Expert Opinion

Christopher Mitchell: Electric Grid Disaster in Texas Leads to Broadband Open Access Soul Searching

Published

2 years ago

March 25, 2021

The author of this Expert Opinion is Chris Mitchell, director of the Community Broadband Networks Initiative at Institute for Local Self-Reliance

The disaster in Texas resulting from an electric grid that was deliberately left exposed and likely to fail in rare cold weather events has received a lot of dramatic coverage, as well it should given the loss of life and damage to so many homes and businesses.

It also raised some questions in my mind regarding competition and designing markets that will be discussed below. Texas was a leader in allowing different electricity firms to compete in selling electricity over the same electric grid, an arrangement that has some similarities to open access broadband approaches.

In digging into that recent electricity history, I made another interesting and relevant finding that I discuss first as part of the background to understand the lessons from Texas. In 20 years of competing models between, on the one hand, municipal and cooperative structures to deliver electricity and, on the other hand, a largely deregulated and competitive market, the munis and co-ops delivered lower prices to ratepayers.

Electricity deregulation, Texas style

More than 20 years ago, Texas largely deregulated electricity markets. Residents still have a monopoly in charge of the physical wire delivering electricity to the home, but they could choose among various electricity providers that would effectively use the wire and charge different amounts, differentiating themselves via a variety of factors, including how the electricty was produced.

However, some areas continued to have monopoly electricity providers, including two of the largest public power providers in the nation, San Antonio’s CPS and Austin Energy, among others as well as several rural electric cooperatives.

For 20 years, Texas has conducted an informal test between unregulated market competition and local providers that are democratically accountable to their customers. The Wall Street Journal is the latest of many over the years to study the numbers and dispassionately annoint the munis and cooperatives the winners.

None of this was supposed to happen under deregulation. Backers of competition in the electricity-supply business promised it would lower prices for consumers who could shop around for the best deals, just as they do for cellphone service. The system would be an improvement over monopoly utilities, which have little incentive to innovate and provide better service to customers, supporters of deregulation said….

From 2004 through 2019, the annual rate for electricity from Texas’s traditional utilities was 8% lower, on average, than the nationwide average rate, while the rates of retail providers averaged 13% higher than the nationwide rate, according to the Journal’s analysis.

The findings are similar to a 2015 report from the Texas Coalition for Affordable Power, covered by the Texas Tribune:

But from 2002 to 2013, the average household in deregulated areas paid a total of about $4,800 more than residents of cities — like Austin and San Antonio — served by just one municipal utility, or those served by electric cooperatives, the analysis said.

Not just a question of price

This isn’t the first time we at ILSR’s Community Broadband Networks team have looked at electricity. Given that many of the arguments against municipal broadband are identical to arguments against public power more than 100 years ago, we like to look at the 100+ years of empirical evidence that local governments can handle these responsibilities.

Many studies looking at prices and reliability have found public power to be at least as good as the big investor-owned utilities, and often better. Back in 2011, I wrote about Connecticut Light and Power compared to Norwich, Connecticut after a storm demonstrated the benefits of community ownership.

Norwich had far fewer customers lose power, and they regained service more quickly than the investor-owned utility. It led to the New York Times digging into the two companies’ budgets to seek answers.

In contrast to Connecticut Light and Power, Norwich’s electric unit last year increased operations and maintenance spending by 11 percent, to $2.9 million. Put another way, in 2010 Norwich allocated about $132 a customer to this line item in its accounts. Connecticut Light and Power reported maintenance, unadjusted for deferred expenses, of $96.5 million, or around $78 per client.

We generally see networks that are directly accountable to their customers doing a much better job, not just in price but all-around value.

Lessons for designing markets competitively

The competitive market was supposed to deliver far lower prices to consumers. As several have stated, including ILSR’s very own energy expert, John Farrell, what it mostly did was allow electricity companies to introduce the tricky and opaque billing practices common among the national cable monopolies to what had been a fairly transparent market.

A 2019 Houston Chronicle article, “Analysis: The Murky and Confusing Texas Electricity Market” sheds some light:

But the shopping site became overwhelmed with offerings. Some companies offered more than 30 plans that were hard to distinguish from each other. Several retail electric providers began offering multi-tiered electricity plans with low teaser rates designed to catch the attention of shoppers, only to have those who signed up learn too late that using one kilowatt hour above a certain threshold would send the advertised price soaring by as much as 10 times.

