Friday, May 12, 2023
Headlines Daily Digest
A Discussion About the State of Universal Service
Biden-Harris Administration Launches First Tech Hubs Funding Opportunity
Private equity firms discuss the business model of fiber deployments
DigitalC Selected by City of Cleveland As Partner to Build Citywide Broadband Network
Stories From Abroad
All people in the United States shall have access to rapid, efficient, nationwide communications service with adequate facilities at reasonable charges. This is Congress' original mandate for the Federal Communications Commission (FCC), a mandate known to many as "universal service." On May 11, the Senate Commerce Committee's Subcommittee on Communications, Media and Broadband convened a hearing to discuss the current state of universal service as demand for connectivity in all aspects of American life continues to grow. The hearing examined the need for connectivity in rural and insular areas, for health professionals in providing telemedicine and telehealth, for low-income households that otherwise could not afford internet access, and for access to broadband in our nation’s schools and libraries.
The Department of Commerce’s Economic Development Administration launched the Regional Technology and Innovation Hubs (Tech Hubs) competition. This program will create tech hubs in regions across the country by bringing together industry, higher education institutions, state and local governments, economic development organizations, and labor and workforce partners to supercharge ecosystems of innovation for technologies that are essential to our economic and national security. The program was authorized by the CHIPS and Science Act and is a key part of President Joe Biden’s Investing in America agenda, stimulating private sector investment, creating good-paying jobs, revitalizing American manufacturing, and ensuring no community is left behind by America’s economic progress. This first Notice of Funding Opportunity (NOFO) will open applications for planning grants and Tech Hubs Designations. Later in 2023, the Department of Commerce will launch a second NOFO, for applicants designated as a Tech Hub to apply for implementation funding.
WIA Connect(X) show panelists were asked if there is a magic number that developers should target for the cost per home passed with fiber. Beth Hoffman, managing director with Berkshire Partners, said that a lot of it depends on the density of the market. The cost per home passed in a dense city like San Francisco (CA) could be as low as $700. But in many of the rural areas that Broadband Equity, Access, and Deployment (BEAD) is targeting, the cost will be in excess of $3,000 per home passed. But there are numerous variables that can throw off business models. Paul Pishal, business development director for Connectivity, Commercial & Industrial with Black & Veatch, said, “If there’s a river crossing, you’ll never get your return on investment.” Patrick Fear, managing director with AB - Private Credit Investors, noted that the current macroeconomic environment with high-interest rates also plays a big factor. “With rates where they are, what’s the actual cash flow? Any business that’s using a meaningful amount of debt today is more at risk.” In February 2023, AT&T’s CFO Pascal Desroches said of the company’s fiber build: “I think it’s fair to say that it’s probably costing us more than we thought when we started.”
Some policymakers are calling for money to subsidize middle-mile networks. Because it is so difficult to precisely define “middle mile,” and therefore identify and measure its outcomes beyond simply being built, it’s hard for politicians and recipients of the money to resist their spending spree of federal funds regardless of whether it’s needed. More middle-mile funding can generate new construction and a ribbon-cutting ceremony, but nobody will ever know if it generated more broadband.
[Sarah Oh Lam is a senior fellow at the Technology Policy Institute]
Broadband providers have been complaining that the Broadband Equity, Access, and Deployment (BEAD) Program rules are adding a lot of cost to building broadband networks. One of the issues adding the most cost to BEAD-funded networks is the requirement that all construction be done using prevailing wages. That means wages that are paid at Davis-Bacon wage levels—to include benefits. The Davis-Bacon Act was passed in 1931 and requires workers used for federal public work projects to be paid a prevailing wage rate. Since the calculations are done regionally, and since most federal projects are done in or near cities, the prevailing wages tend to reflect the wages and benefits paid in urban areas. Davis-Bacon's prevailing wages are almost always higher than the labor rates paid by the contractors that construct rural fiber networks. The contractors that build fiber in rural areas typically specialize in rural work. Since the cost of living is lower in most rural areas, the wages tend to be lower than the Davis-Bacon prevailing wages. One of the problems with driving up the cost of the project is that it might make the project unfeasible. There is not much margin in rural grant projects even if paying market wage rates, and the extra matching funds might be enough to make a provider decide not to pursue the grant or the project. Another issue that might compound problems is that some rural contractors aren’t interested in projects at the prevailing wages. They are uncomfortable having some crews being prevailing wages and others making market wages. That is an uncomfortable position for an employer.
Florida Department of Economic Opportunity Announces $133 Million Available Through the Broadband Opportunity Program
The Florida Department of Economic Opportunity (DEO) commited $133 million in funding to broadband Internet projects in the second application cycle through the Broadband Opportunity Program. The program was created to expand broadband Internet service to unserved areas of this state, which will encourage job creation, capital investment, and the strengthening and diversification of local economies. Applications will be accepted through Friday, June 23, 2023, and additional information is available on the Broadband Opportunity Program webpage. Eligible applicants include corporations, limited liability companies, general partnerships, and others. DEO will host a Technical Assistance Webinar on May 24, 2023, at 11 a.m., Eastern Time, to provide technical assistance and an overview of the application process. The deadline to submit an application is Friday, June 23, 2023, at 5:00 p.m., Eastern Time.
