March 3, 2021—Vantage Point Solutions is questioning whether wireless providers can deliver on their contractual obligations following the announcement of $9 billion in federal award for the first phase of the Rural Digital Opportunity Fund.
The concerns, outlined by CEO Larry Thompson in a white paper, relate to the winners’ ability to meet the build requirements.
Since the winners were announced in December, some have claimed that the reverse auction process – which rewards those who can build with the least amount of federal money — has allowed unqualified bidders to win projects they can’t complete in the first place.
The allegation has spawned an array of contretemps in the broadband community. In response, the Wireless Internet Service Providers Association has publicly lobbied the FCC on behalf of WISPA members.
Fred Goldstein, who serves as a technical consultant to WISPA and penned the technical statement that was attached to the document, argued that many of Thompson’s technical assertions were inaccurate.
Hear both sides of the debate at “Broadband Breakfast Live Online on Wednesday, March 3, 2021 — Design, Product and Execution: 3 Essential Steps for Every RDOF Award Winner.” You can also PARTICIPATE in the current Broadband Breakfast Live Online event. REGISTER HERE.
As part of the RDOF process, the FCC divided prospective bidders into performance tiers, ranging from the “minimum” tier of 25 megabits per second (Mbps) download and 3 Mbps upload speed, up to the “gigabit” tier delivering speeds at 1 Gigabit per second (Gbps) download and 500 Mbps upload. The 1000 Mbps download speeds of the gigabit tier should theoretically be 40 times faster than the 25/3 minimum tier.
Vantage Point says wireless providers cannot maintain claimed speeds
Thompson’s primary contention is that consumers should be able to simultaneously utilize 1 Gbps download and 500 Mbps upload—a feat he asserts many wireless providers have not demonstrated can be reliably achieved. This is due to the ever-increasing number of connected devices consumers use on a daily basis.
“You’re not going to be able to sit and coordinate which [devices] are downloading and which ones are uploading at any given time—those things happen simultaneously,” Thompson stated. “I believe the FCC’s intention was that when they say that we have a broadband pipe of one [Gbps] down and 500 [Mbps] up—that means you should be able to do those simultaneously.”
Thompson insisted that he is not shifting the goal posts. As he understood the FCC’s requirements, simultaneous 1 Gbps/500 Mbps was always the goal. “It seems to me to be common sense,” Thompson said.
If he were ordering symmetrical service from a broadband provider, the expectation would not be that he would have to wait for a download to complete before he could begin uploading.
Another new group also complaining about wireless entrants
A new organization known as Ensuring RDOF Integrity Coalition, or ERIC, has now appeared and claims to share Vantage Point’s concerns.
Out the top 10 RDOF contract recipients, four are believed to have plans to use fixed wireless technology to deliver their services to consumers; LTD Broadband, Nextlink, Resound Networks, and Starry represent the first, sixth, eighth, and ninth largest recipients, respectively.
Additionally, SpaceX was the fourth largest recipient, and plans to deliver its services via a constellation of low Earth orbit satellites. Even though the technology is in its infancy, SpaceX received more than $885 million out of the total $9.2 billion allocated for RDOF.
As reported by Telecompetitor, ERIC would see that “interested stakeholders” have an opportunity to go over sensitive and proprietary data collected regarding RDOF recipients and the status of the services they provide.
WISPA claims fiber zealots are ‘sowing fear, uncertainty, and doubt’
In an interview with Broadband Breakfast, Fred Goldstein dismissed the concerns raised by Vantage Point and others. He said they were sowing fear, uncertainty, and doubt.
“They did this by making some incorrect technical assumptions and incorrect assumptions about the way people use the internet traffic levels and a lot of other details,” he added. “They basically put together something that if you really don’t know all that much, it sounds credible.”
Goldstein said wireless providers must live up to their promised broadband speeds. “If they’re offering gigabit service,” he said, “they are committed to it and there are penalties and clawbacks if they do not deliver.”
Goldstein said wireless providers were required to thoroughly explain exactly how they intended to deliver the speeds advertised. If Vantage Point has an issue with the explanations of the FCC or any particular wireless provider, they should have raised these concerns prior to the conclusion of the first phase.
WISPA says gigabit speeds may be overvalued
While Goldstein disagreed with many of the technical evaluations made by Vantage Point, his primary issue rests in the interpretation of RDOF guidelines.
For example, where Thompson believed that 1 Gbps/500 Mbps speeds must be achievable simultaneously, Goldstein states that while gigabit download speeds are the goal, it is not necessary for every consumer to be able to access gigabit speeds all the time.
“In reality, the average subscriber is running about 3 Mbps,” Goldstein said. He explained that there are diminishing returns once a consumer starts to reach speeds above 25 megabits per second. “It’s nice to have 100 megabits—it’s nicer to have 500 megabits or a gigabit—but it’s very rare you actually get to use it.”
“So nice, but I think people overemphasize the value of the gigabit, even as we are prepared to deliver it,” Goldstein stated. “We know how much we need—we can burst it at a gigabit, but the average is the average—it applies to their fiber, and it applies to our wireless—and everybody does it that way when you buy the backbone.”
But Thompson said that while WISPA is very focused on the backbone component of the service, Vantage Point is more concerned with the user experience and the wireless service on the customers’ end.
