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Infrastructure

Financials Behind Wireless Infrastructure Industry Remain Strong Despite Pandemic

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Screenshot of M/C Partners Vice President Abhishek Rampuria from the webcast

June 24, 2020 — Amid general economic downturn, shares in publicly held tower companies are holding steady with 2019 levels, a trend that is expected to continue, said analysts and investors speaking at the virtual ConnectX conference of the Wireless Infrastructure Association.

While short term supply chain issues have caused problems for both carriers and infrastructure providers, disrupting rollouts and build cycles, M/C Partners Vice President Abhishek Rampuria was optimistic about long term trends.

“In general, we’ve definitely slowed down on our new investment front and are waiting to see how things shake out over the next six months,” he said. “We think there’s going to be unique opportunities of new deals that come up into the market coming out of this.”

Rampuria and other analysts were speaking during pre-recordings of the ConnectX show that originally launched in May, although new content has continued to go live on the site during the month of June.

Other panelists in the program pointed out less encouraging data, however.

“If I was to play devil’s advocate and be a bit more negative on what we’re seeing as relates to COVID-19, I’d actually made the argument that from a wireless mobile network usage perspective, usage is actually down,” said Colby Synesael, senior research analyst at Cowen.

The coronavirus pandemic has highlighted the importance of carriers teaming up with the right infrastructure providers, said Bo White, vice president of global business development for the Macquarie Group.

“We’re seeing the carriers asking the infrastructure providers to really evolve beyond just steel in the air — they’re asking them to do more and more services,” White added. “That trend was developing before COVID, and we believe that that that trend is going to accelerate post COVID.”

For example, AT&T is actively looking for an increasingly holistic relationship with tower operators, Synesael said.

White predicted that most future industry changes would be an expansion of current agreements, such as altering agreements to allow infrastructure providers to provide additional services.

“The most boring but exciting thing at the same time about the tower industry is that the delta between a good year and a bad year is maybe two or three hundred basis points,” Synesael said. “It’s that limited level of volatility, that defensiveness, that obviously makes the space so attractive.”

Jennifer Fritzsche, managing director of the Equity Research department at Wells Fargo Securities, predicted that small cell deployment would continue to see growth.

“Verizon really has put the majority of their eggs in the millimeter wave spectrum basket — that is best supported with small cells,” Fritzsche said. “I think you’re going to see a lot of money flowing towards small cells.”

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Infrastructure

As Middle Mile Program Deadline Approaches, NTIA Proposes ‘Buy America’ Exemptions

The NTIA is proposing a limited-equipment, limited-time exemption to purchasing American-made products.

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Screenshot of NTIA head Alan Davidson

WASHINGTON, September 27, 2022 – The National Telecommunications and Information Administration is proposing this month a limited 12-month exemption from rules requiring the purchase of American-made telecommunications equipment for applicants to its middle mile program – even as the Friday deadline quickly approaches.

The Infrastructure, Investment and Jobs Act, which was signed into law by President Joe Biden last November, spawned the NTIA’s $1-billion Enabling Middle Mile Broadband Infrastructure Program and included a “Buy America” provision that require domestically purchased materials to make up more than 55 percent of the cost of all components of the project.

But leading up to the September 30 deadline for middle mile program funding, the Commerce agency had been fielding complaints about the provision, stemming from concern that projects will be stalled or incomplete without adequate access to foreign supply. A waiver exemption provision exists in the Build America, Buy America Act.

In the middle of this month, the Commerce agency responded by releasing a proposed waiver document – comments on which are due October 3 – outlining a possible limited exemption to those Buy America preferences. The document said that an initial industry assessment told them that materials for middle mile broadband infrastructure are “not available in the quantity or quality needed for the MMG Program.”

As such, the NTIA is proposing a Buy America exemption for specific equipment including broadband routing, switching and aggregation equipment; microwave backhaul equipment; fiber transport equipment; undersea cable equipment; fixed test equipment; telemetry router and switch equipment; and the construction of fiber optic cable if the optical fibers inside are manufactured exclusively in the U.S.

