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Permitting, Purchase Restrictions Still Outstanding as BEAD Makes Way to States

Permitting delays could make the five-year deployment timeline difficult to meet, panelists said.



Photo of Tamarah Holmes, Kelly Schlegel, Jade Piros de Carvalho, and Drew Clark (left to right)

WASHINGTON, June 27, 2023 – One day after the White House announced the allocation of broadband infrastructure money to the states, state broadband officials said there remain permitting and purchase restriction obstacles in the path of completing builds within the mandated five-year timeline.

The officials from Virginia, Kansas and New Mexico reflected on the amounts they received from the government’s $42.5-billion Broadband Equity, Access and Deployment program and on the challenges ahead to deploy the money at Broadband Breakfast’s Made In America Summit Tuesday.

The challenge of getting a timely response and the actual permits from utility and federal land agencies managed by the Department of the Interior to deploy the actual infrastructure was raised as a primary obstacle to get resolved.

“We can’t get anyone to respond,” said Kelly Schlegel, the New Mexico director of the Office of Broadband Access and Expansion, referring to the BLM.

“So not only is it getting the whole process of the rights-of-way, it’s getting somebody to respond and start the process.”

Tamarah Holmes, director of Virginia’s Office of Broadband, backed that up with an example of a broadband project funded in 2019 to connect 22 houses that crossed federal land overseen by the National Park Service. Those homes have yet to get broadband access because Holmes said she can’t get a response from the agency.

“Just think about it: Design and engineering is done. We got the houses identified. We can’t get the permit…at the same time the costs are significantly going up on the ability to get to those 22 [houses]. So maybe in five years I’ll get to them, but now the cost might be twice as much as it was in 2019.”

Indeed, since the start of the pandemic, supply chain issues have meant not only delays in getting equipment, but a shortage of said equipment. In combination with higher inflation, the cost of broadband equipment has increased.

Jade Piros de Carvalho, Kansas’s director of the Office of Broadband Development, noted that a land agency official remarked that the permitting process would take at least 18 months.

“You’re telling us some of this is going to take 18 months to get one of these [permits] done?” Piros de Carvalho said. “I think the federal government needs to staff those agencies.”

Schlegel also noted that internet service providers who want to attach to existing wood poles – a primary way to attach broadband equipment – must still pay for the replacement of poles if an upgrade is needed to accommodate them. Because the third-party providers must also continue to rent space on the pole, the project because very expensive.

This has forced some ISPs in New Mexico to just dig underground – the traditionally more expensive way of rolling out infrastructure – because it turns out to be cheaper, a reality that Piros de Carvalho called “shocking.”

The Federal Communications Commission is currently deliberating on whether to force pole owners to share in the cost of pole replacements, with the prevailing idea being that the owners derive long-term revenue benefit from the new pole.

Holmes said the complaints and friction between the pole owners and broadband provides has been a “huge issue and it will continue to be a huge issue.” But she noted that there are some ISPs who are buying poles for the utility companies and have a cost-sharing agreement already in place to work around some of these access issues.

Piros de Carvalho also noted that the Build America, Buy America requirements under the Infrastructure, Investment and Jobs Act – which requires that most of the cost of a project be made in America – could end up being a sticking point because some key products required for builds are simply not in enough supply in the country.

“We’ve got labor constraints, we’ve got supply chain constraints, we’ve got rights-of-ways and permitting, but definitely yes, we’re talking with the NTIA…after we get a year or so into this, we’re going to have to get real about what it takes.”

Piros de Carvalho said when it comes time for final proposals on broadband deployment plans using BEAD money, the conversation on what to do about the Buy America requirements will begin to really ramp up.

Despite the preference of the National Telecommunications and Information Administration for hard fiber for its ability to scale to the highest available speeds, Piros de Carvalho said her state must grapple with the reality that its $475-million allocation was not enough to connect the geographically large state with many high-cost rural areas with hard infrastructure.

“We’re just going to have to use a mix of technologies that we maybe wouldn’t have considered had we gotten a billion dollars,” she said.

New Mexico received $675 million, though Schlegel said she expected money in the $700 million territory based on analyst estimates.

Virginia received a comparatively hefty $1.48 billion.

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A Hidden Issue Potentially Impacting BEAD Implementation: Pole Attachments

Problems accessing poles could delay fiber builds funded by the Broadband Equity, Access and Deployment program.



The heat that arose over the course of 2022 on the topic of pole attachments shows no signs of abating. Indeed, the rollout of the broadband infrastructure program under the bipartisan infrastructure law may be heightening tensions over the topic.

Now, some experts are claiming that concerns about access to poles could delay fiber builds funded by the $42.5 billion Broadband Equity, Access and Deployment program of the U.S. Department of Commerce.

In order to deploy broadband networks, fiber and cable companies must run wires either underground or above ground. Utility poles, the poles that support public utility services such as electricity, are an attractive option to minimize deployment costs and reach every address in a provider’s jurisdiction.

The specific controversy generally centers around the rates that broadband companies seeking to put fiber on utility poles need to pay the owners of the poles, often utilities. Internet companies claim that utility companies place an undue financial burden on attachers, which can hinder builds through the federal grant programs coming down the pipeline.

Utilities often require that new attachers pay the price of pole replacement or else the cost to make the poles ready for new attachments. This financial burden is felt particularly heavily by new entrants that do not have the necessary capital to invest in these poles. In fact, Google Fiber faced these hurdles in Nashville in 2016 when pole attachment permits became hard to acquire and financially burdensome.

