Be Wary of 5G Hardware

We’ve now entered the period of 5G competition where the wireless carriers are trying to outdo each other in announcing 5G rollouts. If you believe the announcements, you’d think 5G is soon going to be everywhere. Device manufacturers are joining the fray and are advertising devices that can be used with the early carrier 5G products. Buyers beware – because most of what the cellular companies and the manufacturers are hyping as 5G is not yet 5G. Any first generation hardware you buy today will become quickly obsolete as future 5G upgrades are introduced.

5G Cellular. Cellular carriers are introducing two new spectrum bands – CBRS spectrum and millimeter wave spectrum – as 5G. The actual use of these spectrums is not yet technically 5G because the carriers aren’t yet using much of the 5G specifications. These two specific spectrum bands come with another warning in that they are only being used to produce faster outdoor broadband. Customers who live in places where they can receive the new frequencies, and who compute outdoors might see value in paying extra for the devices and the 5G data plans. Most people are not going to find any value in what these plans offer and should not get sucked into paying for something they can’t get or won’t use.

Cellphone manufacturers are already starting to build the CBRS spectrum into high-end phones. By next year there should be a 5G version of every major cellphone – at a premium price. Within a few years this will be built into every phone, but for now, expect to pay extra.

The question that users need to ask is if faster cellphone data is worth the extra hardware cost and worth the extra monthly fee that will be charged for 5G browsing. I’ve thought about the cellphone functions that would be improved with faster broadband and the only one I can come up with is faster downloads of movies or software. Faster broadband is not going to make web browsing any faster on a cellphone. Cellphones have been optimized for graphics, which is why you can scroll easily through a Google map or can flip easily between videos on social media. The trade-off for faster graphics is that cellphones aren’t good at other things. Cellphones crawl when trying to process non-cellular websites or when trying to handle spreadsheets. Faster broadband is not going to make these functions any faster, because the slowness comes from the intrinsic design of the cellphone operating software and can’t be improved with faster broadband.

I also think customers are going to face a huge challenge in getting a straight answer about when CBRS spectrum or millimeter wave spectrum will be available in their local neighborhood. The carriers are in full 5G marketing mode and are declaring whole metropolitan areas to have 5G even if that only means new spectrum is in a few neighborhoods.

Finally, beware that both of these spectrums only work outdoors. And that means on foot, not in cars. Millimeter wave spectrum is likely to always be a gimmick. Folks testing the spectrum today report that they can lose the connection simply by rotating their phone slightly or by putting their body in the path from the transmitter. CBRS spectrum will be much more well-behaved.

Laptops.  Lenovo has already announced a 5G-capable laptop coming in 2020 and others will surely jump on the bandwagon soon. The big issue with laptops is also an issue with cellphones. It might be reasonable in an area with good CBRS spectrum coverage to get a 100 Mbps or faster cellular connection. This is going to tempt a user to use a laptopas if it was on a home broadband connection. However, this is still going to be cellular data supplied on a cellular data plan. Unless the carriers decide to lift data caps, a customer using a CBRS spectrum laptop might find themselves exhausting their monthly data cap in a day or two. It’s also worth repeating that these are outdoor spectrums, and so only students or others who regularly use computers outdoors a lot are going to find this spectrum potentially useful.

5G Hotspots. A 5G hotspot is one that broadcasts bandwidth in millimeter wave spectrum. Sprint is already marketing such a hot spot. This takes us back to the early days of WiFi when we needed a dongle to use WiFi since the spectrum wasn’t built into desktops or laptops. A 5G hotspot will have that same restriction. One of the primary reasons to consider a millimeer wave hotspot is security. It will be much harder to hack a millimter wave connection than a WiFi connection. But don’t select the millimeter wave hot spot for speed because a millimeter wave connection won’t be any faster than the WiFi 6 routers just hitting the market.

