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Sean Gonsalves: Illinois and Possibly New York Are Poised to Fumble Federal Broadband Funds

Some state laws, as written, may run counter to IIJA language and constrain the use of federal funds.

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The author of this Expert Opinion is Sean Gonsalves, senior reporter, editor and researcher for the Institute for Local Self Reliance’s Community Broadband Network Initiative

Now that the fight over federal funding to expand broadband access has been largely settled with the passage of the American Rescue Plan Act and the Infrastructure Investment and Jobs Act, states and local communities are preparing to put those funds to work.

The President Joe Biden administration had initially hoped to tip the scales in favor of building publicly-owned broadband networks as the best way to boost local (more affordable) Internet choice, and inject competition into a market dominated by monopoly incumbents. And while the Treasury rules on how ARPA money can be spent does give states and local governments the ability to do just that, the rules for how the IIJA’s Broadband Equity, Access, and Deployment program can be spent have yet to be finalized by the National Telecommunications and Information Administration, the agency in charge of allocating those funds to the states.

Predictably, the big monopoly incumbents are focusing their lobbying efforts on state lawmakers as states funnel those federal funds into state broadband grant programs. In some states, Big Telco is getting the desired result: the shunning of publicly-owned network proposals to shield monopoly providers from competition. Of course, we expected some states – especially those with preemption laws that either erect barriers to municipal broadband or outright ban such networks – to shovel most of their federal broadband funds to the big incumbents, even though they have a long track record of over-promising and under-delivering.

But while we might expect Florida and Texas to favor the private sector and stealthily move to shut out projects that are publicly-owned, we’re surprised that the first place it’s happening is actually Illinois and New York.

Illinois lawmakers thumb nose at federal law

In January, Illinois Democratic State Senator Patrick Joyce introduced legislation in the Illinois general assembly known as the Illinois Broadband Deployment, Equity, Access, and Affordability Act of 2022 (SB 3683).

As recently detailed by Kevin Taglang, executive editor at the Benton Institute for Broadband and Society, the bill is “rumored to be on a fast track to approval and attempts to establish the exclusive processes the state will use to distribute grant funds Illinois receives from the National Telecommunications and Information Administration through the Infrastructure Investment and Jobs Act. Although SB 3683 includes some of the same findings that Congress included in the Infrastructure Investment and Jobs Act, State Senator Joyce proposes constraints on the use of federal funds that fly in the face of the clear language of federal law.”

The Illinois’ Broadband Advisory Council is dominated by Big Telco with council members representing Frontier, Verizon, Metro Communications, Comcast, and AT&T.

So it shouldn’t come as a surprise that, according to the bill summary, the state’s Department of Commerce and Economic Opportunity would be tasked with implementing a statewide broadband grant program that proposes the state “shall use money from the grant program only for the exclusive purpose of awarding grants to applicants for projects that are limited to the construction and deployment of broadband service into unserved areas” and that the state “shall not award grant money to a governmental entity or educational institution.”

That language alone validates Taglang’s assessment that this bill is a recipe for “How a State Can Blow a Once-in-a-Generation Investment to Close the Digital Divide.”

While the IIJA doesn’t have a preference for publicly owned and cooperative projects (as the Biden Administration initially wanted), it does explicitly say that states cannot exclude cooperatives, nonprofit organizations, public utilities, or local governments from being eligible as grant recipients.

For that reason alone, as Taglang notes with blunt concision:

“If Illinois adopts this law, it risks losing access to over one billion dollars of federal support for broadband deployment.”

The IIJA does say that the money from the NTIA’s BEAD program must first be used to deploy networks in “unserved” areas (areas that do not have access to broadband with minimum download and upload speeds of 25/3 Megabits per second). However, after those areas have been addressed, current statute says that the money can, and should be, then used to deploy networks in “underserved” areas (areas that do not have access to 100/20 Mbps connections).

The federal infrastructure bill also says the money can be specifically used to build-out to multi-dwelling units where Internet service affordability is an issue and to community anchor institutions such as educational institutions, which the proposed Illinois legislation would expressly forbid.

It strains credulity to think that State Sen. Joyce and the 14 other state lawmakers who have signed on as co-sponsors do not know that provisions of their bill run counter to the clear language in the IIJA. (To understand how NTIA can navigate this challenge, don’t miss our interview with Nancy Werner, general counsel of NATOA.)

