about any of the capital allocation. I couldn't tell you until we know what that outcome is. But yes, all of those are considerations that we all -- of course, we have taken the thought into part of the thought process. Because again, it gets back to what I was driving at earlier is that value is what we're going for. Part of the value that we deliver to our investors today is the dividend. Part of the value is the growth, part of the value is the stability part of the value is differentiation. We have to consider all of those things. The Board, we use a strong word. The Board has to consider all of those things in order to make a decision that will drive the most value.

So then the last question is just more of the Econ question, which is, so the fiber services business has been able to put up some growth in the first half of the year. A lot of companies have not. So I guess kind of 2 related questions. One is how have you been able to do it on others [ cabin ]? And is kind of the drivers here in any way, economy dependent as the world is wondering, are we going from high inflation and hyper growth to hard landing?

Yes. I think the answer to the first question of how we do it we have purposely taken a somewhat differentiated position within the enterprise fiber business. We have focused more on complex situations, multiple colocations, lots of connectivity, lots of capacity and lots of engineering goes into it. which takes some investment, both from a capital standpoint to build the right fiber and some investment from a people standpoint. But by doing so, we believe we've targeted a lower churn part of the market, which you can see in our results. We've also, we believe, targeted a more consistent growth part of the market because companies like -- I don't know if you're a customer not off the top of my head, but probably like Bank of America, our thinking about, okay, we have to grow our business and this is how we're going to support it with a fiber perspective, and it's more consistent than a small business. So we believe we've gotten -- we've positioned ourselves very well to grow and have less churn than the typical fiber business has over time. And you can see that in our results. Whether that's economic dependent, I don't know yet. I think there's as much to say that there's going to be more data in the short-term than less data than necessarily in the short-term because of other things that are going on. So overarching things like AI or connecting data centers I know how to get that...

You've got 18 seconds left.

I know, I was thinking about it, too. Whether it is more data being demanded in just the industry or the economy in general versus the economic output. I don't know how that plays out, but we feel good about where we're positioned.

That's awesome. Dan, thank you so much. Great way to end.

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Thanks.