The document notes that 67 percent of middle mile network device is sourced from Asia; fiber optic cable assembly “generally occurs in Mexico;” and over 70 percent of global semiconductor production occurs in Asia. (President Biden also signed into law legislation that would plow $52 billion toward incentivize domestic manufacturing of semiconductors, but the NTIA said the impact of that is unlikely to be realized for “several years.”)

“We have been talking to the made-in-America office because we do believe that there is reason for us to ask for some kind of waiver on this middle mile program,” Sarah Bleau, middle mile program director, said at an event fielding questions about the program on September 15.

If the waiver is granted, it would apply to all middle mile program money awarded between March 2, 2023 and March 1, 2024.

The document notes that the waiver would allow entities to compete on an “equal footing” for middle mile program funds and allow them to construct broadband projects in a timely manner.

NTIA has been studying issue for months

The NTIA said it had been exploring this issue before it released the notice of funding opportunity – which opened the program for applicants on May 13.

“During the course of that assessment, it became clear that the impact of BABA on the MMG Program would likely be particularly significant, necessitating an approach that acknowledges the non-availability of certain construction materials and manufactured products required for the deployment of middle mile infrastructure on the timeline mandated by the IIJA,” the NTIA’s waiver proposal document said.

“MMG Program awards may be announced as early as spring of 2023 and will require supplies to be available on short timeframes, allowing little time to address supply chain issues,” the document added.

The NTIA would also require waiver grantees to report on their foreign equipment purchases, which the agency said will help “future NTIA grant programs and awards “that also use those items and support market research.

“NTIA will use this information to better understand the market and availability of U.S. products in this supply chain to inform its implementation of the MMG Program as well as its other broadband infrastructure deployment programs,” the document added.

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Spectrum

FCC Spectrum Authority Expires on September 30, Agency Seeks Renewal

FCC Chairwoman Jessica Rosenworcel’s proposal for increased auction authority would allow the agency to support infrastructure investment.

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WASHINGTON, September 26, 2022 – Federal Communications Commission Chairwoman Jessica Rosenworcel urged Congress last week to extend the agency’s authority to conduct spectrum auctions, which is set to expire this week.

“The FCC has held the authority to hold spectrum auctions for about three decades,” Rosenworcel said during a National Telecommunications and Information Administration spectrum policy symposium on September 19.

“It has been a powerful engine for wireless innovation and economic growth.
In fact, using this authority the FCC has held 100 auctions and raised more than $233 billion in revenue”

September 30 will mark the end of Congress’s fiscal year and the expiry of the FCC’s authority. In July, the House Committee on Energy and Commerce passed the Spectrum Innovation Act of 2022, H.R. 7624, which includes an extension of the auction authority through to March 2024.

Spectrum and Next Generation 911

The Spectrum Innovation Act was passed in July of this year, which required the FCC to host a spectrum auction to use $10 billion of allocated funds towards Next Generation 911, an Internet Protocol-based system to replace the analog 911 system.

Implementing NG911 in states and counties nationwide will require the coordination of emergency, public safety, and government entities. 

Urgent Telecommunications reported last week that the Public Safety Next Generation 911 Coalition, a coalition of public-safety associations, said that NG911 would not be available for years.

The coalition requested that NG911 funds could be borrowed immediately from the U.S. Treasury, which would be repaid when the proceeds from the 3.1-3.45 GigaHertz (GHz) spectrum auction are made available.

 

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Broadband Mapping & Data

Kirsten Compitello: The Need for a Digital Equity Focus on Broadband Mapping

Incorporating equitable processes and outcomes from the start is crucial to avoid perpetuating continued inequalities.

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The author of this Expert Opinion is Kirsten Compitello, National Broadband Digital Equity Director at Michael Baker International

Broadband for all is in the spotlight right now, and closing the digital divide is recognized as a national priority. The divide goes far beyond access and touches issues of costs, ownership, culture, awareness, skills, and more. As we enter into a period of major statewide planning and deployment efforts, incorporating equitable processes and outcomes from the start is crucial to avoid perpetuating continued inequalities in access, adoption, and literacy.

