Monday, April 25, 2022
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Alan Davidson, the administrator of the National Telecommunications and Information Administration (NTIA) who is overseeing the disbursement of the $42 billion Broadband, Equity, Access and Deployment (BEAD) Program, said the "starting gun" of the program will go off May 16 when states can officially start declaring they want the money. The five-year plans that states are supposed to develop next, though, could hit immediate roadblocks. Those plans are dependent on identifying which areas are unserved and underserved by broadband, as measured on Federal Communications Commission maps that have been delayed for years. "That timeline depends quite a bit on when the FCC maps are in shape to to be available for that purpose," Davidson said. According to him, the NTIA has "some great maps" available to compensate for the notoriously insufficient ones the FCC currently makes available. Many states have also done their own mapping, and communities often have a robust sense of local broadband coverage, he added. "Our hope is that — working with local communities, working with the mapping data that's available — states can begin their planning," Davidson said. "Then when we have the final maps, we'll be able to make those final determinations about allocations and ultimately where to deploy."
The Benton Institute for Broadband & Society previously highlighted the National Telecommunications and Information Administration's (NTIA) Broadband Infrastructure Program awards given to 5 states and 1 US territory–Maine, Mississippi, Missouri, North Carolina, Washington, and Guam. Here, we look at NTIA's seven awards given at the state commission and county level, offering a closer look at each grantee’s identified needs and broadband deployment objectives. What sets the Broadband Infrastructure Program apart from other federal funding initiatives is its focus on "covered partnerships" as recipients of its funding–that is, a public-private partnership between a state or subdivision(s) of a state and a provider of fixed broadband service.
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. That’s when we hear that money for capital spending is tight, but a broadband provider will make upgrades a priority in the future. What’s never heard in conversation about capital spending is how much big broadband providers spend to buy back shares of their own stock. This is a practice where big broadband providers (and many other large corporations) use profits to purchase and retire stock. The transaction reduces the number of shares of outstanding stock and consequently nudges up the announced earnings per share. The first time I encountered the practice, I was flabbergasted. This makes me wonder if corporations that are engaging in stock buybacks should be allowed to get federal grants. For example, should we have allowed a company like Charter to get $1.2 billion in Rural Digital Opportunity Fund funding in 2020 at a time when the company was spending $11 billion to buy back its own stock? Did Charter really need a federal subsidy, or does grant funding just allow a company to even further increase stock buybacks? I don’t have an answer for that other than it just doesn’t feel right.
Sufficient access to and utilization of broadband is an ongoing concern for rural economic development. Using a rural region in Northern New York (USA), we consider the investment and operational costs of a broadband cooperative and determine service prices for which it is financially viable. Service prices need to increase 75%–131%, depending on grant restrictions, relative to existing market prices for a new broadband cooperative to become financially feasible. Put differently, the cooperative would not cash flow at market prices unless there was at least 14 potential subscribers per mile at a 62% take rate. For a cooperative, the grant restriction that providers offer a minimum level of speed at a maximum price results in a high level of subsidization by high-speed to low-speed members to support the business. Given grant funding and member equity investments, financial infeasibility has little to do with construction costs, than with annual operational and maintenance costs required to sustain the system long term. More reasonable feasibility scenarios occur for existing utility cooperatives expanding services into broadband, particularly areas with a high proportion of high-speed, year-round users and strong take rates. Consideration of public benefits of broadband arguably needs to be added to the equation, particularly surrounding access to healthcare and educational purposes, and as a prerequisite to supporting taxpayer-funded public-private partnerships to expand broadband services. Policy levers to eliminate or subsidize property taxes and pole rental costs reduce cash flow prices considerably; however, feasibility is highly sensitive to assumed take rates.