Other companies offered “free nights and weekends” plans that could cost consumers more because of much higher weekday rates. One company offered a $600 bill credit for a two-year plan that would ultimately cost customers twice as much as another plan offered by the same company.

It is worth nothing that Texas was not solely seeking lower prices, but also incentives to encourage customers to shift their electricity use away from peak times, especially in the summer. Some companies have achieved those goals, but reading the investigations suggests that the bulk of energy in the market has been expended trying to fool potential customers with opaque pricing.

What this means is that rather than technical or other useful progress, the main innovation was in the form of legalized fraud or trickiness. Companies often competed in how they could fool people into signing up, though they would pay more. This is one of the biggest complaints people have today about telecommunications bundles that are hard to understand and often change price without adequate warning.

Open access broadband networks

As more municipal networks explore and iterate on open access models, proponents need to consider some of the recent lessons learned from Texas. To date, most ISPs on open access networks are earnest, small local companies with a variety of reasons to enter the business, though maximizing wealth extraction has not been one of them.

To my knowledge, I don’t see these shenanigans on UTOPIA despite it passing 120,000 premises. But what happens when open access networks pass 2 million potential users? Or 10 million?

I hope this issue won’t even arise, in part because I would expect the local ownership of the network to produce more accountability than a state or federal agency. But it wouldn’t hurt to have some rules regarding transparency of pricing or some mechanism to ensure the competition on these networks doesn’t devolve to harmful games.

These cable pricing dynamics aren’t just annoying. They are particularly pernicious for the lowest-income households that don’t have the time, and sometimes the literacy, to spend hours digging into complex pricing. Returning to the case of electricity and the Houston Chronicle’s “Murky” story:

“Too many Texans are still overpaying for power,” said Fred Anders, founder of Texas Power Guide in Houston, a website that helps consumers find the lowest cost plans. “And very likely a disproportionate share of them are people who can least afford to overpay and have less time and awareness to navigate the minefield of gimmicks in the electricity market.”

That story also has the interesting nugget that very few people are actively switching providers, which is supposedly the best way to keep prices low. A fatigue seems to set in rather than the kind of enthusiasm that might be expected from the heartiest fans of markets.

This reality is an important reminder when it comes to internet access: I believe people generally want “competition” when they are frustrated with their provider. I don’t think a survey of the subscribers to EPB in Chattanooga or NextLight in Longmont or US Internet in Minneapolis or Sonic in California would reveal much desire for more local competition because users there are happy to pay a fair rate for reliable and straightforward service.

I don’t think people want to spend their time trying to save another $2/month on internet access by checking in on the deals each week to change providers. If that would be all that open access could offer, I will be disappointed. Of course, it may be that for communities that do not want to offer retail service, offering the possibility of choice will result in better outcomes than if they chose a contract with a single ISP, so there are many factors to consider.

People want something that works transparently at a reasonable price. My enthusiasm for open access is very much tied up with the possibility of specialized niche services. Services that we have trouble imagining today because nearly all Americans are locked behind networks owned by corporate monopolies that are not open to innovation. Ammon’s genius is not merely the financial model but the courage to open so much power to users and ISPs. Time will tell if they do anything special with it.

I believe that valuable innovation will come from open platforms, but think the Texas lessons offered a chance to explore why as well as some potential hazards along the way.

Editor’s Note: This piece was authored by Christopher Mitchell, director of the Institute for Local Self Reliance’s Community Broadband Network Initiative. His work focuses on helping communities ensure that the telecommunications networks upon which they depend are accountable to the community. He was honored as one of the 2012 Top 25 in Public Sector Technology by Government Technology, which honors the top “Doers, Drivers, and Dreamers” in the nation each year. Originally published on MuniNetworks.org, this piece is part of a collaborative reporting effort between Broadband Breakfast and the Community Broadband Networks program at ILSR.

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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Expert Opinion

Craig Settles: Believe in the Healing Power of Telehealth

Healthcare organizations are seeing telehealth as an opportunity to enhance connectivity with patients and improve healthcare outcomes.

Published

3 weeks ago

August 28, 2023

Craig Settles

The author of this Expert Opinion is Craig Settles, who unites community broadband teams and healthcare stakeholders through telehealth

Listening to many politicians and National Telecommunications and Information Administration officials, you’d think “broadband” is practically synonymous with “telehealth.” So let’s go with it! Make telehealth front and center, the marketing hook of your NTIA Broadband Equity Access Deployment and Digital Equity Act grant applications.

