Monday, February 13, 2023
Headlines Daily Digest
Today: NACo Broadband Local Coordination Summit
Evaluating claims about unlicensed fixed wireless
Stories From Abroad
To make sure that the Infrastructure Investment and Jobs Act's Broadband Equity, Access, and Deployment (BEAD) program funding is used efficiently and not misallocated, it is important that National Telecommunications and Information Administration (NTIA) rules for allocating those funds be based on sound economic and policy principles. Unfortunately, that is not the case presently. As framed, the BEAD Notice of Funding Opportunity (NOFO) is heavily biased to favor and fund Fiber to the Premises (FTTP) projects. As an initial matter, the IIJA does not require NTIA to prioritize BEAD funds for the deployment of FTTP projects. Moreover, it is bad policy for multiple reasons:
- “FTTP-only” or “FTTP-first” is inconsistent with optimal planning for US essential and critical digital infrastructure and promoting efficient market competition and consumer choice;
- It will increase the total cost of achieving broadband universal service goals unnecessarily while offering no compensating advantages;
- It will increase the public-cost contribution and likely the total costs of eventual FTTP deployments; and
- It will delay substantially the deployment of broadband and associated complementary digital infrastructure, including progress toward FTTP in many situations where FTTP deployments make sense.
Low-income multifamily communities or those with a high percentage of unserved residents are now eligible to receive broadband deployment funding from Congress, and the National Telecommunications and Information Administration (NTIA) reaffirmed this eligibility. Each state is now building out its programs and establishing criteria that build upon federal priorities and requirements. This is a critical next step in ensuring the total and efficient disbursement of these funds. Very important: The way each state chooses to stand up for its programs will make or break industry eligibility in that state. The National Multifamily Housing Council (NMHC) doubled down on advocacy efforts in this space. Though much of the work to get the dollars out the door and broadband deployed happens at the state level and will take considerable time, the last federal piece of the puzzle rests with the FCC. The NTIA ultimately distributes the funding, but Congress requires using FCC broadband maps to determine where deployment is needed in unserved and underserved areas. The FCC needs to act quickly to make these critical changes and support the priority status given to low-income multifamily properties in the IIJA.
[Kevin Donnelly is vice president of Government Affairs, Technology & Strategic Initiatives for the National Multifamily Housing Council. Valerie M. Sargent is a multifamily speaker, trainer, and executive consultant and is the multifamily news correspondent for Broadband Communities.]
It was worth the wait. The third round of the US Department of Agriculture's ReConnect Loan and Grant Program closed in 2022, after awarding $759 million in rural broadband grants and loans to 49 deployers, mostly small local exchange carriers (LECs). The average cost of passing each home, farm, other business, or school was just over $4,500, compared to $4,100 in 2019 and almost $6,000 in 2020. All awardees in this round, and almost all in previous rounds, told USDA they were deploying fiber to the premises. USDA awards typically cover as much as 80 percent of the total deployment cost. All relevant deployers (some tribal winners are not eligible) pledged to comply with Federal Communications Commission programs subsidizing low-income families, such as the old Lifeline program and the $30 per month subsidy authorized in the Infrastructure Investment and Jobs Act (IIJA). Doing so improved their USDA grant application scoring. ReConnect3 loans and grants are expected to pass 156,601 dwelling units and 11,811 businesses, farms, and schools with fiber – a total of about 168,000 premises. This is in line with earlier rounds, strongly suggesting that the need is vast and federal money – US taxpayer money – is not being wasted by chasing ever more problematic projects.
The Arkansas Legislature's Joint Budget Committee approved the state Department of Commerce's request to use $53.3 million in federal American Rescue Plan funds for eight broadband grant projects and $2 million for broadband administrative expenses. The proposed broadband grant projects are in Ashley, Baxter, Chicot, Clark, Columbia, Hot Spring, Logan and Lonoke (AR) counties. On January 25, a legislative subcommittee delayed action on this request, after Gov Sarah Huckabee Sanders (R-AR) issued an executive order repealing former Gov Asa Hutchinson's executive orders that created the Arkansas American Rescue Plan Steering Committee and the Governor's Infrastructure Planning Advisory Committee. The state Department of Commerce requested spending authority of $53.3 million in American Rescue Plan Act funds to fund eight broadband projects and $2 million in broadband administrative expenses for a total request of $55.3 million, state broadband office Director Glen Howie said in a letter to the budget committee's performance evaluation and expenditure review subcommittee.
