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Expert Opinion

SmartGrid: Moving Toward Regulatory Uniformity

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Expert Contributors: Stephanie A. Joyce, Esq. and Stephen Thompson, Esq. 

WASHINGTON, November 18, 2011 – The development of SmartGrid technology, which generally refers to devices that monitor, and possibly control, energy use via telecommunications-enabled devices, is proceeding apace, though not as quickly as many had hoped or anticipated.

At the most recent Broadband Breakfast that was focused on SmartGrid, panelists were in agreement that among the reasons for this slow development is the lack of regulatory uniformity at the state level regarding how SmartGrid-related services are treated and, more specifically, how SmartGrid-related costs are recovered.  According to the panelists, until energy companies sense some degree of regulatory support for SmartGrid, coupled with a relatively normalized set of costing rules, the deployment and offering of SmartGrid will remain limited.

It appears that many states already have heard the call of industry on this matter.  According to research conducted by the Edison Electric Institute, in the last two years, several state commissions have adopted rules and orders focused on SmartGrid ratemaking.  These commissions have recognized the need to incentivize energy companies, through favorable cost recovery mechanisms, to invest in the network facilities and devices SmartGrid requires.  The possibly unwitting result is that a significant degree of regulatory uniformity is spreading across the country.  Today’s status quois not perfect, but it’s a start.

Through either general rulemakings or company-specific rate cases, the commissions of many states have decided to permit energy companies to recover SmartGrid costs through their rates, with some limitations.  These states include California, Colorado, Illinois, Massachusetts, New Jersey, and New York.

Some states, such as California and Colorado, limit the amount of recoverable investment to the figures presented in the companies’ initial SmartGrid plans.  Illinois, in reviewing Commonwealth Edison’s proposed “Advanced Metering Pilot”, identified specifically which costs the company may amortize within its rate design.  New Jersey and New York are allowing companies to recover costs through existing mechanisms.

Still other states, such as Delaware and the District of Columbia, have approved the concept of cost recovery for SmartGrid in theory, and will determine specifically which costs may be passed through, and to what degree, in forthcoming rate cases.

In all, 21 states have agreed that some portion of the costs associated with SmartGrid facilities may be recovered through rates, whether base energy rates or specific surcharges (of these, Montana will permit NorthWestern Energy to begin pass-through in 2013).

This permission has been withheld, in some instances, from certain companies whose applications were deemed incomplete or implausible, but these states at least have accepted the concept of SmartGrid cost recovery as a reasonable policy choice.  At this time it appears that, of the state commissions that have addressed the issue, only Indiana and Nevada have not approved some form of cost-recovery mechanism for SmartGrid.

Unfortunately, about half of U.S. states have not yet addressed SmartGrid ratemaking.  The considerable work done by several other state commissions may spur those states to action, and certainly their decisions can be instructive examples to states that will tackle these issues in the future.

The more regulators display an understanding of the need to address SmartGrid costs and rates, the more comfortable the industry will be that they can invest in this technology safely and profitably.

Broadband Mapping & Data

Garland McCoy: How Your State Can Defend Its Broadband Maps for Maximum Funds

Crowdsourced and bulk data are subject to a challenge process that has successfully eliminated crowdsourced data in the past.

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The author of this Expert Opinion is Garland McCoy, Co-Founder and Executive Director of PAgCASA

On September 15, 2022, the Federal Communications Commission’s Broadband Data Task Force issued a public notice on “Specifications for Bulk Fixed Availability Challenge and Crowdsource Data.”

The notice provided guidance for filing bulk challenges, and bulk crowdsource data, to fixed broadband availability data that will be published later this year by the FCC as part of its new Broadband Data Collection. According to the notice, “individuals and entities, including consumers, state, local, and Tribal governmental entities, and service providers,” can submit challenges to the BDC fixed broadband availability data for single locations, as well as “bulk” challenges with respect to multiple locations.