Infrastructure in Alabama’s Black Belt region - and in rural Alabama in general - lags far behind the rest of the state, but some progress is being made. From roads and bridges to sewage systems to broadband internet access, there has been a shift among Alabama’s leadership in the last few years that will benefit rural areas in the long run, according to researchers at the University of Alabama’s Education Policy Center. “In recent years, Alabama’s state infrastructure policy has gone from being reactive to proactive,” said Dr. Stephen Katsinas, head of the Education Policy Center, at a press briefing on infrastructure in the Black Belt this week. “I give Gov. [Kay] Ivey a lot of credit.” For years, Alabama’s Black Belt - the poorest region in the state and one of the poorest in the nation - trailed in infrastructure. There are whole counties where 0 percent of residents had broadband internet access as recently as 2020, according to the Education Policy Center. Yet some of that is now starting to change. Gov Ivey (R-AL) used $17 million from the Alabama Broadband Accessibility Fund to help expand rural broadband access during the pandemic, and signed the Connect Alabama Act of 2021, both of which have already started to help.
The Tennessee Department of Economic and Community Development (TNECD) announced the state broadband map is now available for public comment. The map is available on the TNECD mapping site, and the public comment period closes on May 30, 2022. TNECD invites broadband providers, local leaders and community members to provide input on the map via TNECD’s broadband site. Under contract with TNECD, Connected Nation requested data from providers in Tennessee to create a statewide broadband map. The map includes information, searchable by address, for all 95 counties by covering broadband availability, speeds and technology types. Following the May 30, 2022, deadline, TNECD will work with Connected Nation to make any necessary validations and adjustments to the map. TNECD anticipates releasing an updated version of the map in late summer 2022.
Every decade or two, a new wave of innovators tells us they've found the technological key to eliminating society's gatekeepers and empowering individuals — but every time the music stops, big companies remain in charge. These recurring waves of decentralizing energy have repeatedly failed to empower individuals and build small-is-beautiful paradises. But they've been highly effective at unseating incumbents in the industries they target for disruption. Now Web3's leaders are taking aim at today's finance giants — banks, brokerages, Wall Street. Web3 could certainly win its fight with Wall Street over time, just as Google and Facebook wrested control of global advertising from its former leaders. But if history is any guide, the digital world's new bosses will look very much like its old ones.
The New Yorker recently published a piece about the work of the American Accountability Foundation (A.A.F.) — a dark-money group aiming to sabotage the Biden administration’s agenda by torpedoing the confirmation of nominees to fill critical roles across the government. The group brags about having stopped the confirmation of nominees like Saule Omarova, Biden’s pick to be comptroller of the currency, and Sarah Bloom Raskin, who the president nominated to serve as the vice-chair for supervision of the Federal Reserve Board. Possibly their most famous target was now-Supreme Court Justice Ketanji Brown Jackson. Also on their list? Gigi Sohn, Biden’s nominee for the fifth and tie-breaking seat at the Federal Communications Commission. As of this writing, she’s featured on the homepage of A.A.F.’s website targeting Biden nominees. The ones who benefit the most from delaying Sohn's confirmation are white-owned and -controlled internet service providers and broadcasters. This is preventing the FCC from adopting policies that would ensure that broadband access is affordable, accessible and reliable for all. It’s allowing runaway media consolidation to continue. And this is especially harming those who suffer the most when the government doesn’t work: low-income families, Black and Brown people and people in rural areas.
Verizon reported first-quarter 2022 results that showed strong growth in its wireless business. Consolidated revenues for first-quarter 2022 totaled $33.6 billion, up 2.1 percent from first-quarter 2021. Verizon's growth in first-quarter 2022 was driven by the first full quarter of ownership of TracFone Wireless, higher equipment revenue, and strong wireless service revenue growth. The company saw a total wireless service revenue of $18.3 billion, a 9.5 percent increase year over year. In total, Verizon had 229,000 total broadband net additions, the best quarter in over a decade, including 194,000 fixed wireless net additions, 2.5 times the fourth quarter 2021 level. The company reported 35,000 wireline broadband net additions, driven by 60,000 Fios Internet net additions in first-quarter 2022. "The January launch of C-Band and expansion of our 5G Ultra Wideband network helped to amplify our fixed wireless momentum in both Consumer and Business, with quarterly additions 2.5 times that of our fourth-quarter performance, and drove momentum in wireless upgrades," said Verizon Chairman and CEO Hans Vestberg.