What these state lawmakers are likely not telling their constituents is that if their bill passes, the state will jeopardize hundreds of millions in federal funds to improve broadband access and leave them at the mercy of monopoly providers that have failed to deliver universally reliable (and broadly affordable) high-speed Internet service.

You can read Taglang’s entire analysis here in which he explores the various other ways SB 3683 violates both the spirit and letter of the IIJA.

New York’s municipal broadband-killing Trojan horse?

In the Empire State, legislation is making its way through the New York state legislature that, while not openly violating Congressional intent the way the legislation introduced in Illinois does, it does potentially limit the viability of municipal broadband projects.

In the state Senate’s Transportation, Economic Development, and Environmental Control portion of the budget (S. 8008 B), subsection 140, paragraph (e), it directs the New NY Broadband Grant Program referred to as ConnectALL to “identify and engage any and all private partners to undertake and manage the proposal, or demonstrate to the division’s satisfaction that a private or private-public partnership model is not viable, practical or suitable to meet the needs of the consumers covered by the proposal.”

Then in subsection 141, paragraph 7(a), it stipulates that “in awarding the grants, the division shall give preference to: (a) proposals that have a business plan based on a public-private partnership model or provide a mechanism for transition of services to a private entity in the future.”

We are not lawyers, but we have spoken to community broadband advocates in New York who see these bits of legalese as a Trojan horse that would make it difficult to fund municipal broadband proposals with these unnecessary obstacles in place.

Now, in fairness to the New York state senators working on this, there is language in the bill that explicitly states that the ConnectALL program is authorized to use broadband grant funds “to solicit and receive proposals from municipalities, state and local authorities,” and other public entities for “open-access deployment and/or increasing adoption of broadband services, and to issue grants for planning and implementation of such proposals.”

So it may be that harried lawmakers and their staff do not understand the implications of those particular provisions. However, considering the outsized influence that Charter and Verizon has historically held over state lawmakers in New York, the subsections referred to above should be considered a red flag.

In our view, it is better to err on the side of clarity, and conform with both the letter and spirit of NTIA’s rules. If Charter or Verizon afterwards want to spend the wealth they’ve extracted from communities suing the state for supporting a municipal broadband project designed to solve local connectivity problems, they are welcome to do so.

It’s also worth noting the flawed premise of the bill’s language in those subsections, which is that privately-owned networks are the same as publicly-owned networks. That’s demonstrably false.

Take Chattanooga’s municipal utility EPB Fiber, for example. Because they successfully built a citywide fiber network that has kept those investment dollars in Chattanooga, the city was able to establish HCS EdConnect, which is a program that provides a decade worth of 300 Mbps symmetrical fiber-to-the-home connectivity to over 15,000 low-income students (8,500 households) in the city’s school district for free. This is in addition to the $2.7 billion return on investment already identified by an academic study. Chattanooga’s EPB Fiber uses the same gear and vendors that many of the big monopolies do.

The reason for the difference in outcome is simple: large monopoly and local publicly-owned Internet Service Providers have different incentives. The monopoly providers are looking to extract wealth from communities. Publicly-owned networks are more like roads or water and sewer systems with no demand that the enterprise turn a profit. In the community broadband approach, broadband is seen as a utility with far-reaching economic and social multiplier effects, not a mere consumer product to be sold for the benefit of company shareholders.

Keep an eye on state legislatures

If Democrats are pushing these bills in Illinois and New York, we’ll be surprised if no other states suddenly emerge with language to slow investment in new networks designed to meet low-income family needs or solve other pressing challenges in areas where the big monopoly providers prefer to continue being the only game in town.

Editor’s Note: This piece was authored by Sean Gonsalves, a senior reporter, editor and researcher for the Institute for Local Self Reliance’s Community Broadband Network Initiative. Originally appearing at MuniNetworks.org on March 24, 2022, the piece is republished with permission.

Broadband Breakfast accepts commentary from informed observers of the broadband scene. Please send pieces to commentary@breakfast.media. The views reflected in Expert Opinion pieces do not necessarily reflect the views of Broadband Breakfast and Breakfast Media LLC.

Broadband Mapping & Data

Garland McCoy: How Your State Can Defend Its Broadband Maps for Maximum Funds

Crowdsourced and bulk data are subject to a challenge process that has successfully eliminated crowdsourced data in the past.