Local Governments Provide Valuable Information for Rural Infrastructure Builds
Rural communities vary in broadband needs, making community engagement essential for breaching the digital divide.
WASHINGTON, May 11, 2022 – A critical first step to delivering on the Infrastructure Investment and Jobs Act for rural communities at a local level is community engagement and understanding, panelists said at a Tuesday event of the Local Initiative Support Corporation.
As a local leader in a rural community “the first thing to do is a community survey,” said Josh Seidemann, vice president of policy at NTCA – The Rural Broadband Association.
Seidemann and other panelists provided advice on what local communities need to do to be successful in applications under the IIJA. The process is expected to kick off upon release of rules from the Commerce Department’s National Telecommunications and Information Administration. The agency must release rules under the IIJA by May 16.
A community survey will help “determine and evaluate where your community needs broadband the most,” said Seidemann. Such a survey is “going to inform and illuminate the type of network that will best meet your needs.”
Community needs can vary due to topography and existing infrastructure available for use. “Make sure your network meets your community needs,” added Bob Knight, CEO of public relations agency Harrison Edwards and a local government official in Connecticut. He is co-chair of Fiber Broadband Association’s public officials group. “The best projects have an element of community engagement.”
Jerry Kuthy, Program Officer at Cameron Foundation, urged local leaders to create a mapping system of their individual geographical broadband needs.
The Virginia Department of Housing and Community Development launched an interactive broadband coverage map in April of 2022. Kuthy said the map will help local leaders in Virginia roll out funding for rural broadband infrastructure.
Mapping areas of focus for broadband projects has long been the focus for state and regional leaders, in part because so many people have expressed disappointment at previous FCC broadband mapping efforts.
LISC is an intermediary non-profit that connects public and private resources with underinvested places. The role of Community Development Financial Institutions was also discussed at the event.
Community Development Financial Institutions Funds Prepare for Broadband Infrastructure Funding
CDFI funds are responsible for rural Wyoming broadband and may offer a solution to rural areas across the nation.
WASHINGTON, May 11, 2022 – A Treasury Department program that is bringing capital to disadvantaged communities is helping drive key money into broadband infrastructure builds in rural America, some of those recipient institutions said at an event Tuesday.
The department provides grants to and certifies institutions such as banks, credit unions, loan funds, microloan funds, or venture capital providers as Community Development Financial Institutions that provide financial services in low-income communities and to people who don’t have access to financing, according to the government website.
The program is also helping build much-needed broadband connectivity, as seen in rural Wyoming, where the Midwest Minnesota Community Development Corporation has already utilized CDFI funds to finance a project to run fiber optics networks to rural Wyoming.
“We believe that there’s capital available for rural broadband,” Gary Franke, managing director of the communications group at CoBank, said at the Local Initiative Support Corporation event on Tuesday.
LISC is an intermediary non-profit that connects public and private resources with underinvested places. CoBank, however, is not a CDFI.
Such deals “typically will involve partnerships with state, local, or federal programs in addition to private equity,” he said.
Suzanne Anarde, CEO at Rural Community Assistance Corporation, a CDFI, said Tuesday that CDFIs must “find out what our individual niche is and how we can build capacity that makes us viable.”
Brian Vo, chief investment officer at Connect Humanity said that his organization could work with CDFIs in the future to fund their holistic approach to digital equity.
LISC alleges that the large national financial institutions are not interested in making investments to improve rural broadband expansion across the country. The organization states on its web site that “rural broadband is lacking in many areas because the large national providers are not interested in making the investment.”
“We see a lot of opportunity out there. With the right capital and the right funding programs, there’s a lot more to come,” Franke said.
There are currently more than 1,200 CDFI funds operating across the nation, many of which are now focusing on crossing the digital divide by providing funds for rural broadband infrastructure.
Universal Service Fund in Need of Reform, Said Panelist at Broadband Community Summit Event
The Universal Service Fund’s base is shrinking.
HOUSTON, May 3, 2022 – As funding for the Universal Service Fund continues to fall year over year, the Federal Communications Commission is evaluating options to reform it.
During Broadband Communities Summit 2022, Principal Consultant for Mattey Consulting LLC, Carol Mattey anticipated what kind of changes to the Universal Service Fund that stakeholders could expect in the coming years.
The Universal Service Fund is responsible for funding several high-profile financial benefits including the Rural Digital Opportunity Fund, the Connect America Fund, E-Rate, the Lifeline Program, and the Rural Healthcare Program.
The USF is funded through compulsory service provider contributions. Though those contributions have historically been based on providers’ interstate and international telecommunications service revenues, critics of the program argue that providers are increasingly able to dodge these contributions by reclassifying their sources of revenue.
A common misconception for dwindling contributions is cord cutting, Mattey said. As more people drop landlines, there is simply less voice revenue – but that is only part of the issue.
Mattey said that while information revenues have increased through consumer use of the internet, voice revenues have fallen. This disparity has caused the telecommunication contribution to skyrocket and could be nearly 30 percent in 2022.
Mattey explained that most companies simply bill their consumers to offset that amount, and as a result, the contribution has been disproportionately burdened by the elderly who are more likely to use landlines.
When addressing potential reforms, Mattey pointed to three most likely possibilities being considered: broadband internet access revenue, a flat fee per voice and broadband connection, and a flat fee per phone number.
“Any reform needs to be simple and must be able to be audited,” she said. “The current system is not equitable.”
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