It’s sometimes easy to forget that the broadband business is just over twenty-five years old. Cable companies have adopted another interesting way to compete through what is called hidden fees, which are fees that are not clearly identified when new customers sign for service. Hidden fees have been around a long time, but in recent years have become gigantic. The motivation for having hidden fees is clear – it lets a cable company advertise a low price for basic service by not mentioning the hidden fees.
It is my firm belief that counties that form partnerships with regional internet service providers (ISPs) to build fiber networks--funded by both Broadband, Equity, Access and Deployment (BEAD) Program grants and local matching grants--will be the ones to win BEAD grants. But this is not an easy choice. For an area that doesn’t have broadband today, the BEAD grants sound like a far distant opportunity. It’s hard to think that any recipients of BEAD grants will be constructing networks any sooner than 2024 – assuming by then that they’ll be able to get the needed fiber and electronics.
All of the big broadband providers brag to the public about how much they spend on their networks. Even at the local level, it’s rare to ask a big broadband provider to a local government meeting where they don’t open the conversation by reminding local politicians how much money they have spent in a given town or county. The story is often just the opposite when problems with networks are pointed out, and communities ask the broadband providers to beef up networks and improve service.
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.
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.
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.
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.
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.
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 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.