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TPI President Wallsten Defends Reverse Auction, Points to Mapping Flaws in Light of RDOF Defaults

In an interview with Broadband Breakfast, Technology Policy Institute President Scott Wallsten blamed bad mapping for RDOF mess.

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Photo of Scott Wallsten delivering his opening remarks for TPI's 2021 Aspen Conference.

ASPEN, Colorado, August 19, 2021—Scott Wallsten, president and senior fellow of the Technology Policy Institute, on Monday defended the reverse auction process used to divvy up funds from the $9.2-billion Rural Digital Opportunity Fund in light of winners having to default on territory that new mapping shows are adequately connected.

In an interview with Broadband Breakfast at the 2021 Aspen Conference that his organization was hosting, Wallsten said the issue with the growing number of defaults is not the process by which money was awarded, but the mapping that led to a recently increasing number of companies approaching the Federal Communications Commission with admissions the areas they promised to serve are already served. (More companies have filed defaults in recent days.)

“The FCC is taking the wrong approach to mapping,” argued Wallsten, who had a recent op-ed about his views published in The Hill. In his view, the FCC is “going too micro,” that is, trying to establish the precise coverage of exact addresses rather than simply getting accurate broadband data for an entire region or census level. He explained that this fixation on microdata contributed to areas being mapped incorrectly during the RDOF process.

Though Wallsten defended the reverse auction – which awards money to those promising to build with the least amount of subsidy – component of RDOF, he was not without his criticisms. Wallsten pointed to some of the surprising bids brought about by small companies or those using emerging technologies, such as SpaceX’s low earth orbit constellation, Starlink.

“Who ought to assume the risk?” He explained how because companies secure payment before completing the project, some argue that smaller companies bite off more than they can chew during the bidding process.

“It’s hard to say [how changing this would impact bidding strategies].”

Though Wallsten does not want to discourage innovation and the use of new technologies, he does not want taxpayers to be the party left holding the bag.

“We want new technologies—just not on the taxpayers’ dime,” he said. “If [Elon] Musk believes in Starlink, let him front the money.”

Internet speeds standards

Another topic Wallsten addressed was the recent movement for faster internet standards and symmetrical speeds.

Wallsten is calling the push for 100 Megabits per second symmetrical speeds “nonsense,” arguing that the only reason that there has been this push for symmetrical 100 Mbps, and even Gigabit speeds, is to push fiber on consumers. “There is no other reason.”

Wallsten clarified that he believes that fiber plays a critical role in networks around the country, but that nobody needs gigabit speeds. In response to the criticism that fiber will be necessary to create and maintain future-proof networks, he refuted the premise of the problem, stating that the term “future-proof” itself is loaded, and assumes that spending a lot now is inherently better than spending a lot in the future, which he argues may not be the case.

Wallsten pointed out that speed is only one aspect of a network—an aspect that, he said, receives an undo amount of attention. He stated that there are myriad other factors that may supersede speed in terms of what customers value in future networks—such as super low latency. Though he acknowledged that everyone enjoys faster internet speeds, he cautioned against diminishing returns as the speed increases.

“The difference between 1 Mbps and 5 Mbps is extraordinary—the difference between five and 25 is noticeable, but less so,” he said. “In terms of practical usage, there is very little difference between 100 Mbps and a gig.”

On the infrastructure bill

On the bipartisan infrastructure framework, Wallsten voiced his concerns that the federal government is beginning to distance itself from the reverse auction process in favor of simply giving money to the states and allowing them to distribute it as they see fit.

He reiterated that RDOF’s failings were due to inadequacies in mapping, and not the auctions process, but that politicians want to be seen as bestowing money on their constituents.

“Politicians love to give away money,” Wallsten mused.

Expert Opinion

Bryan Darr: An Order of Fiber, Please, with Wireless on the Side

Wireless is essential because for truly remote properties, a physical connection may never be practical.

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The author of this Expert Opinion is Bryan Darr, vice president of Smart Communities at Ookla.

Over the next five to ten years we will see an explosion of projects bringing high-speed connectivity to underserved communities in the United States. Although fiber infrastructure rightly gets most of the attention and funding, wireless networks should also be part of this planning process. Wireless networks can deploy faster, serve remote locations more economically, and provide some capabilities that fixed networks can’t. Failure to consider the comprehensive needs of the mobile broadband environment will hobble efforts in the next phase of this technology revolution.

How we got here

As federal broadband infrastructure funding is ramping up, state broadband offices are preparing to prove their need for a larger slice of the pie. This is detailed in the $42.5 billion Broadband Equity, Access and Deployment Program, which is a part of the infrastructure bill (the Infrastructure Investment and Jobs Act) passed into law in the fall of 2021. Although every state is guaranteed $100 million, that leaves about $37 billion yet to be divided up.

