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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.

 

Craig Settles conducts needs analyses with community stakeholders who want broadband networks to improve economic development, healthcare, education and local government. He hosts the radio talk show Gigabit Nation, and is Director of Communities United for Broadband, a national grass roots effort to assist communities launching their networks. He recently created a guide to help librarians uncover patrons’ healthcare needs, create community health milestones and effectively market telehealth.

Broadband Mapping

NTIA National Broadband Availability Map Expands to New States and Territories

Nevada, Louisiana, American Samoa and Puerto Rico will join.

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WASHINGTON, December 29, 2021 – The National Telecommunications and Information Administration said Tuesday it will expand its National Broadband Availability Map to include Nevada, Louisiana, American Samoa and Puerto Rico.

The NBAM, which now includes 38 states and two U.S. territories, is a geographic information system platform that allows for visualization and analysis of federal, state and commercially available data on broadband availability.

It is designed to better inform administrators’ broadband projects and funding decisions in their states.

Additionally, it includes five federal agencies: the U.S. Department of Agriculture, the U.S. Department of the Treasury, the Bureau of Indian Affairs, the Economic Development Administration and the Appalachian Regional Commission.

In June, the NTIA also released to the public a digital map that includes key indicators of broadband needs across the U.S. This “Indicators of Broadband Need” tool “is the first interactive, public map designed to bring multiple third-party data sources together to help” public understanding of the digital divide and broadband affordability issues, the NTIA said.

The map shows overall great need for broadband access in the rural western U.S. compared to areas of the country such as the northeast and many parts of the Midwest.

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Broadband Mapping

Broadband Breakfast Panel Emphasizes Need for Better Mapping to Maximize Infrastructure Bill Money

Funds made available by the infrastructure bill will not need solid maps to make spending efficient, experts agree.

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WASHINGTON, November 11, 2021 – A critical step to maximizing the Congress-passed bipartisan infrastructure bill is crafting innovative mapping to pinpoint areas of focus for the billions of dollars in money going to broadband projects, experts hosted by Broadband Breakfast said Wednesday.

Following more than a decade of inefficient attempts from the Federal Communications Commission to map broadband needs nationally and continued lagging of current FCC mapping projects, individual states — Georgia has been one standout that is taking that initiative head-on — may need to create their own maps to meet timelines for funding allocated by the new bill. That’s despite FCC Chairwoman Jessica Rosenworcel saying recently that she’s optimistic that the agency is developing the best wireless maps in the country, as the agency reels from errors made in the Rural Digital Opportunity Fund reverse auction.

Commerce Secretary Gina Raimondo said during a Tuesday press conference about the infrastructure bill that the department will be working closely with the FCC’s mapping data.

Once the bill is signed into law, there will be a six-month period in which National Telecommunications and Information Administration can disburse the $42 billion it will get for broadband infrastructure based on need found through mapping efforts, said Public Knowledge’s director of government affairs Greg Guice during Wednesday’s panel discussion.

Under the bipartisan infrastructure bill, each state will receive $100 million in addition to further funding that is allocated based on the number of households in need present in the state.

Per Guice, some of the most useful maps for figuring out where funding is necessary will come from overlaying data such as metrics on internet speed and demographic information that covers income and ethnicity distributions in localities. Demographic information is especially important for addressing issues such as digital redlining, the perpetuation of already existing inequities among marginalized groups through digital technologies.

Steps in the right direction for effective mapping

Still, despite agreement between all the panelists that past mapping practices hinder effective broadband funding disbursement, the panel also lauded recent efforts to improve mapping practices.

Guice commended an FCC request for proposal that seeks to create a “robust” maps in terms of the information it can provide. Gary Bolton, president and CEO of the Fiber Broadband Association, expressed hope about the impacts that crowdsourcing efforts could have in creating accurate broadband maps.

Steve Pastorkovich, senior director of broadband funding and development for the National Rural Telecommunications Cooperative also hailed increased flexibility put in place for the Rural Digital Opportunity Fund as helpful in mitigation of the problems that subpar mapping practices have created for fund disbursement.

Our Broadband Breakfast Live Online events take place on Wednesday at 12 Noon ET. You can watch the November 10, 2021, event on this page. You can also PARTICIPATE in the current Broadband Breakfast Live Online event. REGISTER HERE.

