Wednesday, September 6, 2023
Headlines Daily Digest
Stories From Abroad
A tour of the remaining United States Digital Divide from a home in Quincy (CA) to an unserved farm in Newton (NC) to a home in Troy (AL). These locations (and more) are from a random sample of BEAD-eligible unserved and underserved locations that are not part of the Federal Communications Commission's Rural Digital Opportunity Fund (RDOF) or Alternative Connect America Model (A-CAM) programs.
The cost of connecting Nebraska’s Winnebago Tribe reservation with fiber-optic cable could average $53,000 for each household and workplace connected. That amount exceeds the assessed value of some of the homes getting hookups, property records show. While most connections will cost far less, the expense to reach some remote communities has triggered concerns over the ultimate price tag for ensuring every rural home, business, school, and workplace in America has the same internet that city dwellers enjoy. “The problem is, money is not infinite,” said Blair Levin, a senior communications policy official in the Clinton and Obama administrations who is now an equity research analyst. “If you’re spending $50,000 to connect a very remote location, you have to ask yourself, would we be better off spending that same amount of money to connect [more] families?” Providing fiber-optic cable is the industry standard, but alternative options -- such as satellite service -- are cheaper, if less reliable. Congress has left it up to state and federal officials implementing the program to decide how much is too much in hard-to-reach areas. Defenders of the federal broadband infrastructure programs say a simple per-location cost doesn’t capture their benefits. Once built, rural fiber lines can be used to upgrade cell service or to add more connections to nearby towns. For the Winnebago Tribe, the introduction of high-speed internet is seen as a means to spur economic development and to give young people a reason to stay on the reservation, instead of leaving for a city.
We could theoretically reach 94% of the Unserved and Underserved locations nationally. We only miss 750,000 locations. The biggest misses by percentage are Iowa (61% of Unserved and Underserved), Idaho (66%), Illinois, Kansas, and California (all 71%), Minnesota (76%), and Colorado and Nebraska (about 80%). I find it helpful to think about this as a simple math problem: how far the money might go can be estimated by multiplying the number of locations that need service times the average cost to serve them. There are 11.9 million Unserved and Underserved locations nationally. About 2.4 million locations are Unserved or Underserved and are part of the Federal Communications Commission's Rural Digital Opportunity Fund (RDOF) program, and broadband will be deployed as part of that program. Also, according to my recent estimates, 1.3 million locations would be served by broadband providers under the FCC’s Enhanced Alternative Connect America Cost Model (A-CAM) program. Together, that’s 31% of the remaining digital divide that will get broadband through a program other than the Broadband Equity, Access, and Deployment (BEAD) Program. And it doesn’t factor in the billions of dollars that went into broadband through programs the Covid recovery bills administered by the Treasury Department. That leaves 8.3 million locations nationally that we need to reach with the BEAD program.
The Benton Institute for Broadband & Society joined a coalition of 300 broadband experts, internet service providers (ISPs), community leaders, nonprofits, consumer advocates, and business groups to highlight concerns about the National Telecommunications and Information Administration's (NTIA) Broadband Equity Access and Deployment (BEAD) program. In a letter to NTIA head Alan Davidson and Secretary of Commerce Gina Raimondo, the group warns that the program’s letter of credit requirement will block the vast majority of smaller operators, community-centered ISPs, and city-owned networks from securing grants. The result is that these ISPs, which are overwhelmingly the most able and willing to serve currently unserved, primarily small and rural communities the BEAD program is designed to support, will be largely unable to secure funds. By requiring awardees to post an irrevocable letter of credit equal to 25 percent of their grant award—which banks typically insist be collateralized with cash—recipients will “have to lock away vast sums of capital for the full duration of the build, likely several years,”
The National Telecommunications and Information Administration (NTIA) has tried hard to generate excitement about Buy America requirements for the $42.5 billion Broadband Equity, Access, and Deployment (BEAD) rural broadband funding program, even enlisting US Vice President Kamala Harris in the process. While some industry stakeholders initially thought it would be difficult to meet Buy America requirements, more and more suppliers are revealing that they can. These include companies like Nokia and Adtran, both of whom were involved in high-profile announcements that they would build key fiber broadband equipment in the US, as well as other companies with lower Buy America profiles, but who, nevertheless, are expected to be able to meet Buy America requirements. One of the companies in the latter group is Calix. Like Nokia and Adtran, Calix offers fiber broadband equipment, and the company says that it is “working with our supply chain partners to ensure we have the appropriate products manufactured in the US." Among these products are optical line termination (OLT) cards and modules, as well as optical network terminals (ONTs). The fiber broadband equipment suppliers join a burgeoning group of fiber cabling suppliers that already meet or have announced that they will be able to meet Buy America requirements. These companies include Prysmian, Corning, Commscope and Superior Essex. The NTIA expects to issue a limited waiver of certain Buy America requirements. And, it would be surprising not to see a groundswell of suppliers building products in the US, considering that anyone who doesn’t could be locked out of BEAD and other funding programs.
