Doug Dawson

Following the Rules When Choosing an Internet Service Provider Partner

Local governments all over the country are choosing internet service provider (ISP) partners and making grants from American Rescue Plan Act (ARPA) funds to help bring better broadband. This blog is a warning to handle the awards of such monies in a way as to be safe from challenges from ISPs you don’t choose to fund.

An Easier Way to Define Broadband

Our broadband policies always seem to lag the market. If and when the Federal Communications Commission seats the fifth Commissioner, it’s expected that the agency will raise the definition of broadband from 25/3 Mbps to 100/20 Mbps. That change will have big repercussions in the market because it will mean that anybody that can’t buy broadband speeds of at least 100/20 Mbps would not have broadband. There is a much easier way to define broadband.

A New Source of Financing

Section 80401 of the Infrastructure Investment and Jobs Act new law allows for the use of private activity bond financing for qualified broadband projects. It’s an interesting new form of financing that has never been easily available to commercial internet service providers before. This bond funding can only be used for projects that fit the criteria for broadband projects that are covered by the other provisions of the Infrastructure Act.

Embracing Network Resiliency

For years the industry used the word redundancy when talking about how we protected our networks. The primary aspects of redundancy are having multiple fiber routes in place so that areas don’t become isolated if a fiber is cut or having enough spare electronics to quickly recover from problems. But in recent years, we’ve started to talk about resiliency, which encompasses redundancy but means a whole lot more. Resiliency means taking proactive steps to prepare against reasonably expected problems of all sorts.

Can the Big Telecom Companies Turn the Corner with Fiber?

I was asked an interesting question recently: will fiber help the big telecom companies turn the corner to success? It’s a good question when looking at telcos like Frontier, Windstream, Lumen, and any others who are late to the game for converting copper to fiber. There are a lot of factors that will come into play, so the answer is likely to be different by company. On the plus side is a general consensus by many households that fiber is the best technology. There is a sizable percentage of homes in any market that will move to fiber given a chance.

Are Earmarks a New Source of Broadband Funding?

The current Congress stuck almost 5,000 earmarks costing almost $9 billion into the $1.5 trillion budget that was recently signed by President Biden. An earmark is when each member of Congress gets to designate funds directly to pet projects. There is no reason that earmark spending can’t be used for broadband infrastructure, and it’s likely that there were broadband construction projects buried inside of the 4,962 projects that were just funded this way. The idea of getting an earmark for broadband is intriguing because I’m not sure anybody knows what rules would apply.

The Grant Drop Dilemma

The short time frame for many state grants is out of synch with the reality of the way that internet service providers (ISPs) can add customers to a network. Grants generally pay only for the capital cost of assets. The largest cost for fiber grants is likely the cost of the fiber running up and down streets to pass customers. The second largest cost in many grants is the fiber drops that connect from the street to customers. In short, an ISP has two concerns with a grant with a short timeframe. Make sure to ask for enough money upfront.

Dish–The New Broadband Player

Dish Network has been quietly building out its new cellular networks and plans to launch in 25 major markets and over one hundred smaller markets before June 2022. This company is shooting to stay on track for its commitment to the Federal Communications Commission to cover 20% of the US population by this summer and 70% by June 2023.

When Will We See BEAD Grants?

When we’ll be able to file for grants from the Broadband Equity, Access, and Deployment (BEAD) program? The short answer to the question is that we can’t know yet. But we know all of the steps that must be taken by a state before it can start offering grants. We have a date for the first step of the process. On May 15, the National Telecommunications and Information Administration will release a Notice of Funding Opportunity (NOFO) for the BEAD program. This document will flesh out the NTIAs understanding of how the grant process will work.

Revisiting the Definition of Broadband

Will the Federal Communications Commission raise the definition of broadband to 100/20 Mbps? It looks like that probably doesn’t happen until Congress approves a fifth FCC commissioner. But we  need to understand that a 100/20 Mbps definition of broadband is not forward-looking and will start being obsolete and too slow from the day it is approved. We need a mechanism to change the definition of broadband annually, or at least more often than we have been doing. The market has already told the FCC that 100 Mbps is quickly becoming last year’s news.

Quantifying Grant Matching

For anyone planning on funding a broadband project with a grant, there are some important costs to consider. First, grants don’t cover all assets. Most grants cover network assets and assets needed to connect to customers, but grants typically don’t cover vehicles, computers, furniture, test equipment, and any other assets needed to launch a new internet service provider (ISP) or a new market. Grants also aren’t going to cover major software costs like upgrades to billing systems or marketing software.

Can Courts Mandate Better Broadband?

In April 2021, State District Court Judge Matthew Wilson in New Mexico ordered school officials to take steps to provide the needed devices and broadband connections for students who are forced to attend school remotely. This ruling was made during the deepest part of the pandemic when most schools in New Mexico were shut down. His ruling was based upon complaints that The New Mexico Public Education Department was not complying with a court decision in the case of Yazzie/Martinez v.

