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Bruce Mehlman: It’s Fitting that Congress is Focused on Accelerating Our 5G Future

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At the beginning of a new Congress, there’s generally an exciting, hopeful spirit, even after the bitter partisanship of the past election.  The issues that new committee chairs choose to focus on upfront are a good indication of their priorities and where they believe progress can be made.

In telecommunications, therefore, it’s promising that Senator Roger Wicker, the new Chairman of the Senate Commerce Committee, opted to begin his tenure by focusing on the need to support and accelerate deployments of 5G technology – the exciting next generation of mobile technology that promises exponentially faster speeds (up to 100 times faster than today’s 4G) and will enable innovations such as truly connected cars and smart cities. Some companies have already begun deployments of 5G, and more are coming this year to dozens of cities across the country…but the real wave will start hitting only in future years.

Make no mistake: these deployments will come from the private sector, not government.  With trillion-dollar deficits and trillions more needed for roads, bridges, air traffic control and other infrastructure improvements, government doesn’t have the hundreds of billions of dollars to make these deployments. But even if policymakers were willing to continue ignoring deficits, the private sector would still be better able to target these resources to national needs, as they have with previous generations of telecommunications infrastructure.

Which is not to say policy makers have no role. To the contrary, government is essential for encouraging and accelerating the massive investments in and deployments of 5G, and they have many methods at their disposal.  First, and most important, policy makers need to identify spectrum that can be used for 5G and then make that spectrum available to innovative companies.  Some of this spectrum will be new; other spectrum will come through repurposing spectrum currently used for other purposes.

Congress took a big step in this regard last year by requiring the FCC to identify 30 megahertz of low-band spectrum suitable for 5G.  Now, the focus must shift to mid-band spectrum, where the properties of 5G can truly shine and where most 5G communications will actually occur – if we get the spectrum.

Other nations, including major economic competitors such as Japan, South Korea, Germany, and the UK, are already allocating mid-band spectrum for their users.  China – our principal competitor in the global race to 5G – has committed to 460 MHz of this valuable spectrum for its three operators.

The U.S. needs to catch up, quickly.  The FCC is looking at repurposing up to 500 megahertz of spectrum for 5G in the “C-Band,” a mid-band spectrum range. This can move forward in a bipartisan manner.  Because 5G is so much more powerful than the previous generations of mobile technology, the needs for spectrum to take advantage of 5G’s potential are likewise more complex.

Congress can help by passing the AIRWAVES Act, a bipartisan bill introduced in the last Congress which would establish a schedule for future spectrum auctions over the next five years to help ensure U.S. preeminence in 5G.

It matters who wins the race to 5G.  The country that gets there first will be able to set standards for this vital technology with implications for all American industries, from automotive to healthcare, in addition to our national defense.  China is already staking out a claim for global leadership in 5G – the first time that our preeminence in mobile technology has been seriously challenged.

That’s why it’s so important to act now, to have a predictable schedule of spectrum so private sector operators will invest the hundreds of billions of dollars necessary.

Accenture estimates that U.S. operators will invest $275 billion to deploy 5G, with an economic benefit of $500 billion.  But these investments and benefits only happen if markets know the spectrum will be there.  Because of the unique nature of 5G, those investments will benefit every corner of our country.

The switch to 5G technology can transform our lives.  The ability for connected cars to send and receive information, for instance, can help avoid school bus accidents and give safer driving experiences.  Getting all this right will be extremely important for the future of our economy and our global leadership.

During a recent hearing, Senator Wicker said that “we need to be the leader in 5G globally.”  He’s right. The time to act is now.  It’s a good first step this year and a good signal to hold this hearing so early in the Congressional session.  I hope the AIRWAVES Act will be reintroduced in this Congress and enacted quickly.  Let’s get this done, in a quick win for the new Congress and a big win for the American people who will benefit from a faster transformation to 5G.

Bruce Mehlman is a founding co-chairman of the Internet Innovation Alliance and previously served as assistant secretary of commerce for technology policy.

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

Digital Inclusion

Catherine McNally: The Digital Divide is an Equality Issue

To work toward equal access, more affordable options must be created, including community-based solutions.

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The author of this Expert Opinion is Catherine McNally, editorial lead for Reviews.org

Per the latest U.S. Census numbers, about one in four American households is stuck without internet. And a quarter million people with home internet still listen to the dial up screech when they hop online.

The majority of folks lacking home internet live in states with large rural populations and high rural poverty rates, like Mississippi, Arkansas and Alabama.

In Mississippi, as an example, 60% of homes don’t have broadband, satellite or dial up. And 53% of the state’s population is considered rural with a rural poverty rate of 23%.

Limited options and slow speeds top the list of reasons why rural states are home to high numbers of disconnected households. But steep costs are the most imminent barrier to home internet in rural areas.

According to a 2020 report on worldwide internet pricing by Cable.co.uk, the U.S. is the most expensive country for internet out of all developed Western nations. Here, internet costs an average of $60 a month. Internet in the cheapest country, Ukraine, costs an average of $6.40 a month.