Do a medical needs assessment of NTIA’s eight populations (target markets): 1) low-income urban dwellers, 2) rural communities, 3) Native American communities 4) veterans, 5) seniors, 6) people with disabilities, 7) those for whom English is a second language, and 8) the incarcerated. Low-income Americans have high rates of heart disease, diabetes, stroke, and other chronic conditions compared to higher-income Americans.

How many people would we help with telehealth and how many people would go home with a computing device? A marketing win-win – attack the disease, attack the digital divide.

By the numbers

The Centers for Disease Control and Prevention reports 4 of 10 adults live with two or more chronic diseases. That’s 103.2 adult human beings. Imagine if we leveraged those $45 billions from NTIA, the thousands of all staff people, and the hosts of volunteers to treat, cure, or prevent chronic conditions?

In 2020, 1,603,844 new cancer cases were reported and 602,347 people died. About 695,000 people in the U.S. died from heart disease in 2021 and the disease costs us about $239.9 billion each year in 2018 and 2019. 37.3 million people have diabetes.

Many more millions suffer from and die from lung disease, strokes, Alzheimer’s disease, obesity, and kidney disease. What’s more, many these of chronic diseases are driven by unhealthy lifestyles – smoking, minimal physical activity, poor nutrition, and excessive alcohol use.

Make sure the numbers include the dramatic disparities. For example, African Americans make up 12% of the U.S. population, but twice as many die from strokes (100,000) as all other ethnic groups combined. Studies have found that Black people between the ages of 45 and 54 die of strokes at a rate that’s 3 times greater than their White counterparts. Being overweight or obese increases your risk of stroke. About three out of four Hispanics are overweight.

Telehealth making a difference: Gilda Radner’s legacy

Gilda’s Club Twin Cities, part of the Cancer Support Community global non-profit network providing free social and emotional support for those impacted by cancer, offers telehealth to medically underserved Minnesota urban and rural residents. The club partnered with telehealth firm Equiva and ISP Infinti Mobile to enroll members in the Federal Communications Commission’s Affordable Connectivity Program, to sign them up for Internet access, and send them tablets preloaded with special content.

“CSC organizes the telehealth content in a way that makes sense for their constituents,” says Beth Strohbusch, head of marketing for Equiva. “Members learn about cancer treatment options, digital support groups, and free psychosocial services if members are having problems with depression.”

Strohbusch believes it’s not just hospitals and support groups pursuing broadband and telehealth. Healthcare organizations, nursing homes, and financial risk-bearing organizations are seeing telehealth as an opportunity to enhance connectivity with patients and improve organizations’ financial and chronic healthcare outcomes.

Jason Welch, Infiniti president, says, “Equiva has a reach we don’t have – the healthcare communities, the cancer support community, those in elder care, the larger healthcare organizations. Infiniti saw a natural, practical fit. The Equiva ACP Connect Program is a practical combination of services that are easily explained. Our customers understand accessing healthcare and related resources from their computers and is the data transport mechanism allowing them to do so.”

The eyes have it

Age-related macular degeneration affects the central part of the retina that allows you to see fine details clearly. AMD causes damage to the macula and results in blurring of your central vision. It is a leading cause of blindness among older Americans and is more common in individuals of European ancestry.

Ocutrx manufactures an augmented reality corrective devices that tackles AMD and doubles as patients’ cell phone with Wi Fi, 4G, and 5G capabilities. CEO Michael Freeman says, “We build circuit board in our headsets that enables them to do everything that cell phones do, control seven cameras, and creates the six degrees of freedom where patients can pose virtual objects out in front of their eyes.”

The user puts on the headset and continually does a field test in each eye. Software signals the device when the user can’t clearly see an object, which triggers the cameras that starts projecting real-time on the lens a live 60-frames/second video. Augmented reality moves pixels from the peripheral to the front of the user and within 13 milliseconds the user can see the object.

Ocutrx has a headset for patients with chronic disease. Patients and their doctor each has a headset and cell phone capabilities for talking real time over an encrypted network. This headset measures temperature, respiratory rate, heart rate and other readings. Freeman adds, “Its camera can be disconnected so you can show the doctor your arm or leg.” To treat ‘lazy eye’, AI in the headset let’s patients play a game virtually. It frosts the lens of the good eye and makes the lazy eye work harder and tracks how well the eyes work together when they’re doing the exercises.