Historically, Internet Service Providers have effectively used the FCC’s challenge process to disqualify the vast majority of disputes brought forward by states, counties, and other complainants regarding FCC’s broadband maps. And frankly, this will be the case again unless states take a new tack to validate their own data in such a way that will stand up to ISP challenges. Given the enormity of the federal broadband funds available to states this time around, the stakes could not be higher; that is, a single state could forgo hundreds of millions of dollars of federal broadband funds due to insufficient preparation to challenge-proof its data.

Here are two observations to start:  1) The ISPs are correct in challenging the data if the data is corrupted or incapable of being validated, and therefore should be disqualified. 2) the FCC and the ISPs must now be seen as embracing the new “crowdsourcing” challenge process since the Broadband Data Act of 2020 was very specific in requiring that the FCC’s new data gathering methodology include third-party crowdsourced data. That said, third-party “crowdsourced” and “bulk” data are subject to the same challenge process that has successfully eliminated individual and crowdsourced data in the past.

Three ways ISPs successfully challenge and disqualify third-party data

Alone, or in combination, the following three scenarios have succeeded year after year in ensuring that third-party data, crowdsourced or otherwise, has not made it past the challenge process and onto the FCC’s approved maps.

  • Was the speed test launched from a device wirelessly? Modern modems set up a Wireless Area Network around the premises over the one or two Wi-Fi channels allocated. Almost all devices are now connected wirelessly to the modem. A wireless launch of a speed test, e.g., from your laptop or smart phone, therefore affects/corrupts the network speed test and disqualifies the data.
  • Was the on-premises modem “still” when the speed test was taken? By “still” the ISP is referring to the modem’s management of data coming from any device remotely or over cable, ethernet connection, during the time of the test. For example, if a family member is working on their laptop, e.g., doing homework, the modem’s management of the data from the laptop will affect a speed test taken during that time. This will disqualify the speed test data.
  • Was the crowdsourced and or bulk data drawn exclusively from the ISP’s premium service customers? The FCC stipulates that the speed testing data must be drawn from an ISP’s customers who have purchased the service provider’s best available service package. A customer might not need or be able to afford FCC’s “broadband” minimum service of 25/3 mbps, and thus would purchase a less expensive, slower service package offered by the ISP. For purposes of accurate speed testing, the ISP should not be penalized for offering true broadband-speed service that is passed over by a customer seeking a cheaper service.

PAgCASA, the Precision Ag Connectivity & Accuracy Stakeholder Alliance, is a non-profit organization whose sole purpose is to ensure broadband map accuracy, connectivity, and rural prosperity, stands ready to help states get their full share of federal broadband funds and successfully defend against challenges.

PAgCASA’s on-premises, cybersecure, network monitoring methodology – which deploys the same network monitoring devices the major ISPs use, on wired/ethernet-connected customer modems, from a volunteer pool of an ISP’s premium service customers selected using standardized random sampling methods – will, in fact, address all the challenge issues above and generate data ready for potential litigation.

As noted in another recent article on Broadband Breakfast, states like Georgia and North Carolina are finding significantly fewer served locations based on their latest state broadband data compared to FCC’s most recent Form 477 data. We expect to see similar differences across the country as states and the FCC bring forward their latest respective data.

Consider this: a ten percent delta between the FCC and state maps translates into a staggering $4 billion based on an overall federal broadband infrastructure spend of $40 billion – needed funds that will not make their way to genuinely unserved or underserved communities across the country.

Our nation can and must do better.

Garland T. McCoy, Co-Founder and Executive Director of Precision Ag Connectivity and Accuracy Stakeholder Alliance, is a long-time non-profit veteran in the fields of technology and telecommunication policy having served as Founder and CEO of the Technology Education Institute & Technology Policy Institute.  Garland was recently an adjunct professor at Syracuse University’s iSchool, teaching information policy and decision making. He can be reached at garland.mccoy@pagcasa.org 

Broadband Breakfast accepts commentary from informed observers of the broadband scene. Please send pieces to commentary@breakfast.media. The views reflected in Expert Opinion pieces do not necessarily reflect the views of Broadband Breakfast and Breakfast Media LLC.

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Expert Opinion

Paul Atkinson: Why Fiber Trumps Satellite When Bridging the Digital Divide

On the surface, satellite seems like the ideal way to close the rural-urban digital divide.