The Congressional directive in the Telecommunications Act of 1996 is for the Federal Communications Commission (FCC) to ensure that there be specific, predictable, and sufficient Federal and State mechanisms to preserve and advance universal service. The dilemma is that the source of Universal Service Fund (USF) programs is end user (i.e. retail) revenues from international and interstate wireline and mobile services, as well as revenue from providers of interconnected Voice over Internet Protocol (VoIP) services. The reduction of long-distance (inter-state) voice minutes, the transition to non-interconnected services, and cord cord-cutting of wireline phone services have reduced the contribution base—the revenues used to calculate USF contributions—by more than 60 percent over the last two decades. As a consequence, the contribution factor, i.e., the percentage surcharge added to remaining telecommunications service bills, has increased by significant amounts. There is little dispute that the contribution base for USF must be broadened. There are a number of proposals to accomplish that goal, some of which the FCC may be able to employ using its existing powers, and others that would require legislation. The Benton Institute takes no position at this time as to which mechanism would be best. However, Benton does emphasize that proposals to finance the USF via the Congressional appropriations process are ill advised and, indeed, extremely dangerous. Even with multiyear appropriations (something which is very difficult to accomplish legislatively for both political and technical reasons), leaving USF to the vagaries of the appropriations process would unquestionably conflict with the established—and essential—objective of maintaining a specific and predictable funding mechanism, and would likely endanger sufficient funding as well.
California is expected to significantly scale down a multibillion-dollar plan to expand high-speed broadband networks soon. And the data the state is using to make the amendments is inaccurate, experts and advocates say, meaning lower-income areas with some of the lowest rates of internet access, like East Oakland, could lose out the most. In pockets of Alameda County, which includes East Oakland, up to 38% of residents don’t have internet access, nearly triple the 13% statewide average. That adds up to nearly 94,000 Oakland residents who lack internet access. Parts of South Central Los Angeles have similar proportions of residents without broadband services, amounting to about 416,000 Los Angeles County residents. Yet, it’s internet deserts in East Oakland and South Central Los Angeles, as well as those in Wasco (Kern County) and Stockton (San Joaquin County), that will be left behind if the state forgoes development of internet infrastructure. Proposed spending cuts for middle-mile infrastructure in East Oakland and South Central Los Angeles will save the state about $28 million. In total, the state is expected to save about $765 million by scaling down middle-mile development.
North Carolina’s first Completing Access to Broadband (CAB) program. It will connect 6,012 households and 164 businesses in 14 counties to high-speed internet. The CAB program, administered by the NC Department of Information Technology (NCDIT), complements the state’s Growing Rural Economies with Access to Technology (GREAT) grant program to reach additional unserved areas. Like GREAT grant awardees, all CAB program grantees must participate in the Affordable Connectivity Program (ACP), which provides eligible low-income households a $30 per month discount on high-speed internet service, or provide access to a comparable low-cost program. CAB program applicants must also agree to provide high-speed service, defined as a minimum of 100 Megabits per second (Mbps) download and 20 Mbps upload, scalable to 100 Mbps download and 100 Mbps upload on or before Dec. 31, 2026. Awardees include:
- Alexander County: Spectrum Southeast LLC (Charter Communications)
- Franklin County: Spectrum Southeast LLC (Charter Communications)
- Granville County: Spectrum Southeast LLC (Charter Communications)
- Haywood County: Spectrum Southeast LLC (Charter Communications)
- Hertford County: Roanoke Connect Holdings (FYBE)
- Madison County: Skyrunner Inc.
- Mitchell County: French Broad Electric Membership Corp. (French Broad Fiber)
- Onslow County: Spectrum Southeast LLC (Charter Communications)
- Robeson County: Spectrum Southeast LLC (Charter Communications)
- Rutherford County: Bellsouth Telecommunications LLC (AT&T)
- Sampson County: Spectrum Southeast LLC (Charter Communications)
- Stokes County: Surry Telephone Membership Corp.
- Vance County: Zitel LLC
- Wilkes County: Wilkes Communications Inc.
On August 14, Sens Ted Cruz (R-TX) and John Thune (R-SD) wrote to Federal Communications Commission Chairwoman Jessica Rosenworcel with concerns about the FCC’s failure to grant approximately 90% of licenses won in the 2496-2690 MHz (“2.5 GHz”) auction. On August 28 she wrote back saying that section 309(j)(11) of the Communications Act explicitly states that the FCC's authority to “grant a license or permit” for any spectrum that is auctioned “shall expire March 9, 2023.” This provision is straightforward. Furthermore, any effort to license these airwaves with temporary authority is conditioned on the agency’s having relevant authority. To this end, the Communications Act states that special temporary authority pursuant to Section 309(f) may be granted only “if the grant of such application is otherwise authorized by law.” Here, that authorization expired on March 9, 2023. If the FCC were to expend funds to continue to process the licenses won in Auction 108 notwithstanding the sunsetting of our authority to do so, it would put the agency staff at risk of criminal penalties for violating the Antideficiency Act. In light of these statutory restraints, it is imperative that Congress renew the FCC's spectrum auction authority as soon as possible.
