CCG Consulting

The poor state of rural broadband can be traced to the ways that the big telcos reacted to industry changes. Small telcos built rural networks, but large telcos gobbled them up over time. The big rural telcos then neglected rural properties in reaction to the changing economics from the deregulation of long-distance and local telephone service. Small telcos showed that it wasn’t necessary to abandon rural properties, but the big telcos stopped making investments in rural networks and for all practical purposes walked away from rural communities.

I’ve been wondering lately if some of the Rural Digital Opportunity Fund (RDOF) reverse auction winners are having second thoughts about accepting the RDOF awards. It’s amazing how much the broadband world has changed since the end of that auction in December 2020. It's gotten more expensive to build fiber projects over the last year. The cost of labor is an even bigger concern. New grants and new requirements, that did not exist at the time of the auction, also complicate the situation.

When we first heard of the possibility of broadband from low-orbit satellites, there was a lot of speculation that the technology could bring affordable broadband to the masses around the globe. The latest announcement from Starlink shows that affordable broadband is probably not coming in the immediate future. Starlink announced a premium tier of service with a $500 monthly fee for 150-500 Mbps. The receiver has a one-time cost of $2,500. The product offers faster speeds by doubling the size of the receiving area of the receiver.

The Federal Communications Commission just announced increased testing for internet service providers (ISPs) accepting funding from FCC High-Cost programs, which includes the Connect America Fund (CAF) II and Rural Digital Opportunity Fund (RDOF). The new rules include the following:

Nielsen recently published some statistics about the way that we watch video that shows a continuing trend of migration from traditional video to watching video online. One of the most striking statistics is the total volume of online video. December 2021 saw an aggregate of 183 billion minutes of online video viewing, and even that number is likely small since there are many uses of video on the web that are not likely counted in the total.

Most people have heard of latency, which is a measure of the average delay of data packets on a network. There is another important measure of network quality that is rarely talked about. Jitter is the variance in the delays of signals being delivered through a broadband network connection. Jitter occurs when the latency increases or decreases over time. We have a tendency in the industry to oversimplify technical issues; we take a speed test and assume the answer that pops out is our speed.

I’ve been thinking about the implications of having a new definition of broadband at 100/20 Mbps. That’s the threshold that has been set in several giant federal grants that allow grant funding to areas that have broadband slower than 100/20 Mbps. This is also the number that has been bandied about the industry as the likely new definition of broadband when the Federal Communications Commission seats a fifth Commissioner. The best thing about a higher definition of broadband is that it finally puts the DSL controversy to bed.

One of the most interesting aspects of the upcoming Broadband Equity, Access, and Deployment (BEAD) Program grants is that the money is going to flow through the states. In many of the states I’ve been following, it looks like the money will be distributed by passing the money through existing state broadband grant programs. Yet since the federal legislation that created the BEAD grants rules is so specific, there will be numerous ways that the BEAD grant will differ from a state grant program. The obvious solution is for states to adopt the federal rules.

When we ask people why they don’t have home broadband, the primary response in every survey is the cost of broadband. So prices be part of the definition of broadband? There is a huge difference between a 100/20 Mbps connection that costs $55 and one that costs $85. As far as the public is concerned, these are not the same product—but we pretend that they are. Of course, there is nothing that scares the big cable companies more than talking about regulating broadband prices.

Hopefully by now, most communities with poor broadband will have heard about the gigantic federal grants on the way to provide broadband solutions. The largest is the $42.5 Broadband Equity, Access, and Deployment (BEAD) program that will be administered by states, with the funding and the rules established by the National Telecommunications and Information Administration (NTIA). The federal grants give priority to locations that are unserved (broadband speeds under 25/3 Mbps) and can also be used to fund underserved locations (speeds between 25/3 and 100/20 Mbps).