Digital equity is not just a value statement: it’s a commitment to inclusive and equitable decision making at every stage of broadband deployment, from planning to service delivery.

Ensuring equitable representation at the table

Embedding digital equity analysis into mapping is especially critical at this moment in time as we prepare for historic broadband funding. This funding is an opportunity to rebalance systemic patterns of exclusion and ensure rapidly deployed planning and implementation funds are fairly dispersed.

The Digital Equity Act provides $2.75 billion to establish three grant programs that promote digital equity and inclusion, including the State Digital Equity Planning Grant Program, a $60 million grant program for states and territories to develop digital equity plans. In creating these Statewide Digital Equity Plans, extensive outreach to and collaboration with underserved, unserved and historically marginalized populations will prove critical. These discussions will be much more informative and effective in guiding successful policies, programs and projects if they are rooted in clear understanding of social, economic and environmental patterns alongside broadband access maps.

Documenting the effects of digital exclusion

Access is not an equal term: reducing it simply to speed of service available neglects the social and economic complexities that determine how and where users are affected by a lack of broadband. In short, mapping where the infrastructure exists only tells part of the story. Data analysis needs to layer in demographic and economic information in order to reveal patterns of exclusion and identify root causes.

To better understand community impacts, our team at Michael Baker developed data visualization tools such as a Digital Equity Atlas which takes the next step toward analyzing how broadband gaps disproportionately impact segments of the population. The methodology looks at Title VI and Environmental Justice data to reveal where poor connectivity correlates to social factors including low income, senior populations, English as a Second Language, households without a vehicle and more. As an example, the Southwestern Pennsylvania Commission leveraged the Digital Equity Atlas to prioritize new broadband expansion projects that stand to benefit the greatest number of at-risk or marginalized households. These households should not be last in line to see broadband investment finally bringing greater connectivity and opportunities to their doorsteps.

Fulfilling Broadband Equity, Access, and Deployment program requirements

Federal reporting requirements for upcoming Investment in Infrastructure and Jobs Act funding call for a proven and documented understanding and analysis of digital equity needs, from planning to projects in the ground.

The IIJA’s Broadband Equity, Access and Deployment Program provides $42.45 billion to expand broadband access by funding planning, infrastructure deployment and adoption programs across the country. Statewide Five-Year Action Plans, funded through this program, will require government agencies and their partners to take an integrated digital equity approach.

From planning through the ensuing reporting requirements, establishing digital equity strategies and a clear rubric for measuring success in achieving digital equity goals is a must for agencies. These entities must demonstrate how projects funded through BEAD improve digital equity. A strong data-driven baseline – such as the Digital Equity Atlas – will be a necessary starting point for agencies to track and monitor the effect of each new deployment on surrounding households. These data-driven metrics will also be a win for state and local governments to tell the story of their successes with clear data to back it up.

Setting a goal for sustainable inclusivity

As the consumption of internet content continues to rise and as broadband for all projects bring connectivity to the unserved, baseline expectations for broadband service and speed will only continue to grow. If we aren’t careful, new categories of have-nots will emerge: for example, those who pay high fees for minimum speeds versus those with lower fees for premier plans and Gig speeds. The currently unserved will gain access to service, but many will continue to struggle with basic internet skills, navigating through complex terms of service, or even simply finding time to schedule installation without missing a day of work.

To create a truly equitable society, everyone – no matter age, ability, location or status – needs access to affordable and reliable broadband; internet-connected devices; education on digital technology and best use practices; tech support and online resources that help users participate, collaborate and work independently.

By grounding our planning in equitable practices from the very first step, we can help to ensure that everyone is able to benefit from Internet for All.

Kirsten Compitello, AICP, is the National Broadband Digital Equity Director at Michael Baker International. 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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