The debate over how internet platforms moderate content has reached a fever pitch. To get around First Amendment concerns, some proponents of content moderation regulation argue that internet platforms should be regulated as “common carriers”—that is, internet platforms should be legally obligated to serve all comers without discrimination. As these proponents regularly point to communications law as an analytical template, it appears that the term “common carrier” has become a euphemism for full-blown public utility regulation complete with a dedicated regulator. However, proponents of common carrier regulation provide no details about how this regime would work. Rather than regulate, perhaps there is a far cheaper and less intrusive solution for complaints about undue content moderation than massive government regulation: consumers can simply choose not to use social media platforms.
Nearly 20% of the top 1000 websites in the world are blocking crawler bots that gather web data for artificial intelligence (AI) services, according to new data from Originality.AI, an AI content detector. In the absence of clear legal or regulatory rules governing AI's use of copyrighted material, websites big and small are taking matters into their own hands. OpenAI introduced its GPTBot crawler early in August, declaring that the data gathered "may potentially be used to improve future models," promising that paywalled content would be excluded and instructing websites on how to bar the crawler. Of the 1000 most visited websites in the world, the number of sites blocking OpenAI's ChatGPT bot has increased from 9.1% on Aug 22, 2023, to 12% on Aug 29, 2023, per Originality.AI's data. Google and other web firms see their data crawlers' work as fair use, but many publishers and intellectual property holders have long objected, and the company has faced multiple lawsuits over the practice.
Northeast broadband provider Archtop Fiber has completed its acquisition of GTel, which will allow Archtop to expand its network in more than five townships across New York’s Columbia County. GTel currently has more than 2,500 customers on a 300-mile fiber network. Archtop indicated GTel won three grants from the New NY Broadband Program to expand to over 5,000 individual locations, “almost tripling” its legacy footprint. GTel states Archtop’s acquisition will bring “new tech-focused jobs and business opportunities” to the region and GTel will have more access to capital for network expansion. Archtop is targeting 500,000 XGS-PON passings in New York’s Hudson Valley region over the next several years. The broadband provider currently serves markets in New York and Pennsylvania but has also expressed interest in expanding to Massachusetts.
Missouri-based Gateway Fiber is stretching its legs outside of the state to break ground on fresh fiber-to-the-home (FTTH) projects in Minnesota. In February 2023, Gateway Fiber was acquired by CBRE Investment Management in part to help finance FTTH build-outs as the team prepares for national expansion. John Meyer, Chief Marketing Officer at Gateway, said that the team found that the Minnesota specifically markets around Minneapolis, fit into its internal formula. Meyer said that the decision to enter Minnesota next was unrelated to the state’s federal grant monies. Right now, the new projects getting ready to launch in early September 2023 are in Blaine and Coon Rapids (MN).
As the US sets out to get everyone connected to broadband, it’s about more than just making sure broadband is available everywhere. As Angela Thi Bennett, the National Telecommunications and Information Administration's (NTIA) first director of digital equity put it, “We’re not just focused on the technical aspects of building out the network but ensuring that people are at the epicenter.” That, Bennett said, will require a “whole of nation” approach that will involve federal and state partners, philanthropy organizations, and the private sector. According to Bennett, “The states are approaching this not as a check-the-box but approaching it as a meaningful way to incorporate [digital equity] into their plans.” Bennett came to NTIA from the non-profit DigitalC in Cleveland (OH), where she was director of advocacy, a job that entailed “helping to develop a strategy to connect with the community and educating leadership at the local state and national level on the importance of access, not only to high-speed internet but also to resources and skills to improve people’s lives,” she said. The move to NTIA is enabling her to take the work she was doing at the local level to the national level. As Bennett noted, the digital equity plans outlined in the Infrastructure Investment and Jobs Act (IIJA) require “robust local engagement” and bring “the voices of all the people to the table.” Ultimately, it’s “the largest demonstration of participatory democracy that our country has ever seen,” she said.
Strategic rethinking of the policies that promote 5G development and deployment in Europe is needed, as they are crucial in determining the future impact of 5G and later 6G on the digital economy. Considering the current state of 5G deployment and insights that have emerged from the debate on 5G technological leadership, there is a need for a more effective and proactive policy from the European Union (EU) in this field. Research suggests the development of industrial policy that contrasts fragmentation in the telecommunications sector by taking the whole EU as the scale of action, instead of just the individual member states. To remain globally relevant and competitive in this race, the EU may need to start treating the development and deployment of 5G, and in the future of 6G, as a true Single Market issue.
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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