WASHINGTON, September 25, 2023 – An absence of middle mile infrastructure is the biggest barrier to affordable broadband in rural areas, experts said at the Broadband Breakfast BEAD Implementation Summit on Friday.

“Middle mile” refers to the infrastructure running between communities that connects their local networks to the internet backbone. Money from the $42.5 billion Broadband Equity, Access and Deployment program can be used for middle mile infrastructure, but last mile builds — internet connections to individual homes and businesses — are prioritized.

“Middle mile is the problem in terms of affordable rural broadband. Plain and simple,” said Joel Daly, a senior vice president at network company Zayo. “If you’re far away from a major internet exchange, that infrastructure is expensive.” 

The National Telecommunications and Information Administration approved in June nearly $1 billion for middle mile projects, over $90 million of which went to Zayo for projects in three states. All told, the money will fund over 12,000 miles of fiber-optic cable to supplement the BEAD program. 

Laurel Leverrier, the assistant administrator of the US Department of Agriculture’s Rural Utilities Service Telecommunications Program, said her experience working on rural broadband projects reflected Daly’s observation. She recounted laying hundreds of miles of fiber and an undersea cable before even breaking ground on last mile connections in Alaska.

“In a lot of places where we see these unserved locations, it really is the lack of middle mile service that is driving that,” she said. “Oftentimes if there’s a good middle mile facility, companies and communities can extend off of that.”

Keeping additional middle costs down will be key for reaching every unserved area – those with the slowest and sometimes nonexistent internet – panelists said.

Dr. Tamarah Holmes, director of the Virginia Office of Broadband, said her state is facilitating partnerships between utility companies and unserved communities to make use of their existing fiber infrastructure and avoid some of this cost.

Through its Utility Leverage Program, the state is using over 3,800 miles of existing fiber across 17 projects to aid last mile builds. 

“It’s been a game changer for us,” she said.

Chaz Eberle, director of outreach at the Treasury Department’s Capital Projects Fund, a $10 billion program set up with the American Rescue Plan Act, noted that CPF funds can be used to support middle mile builds so long as they directly benefit last mile infrastructure.

He pointed to Tennessee, which was awarded $158 million for middle mile builds under the program. The state pitched these as primers for BEAD projects, but other states have successfully applied by providing evidence of current demand for broadband in unserved areas, Eberle said.

If you missed the BEAD Implementation Summit, sign up for Broadband Breakfast’s BEAD Starter Pack for $35/month (cancel anytime). You’ll get access to all the videos and each of the three Breakfast Club reports prepared for the BEAD Implementation Summit:

• July 2023 – A Deep Dive into Allocations Under the Broadband Equity, Access and Deployment Program
• August 2023 – Precursors to BEAD Implementation: A Deep Dive Into Prior Broadband Programs
• September 2023 – A Deep Dive into the BEAD Program’s Matching Funds

Already a Broadband Breakfast Club member? Watch the videos!

WASHINGTON, September 19, 2023 – Tech company trade group INCOMPAS and consulting firm Brattle Group released on Tuesday a report arguing for adding broadband providers as contributors to the Universal Service Fund.

The USF spends roughly $8 billion each year to support four programs that provide internet subsidies to low-income households, health care providers, schools, and libraries. The money comes from a tax on voice service providers, causing lawmakers to look for alternative sources of funding as more Americans switch from phone lines to broadband services.

The Federal Communications Commission administers the fund through the Universal Service Administration Company, but has left it to Congress to make changes to the contribution pool.

The report argues that broadband providers should be one of those sources. It cites the fact that USF funds are largely used for broadband rather than voice services and that broadband adoption is increasing as phone line use decreases.

“The USF contribution base needs to change to account for the fact that connectivity implies not just voice telephone services, but predominantly broadband internet access,” the report says.

It also rebuts arguments for adding tech companies like INCOMPAS members Google and Amazon to the contribution pool, saying they represent a less stable source of income for the program and that added fees for services like streaming could affect . 

The report is the latest salvo in an ongoing dispute between tech companies and broadband providers over who should support the USF in the future, with broadband companies arguing big tech should be tapped for funding as they run businesses on the networks supported by the fund.

Sens. Ben Lujan, D-N.M., and John Thune, R-S.D. established in May a senate working group to explore potential reforms to the program. The group heard comments in August  from associations of tech and broadband companies, each outlining arguments for including the other industry in the USF contribution base.

WASHINGTON, September 18, 2023 – Rural broadband companies are pushing the Federal Communications Commission to require unsubsidized providers to prove their coverage in rural areas.

The calls come weeks after the FCC announced funding offers under the Enhanced Alternative Connect America Cost Model, or Enhanced ACAM. The model allocates support to providers already receiving funding through the Universal Service Fund.

The new allocation of funds takes into account whether an area is already served at the required speed threshold – 100 Mbps download and 20 Mbps upload, faster than the previous Connect America Cost Model – by an unsubsidized provider. Areas the FCC deemed to be served only by an unsubsidized provider were excluded from awards and less money was made available to recipients operating in the same area as an unsubsidized provider.

Providers who were offered Enhanced ACAM funding must accept or decline their offers by September 29, but the FCC will accept challenges from awardees and make adjustments to the awards until 2025.

In a September 15 filing to the FCC, NTCA – The Rural Broadband Association said the process for challenging these determinations is insufficient and urged the agency to require unsubsidized carriers to certify their reported coverage where Enhanced ACAM funds .

The challenge process is lacking, the association said, because it relies on the FCC’s broadband map and the accompanying challenge procedures. 

The map data includes maximum speeds available at a given location, but it does not reflect potential decreases in speed that happen when many people are simultaneously using a fixed wireless network – the technology many rural providers use – and does not include information on standalone voice service, which a provider must offer to meet the agency’s definition of an unsubsidized competitor.

The agency told Enhanced ACAM recipients to submit concerns on these and other issues not captured by the map via public comment in its docket system and to challenge unsubsidized coverage and speeds through its standard broadband map challenge process. 

FCC speed data is also difficult to challenge, the NTCA said in its filing. Challenges alleging a carrier’s provided speed is lower than that recorded in the data cannot be submitted in bulk, but must be submitted individually. That makes it difficult to determine if an unsubsidized provider offers lower speeds than they reported for large areas.

Requiring certifications from unsubsidized providers would provide “a well-structured and well-defined supplemental process,” for submitting challenges to Enhanced ACAM allocations, the association wrote.

The NTCA met with agency officials ahead of the award announcements to ask for the same certification, according to an ex parte filing from July 24.