The fruits of telehealth

Telehealth vender Fruit Street delivers digital therapeutics for addressing bad habits that have medical consequences. CEO Laurence Girard says, “digital therapeutics may be programs that deal with sleep, stress, and resiliency, others may focus on opiate addiction or general mental health.

One in three adults have prediabetes in which someone’s blood glucose (sugar) level is too high but not high enough yet for a diagnosis of type 2 diabetes. Fruit Street’s Digital Diabetes Prevention Program combines group telehealth sessions, wearable devices, and dietary tracking in the vender’s mobile application. Besides lowering the risk to develop type 2 diabetes, the program can also lower the risk of having a heart attack or stroke, improve health overall, and help subscribers feel more energetic.

Consider nonprofits marketing core digital therapeutics within a community. Imagine teams of “Life Changers” whose main goal is to embed broadband, smart home, cloud, and telehealth infrastructure that keeps residents healthy while reducing asthma, diabetes, hypertension, and other chronic illnesses.

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. This piece is exclusive to Broadband Breakfast.

Expert Opinion

Kristian Stout: Red Tape and Headaches Plague BEAD Rollout

States must overcome numerous hurdles before BEAD will be able to succeed.

Published

1 month ago

August 18, 2023

Broadband Breakfast Staff

The author of this Expert Opinion is Kristrian Stout, director of innovation policy at the International Center for Law and Economics

As part of the $1.2 trillion Infrastructure Investment and Jobs Act that President Joe Biden signed in November 2021, Congress allocated $42.45 billion to create the Broadband Equity Access and Deployment program, a moonshot effort to close what has been called the “digital divide.” Alas, BEAD’s tumultuous kickoff is a vivid example of how federal plans can sometimes become a tangled web, impeding the very progress they set out to champion.

In the weeks since the BEAD initiative was rolled out by the National Telecommunications and Information Administration, state officials have been voicing mounting concerns over what they see as bureaucratic roadblocks to implementation. Tamarah Holmes, director of Virginia’s Office of Broadband, recently called BEAD “the most burdensome federal program” she’s ever encountered. Given that she previously worked for the U.S. Department of Housing and Urban Development, an entity notorious for extensive bureaucracy, that’s saying something.

One frequently cited problem has been NTIA’s preference for fiber-optic connections, which finds itself in tension with realities on the ground. While fiber connections often provide the best solution, implementing them can be challenging in rough terrain and remote areas. Other technologies like fixed wireless and satellite often make better sense in such territories. Here, the one-size-fits-all approach that NTIA has preferred is proving detrimental to a more tailored, location-based strategy.

This should not be news to NTIA. As Sen. John Thune, R-S.D., and his colleagues noted in April, states must overcome numberous hurdles before BEAD will be able to succeed—from labor stipulations that are more prescriptive than inclusive to the program’s inexplicable favoritism for government networks over private enterprises. Coupled with requirements like the middle-class affordability option, which will essentially function as a form of rate regulation, the entire implementation push has been creaking under the weight of its own red tape.

In its initial notice of funding opportunity, NTIA also required a preference for noncontract labor when an internet service provider rolls out a network. Unfortunately, there are not nearly enough fiber-optic technicians available in the United States to keep up with the demand created by BEAD. Thus, creating impediments to quickly bringing technicians online only saddles the program with further costly problems.

So, where does this leave America’s ambitions of broadband equity and access?

For one, there’s a compelling need to reassess the BEAD initiative’s guiding principles. The rigidity that’s currently the program’s hallmark needs to be replaced with adaptability. Each state, with its unique geography and challenges, should be given the flexibility to chart its own digital course. The federal role should be that of facilitator, not gatekeeper or, worse still, roadblock.

Moreover, implementation should be guided by a principle of technological neutrality; preferences for particular technologies simply do not make sense. Above all, realities on the ground must shape deployment strategies, not overarching directives that may be disconnected from the local context. The impending workforce challenges must also be addressed proactively. The most obvious solution would be to remove requirements that frustrate the onboarding of technicians as expeditiously as possible.

America’s broadband aspirations will only be realized through a commitment to adaptability and putting the demands of reality ahead of political preferences.

Kristian Stout is the director of innovation policy at the International Center for Law and Economics. This piece is exclusive to Broadband Breakfast.