Like most states, Ohio has its own approach to bolstering broadband accessibility. One area where Ohio is seeing progress, Lt. Governor Jon Husted (R-OH) said, is in enhancing its broadband workforce. Lt. Gov Husted, who also leads Ohio’s Office of Workforce Transformation, explained Ohio State University (OSU) has developed a curriculum for 5G and high-speed internet expansion, which can be used by other colleges and universities as well as the private sector. In 2022, OSU received $3 million in state funds to design its curriculum, which is also being deployed at high schools as well as adult career centers, said Lt. Gov Husted. The state has also doled out around $500 million to four other institutions to help train broadband technicians. Lt. Gov Husted pointed out that the private sector – in many cases the broadband providers– has helped the initiative by providing instructors. He added the structure of Ohio’s broadband grant program has caused some rural areas, particularly in the northwest part of the state, to not be “served as well as I had hoped.” “In the way [the program] was structured, it just skewed towards more Appalachian, lower-income rural parts of Ohio, rather than some of the less dense, farm communities you have in Northwest Ohio,” he said. That implementation spans all areas, from developing the workforce to having accurate maps, “all those kinds of details, those need to be in play,” he added.
DigitalC, a local nonprofit technology social enterprise, has been selected by Mayor Justin Bibb (D-Cleveland) to receive $20 million in American Rescue Plan Act (ARPA) funding from the City of Cleveland (OH) to deliver affordable, high-speed internet to city residents. The Cleveland City Council must approve legislation submitted by the mayor to allocate this funding to DigitalC. The legislation will be presented at the next City Council meeting on May 15, 2023. DigitalC was selected through a competitive process. Along with its many consortium partners, DigitalC laid out a plan to provide citywide internet coverage for $18 per month and provide basic technical skills training at no cost to residents, per the city’s requirements. Cleveland-based DigitalC has thousands of customers in 16 neighborhoods in the City of Cleveland. It will expand its coverage citywide from these neighborhoods, which include Hough, Glenville, Ohio City, Tremont, Clark Fulton and Central. In addition, DigitalC and its consortium partners, such as the Cleveland Public Library, ASC3 Digital Literacy Training Center and Cleveland Neighborhood Progress, plan to support and train residents on basic computer skills to assist them in utilizing everything from TeleHealth, online job applications, mobile banking, email, Zoom and more.
Does your neighborhood pay more money for slower internet compared to neighborhoods across town? This step-by-step guide helps you answer that question and more. All you need is a computer, a Google account, and (yes) internet access. The steps are as follows:
Pick a geographical area and a target: Determine where you want to analyze internet plans. This could be any town, city, or county. Once you’ve picked a place, you can figure out what broadband providers serve in that area. BroadbandNow is a website allowing you to search for providers operating in any zip code. Try searching various zip codes in the area to ensure you’re capturing all the possible broadband providers.
Generate some random addresses: To gather data on what internet plans are offered in the area you selected, you need to get a list of real addresses in that area. To conduct your research fairly, you’ll want to get and use a random sample of addresses, because, in addition to other benefits, it minimizes bias.
Put everything into a spreadsheet and format it: You’ll need to properly format the spreadsheet of addresses you just downloaded and pull in socioeconomic data for the analysis you’re about to do. You’ll perform these steps in Google Sheets (but you can move to Microsoft Excel afterward, if you prefer).
Get internet plan data: You’ll collect this data by hand. Go to the website of the broadband provider you’re interested in and find where you can search for internet offers by address. Then enter each address from your spreadsheet and record details about the plans offered.
Analyze the results: With your hand-collected internet offers handy, you can start your analysis. Whatever you’re interested in testing—whether it is speed, price, value, or availability, you can test for disparities.
Share what you found: Once your data is complete, find a place to publicly share the results and your methodology. We suggest hosting the underlying data (internet plans and any screenshots) on GitHub, Google Drive, a public Google Sheet, or on Big Local News.
The National Telecommunications and Information Administration (NTIA) recently released a report that shows Citizens Broadband Radio Service (CBRS) is working. However, CBRS opponents, led by CTIA, insist that CBRS remains an unproven experiment in spectrum sharing, with constraints like low power levels that make it impossible to provide broad coverage. It’s top of mind as the nation’s policy makers develop a national spectrum strategy and various sharing models. Charter deems the CBRS band a success, while T-Mobile basically doesn’t want to see it duplicated in any way, shape or form. While T-Mobile doesn’t want to see the CBRS structure replicated, it agrees that there’s a need for some spectrum sharing framework going forward. But sharing needs to have equitable access and full power access or there will never be full buy-in by entities like T-Mobile, according to Hunter. Of recent past auctions, CBRS was the lowest revenue generator, he said, adding that’s because there are so many impediments associated with the band.
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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