Digital divide deep dive: Issaquena County, Mississippi

Issaquena County is Mississippi’s least-connected county with only 20% of homes paying for an internet connection. The median income there is $14,154 per individual in 2019, compared to a $31,133 national median income. The overall poverty rate in the county is 29%, which is about 16% higher than the U.S. as a whole.

That is a glaring contrast to the most-connected county in the most-connected state: Morgan County, Utah. Morgan County is home to 95% of households with an internet connection, the median individual income there was $37,091 in 2019 and the overall poverty rate is 3%.

Residents of Issaquena County are lucky if they can get download speeds of 25 Mbps, which is the Federal Communication Commission’s current definition of “high speed internet.” The slowest speeds available, 5–12 Mbps, are barely enough to stream in HD, let alone connect to a Zoom call.

If we narrow down our view to Valley Park, a town of just over 100 people in Issaquena County, we see that some residents have the option of a single AT&T DSL internet plan.

The AT&T plan costs $660 a year for speeds of 25 Mbps, which barely keep up with critical modern-day online tools like online learning and telehealth.

Our case study of Issaquena County and Valley Park, Mississippi, highlights further opportunities tied to home connectivity and equality:

  • Access to online learning. About 23.7% of Issaquena County residents have obtained a high school degree, while 3.2% have no schooling. Online education allows individuals to expand their knowledge and further their careers.
  • Greater access to livable wages.5% of residents earn a household income of $10k or less. This is further divided by race: In 2019, Black and African American residents earned a median household income of $21,146, while white residents earned a median household income of $52,188.
  • More employment opportunities. The employment rate in Issaquena County has steadily declined since 1990. Now, 10.6% of residents are considered unemployed.
  • Better access to health care. The U.S. Health Resources and Services Administration found that half of Mississippi’s residents live in counties with more than 2,000 patients per primary care physician. Issaquena County has been designated a Medically Underserved Area since 1978, meaning the county has a shortage of primary care, dental and/or mental health providers. Better access to telehealth also enables residents who cannot make the drive to the nearest hospital or clinic.

Solving the digital divide

To work toward equal access, more affordable options must be created. The Emergency Broadband Benefit fund is one option, but it remains largely untapped by American households. Subsidies like Lifeline may also lower barriers to internet access, but participation remains low.

Community-focused solutions are likely a better answer, such as Land O’Lakes’s American Connection Project. The project opened more than 2,800 free public Wi-Fi locations in spots like the Tractor Supply Store in Spooner, Wisconsin, in order to keep farming communities connected.

Also significant is this year’s infrastructure bill, which calls on states to determine localized needs and strategies for improving affordability and access to the internet.

State sponsored projects may also solve the severe lack of competition between U.S. broadband services. This should reduce costs last-mile providers incur to connect to middle-mile networks, which could, and should, pass savings down to households. Case in point: California recently introduced an open access middle-mile project with the goal of providing nondiscriminatory access. The bill passed unanimously.

A modernized definition of what qualifies as “high speed internet” would also benefit rural households. Currently, the standard of 25 Mbps download speeds and 3 Mbps upload speeds shorts rural users of opportunities tied to telehealth, online learning and remote work.

This outdated definition allows service providers to complete minimum-viable network expansions and mark areas as “connected.” It also de-incentivizes providers to improve existing-but-subpar networks, such as the 10 Mbps DSL line I found offered in nearby Morton, Mississippi.

One thing is clear: The way the U.S. has approached internet access in the past does not work. New strategies and policies are required to repair the digital divide. Internet access is a right, not a privilege in today’s world.

Catherine McNally is an Editorial Lead for Reviews.org, where she reviews internet service providers across the US. She has a passion for using data to highlight the need for better internet access across the US and believes that internet is a critical lifeline in today’s world. She has also published speed test and pricing reports to help everyday consumers make informed decisions. 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 expressed in Expert Opinion pieces do not necessarily reflect the views of Broadband Breakfast and Breakfast Media LLC.

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Education

National Non-Profit to Launch Joint Initiative to Close Broadband Affordability and Homework Gap

EducationSuperHighway is signing up partners and will launch November 4.

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Evan Marwell, founder and CEO of Education Super Highway.

WASHINGTON, October 18, 2021 – National non-profit Education Super Highway is set to launch a campaign next month that will work with internet service providers to identify students without broadband and expand programs that will help connect the unconnected.

On November 4, the No Home Left Offline initiative will launch to close the digital divide for 18 million American households that “have access to the Internet but can’t afford to connect,” according to a Monday press release.

The campaign will publish a detailed report with “crucial data insights into the broadband affordability gap and the opportunities that exist to close it,” use data to identify unconnected households and students, and launch broadband adoption and free apartment Wi-Fi programs in Washington D.C.

The non-profit and ISPs will share information confidentially to identify students without broadband at home and “enable states and school districts to purchase Internet service for families through sponsored service agreements,” the website said.

