Tuesday, November 8, 2022
Headlines Daily Digest
Pathways to Digital Equity: How Communities Can Reach Their Broadband Goals—and How Philanthropy Can Help
How Philanthropy Can Help Communities Reach Their Broadband Goals
What is community broadband and why it matters
Elections & Media
Kids & Media
Stories From Abroad
For community leaders striving for digital equity, I am happy to share Pathways to Digital Equity, a guidebook to help communities evaluate and meet specific connectivity needs. My colleague Robbie McBeath charts three pathways—Access, Adoption, and Use—that together offer a comprehensive approach to guide communities’ digital equity planning and provide structure for implementing effective solutions. In order to receive federal funding from the Infrastructure Investment and Jobs Act (IIJA), states, territories, and tribes are required to develop broadband infrastructure and digital equity plans in collaboration with local and regional entities. And states are feeling a sense of urgency as these plans required by the National Telecommunications and Information Administration (NTIA)—the administrator of the Broadband Equity, Access, and Deployment Program (BEAD) and Digital Equity Act (DEA) funds—must be completed months after states receive their planning grant funds this fall. Community plans can serve as a vehicle for the input states, territories, and tribes need as they answer the following questions:
- How will we engage with the groups that federal broadband programs are designed to help?
- Which projects will serve communities of color and address the historic lack of investment in marginalized communities?
- Which projects will increase meaningful internet adoption and use in communities?
Policymakers can create community-centric solutions only with education, planning, and engagement programs formulated to solve digital equity challenges and structured to engage local stakeholders. Pathways to Digital Equity shows how many solutions have been executed with the help of philanthropy.
The digital divide needs to be closed for society to grow, but without the high demand to ensure a return on investment, many smaller, less fortunate communities risk falling behind in a widening gap. The longer larger companies wait to prioritize these regions, the further isolated the people who live there may become from the rapidly digitizing future. Who will take ownership to bring those communities across the digital divide? With community broadband, the residents themselves can take the initiative to carry their communities across the digital divide and give themselves a fighting chance to keep up. Community broadband encompasses not only those in rural areas that need service but also people in poor neighborhoods in big cities. Here are four ways community and business leaders can build out the best model:
- Assess community needs. Get a clear picture of the services available, barriers to access or speeds, the devices people use most, and where they use them. With this understanding, broadband business leaders and entrepreneurs can create the best programs to address those community needs.
- Upgrade rural electrical co-ops. Local electric cooperatives may already have the necessary resources, infrastructure, and personnel needed through their existing operations that can be modernized to incorporate fiber and bring high-speed broadband to community homes and businesses.
- Look into partnerships. City-owned or investor-owned utilities may allow local providers to use their existing infrastructure as the middle-mile network: This connects main data routes to the last mile, bringing service to homes and businesses. Multiple towns or municipal entities might also partner to form regional utility districts, combining the populations of multiple regions and raising the aggregate demand.
- Get local voices involved. Encourage community leaders to determine where to allocate money for buildouts, the rate and type of deployment, whether to take on a partner, or where it would be better to focus on affordability. Let each group of affected citizens give their input into making decisions that are best for their communities.
[Cheri Beranek is the President and CEO of Clearfield, providing optical-fiber management and connectivity solutions across North America.]
Using American Rescue Plan Act (ARPA) funding, Massachusetts’ Executive Office of Housing & Economic Development, working in concert with the Mass Broadband Institute (MBI), launched two programs in September — Digital Equity Partnerships Program and Municipal Digital Equity Planning. “Digital inclusion really cuts across every aspect of society, whether its social connectivity, being able to get into the workforce and stay in the workforce, civic participation, health care access..., educational opportunities... and financial resources,” said Michael Baldino, the Director of the Massachusetts Broadband Institute. The funding has to be fully committed by the end of 2024 and fully spent by the end of 2026, Baldino said. MBI is managing the funds through a contract with the Commonwealth. Through the Digital Equity Partnerships Program, MBI is looking for 10 to 15 organizations to help execute six initiatives that will address digital literacy; public space internet modernization; connectivity for economic hardship; device distribution and refurbishment, and education, outreach, and adoption. The goal of the six initiatives is to make sure everyone has access to the internet, access to a device that they can use the internet on, and the necessary digital literacy to be able to use the internet, according to Baldino. There will also be a focus on educating communities about existing programs, like the Affordable Connectivity Program (ACP).