Expert Opinion

Scott Sampson: How Fiber Can Build a Work Culture in a Remote World

Greater reliable and secure broadband bandwidth is necessary to support a quality remote culture and work environment.

Published

1 month ago

August 15, 2023

Broadband Breakfast Staff

The author of this Expert Opinion is Scott Sampson, CEO of Fiber Fast Homes

With the increased popularity of working remotely, organizations are being challenged to create and maintain a positive culture in a virtual environment. While elements of creating a strong, collaborative work culture have not changed, technology has taken on a more vital role during the surge in remote work.

A core necessity needed to support remote workers is high-speed Internet connectivity. Remote workers count on their Internet service provider to deliver the connectivity needed to keep up with and manage the applications required to have a successful workday in a remote environment. Fiber Internet is the best solution to provide the “enterprise-level” performance and reliability needed to support this paradigm shift.

Why is a strong remote work culture important and what are best practices?

Just like the work culture in the office, there are many benefits to developing a work culture that considers the remote nature of the environment:

A strong and consistent remote work culture can unite employees and give them a shared sense of purpose.
Remote work culture prepares organizations for future success.
Remote work culture can build long-term relationships using the right environment.

Since the pandemic, companies have been working hard to create a remote work culture and a lot of best practices are coming out of that work:

Create an environment of trust — To create a healthy remote work company culture, it’s important to communicate all the high-level decisions with teams to show employees that they are trusted completely to manage their work and are not being left out of the conversation just because they are not in the office.
Share the company’s mission and goals — Creating an optimum and high performing remote teamwork culture becomes easier when everyone understands the mission and goals an organization is trying to achieve. It can work as a constant reminder for employees to always know what they are trying to accomplish as a team.
Define the company’s remote work policy — Remote work or flexible work can mean different things to different people. As a result, a company needs to be as specific as possible about the organization’s remote work policy so the employees know exactly what to expect. More clarity will only lead to smoother remote work and better culture.
Make face-to-face meetings a priority — While there is no replacement to meeting your team members directly, regular video calls can help close the communication gap. Team managers should hold regular one-on-one meetings with employees to build better connections, establish trust, and celebrate their individual accomplishments. Another simple thing — encourage team members to switch on their video during team meetings. Face-to-face communication helps workers get to know each other in a better way.
Collect regular feedback and make changes accordingly — It is always a good idea to ask remote employees for their feedback regularly so that they can tell you what’s working for them and what just isn’t. Many are new to the remote work culture so feedback is invaluable.
Use the right tools — The long-term success of remote work also depends on whether you’re using the right tools to manage work. Such things as video conferencing, a digital workplace platform for collaboration, or instant messaging are essential to supporting the remote culture workers’ needs. Having the right tools makes a difference, but just as important is having high performing bandwidth to make those tools perform optimally.

Broadband connectivity is the technological backbone for building a remote culture

All kinds of technology tools are popping up to better support the remote worker from online video conferencing to digital workplaces to cloud-based data management tools. As a result, greater broadband bandwidth that is reliable and secure is necessary to support the delivery of a quality remote culture and work environment. There are four reasons why:

Performance Needs to Be Comparable to That in the Office – Just because one is remote doesn’t mean poorer network performance than the enterprise is okay. Companies are demanding commercial grade Internet performance at home, too.
Remote Enterprise Applications Demand More Bandwidth — New, advanced applications requiring greater network speeds that could only be available at the office need to be attainable by remote workers.
Scalability Is Paramount — Broadband connectivity needs to be able to scale as more remote workers require access and applications require greater bandwidth and performance.
To Duplicate In-Person Culture, Bandwidth Needs to Do More — Bandwidth needs to be fast enough to support technologies that can more closely duplicate in-person culture, such as AI, real-time interactive streaming, and human resources applications that analyze unique types of data about the employee experience and interaction, often in real time.

While technological innovations will continue to change and improve the cultural experience for an organization regardless of where an employee works, the demand for higher performing, more reliable, and more secure bandwidth will be needed. Fiber is the only technology that can meet these demands today and scale to meet even greater demands in the future.

Scott Sampson is an experience executive with extensive knowledge in all aspects of telecommunications and IT and is one of the industry’s leading experts on fiber to the home. He has worked with companies such as Arrow Electronics, ULA, and Rio Tinto, as well as a successful sale of a company he co-founded. Sampson is known for building high-achieving teams. This piece is exclusive to Broadband Breakfast.