The initiative will run on five principles: identify student need, have ISPs create sponsored service offerings for school districts or other entities, set eligibility standards, minimize the amount of information necessary to sign up families, and protect privacy.

The non-profit said 82 percent of Washington D.C.’s total unconnected households – a total of just over 100,000 people – have access to the internet but can’t afford to connect.

“This ‘broadband affordability gap’ keeps 47 million Americans offline, is present in every state, and disproportionately impacts low-income, Black, and Latinx communities,” the release said. “Without high-speed Internet access at home, families in Washington DC can’t send their children to school, work remotely, or access healthcare, job training, the social safety net, or critical government services.”

Over 120 regional and national carriers have signed up for the initiative.

The initiative is another in a national effort to close the “homework gap.” The Federal Communications Commission is connected schools, libraries and students using money from the Emergency Connectivity Fund, which is subsidizing devices and connections. It has received $5 billion in requested funds in just round one.

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Broadband's Impact

Steve Lacoff: A New Standard for the ‘Cloudification’ of Communications Services

The cloudification of communications services makes it easy to include voice, data, SMS, and video within any existing service.

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The author of this Expert Opinion is Steve Lacoff, general manager of Avalara for communications

The line of demarcation between what has traditionally been considered a telecommunications service was once very clear. It was tangible – there were wires, end points, towers, switches, facilities. Essentially, there was infrastructure required to relay voice or data from point A to point B.

Today that line is fuzzy, if not invisible. The legacy infrastructure remains, but an industry of cloud-based services that don’t require the physical connections has exploded. Voice, data, SMS, and video conferencing can now be conveniently delivered OTT. Enabled by simple API integrations, businesses can embed just one of these services or a complete communications platform-as-a-service (CPaaS) into an app, service, or product.

Cloudification is a game changer

This “cloudification” of communications services makes it easy to include voice, data, SMS, and video within any existing application, product, or service. These are essential components for many business models.

Consider these services we have come to rely on in our daily lives: food or grocery delivery, ride services, and business and personal communications. These require multiple methods of communication with shoppers, drivers, co-workers, watch party groups, and external business partners.

The exciting news is there is no end in sight. Use cases will continue to evolve and growth will continue to skyrocket. The scale cloud delivery accommodates is massive. These untethered, easy to embed communications services are a critical differentiator for both business-to-business and business-to-consumer buyers, and the lifeblood of the businesses providing both the end user subscriptions and the APIs.

In fact, one industry juggernaut saw H1 YoY video application service demand grow nearly 600% in 2020.

Not surprisingly, as business demand for these services increases smaller CPaaS players continue to enter the market to quickly snag market share. According to a recent IDC study, “the global market revenue for CPaaS reached $5.9bn in 2020, up from $4.26bn in 2019, and is expected to reach $17.71bn by 2024.”

Merger and acquisition activity is aligned with this hockey stick growth forecast. Large telcos, SaaS providers, and even other CPaaS providers are all on the hunt. Whether they want to add additional features to punch up their products or eliminate the competition in a very tight, nuanced market, the end game is clear – as the market expands, the players will ultimately contract leaving only the most competitive offerings.

Don’t let communications tax take you by surprise

One of the least understood risks when adding cloud-based voice, data, SMS, or video conferencing to an existing product or service is new eligibility for and exposure to the complex world of communications taxation. Making mistakes can get costly very quickly.

Here are some of the key pitfalls to keep an eye on:

  • Expanded nexus: Understanding communications tax nexus is different – and exceptionally more complicated – than sales tax. There are approximately 60,000 federal, state, local, and special taxing jurisdictions, each with uniquely complex rules that tend to change at their own pace. Rules are very different for each service.
  • More complex calculations: The more communications services you provide via API, the more complicated communications taxes will be. Each feature can be taxed at different rates in each individual jurisdiction, or the whole bundle can be taxed at one rate. It’s critical to monitor monthly to avoid audit issues.
  • Maintaining overall compliance: Just as tax rates and rules need to be maintained, so must tax and regulatory filing forms in each jurisdiction. Some of these are very long and require significant detail.  They must be filed in a timely, accurate cadence to avoid additional audit risk.

Bottom line: Don’t assume, be prepared! As these communications services become more pervasive a larger swath of technology providers will find themselves liable for communications tax. The more your business falls behind, the more it can cost you.

It pays to be proactive and prepared. Tax and legal advisory experts can help determine your level of risk, and tax and compliance software providers can help you keep up with changing rules and regulations. Don’t underestimate the ongoing value of networking with peers who are either struggling to answer the same questions or have already overcome the hurdles you’re facing today.

Steve Lacoff is General Manager of Avalara for Communications. With a focus on data, VoIP, and video streaming, Steve has spent 15 years in various product and marketing leadership roles in communications and technology industries, including Disney’s streaming services and Comcast technology solutions. Steve now drives business strategy on today’s changing industry landscape and associated tax impacts. 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 expressed in Expert Opinion pieces do not necessarily reflect the views of Broadband Breakfast and Breakfast Media LLC.

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