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The author of this Expert Opinion is Garland McCoy, Co-Founder and Executive Director of PAgCASA

On September 15, 2022, the Federal Communications Commission’s Broadband Data Task Force issued a public notice on “Specifications for Bulk Fixed Availability Challenge and Crowdsource Data.”

The notice provided guidance for filing bulk challenges, and bulk crowdsource data, to fixed broadband availability data that will be published later this year by the FCC as part of its new Broadband Data Collection. According to the notice, “individuals and entities, including consumers, state, local, and Tribal governmental entities, and service providers,” can submit challenges to the BDC fixed broadband availability data for single locations, as well as “bulk” challenges with respect to multiple locations.

Historically, Internet Service Providers have effectively used the FCC’s challenge process to disqualify the vast majority of disputes brought forward by states, counties, and other complainants regarding FCC’s broadband maps. And frankly, this will be the case again unless states take a new tack to validate their own data in such a way that will stand up to ISP challenges. Given the enormity of the federal broadband funds available to states this time around, the stakes could not be higher; that is, a single state could forgo hundreds of millions of dollars of federal broadband funds due to insufficient preparation to challenge-proof its data.

Here are two observations to start:  1) The ISPs are correct in challenging the data if the data is corrupted or incapable of being validated, and therefore should be disqualified. 2) the FCC and the ISPs must now be seen as embracing the new “crowdsourcing” challenge process since the Broadband Data Act of 2020 was very specific in requiring that the FCC’s new data gathering methodology include third-party crowdsourced data. That said, third-party “crowdsourced” and “bulk” data are subject to the same challenge process that has successfully eliminated individual and crowdsourced data in the past.

Three ways ISPs successfully challenge and disqualify third-party data

Alone, or in combination, the following three scenarios have succeeded year after year in ensuring that third-party data, crowdsourced or otherwise, has not made it past the challenge process and onto the FCC’s approved maps.

  • Was the speed test launched from a device wirelessly? Modern modems set up a Wireless Area Network around the premises over the one or two Wi-Fi channels allocated. Almost all devices are now connected wirelessly to the modem. A wireless launch of a speed test, e.g., from your laptop or smart phone, therefore affects/corrupts the network speed test and disqualifies the data.
  • Was the on-premises modem “still” when the speed test was taken? By “still” the ISP is referring to the modem’s management of data coming from any device remotely or over cable, ethernet connection, during the time of the test. For example, if a family member is working on their laptop, e.g., doing homework, the modem’s management of the data from the laptop will affect a speed test taken during that time. This will disqualify the speed test data.
  • Was the crowdsourced and or bulk data drawn exclusively from the ISP’s premium service customers? The FCC stipulates that the speed testing data must be drawn from an ISP’s customers who have purchased the service provider’s best available service package. A customer might not need or be able to afford FCC’s “broadband” minimum service of 25/3 mbps, and thus would purchase a less expensive, slower service package offered by the ISP. For purposes of accurate speed testing, the ISP should not be penalized for offering true broadband-speed service that is passed over by a customer seeking a cheaper service.

PAgCASA, the Precision Ag Connectivity & Accuracy Stakeholder Alliance, is a non-profit organization whose sole purpose is to ensure broadband map accuracy, connectivity, and rural prosperity, stands ready to help states get their full share of federal broadband funds and successfully defend against challenges.

PAgCASA’s on-premises, cybersecure, network monitoring methodology – which deploys the same network monitoring devices the major ISPs use, on wired/ethernet-connected customer modems, from a volunteer pool of an ISP’s premium service customers selected using standardized random sampling methods – will, in fact, address all the challenge issues above and generate data ready for potential litigation.

As noted in another recent article on Broadband Breakfast, states like Georgia and North Carolina are finding significantly fewer served locations based on their latest state broadband data compared to FCC’s most recent Form 477 data. We expect to see similar differences across the country as states and the FCC bring forward their latest respective data.

Consider this: a ten percent delta between the FCC and state maps translates into a staggering $4 billion based on an overall federal broadband infrastructure spend of $40 billion – needed funds that will not make their way to genuinely unserved or underserved communities across the country.

Our nation can and must do better.

