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Municipal Networks and Incumbent Providers Will Compete for Grant Funding in 2023

The cost of remote fiber deployment can be a deterrent, necessitating creative community solutions.

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WASHINGTON, December 28, 2022 — The emerging preference for fiber over competitor technologies is likely to continue in the coming year, with municipal networks playing an important role, said panelists at a Broadband Breakfast Live Online event Wednesday.

“I always think of fiber going into a town as rippling,” said Sean Buckley, editor in chief at Broadband Communities. “It’s not just fiber to the home — it’s fiber to the tower, the business, the school, et cetera.”

Buckley and others were reacting to Broadband Breakfast’s 12 Days of Broadband, a monthly report that included articles about the 12 top issues for broadband in 2022. The first of the 12 days articles was about how “Fiber Finds Its Footing, Offering Future-Proof High Speeds,” by Drew Clark, editor of Broadband Breakfast and moderator of the Wednesday session. Clark said that the strength of the case for fiber was gaining momentum with the federal bipartisan infrastructure investment in broadband.

In many areas, smaller community broadband networks are challenging the monopolies held by large incumbent players.

“Lots of folks are fed up with sort of having no choice or having only one provider, and lots of communities are becoming much more aware of the community broadband model and are looking at exploring that,” said Sean Gonsalves, senior writer for the Institute for Local Self-Reliance’s Community Broadband Networks Initiative.

Gonsalves pointed to Fairlawn, Ohio as a successful example of the community broadband model. The municipal network has been so successful that they recently upgraded all customers to a higher speed tier and simultaneously dropped prices, now offering a symmetrical gigabit connection for $55 per month.

Incumbent networks are sometimes hostile to emerging community broadband networks, Gonsalves said, citing an email where an incumbent network executive said their top challenge was preventing municipalities and nonprofits from accessing grant funding.

Some states will probably “shovel their hundreds of millions of dollars to the big incumbent providers, and then 10 years down the road, people will be scratching their head wondering why we still have the digital divide,” Gonsalves said.

Despite the significance of the $42.5 billion Broadband Equity, Access and Deployment program, it is unlikely to be enough to give the whole country access to high-speed connectivity, panelists agreed.

In the coming year, it will be interesting to see whether states “adhere to the letter and spirit of the BEAD law, which says that you’re not able to exclude municipalities and the like from getting access to those to those grant funds,” Gonsalves said.

In some remote areas, fiber’s cost might outweigh the benefits

Federal funding is giving fiber a boost over competitor technologies, but it isn’t necessarily a universal solution.

Deploying fiber to rural areas can be extremely expensive, said Linda Hardesty, editor in chief at Fierce Telecom. For example, a company in Alaska received a $33 million grant to run fiber to just 211 homes and five businesses — meaning that the cost per passing would be more than $200,000, according to Fierce Telecom.

“That exorbitant cost is the reason why fiber has never been run to places like that before, because private companies couldn’t make a business model out of that,” Hardesty said.

Most rural fiber deployments cost far less than the Alaska project, but several other grant winners are undertaking projects that cost tens of thousands of dollars per passing, which Hardesty noted is still exorbitant compared to the typical deployment cost of less than $3,000 per passing.

Proponents argue that the long-term economic and societal benefits of bringing fiber to rural areas outweighs the upfront costs, Hardesty said.

“It’s more expensive to build bike lanes than it is per mile than it is to lay fiber,” Gonsalves said. “Roads, water systems, schools — these are all projects that municipalities take on all the time and so in my mind it’s not really a question of the cost per se. It’s really a question of political will.”

Setting aside the issue of cost, Hardesty questioned whether or not the government is responsible for deploying fiber to remote locations in the first place.

“The government helped get electricity to places that are really remote, and broadband is practically as much of a necessity now as electricity is,” she said. “But then others would say, if you choose to live in a really remote location… you’d have to pay for getting plumbing out there. So why should the government have to pay for your broadband?”

Another challenge in fiber deployment is the broadband workforce shortage, Buckley said. Several industry organizations and community colleges are working together to design and offer training programs, but there is still a need for skilled fiber technicians.

Our Broadband Breakfast Live Online events take place on Wednesday at 12 Noon ET. Watch the event on Broadband Breakfast, or REGISTER HERE to join the conversation.

Wednesday, December 28, 2022, 12 Noon ET – New Year Recap: Biggest Stories in Broadband

Join the Broadband Breakfast team and our guests to discuss the biggest stories in broadband in 2022. Plus, we’ll make predictions for what to expect in 2023. We’ll discuss:

  • The first year of implementing the Infrastructure Investment and Jobs Act.
  • How broadband and the hybrid workforce are adapting to the post-pandemic reality.
  • The role of the national broadband map and challenges to it.
  • Key moments in the ongoing fight about online content moderation.
  • The future of broadband infrastructure development in the face of a number of workforce and supply chain challenges.
  • And more!