Assuredly, this pie won’t be sliced into equal portions across states, tribal areas, and U.S. territories. Differences in population, geographic area, household density, and income levels will impact the funding eligibility of individual jurisdictions. Preparedness to verify underserved areas will ensure that state and local governments can maximize their chances of securing adequate funding. The first step is to identify these communities and estimate the cost of covering each household. With a desire to help as many people as possible, there will be a tendency to prioritize areas with the lowest cost per connection.

State governments have been focused primarily on fiber access. However, as big a pot of money as the IIJA may be, it won’t be big enough to connect every household to fiber. Continued supply chain issues, inflation, and labor shortages (particularly with needed expertise) will expand the cost of projects in the coming years.

The race to compete for these billions of dollars has had a very uneven start. Some state broadband offices are fully staffed, have hired consultants, have obtained and collected network performance data, and already have mapping projects launched. Other states are just now funding their broadband offices and beginning to hire their first employees. States that cannot successfully challenge both the mapping fabric (think number of service addresses) and confidently identify unserved households will be disappointed with the size of their slice.

The recipe may require adjustment

Recently, Federal Communications Commission Chairwoman Jessica Rosenworcel called for the commission to reset its definition of broadband from 25 Mbps download speed and 3 Mbps upload speed to 100 down and 20 up. Many would agree that a reset is long overdue. The IIJA legislation is already requiring that new infrastructure builds meet this criteria. We should all recognize that this metric reset could make millions of additional households eligible for funding. Some policy organizations, including the Fiber Broadband Association, are voicing their opinions that those numbers are already dated and that the new target will not be enough for future needs such as the much-anticipated metaverse.

The specific benefits of wireless

Wireless connectivity can be broken down into three basic types of last-mile providers:

  1. Cellular service providers, offering traditional mobile and new fixed wireless access services
  2. Wireless internet service providers (WISPs), offering fixed point-to-point service
  3. Satellite companies (more on them later)

Wi-Fi is also wireless, but provides a final hop for only the last few feet of a network connection.

Wireless is essential because there is broad recognition that for truly remote properties, a physical connection may never be practical. As subsidies flow, that fact may be applicable to fewer locations, but there is certainly a point of diminishing return. As state and federal officials plan their networks to connect as many communities as they can, they should be factoring in where the wireless networks need bolstering as well. This is applicable for both mobile and WISP infrastructure.

Additional wireless investment could serve multiple needs. Poor wireless coverage is a common complaint even in densely populated areas. If you spend any significant time in rural areas, you know that there are locations where service is so spotty that the local population knows when to not risk initiating a call. Even if you get a signal, throughput can vary greatly. Just because you can receive a text in a particular location doesn’t mean you can download a video. These rural areas have weak wireless signals for the same reason that they lack good terrestrial broadband — the population density does not provide enough return on the investment.

Fiber is still a necessary ingredient

Today’s higher data usage demands the capacity that fiber provides. Mobile service providers are not going to build a new 5G tower without access to fiber backhaul. Sites that require long, dedicated fiber deployments can cost far more and lead to an unreasonable dent in the CapEx budget.

As new middle-mile networks are being designed, network planners should consider where wireless networks are weak and new towers are needed for improvement. Strategically adding splice points in poor service areas can significantly lower the barrier to attracting new wireless infrastructure. A lower cost of deployment will be a big incentive to wireless networks to bring improved service to rural communities.

We all depend on wireless services

Mobile connectivity has moved beyond a luxury and has become an expectation. Even if we could practically and affordably connect every house with fiber, there are many reasons to include wireless in your overall design plans.

  • Public safety – If you have ever had a flat tire or an overheated radiator, you know how important wireless coverage can be. Just try calling a rescue service with no bars. FirstNet wants to improve coverage as well, and incentivising new towers can provide a big assist.
  • Precision agriculture – Fiber-to-the-home can connect the farm house, the barn, and even the chicken houses, but it won’t connect the tractor or the combine. Livestock now wear devices that monitor animal well-being. Wireless is the only way to keep the whole farm connected and competitive in a global marketplace.
  • Healthcare – Devices to monitor blood pressure, heart rate, glucose levels, and more are revolutionizing patient care. Many can now automatically notify a care facility when a patient is in distress. Mobile networks keep these devices connected if the patient’s residence lacks fixed broadband and when they are away from the home.
  • Economic development – Picking the best location for a new factory, business park, or neighborhood is about more than adequate roads and water resources. Good connectivity for both wireless and fixed telecom services has become a standard amenity for site selection.
  • 5G, part 1 – These new networks are quickly overlaying the 4G footprint. You don’t have to experience the lightning speeds of inner city millimeter wave service to see huge improvements in network performance. Wireless carriers are now introducing Fixed Wireless Access (FWA) to directly compete with traditional fixed providers. Competition means pressure in the market to keep services more affordable.
  • 5G, part 2 – Just over the horizon is the Rural 5G Fund, established by the FCC in October 2020. Over $9 billion dollars will be made available to improve 5G coverage. However, the Competitive Carriers Association, which represents many rural mobile service providers, estimates the need at well over $30 billion. Without some advance planning and dialogue with the wireless providers in your state, you may see very little of those investments.