Garland T. McCoy, Co-Founder and Executive Director of Precision Ag Connectivity and Accuracy Stakeholder Alliance, is a long-time non-profit veteran in the fields of technology and telecommunication policy having served as Founder and CEO of the Technology Education Institute & Technology Policy Institute.  Garland was recently an adjunct professor at Syracuse University’s iSchool, teaching information policy and decision making. He can be reached at garland.mccoy@pagcasa.org 

Broadband Breakfast accepts commentary from informed observers of the broadband scene. Please send pieces to commentary@breakfast.media. The views reflected in Expert Opinion pieces do not necessarily reflect the views of Broadband Breakfast and Breakfast Media LLC.

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Expert Opinion

Paul Atkinson: Why Fiber Trumps Satellite When Bridging the Digital Divide

On the surface, satellite seems like the ideal way to close the rural-urban digital divide.

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The author of this Expert Opinion is Paul Atkinson, CEO of Optical Networks of STL

The Grand Canyon in Arizona is 18 miles across at its widest point. The only thing wider is the digital divide between the state’s rural and urban areas. Roughly 99% of urban Arizonans have access to fixed terrestrial broadband services that deliver at least 25 Megabits per second (Mbps) down and 3 Mbps up, according to the FCC’s 2021 Broadband Deployment Report . Only 66% of its rural residents do.

Arizona isn’t an anomaly, either. Nearly 99% of all urban Americans have access to broadband versus 82.7% of rural residents.

This problem also is a business opportunity, which is why so many vendors and service providers are positioning their technology of choice as the best way to bridge the digital divide. The main contenders are satellite, fiber, Wi-Fi and fixed wireless access that uses 5G cellular. Each has its strengths and weaknesses.

For example, 5G FWA requires building hundreds of thousands of base stations in remote areas that might be home to only a handful of homes and businesses — a buildout that likely would take years and tens of billions of dollars. That’s a difficult investment to recoup and make profitable.

That’s simply not a viable business model, as a US Cellular white paper acknowledged: “ Our economics require approximately 500 subscribers to build a new tower, and we can’t assume that everyone will adopt the service. The cost of building and maintaining a tower in rural America can be nearly twice as expensive as building a tower in an urban area.”

Satellite and fiber have emerged as the top two contenders. On the surface, satellite seems like the ideal way to close the rural-urban digital divide because it doesn’t require hundreds of thousands of base stations. But satellite has its share of technological and business limitations, too — to the point that in August, the FCC rejected SpaceX’s application for Rural Digital Opportunity Fund (RDOF) subsidies.

FCC Chairwoman Rosenworcel questioned whether it was affordable to ‘subsidize ventures that are not delivering the promised speeds or are not likely to meet program requirements, especially when consumer would have to purchase a $600 dish.

Rural America’s high-fiber diet

The FCC’s rejection of SpaceX/Starlink is not a setback in bridging the rural-urban digital divide. It’s actually a milestone toward parity because it ensures that an unproven technology doesn’t divert scarce public subsidies from a proven one.

As Gary Bolton, Fiber Broadband Association president and CEO rightly stated, this is a huge victory for 640,000 families who were relegated to Low Earth Orbit Satellite service. They could have been redlined from being eligible for fiber broadband. There is now clarity and a path forward for fiber to bridge the digital divide.

Fiber has already proven its worth in rural America, where it has 23% of the broadband market and the highest customer satisfaction of all internet-access technologies, according to a 2021 Pivot Group study . By comparison, fixed wireless and satellite have only 10% and 6% penetration, respectively. Cable has the largest share of the rural market, but many customers find it lacking: One third say they want faster speeds.

In fact, broadband speed is a decisive factor when people are deciding where to relocate. According to the 2022 RVA Market Research & Consulting study “A Detailed Review: The Status of U.S. Broadband and The Impact of Fiber Broadband,” 47% of the people who moved to a rural area in the past year chose one where fiber-to-the-home service is available. That preference highlights how rural communities can use fiber to attract retirees, young professionals, families, entrepreneurs and other demographics looking to escape to the beautiful countryside.

Fiber’s 23% share of the rural broadband market also busts the myth that as a wired technology, it takes too much time and money to deploy in sparsely populated areas, including those with challenging terrain such as mountains. Another wired technology — electricity — overcame those challenges 86 years ago with passage of the Rural Electrification Act , which funded utility cooperatives that built out transmission and distribution networks to serve farms, ranches, small towns and other rural places.

