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Expert Opinion: Broadband Adventures in Wunderland: The Myth of the $7 million home

If it were a piece of classical music, the “study” by Navigant Economics’ Jeffrey Eisenach and Kevin Caves could easily be titled “Variations on a False Narrative in the key of F.” They claim, after a review of three (count ‘em, 3) of the hundreds of broadband grants, the broadband stimulus cost too much for too little ROI.

The most misleading of the claims, though, is the alleged $349,234 spent per un-served household. Well, I should say the $7 million per un-served household, but I’ll come back to that in a bit.

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If it were a piece of classical music, the “study” by Navigant Economics’ Jeffrey Eisenach and Kevin Caves could easily be titled “Variations on a False Narrative in the key of F.” They claim, after a review of three (count ‘em, 3) of the hundreds of broadband grants, the broadband stimulus cost too much for too little ROI.   

The most misleading of the claims, though, is the alleged $349,234 spent per un-served household. Well, I should say the $7 million per un-served household, but I’ll come back to that in a bit.

U.S. broadband policy and strategy suffers from three fundamental failures that limit the advances we could be making, while allowing the most ridiculous assertions to pass as educated commentary on the progress we do make. Industry funded “research” such as this National Cable & Telecommunications Association (NCTA) funded and hyped report is an example of our latter affliction.

The biggest threats to better broadband in America are many people’s 1) failure to understand financial sustainability, 2) failure to understand what the broadband need are and 3) unwillingness to acknowledge, let alone fight, the failure of competition.

Six years ago, I wrote in my book “Fighting the Good Fight for Municipal Wireless” that consumers are the weakest pillar in the business case for broadband in many communities. They cost a lot to win and retain as customers, and the revenue they generate can be small compared to the cost of the network, particularly in small rural communities. Local government, businesses and other anchor “tenants” (a.k.a. institutions) subscribing to the network is how you generate revenue (or grants) needed to run the network. If broadband is to be successful in many communities, you can’t ignore this reality.

Yet everyone and his mother seems to cling to the consumer as their point of reference. How many houses are passed (served)? What’s the ARPU (average revenue per user)? Pricing practices, marketing messages, types of services offered, measures of success, arguments made against broadband stimulus, reasons given for having a stimulus.

Broadband success is not a matter of homes “passed” but by first resolving the needs of those various anchors I listed. Santa Monica is a good example. The IT department used that city’s dark fiber to replace aging communications technology, generating $750,000 in savings that they invested in expanding the network, and then selling access to local businesses. That revenue, in turn, went into further expansion and the circle continued. In time, consumers received free WiFi in various city locations and other benefits that wouldn’t have been possible if the first emphasis had been consumers.

Whether small town or large metropolis, serve the institutions first and then leverage the benefits to meet constituents’ needs. “Pass” a home with fiber for $30,000 on the way to providing a school with gigabit service that subsequently serves 100 homes with highspeed fixed wireless for five years, and you get a pretty good deal. The supposed “high cost of the stimulus” is less dramatic when you have a clearer understanding of the big financial picture of some of these projects.

That leads to the second failing: not grasping the real needs these projects are meant to resolve. Assess the need of local government to revamp its communication systems to deliver more and better services in the face of continuing budget cuts. Examine what type of communication infrastructure local businesses need to compete on a global scale, what schools need to capitalize on digital learning tools for the 21st Century, what hospitals need to transform healthcare delivery.

These needs translate into demand for high-capacity broadband networks that come with hefty price tags, so you have to spend a lot to put the right infrastructure in place. But those needs also translate into subscribers willing to pay healthy but fair prices that financially sustain these networks in the long term. More importantly, when you meet these combined institutional needs, the benefits are many, varied and long lasting. You get a very different picture of the cost effectiveness of Rural Utilities Service (RUS) broadband subsidies. Often, the picture does not fit neatly or obviously into an accountant’s Profit & Loss mindset.

Because there are politicians, journalists and regular citizens who can’t or won’t see the true needs of organizations that comprise the foundation of the broadband business case, they are easily distracted by shrill claims by industry shills of government waste. They more likely become contributors to the problem rather than enablers of the solution.

This brings us to the third failing epitomized in the false narrative of the $7 million un-served home: the absence of political will in some quarters to aggressively address the lack of competition. Quite a few of these stimulus awards went to projects that will “overbuild” areas where there are existing providers. In case you missed my last column, just because a provider offers service in an area doesn’t mean there is competition in that area.