Make sure to tune in for this special year-in-review Live Online.

Panelists:

  • Sean Buckley, Editor in Chief, Broadband Communities
  • Linda Hardesty, Editor in Chief, Fierce Telecom
  • Sean Gonsalves, Senior Writer and Editor, Community Broadband Networks Initiative, Institute for Local Self-Reliance
  • Drew Clark (moderator), Editor and Publisher, Broadband Breakfast

Sean Buckley is the Editor in Chief of Broadband Communities. Buckley comes to the magazine publishing and conference company after serving nine years as Senior Editor at FierceTelecom, a daily online newletter. He also oversaw FierceInstaller, a weekly publication chronicling trends in network installation. Prior to coming to FierceTelecom, Sean spent eight years at Horizon House publications, serving as senior editor and later as Editor in Chief of Telecommunications Magazine and Telecom Engine. He also had a one-year stint at Current Analysis tracking public sector IT trends.

Linda Hardesty is editor-in-chief at Fierce overseeing the telecom group comprised of FierceWireless, FierceTelecom and FierceVideo. She’s been a trade journalist since the mid-1990s covering the business and technology of telecommunications networks. Prior to Fierce, she wrote for SDxCentral, Communications Technology/CableFax and Cable World.

Sean Gonsalves is a longtime former reporter, columnist and news editor with the Cape Cod Times. He is also a former nationally syndicated columnist in 22 newspapers, including the Oakland Tribune, Kansas City Star and Seattle Post-Intelligencer. His work has also appeared in the Boston Globe, USA Today, the Washington Post and the International Herald-Tribune. In October 2020, Sean joined the Institute for Local Self-Reliance staff as a senior reporter, editor and researcher for ILSR’s Community Broadband Networks Initiative.

Drew Clark (moderator) is CEO of Breakfast Media LLC. He has led the Broadband Breakfast community since 2008. An early proponent of better broadband, better lives, he initially founded the Broadband Census crowdsourcing campaign for broadband data. As Editor and Publisher, Clark presides over the leading media company advocating for higher-capacity internet everywhere through topical, timely and intelligent coverage. Clark also served as head of the Partnership for a Connected Illinois, a state broadband initiative.

WATCH HERE, or on YouTubeTwitter and Facebook.

As with all Broadband Breakfast Live Online events, the FREE webcasts will take place at 12 Noon ET on Wednesday.

SUBSCRIBE to the Broadband Breakfast YouTube channel. That way, you will be notified when events go live. Watch on YouTubeTwitter and Facebook

See a complete list of upcoming and past Broadband Breakfast Live Online events.

Reporter Em McPhie studied communication design and writing at Washington University in St. Louis, where she was a managing editor for the student newspaper. In addition to agency and freelance marketing experience, she has reported extensively on Section 230, big tech, and rural broadband access. She is a founding board member of Code Open Sesame, an organization that teaches computer programming skills to underprivileged children.

Fiber

FCC Commissioner Carr Criticizes BEAD Fiber Priority Ahead of Funding Allocation

The NTIA has acknowledged a clear preference for fiber in its bipartisan infrastructure deployment effort.

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Photo of FCC Commissioner Brendan Carr in Feb 2018 by Gage Skidmore used with permission

WASHINGTON, May 31, 2023 – Brendan Carr, commissioner of the Federal Communications Commission, voiced reservations last week about the fiber preference in the National Telecommunications and Information Administration’s flagship broadband funding program, citing potential time and financial constraints.

The NTIA’s Broadband Equity, Access, and Deployment program, an offspring of the Infrastructure, Investment and Jobs Act, is expected to deliver $42.5 billion to the states by June 30 for infrastructure that needs to be built within a handful of years. Funding priorities under BEAD will be given to “projects designed to provide fiber connectivity directly to the end user,” according to an NTIA document.

“I do think some of the BEAD policies put a bit too much of a thumb on the scale for fiber,” Carr said in an interview with John Foley, managing director of Safer Building Coalitions, at the Wireless Tech and Policy Summit in Washington.

“In the case of fiber, where it could take potentially years to get fiber built out, not to mention significant delta in funding,” said Carr. “It can take anywhere from $40,000 to $60,000 to run a mile of fiber.”

He said fixed wireless access can sometimes provide “robust high-speed service” while still remaining within budget.