Today, more than 250 of those co-ops have built or are planning broadband networks, according to the National Rural Electric Cooperative Association . Many have been in service for the better part of a decade — or longer. For example, in 2006, Blue Ridge Mountain EMC launched FTTH in Georgia. In 2019, it deployed a 7,000-foot line up a mountain, using drones to overcome challenges such as deep gorge and 100-foot-tall pine trees. In 2016, Elevate Fiber, a division of Delta-Montrose Electric Association, launched gigabit FTTH in two Colorado counties by overlaying fiber on its 4,000 miles of distribution lines.

Co-ops are just one example of how fiber isn’t just poised to bridge the rural-urban digital divide. It already is. That’s great news for rural Americans, who don’t have to wait on unproven, pie-in-the-sky technologies such as satellite.

Paul Atkinson is Chief Executive Officer of Optical Networks for STL. This Expert Opinion 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 reflected in Expert Opinion pieces do not necessarily reflect the views of Broadband Breakfast and Breakfast Media LLC.

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5G

Johnny Kampis: Wireless Survey Shows 5G’s Role in Closing Digital Divide

5G has experienced a quantum leap in growth since it first began rolling out in 2018.

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The author of this Expert Opinion in Johnny Kampis of the Taxpayers Protection Alliance

There was universal consensus that 5G wireless technology would be a game changer for closing the digital divide. The question was whether or not private investment would be enough to deploy the needed infrastructure. A new report shows that capital expenditures from wireless providers reached a record high in 2021, as 5G saw tremendous growth and will continue to help connect households now unserved by broadband.

CTIA’s 2022 Annual Wireless Industry Survey shows that wireless providers invested $35 billion into growing and improving their networks, the fourth consecutive year of industry growth.

CTIA said this is “a powerful trend that emphasizes the societal importance of wireless connectivity and underlines the industry’s commitment to building a robust platform for innovation that connects all communities.”

5G has experienced a quantum leap in growth since it first began rolling out in 2018, as infrastructure reforms that eased deployment barriers have resulted in 5G growing twice as fast as 4G. Since the Federal Communications Commission and state legislatures worked to modernize key siting regulations that could have stymied the technology’s growth, wireless providers have added 70,000 active cell sites. There are now nearly 420,000 operational cell sites across the U.S.

As CTIA notes, “More cell sites enhance coverage, encouraging adoptions and helping to close the digital divide.”

Clearly consumers want faster mobile internet speeds as the number of connective 5G devices grew more than a whopping 500 percent this past year from 14 million to Accenture 85 million. About one-third of American now possess an active 5G device.

CTIA points out that the number of connections that require wireless technology is helping fuel the growth – everything from smart watches to medical sensors. Such data-only devices represent about 42 percent of all wireless connections.

Wireless providers have invested nearly $121 billion into their networks since the launch of 5G.

CTIA notes that in an age of incredible inflation, the wireless industry’s investment, combined with increased market competition, has led to lower prices, “providing a welcome contrast to an economy where consumers have faced priced increases for 94 percent of tracked goods and services nationwide.”

Since 2010, the cost of unlimited data plans has declined 43 percent while wireless speeds have increased 85-fold over the same period.

Investment and competition have also led to new innovations such as 5G for home broadband and 5G fixed wireless. The latter is particularly useful in connecting rural areas where it’s hard to make a business case for fiber due to the cost of the last-mile connections. CTIA notes that 5G home broadband is available in more than 40 million households, providing home connections via spectrum with high capacity and low latency rather than a wired connection.

The report also points out that 5G is helping mitigate the impacts of climate change by creating green jobs in key industries. Accenture has found that 5G-enabled use cases should delivers 20 percent of the U.S.’s emission reduction targets by 2025.

5G is clearly helping usher in a new age of connectivity in this country. CTIA’s statistics are encouraging signs that the latest wireless technology is helping make broadband access available to more Americans than ever before. The best part of this growth is that taxpayer dollars are not being spent.

Johnny Kampis is director of telecom policy for the Taxpayers Protection Alliance. 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 reflected in Expert Opinion pieces do not necessarily reflect the views of Broadband Breakfast and Breakfast Media LLC.

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