Pole attachments differ from pure conduits

Pole attachments differ from conduits, which are structures containing one or more ducts — a single enclosed path for conductors, cables or wire — usually placed in the ground, in which cables or wires may be installed. Service providers may rent conduit, often owned by utilities or other providers, for their broadband networks.

read more….

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Broadband's Impact

FCC Inspector General Suspects Providers of Improperly Taking Subsidies

The agency’s Office of the Inspector General said providers were still paid for un-enrolled subscribers.



Photo of the FCC's headquarters at 45 L Street NE from the Smith Group.

WASHINGTON, October 2, 2023 – Dozens of mobile broadband providers are likely not complying with federal subsidy rules, the Federal Communications Commission inspector general said in a report on Friday.

The Affordable Connectivity Program provides about 20 million low-income households a $30 monthly internet discount. That money is paid by the government to providers giving those households broadband service.

When customers receiving ACP discounts stop using a provider’s broadband service, the provider is required to report that to the FCC so money is only disbursed for active users. Typically, anywhere from a third to one half of an ACP provider’s subscribers will be de-enrolled each month, according to the report from the Office of the Inspector General.

But the OIG said that it found “dozens” of providers report few, if any, of these lost customers, making it likely the providers are taking government subsidies for broadband service they are not providing. It did not name the providers.

“We strongly suspect [the unnamed providers] are not complying with program usage and related de-enrollment rules,” the OIG wrote.

One company repaid the commission almost $50 million after being approached by the OIG. That’s one third of all ACP subsidies the provider received from June 2021 to July 2022.

The OIG released data from five of the suspect providers showing they failed to de-enroll more than three percent of their monthly subscribers, making them and similar providers outliers among ACP providers. One provider had over 1 million subscribers.

The office said in its report that it has gathered additional evidence of the same providers taking ACP money for subscribers who are not using their service. Those investigations are ongoing.

In 2021, the OIG found similar abuses in the Emergency Broadband Benefit program, a predecessor to the ACP. The office again found dozens of providers reporting more households with dependent children than existed in several school districts.

In response to the report, the FCC released a public notice directing the Universal Service Administrative Company, the arm of the agency responsible for administering the ACP and other broadband subsidy programs, to strengthen its monitoring around de-enrollment and other requirements.

The ACP, a $14 billion fund set aside by the Infrastructure, Investment and Jobs Act, is set to dry up in April 2024. There have been repeated calls for Congress to renew the program.

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Experts Suggest Measures to Protect Affordable Connectivity Program at Senate Hearing

Under consideration: Opening the Universal Service Fund to contributions from broadband and Big Tech companies.



WASHINGTON, September 28, 2023 – A broadband association asked Congress last week to open the Universal Service Fund to contributions from broadband and Big Tech revenues to allow the umbrella fund to absorb and support the Affordable Connectivity Program.

The industry is concerned that the $14-billion ACP program, which discounts monthly services for low-income Americans and those on tribal lands, is going to run out of money by early next year. Meanwhile, it is universally agreed that the Universal Service Fund, which includes four high-cost broadband programs, is struggling to maintain its roughly $8-billion annual pace without a diversification of its revenue sources.

Jonathan Spalter, president and CEO of USTelecom, told the Communications and Technology subcommittee studying the future of rural broadband on September 21 that Congress could both support the sustainability of the USF and the ACP by forcing contributions from broadband and Big Tech revenues.

The idea is that the extra revenue would solve the USF sustainability question by allowing the fund to continue to support the existing four programs under its purview, while also allowing it to adopt the ACP program, hence removing that program from reliance on Congress for money.

“We can have Congress give the FCC the authorities that it requires to be able to expand the contribution base, integrating the ACP within USF program, and thereby allowing the potentially out of control contribution factor that will potentially bog down the viability and longevity of the Universal Service Fund mechanisms to go down,” Spalter said.

“And in so doing it can expand the contribution base sufficiently to allow not only broadband but importantly the dominant Big Tech companies to participate so that we would effectively fuse the Affordable Connectivity Program with [high-cost program] Lifeline and do so in a way that would actually not require appropriated dollars from Congress.”

The ACP currently has around 21 million Americans signed up, but the FCC says many more are eligible. The commission has been allocating money to outreach groups to market the subsidy program.

While some have argued that the Federal Communications Commission could unilaterally expand the contribution base of the USF, the commission has elected to wait for Congress to make the requisite legislative reforms to give it that authority.

Forcing Big Tech companies, which rely on the internet to deliver their products, has been an idea tossed around by experts and promoted by Federal Communications Commissioner Brendan Carr. Meanwhile, forcing broadband revenues to contribute to the fund has also received good support.

The concern for the ACP program is that the internet service providers rely on the $14 billion to continue to offer discounts.

“With funding set to be depleted early next year, initial notices of service termination could be out during the height of the holiday season in December – that’s a present none of our constituents deserve to receive,” said Congresswoman Doris Matsui, D-Calif.  

“Poverty is everywhere, but higher in rural America, in our region the reason most people can’t adopt service is due to lack of affordability, this impacts more households than lack of infrastructure alone,” said Sara Nichols, senior planner of the Land of Sky Regional Council of Government.

“It’s a program we simply can’t afford to lose,” added Nichols.

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