Significant increases in consumption and speeds, spurred in part by government incentives, powered broadband toward or past major milestones at the end of 2022. The 4Q22 edition of the OpenVault Broadband Insights (OVBI) report indicates that average household consumption neared 600 GB per month, the percentage of subscribers on gigabit tiers more than doubled, and usage by participants in the Federal Communication Commission's Affordable Connectivity Program (ACP) continued to outpace that of the general population. According to this 4Q22 edition, the average per-household consumption was 586.7 GB at the end of 2022, an increase of nearly 10% over the prior year. During the same period, the percentage of subscribers provisioned for gigabit speeds rose to 26%, and median usage by ACP participants was more than 34% higher than the median usage of all subscribers. In addition, the 4Q22 OVBI highlighted late-morning Christmas Day usage spikes that may carry implications for operators’ service and customer support planning. Additional key findings include:
- Usage: The monthly weighted average data consumed by subscribers in 4Q22 was 586.7 GB, up 9.4% from 536.3 in 4Q21.
- Key ARPU Insight: The gigabit subscriber tier accounted for 26% of all users in 4Q22, an increase of more than 100% over 4Q21.
- Power Users: The number of power users of 1 TB or more per month increased by 16% over the previous year.
- Key Bandwidth Usage Insight: Average total usage, which was 586.7 GB at the end of 2022, likely will exceed 600 GB in 2023.
- Speed Tiers: As migration to faster speed tiers continued, the percentage of subscribers in tiers under 200 Mbps declined by 43% in 4Q22.
- Key UBB vs FRB Insight: Nearly 35% of UBB subscribers receive gigabit speeds, up from 13% a year ago and 2.5x the percentage of FRB gigabit subscribers.
Demand for greater internet speed continues to increase, especially on UBB platforms, as evidenced by the significant migration of users to speeds above 500 Mbps. Operators need to be mindful not only of this overall growth but of growth among specific segments of subscribers and at specific times. Consumption by subscribers in the FCC’s Affordable Connectivity Program continues to outpace that of all subscribers, and rapid growth of peak time consumption – especially during and around the holiday season – are both considerations that need to be addressed in network planning.
If you zoom into Pine Bluff, Arkansas, on the Federal Communication Commission’s broadband map, it doesn’t take long to realize something doesn’t look right. While the new map shows broadband service at individual locations, we’d still generally expect a broadband provider (ISP) that serves one location to serve the location next door, up to the edge of their network. This map doesn’t look right. All the green dots on this map have the cable offering; all the red ones don’t. That means all of these red dots will be included in the National Telecommunications and Information Administration’s (NTIA) allocation to Arkansas for unserved locations. The problem isn’t limited to Pine Bluff. In all of WEHCO Video’s service territory (the company has different names in each city), the same pattern is visible. Maybe WEHCO uploaded its subscriber list instead of its coverage area, or it did a particularly haphazard match between its coverage area addresses and the FCC’s Fabric addresses. My understanding is that the FCC is aware of this issue. I assume it will be corrected in the next version of the National Broadband Map, but it will be easy enough to confirm. Overall, I view this as evidence of a process that is working. However, it does highlight that there is less attention and incentives to fix certain types of errors in the map.
The wireless industry is out with a new paper that claims, “The bias [towards fiber to the home] ‘could increase costs by upwards of $30 to $60 billion depending on the distribution of fiber deployment costs for the unserved locations.’” It also says “[excluding unlicensed fixed wireless] ‘unambiguously adds’ at least 1.9 million new locations calling for government-funded overbuilding with [Broadband Equity, Access, and Deployment] BEAD funds”. As both my analysis, and a separate analysis from ACA, have shown, there is enough money to fund fiber to the home (FTTH) in the vast majority of cases and in all but a few of the most expensive states. At this one moment in time, there’s enough money. We shouldn’t be looking for shortcuts. As for the number of locations that are excluded by not including unlicensed fixed wireless, my numbers say 1.79 million fewer locations would be deemed unserved. Current maps show 7.8 million unserved locations. Including unlicensed fixed wireless — 6 million. Yes, including unlicensed fixed wireless would result in fewer unserved, but more than half of the locations would be underserved. Of the 1.79 fewer unserved, 975,000 became underserved. A better metric would be how many unserved and underserved would be deemed served. By that metric, unlicensed fixed wireless reduces the Digital Divide by 1.4 million. I think the distinction between fixed wireless using unlicensed spectrum and licensed spectrum is silly because, if we’re thinking about what’s best for families, the best path forward, in my view, is clear: make the fiber go as far as possible.
