Setting the Right Goals for Grants

Most past federal broadband grant programs had very specific goals. For example, the USDA Community Connect grants that have been around for many years target grants to the poorest parts of the country – the awards are weighted towards communities with the highest levels of poverty. For any grant program to be effective the goals of the program need to be clearly defined, and then the award process needs to be aligned with those goals.

The FCC needs to define the goals of the upcoming $20.4 billion grant program. It the goals are poorly defined then the resulting grant awards are likely to be all over the board in terms of effectiveness. What are the ideal goals for a grant program of this magnitude?

The first goal to be decided is the scope of the coverage – will the goal be to bring somewhat better broadband to as many households as possible, or will it be to bring a long-term broadband solution to a smaller number of households? If the goal is to serve the most households possible, then the grants are going to favor lower-cost technologies and the grants will likely go to the wireless providers and satellite providers – as we saw happen in the recent CAF II reverse auction.

If the grants are aimed at a more permanent solution, then the grants will favor fiber. Perhaps the grants could also go towards anybody willing to extend a cable hybrid-fiber coaxial network into rural areas – but no other technology can be considered as a permanent solution.

There are huge consequences for choosing the first option of serving as many households as possible. These new grants are mostly going to be awarded in the geographic areas covered by the original CAF II program. That program awarded over $11 billion to the big telcos to beef up broadband to speeds of at least 10/1 Mbps. Now, before that program is even finished the FCC is talking about overbuilding those same areas with another $20 billion grant program. If this grant program is used to upgrade homes to fixed wireless, it doesn’t take a crystal ball to understand that in ten years from now we’ll be talking about overbuilding these areas again with fiber. It would be incredibly wasteful to use multiple rounds of grants to upgrade the same geographic areas several times.

The other big issue for these grants to deal with is defining which parts of the country are eligible for the grants. What should be the criteria to decide which homes can be upgraded?

If the test is going to be related to existing speeds, the FCC is going to have to deal with the existing broadband coverage maps that everybody in the industry knows to be badly flawed. The FCC is talking about tackling a new mapping effort – but it’s highly likely that the new maps will just swap old mapping errors for new mapping errors. The reality on the ground is that it’s virtually impossible to map the real speeds on copper or fixed wireless networks. In real life, two rural neighbors can have drastically different speeds due to something as simple as being on different copper pairs. It’s impossible to accurately map DSL or wireless broadband coverage.

To make matters even worse, the current Re-Connect grants are saddled with a rule that says that no more than 10% of grant-covered homes can have existing broadband of more than 10/1 Mbps. Layering that kind of rule on top of terrible maps creates an environment where an ISP is largely unable to define a believable grant footprint.

The FCC must figure out some way to rectify the mapping problem. One of the easiest ways is what I call the technology test – anybody that wants to overbuild copper with fiber should automatically be eligible without trying to figure out the current speeds on the copper. Perhaps the easiest rule could be that any place where there is telco copper and no cable company network should be grant-eligible for fiber overbuilders.

Assuming the grants won’t all go to fiber, then there has to be an alternate way for an ISP or a community to challenge poor maps. Perhaps the FCC needs to provide a realistic time frame to allow local governments to demonstrate the actual speeds in an area, much like what was done in the recent Mobility II grant process.

This blog is part of a series on Designing the Ideal Federal Grant Program.