Governor Laura Kelly (D-KS) will award $15.7 million to seven service providers that will bring high-speed broadband service to underserved, economically distressed, and low-population areas of the state. This is the first of three rounds of awards from the Kansas Capital Project Funds (CPF) Broadband Grant Program. This phase of funding will connect more than 1,900 homes, businesses, schools, healthcare facilities, and other public institutions to fast, reliable internet in the next 24 months. This funding aims to solve the “last mile” of broadband needed in critical areas. The targeted counties have as few as five locations per square mile, which until now has prevented companies from investing the resources to deliver a quality broadband option. The CPF Grant Program provides the funding needed to implement high-speed broadband in these areas of the state. The new grant program results from the US Department of Treasury’s approval of Kansas’ Coronavirus Capital Projects Fund (CPF) broadband infrastructure plan. The federal CPF program is a $10 billion initiative available to states, territories, and tribal governments under the American Rescue Plan Act (ARPA) to fund capital projects. Kansas was one of the first eight states in the country approved for funding under this program and was allocated $83.5 million. The CPF program opportunity resulted in 141 applications from providers requesting $693 million in funding support to build out broadband infrastructure across Kansas.
Policymakers in the US and other nations have begun to consider, and in some cases implement, policies that seek to get edge companies—those who produce and send content to end users over the Internet—to pay a larger share of the cost to build and maintain Internet service providers’ (ISPs’) broadband network infrastructure. While the political appeal of “sending-party-pays” (SPP) proposals is undeniable—especially when many of the payers are US technology firms and the receivers of the cash are domestic telecommunications companies—they actually result in harm to Internet users, do not achieve fair results, and cannot deliver the windfall infrastructure funding they promise. Key takeaways from the analysis of this policy include the following:
- Sending-party-pays policies distort prices in the complex peering and transit services market, resulting in inefficient traffic management.
- The optimal price of peering varies widely and changes rapidly depending on network effects and the price elasticity of demand. Regulating it is likely to raise prices for consumers while driving some out of the market for some online services entirely.
- Broadband infrastructure is not a zero-sum burden because edge companies aren’t just users; they also build delivery networks and cache content to improve performance. And users both create and consume content, which gives Internet services their value.
- South Korea’s experiment with sending-party-network-pays has caused less-efficient traffic flows, higher prices, and lower content quality. It is a cautionary tale for policymakers considering sending-party-pays.
- Proposals in Europe are likely to produce similar results to those in South Korea, which may explain why European regulators have rejected such proposals in the past.
- Expanding universal service fees to edge services is the wrong way to offset the rising costs of U.S. subsidy programs and would raise Internet prices for consumers. Policymakers should instead reduce USF expenditures, especially for rural broadband.
Clearly, fascination with SPP models is spreading internationally. The allure of regulated pricing is a mirage that will give way to consumer harm by distorting the market dynamics that would otherwise coordinate the complex Internet ecosystem.The allure of regulated pricing is a mirage that will give way to consumer harm by distorting the market dynamics that would otherwise coordinate the complex Internet ecosystem.
Cable One stuck invested $50 million to acquire a minority stake in northwestern US operator Ziply Fiber, part of the $450 million new funding Ziply received. WaveDivision Capital and Searchlight Capital Partners were among the other investors who contributed. Cable One handed Ziply an initial $22.2 million in November 2022 and expects to dole out the remaining $27.8 million before the end of September 2023. The investment netted Cable One less than a 10% equity interest in Ziply. The move is Cable One’s latest in the fiber realm. At the start of 2022, Cable One teamed up with three private equity companies to form a joint venture called Clearwave Fiber, aiming to reach 500,000 rural locations by 2027. Cable One contributed assets from its Illinois-focused Clearwave Communications and South Carolina-based Hargray Communications businesses as part of the deal. Shortly after its formation, Clearwave Fiber acquired the assets of Kansas-based operator RG Fiber to gain a foothold in the state. Clearwave Fiber revealed it has already crossed the 100,000 passings mark. By the end of 2022, the company said its services will be available in a total of 35 markets across four states: Illinois, Kansas, Georgia, and Florida.
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