You hear the incessant whining of incumbents about overbuilding and unfair competition. When Eisenach and Caves calculated their “squandered” dollars per un-served home, they identified homes without access to service. But what about the hundreds of homes in areas that subscribe to service that’s over-priced and crappy because there’s insufficient competition to drive prices down and innovations up? They’re also un-served by adequate broadband at an affordable price. Are there hundreds of homes in areas where incumbents advertise services that constituents actually can’t get, but by government standards are deemed “covered?” Sorry, they’re un-served. What about the local companies, home businesses, schools and hospitals that can’t buy high-end broadband to meet identified needs, even if they have the money, because no provider in the area is capable of providing sufficient capacity? They’re un-served.

Eisenach and Caves’ numbers don’t mean jack because they’re running a false narrative. It doesn’t appear they’re addressing numbers for the homes whose broadband is so deficient it may as well be dial up. Their report addresses residences while apparently failing to take into account the businesses and institutions that currently are un-served, yet will be with the stimulus projects. They constantly claim “duplication of services” when in fact, someone selling Internet access doesn’t automatically make their service meaningful broadband.

If you want to know the value of this particular tune, you just need to see who’s paying the piper.

 

Broadband Mapping

Utah’s Broadband Maps Are Ready for Federal Funding, Broadband Director Says

‘The efforts that have been done in the past have been a great foundation.’

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SALT LAKE CITY, July 13, 2022 – Utah’s work on its own broadband availability maps means it is prepared for billions in federal funds coming from the Infrastructure, Investment and Jobs Act, said the state’s broadband director at a Broadband Breakfast Live Online event Wednesday.

“The efforts that have been done in the past have been a great foundation,” said Rebecca Dilg, director of the Utah Broadband Center, the state’s broadband office.

Utah’s decade-old broadband availability maps are updated every six months and Dilg said they provide a foundation for upcoming money from the Broadband Equity, Access and Deployment program, the $42.5-billion initiative from the National Telecommunications and Information Administration.

Utah counties work with the state broadband office to continually update a layer on the map that shows individual addresses, added Kelleigh Cole, director of strategic initiatives at the Utah Education Network, a state research network. This layer allows the broadband office to see whether broadband access extends to specific addresses.

Mapping data, said Dilg, prepares the state broadband office to address “doughnut holes” where urban centers receive high-speed coverage, but surrounding areas do not. The BEAD program requires that unserved residents are served first, but Utah’s broadband office is optimistic that the funds will reach into underserved areas, including cities where antiquated technology, like digital subscriber lines, are primarily used.

The Federal Communications Commission assured that its nationwide broadband coverage maps will be available by the fall. The Broadband Data Collection portal on the FCC website is currently open for internet providers and governments to submit coverage data.

Utah is home to the second largest city in the country fully connected to fiber, West Valley City, which is also the largest U.S. city connected via an open access network.

Screenshot of Rebecca Dilg, director of the Utah Broadband Center.

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Broadband Mapping

FCC Opens Broadband Data Collection Program

The data will go toward improved maps, which the FCC chair said will be available by the fall.

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Screenshot of Bill Price, vice president of government solutions for LightBox

WASHINGTON, June 30, 2022 – The Federal Communications Commission on Thursday officially opened its new system to collect broadband service information from over 2500 broadband providers.

The Broadband Data Collection “marks the beginning of [the FCC’s] window to collect location-by-location data from providers that we will use to build the map,” said FCC Chairwoman Jessica Rosenworcel in a press release.

Screenshot of Bill Price, vice president of government solutions for LightBox

Broadband providers will be required to provide availability claims and supporting data. Supporting data will include sections such as “propagation modeling information” and “link budget information.” The deadline to submit is September 1.

Rosenworcel said the agency has established consistent parameters that require broadband providers to submit data using geocoded locations that will “allow [the FCC] to create a highly precise picture of fixed broadband deployment, unlike previous data collections, which focused on census blocks, giving us inaccurate, incomplete maps.”

With this information, the FCC will build a common dataset of locations in the United States where fixed broadband service can be installed, called the “fabric.” Rosenworcel said that this fabric will serve as a “foundation upon which all fixed broadband availability data will be reported and overlaid in our new broadband availability maps.”

Following the completion of the maps, government entities and internet service providers will be given a challenge window where availability claims may be challenged based on submitted data.

Rosenworcel previously said that the improved broadband maps will be available by the fall.

States expect to be busy fact-checking these claims as they are released, said panelists at Broadband Breakfast Live Online Event Wednesday. States will be involved in individual challenging processes and will be expected to provide information on availability through individual speed testing.

States want to get these maps right because they serve as a broadband investment decision making tool, said Bill Price, vice president of government solutions for LightBox, a data platform that is helping states build broadband maps. That means many states are committed to obtaining accurate local coverage data to utilize federal and state funding.