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The author of this Expert Opinion is Paul Atkinson, CEO of Optical Networks of STL

The Grand Canyon in Arizona is 18 miles across at its widest point. The only thing wider is the digital divide between the state’s rural and urban areas. Roughly 99% of urban Arizonans have access to fixed terrestrial broadband services that deliver at least 25 Megabits per second (Mbps) down and 3 Mbps up, according to the FCC’s 2021 Broadband Deployment Report . Only 66% of its rural residents do.

Arizona isn’t an anomaly, either. Nearly 99% of all urban Americans have access to broadband versus 82.7% of rural residents.

This problem also is a business opportunity, which is why so many vendors and service providers are positioning their technology of choice as the best way to bridge the digital divide. The main contenders are satellite, fiber, Wi-Fi and fixed wireless access that uses 5G cellular. Each has its strengths and weaknesses.

For example, 5G FWA requires building hundreds of thousands of base stations in remote areas that might be home to only a handful of homes and businesses — a buildout that likely would take years and tens of billions of dollars. That’s a difficult investment to recoup and make profitable.

That’s simply not a viable business model, as a US Cellular white paper acknowledged: “ Our economics require approximately 500 subscribers to build a new tower, and we can’t assume that everyone will adopt the service. The cost of building and maintaining a tower in rural America can be nearly twice as expensive as building a tower in an urban area.”

Satellite and fiber have emerged as the top two contenders. On the surface, satellite seems like the ideal way to close the rural-urban digital divide because it doesn’t require hundreds of thousands of base stations. But satellite has its share of technological and business limitations, too — to the point that in August, the FCC rejected SpaceX’s application for Rural Digital Opportunity Fund (RDOF) subsidies.

FCC Chairwoman Rosenworcel questioned whether it was affordable to ‘subsidize ventures that are not delivering the promised speeds or are not likely to meet program requirements, especially when consumer would have to purchase a $600 dish.

Rural America’s high-fiber diet

The FCC’s rejection of SpaceX/Starlink is not a setback in bridging the rural-urban digital divide. It’s actually a milestone toward parity because it ensures that an unproven technology doesn’t divert scarce public subsidies from a proven one.

As Gary Bolton, Fiber Broadband Association president and CEO rightly stated, this is a huge victory for 640,000 families who were relegated to Low Earth Orbit Satellite service. They could have been redlined from being eligible for fiber broadband. There is now clarity and a path forward for fiber to bridge the digital divide.

Fiber has already proven its worth in rural America, where it has 23% of the broadband market and the highest customer satisfaction of all internet-access technologies, according to a 2021 Pivot Group study . By comparison, fixed wireless and satellite have only 10% and 6% penetration, respectively. Cable has the largest share of the rural market, but many customers find it lacking: One third say they want faster speeds.

In fact, broadband speed is a decisive factor when people are deciding where to relocate. According to the 2022 RVA Market Research & Consulting study “A Detailed Review: The Status of U.S. Broadband and The Impact of Fiber Broadband,” 47% of the people who moved to a rural area in the past year chose one where fiber-to-the-home service is available. That preference highlights how rural communities can use fiber to attract retirees, young professionals, families, entrepreneurs and other demographics looking to escape to the beautiful countryside.

Fiber’s 23% share of the rural broadband market also busts the myth that as a wired technology, it takes too much time and money to deploy in sparsely populated areas, including those with challenging terrain such as mountains. Another wired technology — electricity — overcame those challenges 86 years ago with passage of the Rural Electrification Act , which funded utility cooperatives that built out transmission and distribution networks to serve farms, ranches, small towns and other rural places.

Today, more than 250 of those co-ops have built or are planning broadband networks, according to the National Rural Electric Cooperative Association . Many have been in service for the better part of a decade — or longer. For example, in 2006, Blue Ridge Mountain EMC launched FTTH in Georgia. In 2019, it deployed a 7,000-foot line up a mountain, using drones to overcome challenges such as deep gorge and 100-foot-tall pine trees. In 2016, Elevate Fiber, a division of Delta-Montrose Electric Association, launched gigabit FTTH in two Colorado counties by overlaying fiber on its 4,000 miles of distribution lines.