Despite the NTIA’s clear acknowledgement of a fiber preference in its infrastructure deployment effort, Carr has long advocated for the use of fiber alternatives in rural regions, where high-speed internet is still a luxury in some parts. In 2022, Carr criticized the FCC for rejecting full grants to satellite broadband service provider Starlink and fixed wireless service provider LTD Broadband from the Rural Digital Opportunity Fund.

“We should be making it easier for unserved communities to get service, not rejecting a proven satellite technology that is delivering robust, high-speed service today,” read the statement. “To be clear, this is a decision that tells families in states across the country that they should just keep waiting on the wrong side of the digital divide even though we have the technology to improve their lives now.”

Among the summit’s panelists, former FCC Commissioner Jonathan Adelstein also raised skepticism that the program’s intended beneficiaries, those living in rural regions, would see any tangible benefits from a fiber priority strategy.

“Policy makers, I don’t think, are always thinking about how actually consumers are living on the ground,” he said. “The thing that isn’t so obvious sometimes is the affordability factor that not everybody can afford to have a fiber connection and a broadband connection over their handset.”

This isn’t the first time telecom experts raised concern about BEAD’s fiber-focused expansion. The Wireless Internet Service Providers Association released a report in February calling fiber-prioritized financing “a bad policy” due to its potential to raise implementation costs and slow down the rollout timeline.

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Fiber

Utah City Approves UTOPIA Fiber Build

UTOPIA continues to expand open access model builds.

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Photo of Bountiful City Hall

BOUNTIFUL, May 24, 2023 – The city council in Bountiful, Utah, voted unanimously to approve the building of a city-owned fiber network by Utah-based service provider UTOPIA Fiber Tuesday. 

The open access fiber infrastructure will be owned by the city but operated by UTOPIA Fiber, which will then lease the fiber to internet service providers. 

City council members expressed their resounding support for the program. We believe that the estimates of take rates are conservative and reasonable when compared to like communities, said City Manager Gary Hill, pointing to neighboring town Centerville that has 49 percent take rate on its city-owned network. 

Bountiful will issue $43 million in bonds to fund the program, announced the city. The debt service for the bond will be paid for using system revenues with any excess revenue invested into affordability assistance, city council members said.  

The initial contract term is 10 years with buildout expected to take 2-3 years. The city anticipates that it will make profit on the investment within four to five years of operation. 

In 2022, at the request of residents, the city issued a request for proposals that were released to potential fiber providers to build and operate a city-owned network. In January, Bountiful officials began contract negotiations with UTOPIA. 

“The purpose of the City’s involvement with fiber is to provide a competitive marketplace for internet service providers through an open access network,” read the city’s statement.  

The announcement comes months after West Haven, Utah announced its contract with UTOPIA Fiber for a city-wide network. 

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Open Access

AT&T Closes Open Access Fiber Deal With BlackRock

In a new joint venture, AT&T will expand its fiber network across the nation.

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Photo of Christopher Sambar of AT&T

NEW ORLEANS, May 12, 2023 – AT&T is set to invest several million dollars of capital into fiber builds across the country as it announces the closing of its joint venture deal with fund manager BlackRock, the company said.  

In December, AT&T and BlackRock announced the formation of their joint venture, Gigapower LLC, to operate and deploy a fiber network to 1.5 million customers using a commercial open access platform.  

The deal between the companies closed Thursday. According to the press release, the new company’s goal is to “create the United States’ largest commercial wholesale open access fiber network to bring high-speed connectivity to more Americans.” 

“We believe fiber connectivity changes everything. That’s why we’re already one of the biggest investors in fiber in the United States,” said John Stankey, CEO of AT&T in a statement.  

“The demand for high-speed connectivity is unprecedented, and through this innovative partnership with BlackRock, one of the world’s foremost investors in infrastructure, we’re able to connect even more people and businesses, accelerating our efforts to help close the digital divide,” he said. 

Gigapower will enable AT&T to expand its fiber reach beyond its traditional areas and spread across the country, read the press release. BlackRock brings significant expertise and capital to support the buildout. 

The company expects to expand into Las Vegas, Nevada and areas of Arizona as well as Northeastern Pennsylvania and parts of Alabama and Florida that are currently outside of AT&T’s service areas. 

Christopher Sambar, executive vice president of AT&T, said in a Connect (X) event Wednesday that the company has already invested millions of dollars to build the most expansive fiber network in America.  

Between 2018 and 2022, AT&T invested $120 billion into the US economy via capital expenditures, he said, making the company one of the largest capital investors in America. 

Fiber is the backbone of wireless and 5G technology, he said. It is essential that the industry builds the foundation of fiber to support 5G and enable further innovations in the technology. 

According to Sambar, well over 170 million customers are being serviced with high-speed 5G networks and close to 300 million are serviced with speeds close to 5G.  

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