Wednesday, November 10, 2021, 12 Noon ET — Unpacking the Infrastructure, Investment and Jobs Act

The passage of the Infrastructure, Investment and Jobs Act presents an unparalleled opportunity for advocates of Better Broadband, Better Lives. In this “breaking news” edition of Broadband Breakfast Live Online, officials from the broadband industry, including public interest advocates, will talk about the passage of the bipartisan infrastructure bill, how they see the core provisions included within, and next steps for action in developing broadband projects.

Panelists for this Broadband Breakfast Live Online session:

  • Greg Guice, Director of Government Affairs, Public Knowledge
  • Gary Bolton, President and CEO, the Fiber Broadband Association (FBA)
  • Steve Pastorkovich, Senior Director, Broadband Funding & Development, NRTC
  • Drew Clark (moderator), Editor and Publisher, Broadband Breakfast

See House Passes Bipartisan Broadband Infrastructure Bill, But Without Reconciliation Measure, and Industry and Non-Profit Groups Offer Uniformly Positive Views of Broadband Bill’s Passage, Broadband Breakfast, November 6, 2021

 

Greg Guice is the Director of Public Knowledge’s Government Affairs team, where he focuses on outreach on the full complement of Public Knowledge’s issues and policy recommendations to promote broadband access and technological innovation. Greg has more than 20 years of experience working on legislative and regulatory issues affecting today’s technology market.

Gary Bolton serves as president and CEO of the Fiber Broadband Association — the largest trade association in the Americas dedicated to all-fiber-optic broadband. With more than three decades in the telecom industry, Bolton joined the Fiber Broadband Association as president and CEO in 2020 after serving on the association’s board as vice chairman, treasurer and vice chairs of public policy and marketing committees. Prior to taking the leadership role at the Fiber Broadband Association, he spent 11 years at ADTRAN serving as vice president of global marketing and government affairs.

Steve Pastorkovich is NRTC’s Senior Director, Broadband Funding & Development, and has advocated on behalf of rural broadband providers in the nation’s capital for over 20 years. He spearheaded NRTC’s funding initiatives, including work on the Rural Utilities Service’s ReConnect broadband loan and grant program, and the Federal Communications Commission’s Rural Digital Opportunity Fund reverse auction. Prior to NRTC, he spent 20 years working for rural telecommunications trade associations.

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.

Panelist Resources:

  • Statement of Gary Bolton of the Fiber Broadband Association.

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

Broadband Breakfast Panelists Pitch Solutions for Finer Broadband Mapping Data

Experts argue for significant changes in order for broadband mapping efforts to be successful.

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Screenshot from Broadband Breakfast event on July 7th.

July 13, 2021—A federal mandate to get granular broadband data down to the doorstep would greatly speed up deployment, according to panelists on the latest Broadband Breakfast event last week.

Brian Webster, CEO of Wireless Mapping Inc., said on the panel the current Form 477 – which collects data on a broader census tract level to see which providers serve which areas – is not a great metric for measuring broadband coverage, and argued for better, higher-quality, and specific data.

That could be in the form of a federal mandate that would make 9-1-1 data public domain, he said on the July 7 event. This would allow other entities to determine specific buildings to better understand the layout of an area.

Webster pointed to New York as a state that had already done this and said that states that lock this data behind a paywall will continue to fall behind in their broadband deployment efforts. He said one of the great challenges is determining what kinds of buildings occupy a certain area; even if data accounts for a building, it may not distinguish a barn or a shed from an apartment or office building.

He also pointed to the U.S. national grid as an alternative to Form 477, where internet service providers would fill in their coverage areas down to the square meter across a blank grid representing the geography of the U.S., as opposed to simply using census blocks. He said that either of these approaches—or a combination of the two—would be an improvement on the current mapping models used by the FCC.

“[Form 477] gets to be problematic to use as a metric,” he said. “The problem is that it is one of those standardized things that everyone gravitates to.” Webster lauded the use of building data, such as those used in Costquests collection model, as it paints a more reliable picture the landscape that networks need to cover.

Problems with Form 477

The problems with Form 477, which relies on ISP data, have been documented going back years. Earlier this year, the FCC announced it has been working on improving its mapping by collating more granular data and unifying it, with participation from the industry, to help find missing connectivity spots.

The agency has been under fire since allegations emerged that it had used erroneous data from ISPs to provide snapshots of connectivity in rural America. The data, the 2019 allegation goes, was used by chairman Ajit Pai to ostensibly show that millions more Americans were connected to the federal speed standard of 25 Megabits per second download and 3 Mbps upload from 2016 to 2017. That was then corrected in a subsequent press release.