Will Some States Not Accept Broadband Funding?

The upcoming Broadband Equity, Access, and Deployment (BEAD) Program grants bring a huge once-in-a-generation grant to states to solve the digital divide and build broadband infrastructure. The average state will get over $800 million dollars, with the exact amount per state still to be determined. It seems almost too absurd to imagine for communities with poor broadband, but there are some states that may end up not getting this funding.

Will there be a return to broadband duopoly competition?

For the last twenty years, the industry has talked about broadband in cities as a duopoly, meaning there was competition between cable and telecom companies – competition between cable modem broadband and DSL broadband. Whether coordinated by backroom deals or by listening to smart advisors, both industries have given up trying to compete on price. By the time cable modem speeds hit 30 Mbps speeds, the market competition was over, and cable clearly won the price war.

FCC Investigates the Cost of Pole Replacements

The Federal Communications Commission recently issued a Second Notice of Proposed Rulemaking concerning the allocation of costs when replacing poles to accommodate adding fiber or other communications wires communications devices to poles. The traditional rule has been that the new attacher must pay for 100 percent of the cost of make-ready, including the cost of pole replacement if there is not sufficient room to add a new wire or device (like a small cell).

The Concept of Partnership is Expanding

For many years there have been people extolling the huge benefits of public-private partnership for broadband. For all of that talk, there is not a big number of partnerships, but there are some successful examples around the country. Communities that are looking for broadband solutions might want to consider public-public partnerships and non-profit partnerships. I’m seeing public-public partnerships develop that are similar to the more traditional public-private partnership. Existing municipal internet service providers (ISPs) are reaching out to help neighboring communities.

Are Broadband Grants Taxable?

Casey Lide of Keller & Heckman wrote a recent blog that warns that federal grant funding might be considered as taxable income by the Internal Revenue Service (IRS). This would be a dreadful outcome for any taxable entity that receives the grant funding since it would create a huge tax liability that would have to somehow be covered outside of the grant funding.

AT&T to Chop Copper Networks

AT&T announced that it has plans to cut its copper network footprint in half by 2025. However, Jeff McElfish, the CEO of AST&T’s Communications division, said the company isn’t planning to forcibly move customers off copper as they decommission copper. According to McElfish, customers are naturally migrating off copper. I find that hard to believe. CCG Consulting is still seeing DSL penetration rates in cities between 10 percent and 40 percent.

National Broadband Growth is Slowing

Leichtman Research Group recently released the broadband customer statistics for the end of the fourth quarter of 2021. The numbers show that broadband growth has slowed significantly for the sixteen largest broadband providers tracked by the company. LRG compiles these statistics from customer counts provided to stockholders, except for Cox which is privately owned. Net customer additions sank each quarter during 2021. The first quarter of 2021 saw over 1 million net new broadband customers.

The BEAD Grant Dilemma

Rural counties are facing some interesting dilemmas about where to offer local support for the giant upcoming federal grant funds that will hopefully build broadband in their counties. Counties that are willing to provide local matching grants from American Rescue Plan Act or other funds may well rise to the top of the list of lists of who gets funded. I think many counties fear that nobody is going to seek the $42.5 BEAD grant funding in their county – and some are probably right.

Household Broadband Usage is Up Again

OpenVault just published its Broadband Insights Report for the end of the fourth quarter of 2021. As usual, the results are astounding and demonstrate the continued strong growth of household broadband usage. I think one of the most useful statistics from OpenVault is the average household usage of broadband; there were not many people in the industry in 2018 who would have believed that the average home usage in 2021 would be using over a half terabyte of data each month.

Internet service providers offer multi-gigabit broadband

AT&T recently announced multi-gigabit broadband plans on its fiber connections. The company has priced 2-Gbps broadband at $110 per month and 5-Gbps broadband at $180. AT&T isn’t the first company to offer multi-gigabit broadband speeds and joins other large internet service providers (ISPs). For now, multi-gigabit broadband is mostly a marketing gimmick. It’s a way for an ISP to tell the public that its networks are fast.

When Government Impedes Fiber Construction

It always perplexes me at a time when solving rural broadband is a top priority that governments still create policies that are huge barriers to fiber construction. The newest story comes from the State Department of Transportation in New York (NYDOT). The agency has a permitting process that is adding tons of costs to fiber projects – including fiber projects that were funded by State broadband grants. The NYDOT requires an expensive process to get onto a pole located in State rights-of-way.

Big Internet Service Providers Fear Rate Regulation

Now that Democrats are back in charge of the White House, the issue of net neutrality and the threat of rate regulation has surfaced again. The big internet service providers (ISPs) have been trying to derail or delay confirmation of Gigi Sohn [Senior Fellow and Public Advocate at the Benton Institute for Broadband & Society] as the fifth Federal Communications Commissioner because they know that one of the first actions of the FCC under Chairman Jessica Rosenworcel will be to reintroduce Title II regulation.