Our Broadband Breakfast Live Online events take place on Wednesday at 12 Noon ET. Watch the event on Broadband Breakfast, or REGISTER HERE to join the conversation.

Wednesday, June 29, 2022, 12 Noon ET –Broadband Mapping and Data

Now that the National Telecommunications and Information Administration’s Notice of Funding Opportunity has been released, attention turns to a core activity that must take place before broadband infrastructure funds are distributed: The Federal Communications Commission’s updated broadband maps. Under the Infrastructure Investment and Jobs Act, as implemented by the NTIA’s Broadband Equity, Access and Deployment program, these address-level maps from the FCC will determine the allocation of funds among states and serve as a key source of truth. Our panelists will also consider the role of state-level maps, the NTIA challenge process and other topics. Join Broadband Breakfast as we return to one of the subjects that we know best: Broadband data and mapping.

Panelists:

  • Bill Price, Vice President, Government Solutions, LightBox
  • Dustin Loup, Program Manager, Marconi Society’s National Broadband Mapping Coalition
  • Ryan Guthrie, Vice President of Solutions Engineering at ATS
  • Drew Clark (moderator), Editor and Publisher, Broadband Breakfast

Panelist resources:

Bill Price, Vice President of Government Solutions, is responsible for LightBox broadband data and mapping solutions for government. Bill has more than 40 years in telecommunications and technology services development and operations. His track record includes delivering the Georgia statewide location level broadband map, the first fiber metropolitan area network in the U.S., and launching BellSouth’s internet service. LightBox combines proven, leading GIS and big data technology to transform how decisions are made in broadband infrastructure planning and investment.

Dustin Loup is an expert on internet governance and policy and program manager for the Marconi Society’s National Broadband Mapping Coalition. Much of his work centers on improving digital inclusion and establishing transparent, open-source, and openly verifiable mapping methodologies and standards.

Ryan Guthrie is VP of Solutions Engineering at Advanced Technologies & Services.  He started with ATS in 2006 and has been involved in all aspects of the business from sales and marketing through solution design and implementation.  Ryan also manages regulatory solutions for ATS and has been deeply involved with the federally funded broadband projects by assisting ISPs with their performance measures testing compliance.

Drew Clark is the Editor and Publisher of BroadbandBreakfast.com and a nationally-respected telecommunications attorney. Drew brings experts and practitioners together to advance the benefits provided by broadband. Under the American Recovery and Reinvestment Act of 2009, he served as head of a State Broadband Initiative, the Partnership for a Connected Illinois. He is also the President of the Rural Telecommunications Congress.

WATCH HERE, or on YouTubeTwitter and Facebook.

As with all Broadband Breakfast Live Online events, the FREE webcasts will take place at 12 Noon ET on Wednesday.

SUBSCRIBE to the Broadband Breakfast YouTube channel. That way, you will be notified when events go live. Watch on YouTubeTwitter and Facebook

See a complete list of upcoming and past Broadband Breakfast Live Online events.

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Broadband Mapping

Industry Concerned About Challenges of Getting Mapping Data to FCC

The FCC has a September deadline for mapping data it will begin collecting at the end of June.

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Photo of Lynn Follansbee from October 2019 by Drew Clark

WASHINGTON, May 12, 2022 – Key players in the broadband industry are under pressure to deliver coverage data to the Federal Communications Commission, as some expressed concern Monday about workforce availability and the costs of getting that data to the agency.

Specifically, the Federal Communications Bar Association event heard that certification requirements for professional engineers are causing concerns, especially among small internet providers. And workforce shortages are pushing hiring costs up, which small companies often cannot afford.

“Everybody is going to have different challenges depending on the size of the company,” Lynn Follansbee, vice president of strategic initiatives and partnerships at US Telecom, said at the FCBA event Monday.

A big company has “challenges just by sheer number of communities served” and smaller companies often don’t have sufficient manpower for efficiently reporting coverage, Follansbee added.

Chris Wieczorek, senior director of spectrum policy at T-Mobile, said the key is to strike a balance between accountability with proper certifications and small staff limitations.

The Broadband Deployment Accuracy and Technological Availability Act requires the FCC to collect new data from fixed broadband service providers to construct a new map, which is expected by this fall and will help federal programs deliver billions in funding to underserved and unserved areas. In April, the FCC released the preliminary broadband serviceable location fabric to help prepare providers for their data submissions due in September.

Christine Sanquist, vice president of regulatory affairs at Charter, stated that although the FCC has provided the preliminary fabric, “the biggest challenge for Charter is really that the BDC requirements are so different from the Form 477 requirements,” which were the existing forms submitted by providers and which yielded data inaccuracies.

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