In March, a bipartisan-signed letter addressed to Acting FCC Chairwoman Jessica Rosenworcel called on the FCC to improve and update the existing maps.

Better data methods?

Mike Wilson, vice president of business development for data company CostQuest, argued why the existing data can be lacking and why his firm’s own data is more accurate.

On Wednesday’s live event, Wilson argued that CostQuest’s “Broadband Serviceable Location Fabric” has shown that some areas once believed to be served, according to the FCC 477 census data, are only partially served at best.

According to CostQuest’s data, when using the company’s algorithm, the number of unserved locations increased by almost five million when compared to FCC data.

“Think about how that [bad broadband data] impacts policy making, funding, and build-outs by state,” Wilson said. “What that means economically is that it is going to cost a lot more to serve these locations that are unserved.”

The impact of a vacillating definition of broadband

Brian Mefford, vice president of broadband strategy for Vetro Fiber, pointed to a potential pitfall, in that as efforts to shift the definition of broadband continue to grow, some areas that are currently considered served may drop off the map.

Currently, any network capable of 25 Mbps download and 3 Mbps upload is considered broadband. Some advocates and legislators believe that this definition is not aligned with how Americans currently use the internet and want broadband to be considered any network that is capable of 100 Mbps symmetrical service.

“This creates the need for states to play multi-leveled chess,” Mefford said. He explained that a situation like this could lead to a scramble to figure out who is served, who is now considered unserved, who is deserving of grant money, and how to attract new providers to supply broadband in the state.

Our Broadband Breakfast Live Online events take place every Wednesday at 12 Noon ET. You can watch the July 7, 2021, event on this page. You can also PARTICIPATE in the current Broadband Breakfast Live Online event. REGISTER HERE.

Wednesday, July 7, 2021, 12 Noon ET — “Broadband Mapping is Back!”

Before the conversation of broadband deployment can even begin, accurate broadband maps must exist. Without sufficient mapping data, broadband providers may invest in areas that already have ample coverage, or worse yet, they may overlook areas desperately in need of coverage. Join Broadband Breakfast for a deep dive into the work that goes on behind the scenes to ensure that broadband build-outs are cost effective, future-proof, and able to meet the demands of the people they serve.

Panelists:

  • Brian Mefford, Vice President of Broadband Strategy, Vetro Fiber
  • Mike Wilson, Vice President of Business Development, Costquest
  • Brian Webster, CEO, Wireless Mapping Inc.
  • Drew Clark (moderator), Editor and Publisher of Broadband Breakfast

Brian Mefford joined VETRO with a wealth of experience helping to shape federal and state broadband programs and leading community broadband efforts in rural areas. Prior to VETRO, Brian founded Connected Nation, a nonprofit focused on enriching community broadband access. During his time at Connected Nation, Brian led the spin out of CNX, a platform for establishing public/private broadband network deployment partnerships that provided the nexus at which Brian first met and worked with the founders of VETRO to develop a 5G asset management solution. Brian has worked with government leaders at all levels to advance innovation, providing testimony regularly for state legislatures and the U.S. Congress and consulting with federal agencies including the FCC, NTIA, USDA and the State Department.

Mike Wilson, vice president of business development for Costquest, focuses his consulting efforts in the areas of rural telecommunications policy, universal service funding, interconnection, and operational analysis for wireless, competitive, and incumbent local carriers. Prior to joining CostQuest, he worked at Western Wireless/Alltel. He managed Wireless Interconnection, focusing on carrier negotiations and reducing Cost of Service for Alltel’s wireless business unit. Prior to Alltel’s merger with Western Wireless, his work was related to Universal Service Funding.

Brian Webster has been in the commercial wireless and broadband industry as an RF engineer and GIS/Mapping analyst for 31 years. For the past 19 years he has been a consultant where he worked on the National Broadband Map in the states of Illinois and New York. His broadband data analytics and mapping skills have been utilized by both governmental agencies and grant applications alike.

Drew Clark, editor and publisher of Broadband Breakfast, also serves as Of Counsel to The CommLaw Group. He has helped fiber-based and fixed wireless providers negotiate telecom leases and fiber IRUs, litigate to operate in the public right of way, and argue regulatory classifications before federal and state authorities. In addition to representing public and private providers on broadband issues, Drew is actively involved in issues surrounding interconnected Voice-over-Internet-Protocol service, spectrum licenses, robocalling including STIR/SHAKEN, and the provision of video franchises and “over-the-top” copyrighted content.

Panelist Resources:

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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