Tuesday, October 31, 2023
Headlines Daily Digest
Correction: Yesterday we reported that Louisiana and Virginia have won approval of their versions of BEAD Initial Proposal Volume 2.
Both states are awaiting approval of their plans.
Government & Communications
Stories From Abroad
Congress is discussing a number of different scenarios to continue funding the Affordable Connectivity Program once the remaining funds are depleted, which is projected to happen in the first half of 2024. Several of the scenarios being considered involve changes to the current eligibility criteria. Here we examine the potential impact of lowering the household income eligibility threshold, currently set at 200 percent of the federal poverty line (FPL). What would happen if this threshold were lowered to 135 percent of the FPL? How would this affect household eligibility across states and counties, and for disadvantaged populations? Nationwide about 7.4 million households that currently qualify to receive ACP benefits would become ineligible. This represents a decrease of 13.6% from the current number of eligible households (about 54.1M). However, the impact varies widely across states. In Kansas, Utah and North Dakota, this change would exclude over 20 percent of currently eligible households. In contrast, in Massachusetts, New York and California, the relative impact would be smaller with fewer than 10 percent of households losing eligibility. In addition, the relative impact of lowering the income threshold would be larger in states with Republican senators, even though the ACP program is benefitting red and blue states almost equally. The impact will also be unevenly distributed across populations, and affect veterans and older adults significantly more than other historically disadvantaged groups.
With the Infrastructure Investment and Jobs Act of 2021 providing sufficient funding to deploy broadband to nearly every household in the nation, the Digital Discrimination provisions contained in Section 60506 of the statute are a curiosity. Nonetheless, Congress directed the Federal Communications Commission to write rules implementing the statutory provision. The FCC recently released draft final rules implementing Section 60506 in anticipation of its November 2023 Open Meeting which adopt a somewhat standard disparate impact analysis. In this paper, we conduct an empirical analysis of racial discrimination in broadband access motivated by the caselaw on disparate impact analysis. Using data from the FCC’s new broadband fabric data, we test for differences in broadband availability between predominantly minority and majority census block groups and find no evidence of digital discrimination against minorities. In fact, we find that, if anything, minority groups have better access to broadband than do Whites, on average. Accordingly, a prima facie case of disparate impact for “digital discrimination of access” is unlikely to be empirically supported on racial grounds.
I think there are three distinct broadband gaps that together define the broadband availability gap – the rural broadband gap, the urban affordability gap, and what I call the competition gap. Nobody is talking about what I call the competition gap. Most places in the US have only one ISP that can deliver fast broadband of speeds greater than 100/20 Mbps. Why does this matter? It is becoming clear that the majority of people and businesses nationwide want relatively fast broadband. OpenVault reported that in June 2023, only 11% of broadband users in the country are subscribing to broadband products with speeds under 100 Mbps. Only 27% are subscribing to broadband products with speeds under 200 Mbps. Almost 32% of homes nationwide are now subscribed to gigabit broadband. This represents a huge shift, and as recently as June 2021, 20% of broadband users were buying speeds under 100 Mbps, and 68% of homes were buying speeds under 200 Mbps. In June 2021, less than 11% of homes were buying gigabit broadband. The bottom line is that in most of the country, the only place with real broadband competition is where an ISP with fast technology overbuilt a cable company. There is a lot of fiber construction underway, and the number of neighborhoods with two choices of fast broadband is growing. But it’s still not unusual to find entire counties where nobody has a choice of two fast ISPs. The majority of people in the country still have little or no real competition.
The Federal Communications Commission authorized 368 rate-of-return companies in 44 states that elected offers of Enhanced Alternative Connect America Cost Model (Enhanced A-CAM) support to receive model-based support. The authorizations specify support to the electing companies for a 15-year period beginning January 1, 2024, in exchange for these companies committing to deploy broadband service of at least 100/20 Megabits per second (Mbps) service to over 700,000 unserved locations across the United States, and maintain or improve existing 100/20 Mbps service to approximately 2 million locations. Current A-CAM I and A-CAM II recipients are authorized to receive approximately $866.5 million per year, while current legacy support recipients will receive approximately $385.4 million in frozen support in 2024 and transition toward the model-calculated support amounts over the term of support. The Enhanced A-CAM support authorized totals $18,281,852,513 over the full 15-year term. The FCC also authorizes and directs the Universal Service Administrative Company (USAC) to obligate and disburse the appropriate transition payments to those carriers eligible for such support as determined by the FCC.
A recently released survey of fixed-broadband providers demonstrates their workforce expectations as the Broadband Equity, Access, and Deployment (BEAD) Program gains momentum across states. Representatives of 46 broadband providers—including electric cooperatives and fixed-wireless, telephone, and cable companies—completed the survey. These providers typically served between 5,000 and 50,000 customers. Over half of the respondents had between 50 and 200 employees, with another 40 percent having between 10 and 50 employees. Seventy-five percent of survey respondents expected to receive federal or state broadband funding over the next 5-10 years, and most (77%) envision a 10-50% expansion of the geographic size of their network during that time.
[Brian Whitacre is Professor and Jean & Patsy Neustadt Chair in the department of Agricultural Economics at Oklahoma State University. Brian’s main area of interest is rural economic development, with a focus on the role that technology can play. He also serves as the chair of Oklahoma’s Broadband Expansion Council.]