WISPs have brought first-time service to millions 

According to WISPA (the Wireless Internet Service Providers Association), over 2,800 WISPs are now serving more than seven million customers in portions of all 50 states, bringing internet to many rural households that had previously relied on aging satellite services. Although some subscribers are seeing median speeds below the current 25/3 broadband definition, new technologies are improving user experiences as equipment is modernized. Of course, better access to fiber is also needed to increase capacity and link to internet backbones.

All radio signals degrade with distance. Some of the largest WISPs cover sparsely populated regions, often with rugged terrain, making physical household connections particularly expensive to build. Commonly, customers who experience slower than advertised speeds are living at the practical edge of these coverage areas. Providing fiber to just a handful of locations can attract new towers that could substantially expand network services. This would also save much of the cost compared to direct-to-home routes and reduce the time needed for these subscribers to see significant improvements.

The IIJA is written to be technology-neutral, but some broadband officials seem to be paying little attention to proven solutions that could have immediate impact. Even if the eventual goal is to offer direct-to-home fiber for everyone, we may go well beyond this decade without realizing that dream.

Aren’t satellites wireless, too?

Modern and improved satellite services are already fulfilling broadband needs for some households and businesses. Availability is limited to certain geographies but is expanding, and new competitors plan to enter the mix soon.

Throughput speeds and latency have improved dramatically, but waitlists are long, and initial equipment costs of more than $500 (that’s for do-it-yourself) and subscription fees of $100 or more per month will make this a difficult purchase decision for low-income households. There’s also limited capacity for any given geographic area, so even if there is satellite service available in your location, it may be that your neighbors have already maxed out the service and you will be waiting for additional capacity to be made available.

Without wireless, a broadband plan is just half-baked

We are many years away from realizing the full impact of the IIJA and the other recent funding sources that will deliver new fiber connections across the country. The FCC’s map is already delayed. There are early grumblings about uncertain challenge processes and many states are just now getting their planning efforts underway. The federal government has promised millions of Americans better broadband and they are expecting action soon, not in five to ten years.

Regulators and policymakers will ultimately be held accountable by voters and Congress for how the BEAD funds are spent. Two key metrics will matter most: the number of households gaining a new or improved connection and how quickly this progress is being made. Monitoring compliance will become more important as projects hit milestones and contractors get paid.

For some rural communities, wireless may be the best option right now and, perhaps, for the foreseeable future. Some households can already experience better service from their wireless provider than from DSL or satellite options. Reports are surfacing of DSL providers refusing to reconnect service to households where an interruption of service has occurred — whether for late payment or change of ownership — leaving families cut off from the digital economy.

Because satellite service is expensive and hard to acquire, wireless services are the only logical solution to get some rural households (particularly those in low-income brackets) connected before these communities wither past the point of no return. WISPs and mobile providers can fill some of this gap today and, if given the opportunity, will provide competitive options for families unhappy with their service. FWA from the traditional mobile operators is gaining public acceptance quickly in select markets and where signal levels are strong.

Think of anticipating wireless needs while planning fixed networks like an extension of a “dig once” policy. You don’t want to look back years from now and ask why wireless wasn’t considered in your planning process. Across the country, economic and community development departments spend millions of dollars every year to attract new citizens and businesses. Reliable mobile coverage is an amenity everyone – and every thing – wants.

Data from Ookla can highlight areas of need for both fixed and wireless networks. Leveraging coverage data to spotlight deficiencies can serve as an additional assessment in your middle-mile fiber planning, which can ultimately improve public safety, agricultural competitiveness, and overall quality of life.

Prepare for all the broadband needs ahead of you. It’s smart business. It’s smart government.

Bryan Darr is the Vice President of Smart Communities at Ookla. He coordinates Ookla’s outreach to local, state and federal governments and serves on CTIA’s Smart Cities Business & Technology Working Group. 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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FCC Denies Funding for Two of the Biggest Winners of Rural Digital Opportunity Fund Money

‘We are continuing to review the letter and are evaluating our next steps,’ LTD said.

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Photo of Corey Hauer from the StarTribune provided by LTD

WASHINGTON, August 10, 2022 – LTD Broadband’s prolonged effort to get certification status in several states and Starlink’s still nascent and pricey satellite broadband project have proven enough for the Federal Communications Commission to deny them funding from the Rural Digital Opportunity Fund, the agency announced Wednesday.