Verizon was a pioneer in fiber broadband with its Fios product, having launched it well over 15 years ahead of the fiber frenzy we now find ourselves in. Fios was very much the heart of Verizon broadband, but that appears to be changing. Today, and from all indications, the future of Verizon broadband is very much centered on its emerging fixed wireless business. Out of the 229,000 net broadband adds Verizon gained in Q1 2022, roughly 85 percent came from fixed wireless. In 2021, fixed wireless only accounted for 20 percent of the company’s net broadband adds. Verizon added 3 times as many fixed wireless subscribers compared to Fios subscribers in Q1 2022. Verizon executives are quite bullish on fixed wireless (FWA) prospects. “Consumers continue to see the benefit of the speed, reliability, and simplicity of installation of the FWA product and businesses continue to recognize that FWA can be a primary broadband access solution for all of their needs,” said Verizon CFO Matt Ellis. Between business and consumer subscribers, Verizon broadband now counts 433,000 fixed wireless subscribers as of March 31, 2022. That’s still a far cry from total Fios subs of just shy of 7 million, but it’s now clear where the momentum is.
Stories From Abroad
The European Council and the European Parliament reached a provisional political agreement on the Digital Services Act (DSA), a world first in the field of digital regulation. The DSA follows the principle that what is illegal offline must also be illegal online. It aims to protect the digital space against the spread of illegal content, and to ensure the protection of users’ fundamental rights. The DSA will apply to all online intermediaries providing services in the European Union. The obligations introduced are proportionate to the nature of the services concerned and tailored to the number of users, meaning that very large online platforms (VLOPs) and very large online search engines (VLOSEs) will be subject to more stringent requirements. Services with more than 45 million monthly active users in the European Union will fall into the category of very large online platforms and very large search engines. To safeguard the development of start-ups and smaller enterprises in the internal market, micro and small enterprises with under 45 million monthly active users in the EU will be exempted from certain new obligations. If the law is adopted, the European Commission will have exclusive power to supervise VLOPs and VLOSEs. The DSA will impose a duty of care on marketplaces vis-à-vis sellers who sell their products or services on their online platforms.
The information and communication technology, represented by the broadband Internet, has made a profound impact on Chinese urban labor market. However, the effect of broadband Internet on inter-city inequality is less well documented, especially concerning income inequality. This study aims to identify the impact of broadband Internet on income distribution between cities in China and further explore its underlying mechanisms. Based on nationally representative subsamples from the census in 2005, 2010 and 2015, we find broadband Internet is a blessing factor in explaining the inter-city income gap. The conclusion remains stable after overcoming the endogeneity issues with instrumental variables. Interestingly, broadband Internet appears to provide digital dividend for the low-income brackets. Notably, broadband Internet seems to be skill-biased, since it favors highly educated and professional workers, as well as China’s eastern and central regions. Market potential and manufacturing agglomeration are two mechanisms underlying the reducing effects of broadband Internet. These findings provide insights that are valuable for designing policies and strategies aimed at ensuring fairness and efficiency in broadband Internet development.
This research analyzes the relation between mobile phone use – mobile Internet in particular – and employment, self-employment and job regularity in Uganda. It finds no evidence of any positive impact of mobile Internet use on employment or job quality, suggesting that either respondents do not use mobile Internet for job search practices or as a job tool, or that these uses are ineffective. However, the adoption and use of basic mobile phones are positively related to employment and job quality, and we argue that regulators should focus on promoting the affordability of basic phones and mobile airtime.
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) and Grace Tepper (grace AT benton DOT org) — we welcome your comments.
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