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Counties, Private Providers Clash Over Merits of Open Access Networks

Counties see it as a way to increase competition and lower prices, while telecoms see money and quality problems.

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From left to right: John Burchett, Carter Old, and Ramiro Gonzales at Digital Infrastructure Investment

HOUSTON, September 28, 2021 – Tensions emerged Monday when the topic of open access networks pitted municipalities in favor and private companies against the idea of sharing infrastructure with other telecoms.

The Digital Infrastructure Investment conference hosted by Broadband Breakfast heard how counties favor open access networks to drive connectivity, competition among providers, and make internet access more affordable.

“We’re certainly in favor of open access,” said Julie Wheeler, president commissioner of York County, Pennsylvania, noting that affordability and access were York County’s chief priorities. She said York took advantage of Coronavirus Aid, Relief, and Economic Security Act funding they received last year to build a 16-mile dark fiber backbone. The county is now focused on building out their middle mile infrastructure.

Ramiro Gonzalez, director of government and community affairs for the City of Brownsville, is working to bring Brownsville away from being the least connected city in America. His team’s action plan was created during the pandemic working through many models and opportunities. They have allocated 19.5 million dollars into building the middle mile network for Brownsville.

“The middle mile will provide resiliency to all our buildings” and utilities, said Gonzalez. He says the city saw the most value in building middle mile infrastructure and then opening the infrastructure to investors to grow the network from there.

Digital Infrastructure Investment 2021 was hosted as an online and in person conference by Broadband Breakfast at the Broadband Communities Summit. The recording of the Monday event is available for registration and replay.

Open access networks have been a topic of great interest, as cities and states try to figure out how to expand broadband infrastructure. The broadband portion of the infrastructure bill that is expected to be voted on in the House on Thursday will give money to the states and cities to divide. Telecoms have been concerned that builds by municipalities, who then allow other telecoms to ride on it, would effectively replace the incumbents. Republicans in some states have even sought to limit community networks.

But some have suggested that the issue must be framed as more cooperation with providers rather than an existential crisis for them, while others have even said municipal broadband networks with open access provisions could help alleviate competition fears.

Private companies signal issues with open access

Carter Old, co-founder and president for Tachus LLC, approaches networks with one hundred percent buried fiber due to events like hurricanes and floods that have been a tragic part of the recent history of Houston, where Tachus primarily operates.

Tachus’ strategy is to bring a “blazing fast pipe of internet” and from there “allow the customer” to decide what internet experience to bring to their home. “In order to deliver hands down the best customer experience,” said Old, “we feel that owning and maintaining our network is the best way to do that.”

For Ting Internet’s Monica Webb, having too many providers on the same pipeline could potentially create a financial problem whereby a price war would leave some providers without much profit.

John Burchett, head of public policy for Google Access and Google Fiber, noted that building broadband infrastructure is slow, and that Google Fiber is “picking up steam” to penetrate suburbs and small towns.

“With every passing day there’s a new model out there,” he said, stating that there are many paths to building broadband infrastructure. Though he said that Google would be interested in providing an open access network on which it would compete against other providers, he clarified that, “I don’t think you’re going to find any provider who will build a fully open access model,” though he made clear that Google has offered service on shared or leased networks before.

One problem Burchett raised is the lack of choice that the majority of America is facing, alluding to a middle ground between local monopoly and an over-saturated market.

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Funding

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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Funding

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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Funding

Agriculture Department Announces Fourth Round of ReConnect Funding

The announcement is the second round of ReConnect funding in fiscal year 2022.

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Photo of RUS Acting Administrator Christopher McLean by Drew Clark from June 2022

ASHINGTON, August 1, 2022 – The Rural Utilities Service of the United States Department of Agriculture announced the fourth round of funding for the ReConnect Program, with publication of the funding opportunity announcement scheduled for the federal register on August 4.

The announcement is the second round of ReConnect funding in fiscal year 2022.

The RUS has seen great interest in the third round of funding and is considering drawing on other federal infrastructure funds to satisfy demands, said the Acting Administrator Christopher McLean said in June. The latest round of funding received 305 applications requesting a total of $4.8 billion, but the program only allocated $1.15 billion.

USDA Considering Drawing on Infrastructure Bill Money as ReConnect Demand Increases

 

The ReConnect Program uses funds provided under the Infrastructure and Investment Jobs Act which sets aside $42.5 billion for the National Telecommunications and Information Administration to disburse among states for broadband infrastructure. It provides loans and grants to broadband deployment projects in rural areas.

The application will open 30 days after the announcement of funding opportunity is released. Applications will be submitted through the RUS online application portal on the ReConnect webpage. The application process will be open for 60 days.

Applicants should consider projects that will assist rural communities recover economically from the COVID-19 pandemic, ensure all rural residents have equitable access to rural development programs, and reduce climate pollution while increasing resilience to the impacts of climate change.

Proposed service areas are eligible for funding if at least 50 percent of the households in the area lack sufficient access to broadband as defined in the funding opportunity announcement.

As part of the application process, applicants are expected to undergo an evaluation process and will be scored based on the rurality of the proposed service area, level of existing service, economic need of the community, affordability of service offerings, net neutrality principles, cybersecurity, and labor standards. Applications submitted by local governments, non-profits and tribal governments will be awarded higher scores.

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