The reverse auction process for the $9.2-billion fund culminated in December 2020 to awards of $1.3 billion for LTD Broadband – the largest winner in the auction – and $885 million for SpaceX’s Starlink project. But since the winners were announced, a new-look commission emerged under the leadership of Jessica Rosenworcel to weed out projects that did not align with the goals of the program – including bids in areas with adequate coverage or areas that don’t need the services pitched.

In a decision on Wednesday, the commission said that the limited number of dollars available cannot go to support Starlink’s still developing technology. “Starlink’s technology has real promise,” Rosenworcel said in a press release.  “But the question before us was whether to publicly subsidize its still developing technology for consumer broadband—which requires that users purchase a $600 dish—with nearly $900 million in universal service funds until 2032.”

For LTD, the commission ruled that it “failed to timely receive eligible telecommunications carrier status in seven states,” adding the “relatively small fixed wireless provider…was not reasonably capable of deploying a network of the scope, scale, and size required by LTD’s extensive winning bids.

“We must put scarce universal service dollars to their best possible use as we move into a digital future that demands ever more powerful and faster networks,” Rosenworcel said. “We cannot afford to subsidize ventures that are not delivering the promised speeds or are not likely to meet program requirements.”

In a statement to Broadband Breakfast, LTD CEO Corey Hauer said, “We are extremely disappointed in the FCC staff decision.  I don’t believe the FCC fully appreciated the benefits LTD Broadband would bring to hundreds of thousands of rural Americans. We are continuing to review the letter and are evaluating our next steps.”

In the same release on Wednesday, the FCC announced it has authorized $21 million in funding to three companies to deploy gigabit service to nearly 15,000 locations in Tennessee, Texas, Utah and Wyoming. The commission has so far authorized more than $5 billion to bring fiber gigabit to over three million locations in 47 states, it said.

The FCC had provided winning bidders an opportunity last year to review the areas in which they won bids and to relinquish those areas they find are not in need of services. The aftermath included several defaults in areas, some of which were attributed to updated broadband maps from the commission. The commission said that it may waive penalties for the defaults, but last month proposed fines of $4.3 million against 73 RDOF applicants for violations related to those defaults.

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FCC Should Not Increase Rural Program Obligations in Light of New Federal Funding: Meeting Notes

Opponents say increasing coverage and speed obligations of the ACAM program may be unnecessary with new federal broadband money.

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Photo of FCC commissioners

WASHINGTON, August 4, 2022 – The Federal Communications Commission should withhold expanding funding for a program of the Universal Service Fund because there may be support for broadband infrastructure from other federal funds and state activities, according to responses to the FCC proceeding on revising that program.

The FCC’s Wireline Competition Bureau is seeking comment on enhancing the Alternative Connect America Cost Model program – which funds build-outs to rural and high-cost areas by allowing carriers to recover costs from the USF – by proposing additional funding support in exchange for increasing provider obligations to expand broadband deployment locations at higher internet speeds. It would also use the new Broadband DATA Act maps – which are set to be released by the fall – to determine new deployment obligations.

The new obligations would require speeds of at least 100 Megabits per second download and 20 Mbps upload to 90 percent and at least 25/3 Mbps to the remaining 10 percent of eligible census blocks. In 2019, the commission increased the speed obligation to 25/3, which made at least 106,000 additional rural homes and small businesses eligible for A-CAM funding.

But the proposal is facing some opposition. According to a meeting summary with a legal advisor in Commissioner Brendan Carr’s office published Tuesday, telecom company Windstream reiterated that Congress has created an unprecedented $42.5-billion opportunity to deploy broadband networks in rural areas through the Infrastructure, Investment and Jobs Act and corresponding state broadband programs.

Windstream stressed in the meeting the importance of studying the IIJA’s impact prior to increasing current obligations to fund broadband projects, which it said would impact the stability of the USF.

The FCC is currently studying the future of the USF, whose revenues are derived largely from dwindling voice service revenues. Windstream expressed its support of the commission acting under what Windstream views as the FCC’s authority to expand the USF contribution base to include broadband internet access services, which has been an issue of debate for some time and is being studied by the commission.

NCTA, the internet and television association, in a summary of a meeting held with the legal advisor to Chairwoman Jessica Rosenworcel, added that rather than spend USF resources where they may not be necessary – and may even disrupt state activities already in progress – the commission should pause any new high-cost support through the A-CAM program.

The association added that the FCC should be skeptical of requests to increase support for ongoing maintenance and operations through A-CAM as alternative federal funding may eliminate the need for operational support in many areas.

Comments on the decision to revise A-CAM will be accepted through August 18.

The proposal follows a request in June by Siyeh Communications, which asked for a change in A-CAM because the program allegedly incorrectly determined certain areas to be ineligible by misidentifying those areas being served by an unsubsidized, unaffiliated carrier.

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