Governor Gretchen Whitmer (D-MI) and the Michigan High-Speed Internet Office (MIHI) announced $203 million has been awarded in the first round of the Realizing Opportunity with Broadband Infrastructure Networks (ROBIN) grant program to connect over 70,000 unserved Michigan homes and businesses to high-speed internet. In total, the ROBIN, program will provide $238 million in federal funding to support the deployment of high-speed internet to more than 90,000 unserved locations throughout the state thanks to the US Department of Treasury’s Capital Projects Fund investment. MIHI received 154 grant applications from 40 applicants for the ROBIN program. Nearly $2.3 billion in project costs were proposed requesting $1.3 billion in grant funds. After reviewing and scoring each application, 24 projects from 11 applicants moved forward as ROBIN Initial Grant Recommendations (IGRs). The first round of ROBIN Grants total $203 million in grant funds and are being awarded to 18 total projects from 9 applicants, with a total match investment of $202 million . Collectively, these projects represent a total investment of $405 million and will connect 71,333 locations to fiber-to-the-home service with opportunities for gigabit connections. See list of grant awards at the link below.
The Iowa Department of Management received 91 applications for round #8 of the Empower Rural Iowa Broadband Grant Program which is designed to reduce or eliminate areas of the State of Iowa that are unserved or undeserved by broadband service. Notice of Funding Availability (NOFA) #008 made $148,960,000 available for broadband expansion in Iowa. Funds for this grant round have been allocated from the American Rescue Plan Act (“ARPA”) Capital Projects Fund ("CPF") to provide a substantial infusion of resources to help turn the tide on the pandemic, address its economic fallout, and lay the foundation for a strong and equitable recovery. See list of grant awards at the link below.
Charter Communications told the Maine Connectivity Authority (MCA) that the company will decline a $6.9 million rural broadband award announced in April. The decision was driven by a program rule that requires funding recipients to offer a service priced at $30 so that low-income customers on the Federal Communications Commission Affordable Connectivity Program (ACP) can get service for free after their monthly $30 subsidy is applied, MCA said. The award was made in Maine’s Reach Me program, which covers some of the costs of deploying high-speed broadband to remote areas of a provider’s service territory. Charter was the biggest winner in the program. Over 2,000 homes will be impacted by Charter’s decision, MCA said. The agency said it will evaluate alternatives to make high-speed broadband available to those locations.
The commissioners sitting on the Federal Communications Commission should issue a joint statement reminding the public that “the comment process is not a vote.” To my mind, inviting commenters to make some noise and raise a ruckus is not the proper way to encourage public participation most conducive to creating a rulemaking record consistent with the agency’s supposed expertise. To the extent that making noise and raising a ruckus is understood as gearing up the mass comment machines, the notion is devalued that the FCC will be applying its expertise in deciding complex issues—say, what constitutes reasonable network management versus throttling or the impact of the proposed restrictions on investment and innovation. If the filing of computer-generated mass comments with little or no content beyond “yes” or “no” is understood by the public to play a determinative role in the agency’s decision-making process, then what the Commission needs more than expertise is a good electronic filing system for counting votes.
AT&T, T-Mobile, and Verizon made more money from providing wireless services in the third quarter of 2023 compared with the prior year as they added phone lines and nudged many clients toward more expensive plans. The boost in service revenue helped offset weaker equipment sales as purchases of pricey phones slowed at their stores and websites. “Customers are holding on to their phones longer,” said Tony Skiadas, finance chief for Verizon, the country’s largest wireless carrier by subscribers. “I don’t think that’s going to change.” Ebbing smartphone sales would ordinarily be bad news for Apple, which is slated to report quarterly earnings on Nov 2. The iPhone maker has accounted for more than half of annual US smartphone sales since 2021, according to Counterpoint Research. But Apple, too, has adapted to a less phone-hungry customer base. The manufacturer has fostered a thriving secondary market for older smartphones that keeps more customers using them for longer, helping to increase its market share as device sales slow. Revenue growth from services such as advertising, iCloud, and the App Store, while small compared with smartphone sales, have also become a profit engine.
Cable giants Charter and Comcast reported considerably different broadband results for the third quarter. As financial analysts at MoffettNathanson put it in a research note about Charter’s earnings, “Every unit metric in Charter’s report is strong, and more to the point, much stronger than Comcast’s. Every financial metric in Comcast’s report was strong and, again to the point, much stronger than Charter’s.” While Charter gained 63,000 broadband subscribers, Comcast lost 18,000. MoffettNathanson attributes Charter’s stronger performance, at least in part, to the company’s expansion into rural areas. Charter is offering deep price discounts. Comcast is likely to become more aggressive with its rural buildouts if it wins Broadband Equity, Access, and Deployment (BEAD) Program funding in some states.
Oct 29-31––The CyberShare Summit (NTCA—The Rural Broadband Association)
Oct 31––Techlash: Who makes the rules in the digital Gilded Age? (Brookings)
Oct 31––The Future of Private Networks (New America)
Nov 1––Truth, Trust, and Democracy: Leadership in the Information Ecosystem (Shorenstein Center)
Nov 2-3––Michigan Broadband Summit (Merit Network)
Nov 14––The Connect20 Summit (Network:On)
Nov 14––Regulating digital industries (Brookings)
Benton (www.benton.org) provides the only free, reliable, and non-partisan daily digest that curates and distributes news related to universal broadband, while connecting communications, democracy, and public interest issues. Posted Monday through Friday, this service provides updates on important industry developments, policy issues, and other related news events. While the summaries are factually accurate, their sometimes informal tone may not always represent the tone of the original articles. Headlines are compiled by Kevin Taglang (headlines AT benton DOT org), Grace Tepper (grace AT benton DOT org), and David L. Clay II (dclay AT benton DOT org) — we welcome your comments.
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