Co-ops are just one example of how fiber isn’t just poised to bridge the rural-urban digital divide. It already is. That’s great news for rural Americans, who don’t have to wait on unproven, pie-in-the-sky technologies such as satellite.

Paul Atkinson is Chief Executive Officer of Optical Networks for STL. This Expert Opinion is exclusive to Broadband Breakfast.

Broadband Breakfast accepts commentary from informed observers of the broadband scene. Please send pieces to commentary@breakfast.media. The views reflected in Expert Opinion pieces do not necessarily reflect the views of Broadband Breakfast and Breakfast Media LLC.

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5G

Johnny Kampis: Wireless Survey Shows 5G’s Role in Closing Digital Divide

5G has experienced a quantum leap in growth since it first began rolling out in 2018.

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The author of this Expert Opinion in Johnny Kampis of the Taxpayers Protection Alliance

There was universal consensus that 5G wireless technology would be a game changer for closing the digital divide. The question was whether or not private investment would be enough to deploy the needed infrastructure. A new report shows that capital expenditures from wireless providers reached a record high in 2021, as 5G saw tremendous growth and will continue to help connect households now unserved by broadband.

CTIA’s 2022 Annual Wireless Industry Survey shows that wireless providers invested $35 billion into growing and improving their networks, the fourth consecutive year of industry growth.

CTIA said this is “a powerful trend that emphasizes the societal importance of wireless connectivity and underlines the industry’s commitment to building a robust platform for innovation that connects all communities.”

5G has experienced a quantum leap in growth since it first began rolling out in 2018, as infrastructure reforms that eased deployment barriers have resulted in 5G growing twice as fast as 4G. Since the Federal Communications Commission and state legislatures worked to modernize key siting regulations that could have stymied the technology’s growth, wireless providers have added 70,000 active cell sites. There are now nearly 420,000 operational cell sites across the U.S.

As CTIA notes, “More cell sites enhance coverage, encouraging adoptions and helping to close the digital divide.”

Clearly consumers want faster mobile internet speeds as the number of connective 5G devices grew more than a whopping 500 percent this past year from 14 million to Accenture 85 million. About one-third of American now possess an active 5G device.

CTIA points out that the number of connections that require wireless technology is helping fuel the growth – everything from smart watches to medical sensors. Such data-only devices represent about 42 percent of all wireless connections.

Wireless providers have invested nearly $121 billion into their networks since the launch of 5G.

CTIA notes that in an age of incredible inflation, the wireless industry’s investment, combined with increased market competition, has led to lower prices, “providing a welcome contrast to an economy where consumers have faced priced increases for 94 percent of tracked goods and services nationwide.”

Since 2010, the cost of unlimited data plans has declined 43 percent while wireless speeds have increased 85-fold over the same period.

Investment and competition have also led to new innovations such as 5G for home broadband and 5G fixed wireless. The latter is particularly useful in connecting rural areas where it’s hard to make a business case for fiber due to the cost of the last-mile connections. CTIA notes that 5G home broadband is available in more than 40 million households, providing home connections via spectrum with high capacity and low latency rather than a wired connection.

The report also points out that 5G is helping mitigate the impacts of climate change by creating green jobs in key industries. Accenture has found that 5G-enabled use cases should delivers 20 percent of the U.S.’s emission reduction targets by 2025.

5G is clearly helping usher in a new age of connectivity in this country. CTIA’s statistics are encouraging signs that the latest wireless technology is helping make broadband access available to more Americans than ever before. The best part of this growth is that taxpayer dollars are not being spent.

Johnny Kampis is director of telecom policy for the Taxpayers Protection Alliance. This piece is exclusive to Broadband Breakfast.

Broadband Breakfast accepts commentary from informed observers of the broadband scene. Please send pieces to commentary@breakfast.media. The views reflected in Expert Opinion pieces do not necessarily reflect the views of Broadband Breakfast and Breakfast Media LLC.

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