The proportion of US urban populations declined slightly from 2010 to 2020, while the proportion of US rural populations increased during the same period. Yet while the narrative is good news, the changes seem to be less about people moving in or out of rural and urban places and more about how the Census Bureau defines “rural.” Specifically, the Census Bureau:
- Increased from 2,500 to 5,000 people the population threshold at which a place moves from rural to urban;
- Decreased from 2.5 to 1.5 miles “jump distance,” which describes road lengths connecting urban areas with rural places, and
- Eliminated the separate “urbanized areas” and “urban cluster” categories. In sum, the Census Bureau changes tally more places as rural.
Sens. Markey and Baldwin, Rep. Eshoo Introduce Legislation to Uphold Access to Community Television, Undo Trump-Era FCC Rules
Senators Edward Markey (D-MA) and Tammy Baldwin (D-WI), and Representative Anna Eshoo (D-CA) reintroduced their "Protecting Community Television Act" (S 340 and HB 907) This legislation would undo a Trump-era rulemaking by the Federal Communications Commission and ensure that public, educational, and government (PEG) channels have the resources they need to keep producing content for their viewers. In 2019, the FCC allowed cable companies to put a price tag on in-kind contributions they provide to communities, including PEG channels. Under the rule, cable companies can then subtract the ascribed value from the franchising fees that they pay in order to operate. The FCC’s decision has forced local governments across the country to decide between supporting PEG programming and supporting other public services for schools, public safety buildings, and libraries in cable franchise agreements.
In 2023, broadband spending could taper off because of high-interest rates and economic challenges, but buildout expansions remain high. A few factors are driving this. Demand for household internet keeps growing. Leichtman Research Group (LRG) found that 90 percent of US households now get internet service, up from 84 percent in 2017. In addition, Dell’Oro forecasted that the broadband equipment segment would grow 5 to 7 percent in 2023. Jeff Heynen, vice president of broadband access and home networking for Dell’Oro, said, “The revenue growth this year shows the continued emphasis on expanding and improving broadband network capacity by operators as well as state and national governments.” As DSL customers dwindle, telephone companies and communities are amplifying fiber-based broadband. Despite supply-chain constraints and a tight labor market, RVA LLC’s annual fiber-to-the-home (FTTH) report revealed that fiber providers passed an additional 7.9 million homes in 2022. FTTH and fixed wireless access (FWA) will continue to challenge cable’s broadband lead. Wireless broadband has been a factor, growing to 903,000 in the fourth quarter. T-Mobile and Verizon added 524,000 and 379,000 new FWA subscribers respectively. New Street Research forecasts that though FWA could peak in 2023, FWA is pressuring cable.
A lot of smaller broadband providers are currently expanding their service footprints. They are often using grant funding to add more service areas and customers, while others are expanding using the more traditional route of borrowing to build new networks. But not all small providers are expanding, or are only expanding in small increments. The reasons why they aren't expanding:
- Fear of Being Able to Compete
- Fear of New Debt
- Staff Can’t Handle Change
- Reluctance to Change Habits
- Lack of Creativity/Innovation
Sen. Fetterman, Recovering After Stroke, Labors to Adjust to Life in the Senate Through Tech
At Senator John Fetterman’s (D-PA) desk in the Senate chamber, there is a newly installed monitor that rises or lowers, depending on whether he sits or stands, and provides closed captioning so he can follow the proceedings. At the center dais, a custom desk stand has been built to accommodate the same technology for when he takes his shifts presiding over the Senate. The sergeant-at-arms has arranged for live audio-to-text transcription for the committees on which Sen. Fetterman serves, and plans to expand the service to all Senate hearings. Fetterman's adjustment to serving in the Senate has been made vastly more difficult by the strains of his recovery from a stroke, which left him with a physical impairment and serious mental health challenges that have rendered the transition extraordinarily challenging — even with the accommodations that have been made to help him adapt. As Sen. Fetterman adjusts to his new life, the Senate and his colleagues are also adjusting to his needs.
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