In future years, 5G hotspots might make sense as millimeter wave spectrum is built into more devices. One of the biggest advantages of indoor millimeter wave spectrum is to avoid some of the interference issues inherent in WiFi. I picture the ideal future indoor network to be millimeter wave spectrum used to provide bandwidth to devices like computers and TVs while WiFi 6 is used for everything else. There is likely to be an interesting battle coming in a few years between millimeter wave and WiFi 6 routers. WiFi already has a huge advantage in that battle since the WiFi technology will be included in a lot more devices. For now there won’t be many easy ways to use a 5G millimeter wave hotspot.

Comcast Breaks Promise of Lifetime Prices

Barely a month goes by when I don’t read about a colossal failure of customer service by one of the big ISPs. The latest comes from Comcast, and the company seems to have broken a major promise made to customers.

When Google Fiber announced in 2016 that they were coming to Salt Lake City, Comcast decided to compete against Google Fiber by offering ‘lifetime’ prices for various bundles. For example, there was a triple play bundle at $120 per month plan that included broadband, cable TV and a telephone line. In anticipation of Google coming to the market, Comcast engaged in a door-to-door sales campaign that marketed the lifetime special and other discounts on Comcast products in an attempt to lock down customers before Google Fiber hit the market. Ironically, Google Fiber changed their mind and never made any significant investment in the market.

The lawsuit alleges that Comcast doorknockers promised customers the lifetime product and backed this up in writing that their price would be good for as long as the customer kept the plan. Customers were assured at each step of the process that they were buying a lifeline plan and that rates would never be increased. For example, Comcast customer service reps on the phone repeated the assurance that the prices would be good forever. The lawsuit asserts that as many as 20% of the 200,000 upgrades sold during the sales campaign in Utah were sold as lifetime plans.

As you might expect from the title of this blog, after a few years Comcast raised the prices on the lifetime plans. At that point, Comcast customer service denied any knowledge that these were lifetime rates and said they had never heard of such a plan. Comcast enforced the rate increases, some of which were substantial.

It’s hard to imagine that any company would sell a guaranteed lifetime price for a bundle that includes cable TV. The cost of buying wholesale programming has been increasing at 10% – 15% annually for many years. In a decade, any lifetime plan would be massively underwater. Additionally, Comcast is now in the mode of annually increasing broadband prices – but that’s not something that was probably discussed inside of the company in 2016.

It’s not hard to figure out how this could happen in a big corporation. I’m just speculating, but I expect the marketing campaign included an outside sales team. These sales teams get most of their compensation from completed sales and are famous in the industry for making outrageous claims to customers. I always caution my clients about hiring sales companies that bring entire sales teams in from out of state. While these companies will get sales, the worst of them often leave a trail of unhappy customers behind them. I would expect that this sales staff had some role in choosing the message of lifetime rates – something they know they can sell.

However, it had to be more than a rogue sales team that pushed the lifetime rates. Comcast customer service at the time was also telling the customers that the plans were lifetime rates. I’ve talked to several Comcast customer service reps over the years and they describe the customer care process at the company as chaotic. From what they’ve described it’s not hard to imagine the specific customer care group supporting the sales campaign also supported this effort because they also could make sales commissions. Many of the horror stories coming out Comcast customer care over the years have involved employees engaging in bad behavior to chase sales commissions.

But there also had to be local management buy-in of the plan. I’m sure we’ll never know, but it would be interesting to know if this was strictly a local management decision in Salt Lake City or if there was corporate buy-in. Comcast seems to have overreacted to Google Fiber elsewhere and it’s possible that this was a corporate plan.

This lawsuit highlights the difficulty in operating a huge ISP. Many big companies have seen sales commission plans gone awry. Inevitably, some employees find ways to maximize bonuses through bad behavior. We saw something similar from Wells Fargo bank last year and it’s hard for any giant corporation to strenuously push sales campaigns while also policing that employees don’t take advantage of the plans.

This story offers a few lessons for other ISPs. I am a huge believer in the efficacy of door-to-door sales plans done well. But there are unscrupulous outside firms that will sell anything for a high-enough commission. The best sales plan involves local people trained and managed by an ISP directly. The other lesson is that sales commission plans for non-salespeople must be carefully designed to not promote bad behavior.

Broadband Partnerships

A big part of my daily consulting life is helping entities like municipalities and rural electric cooperatives find ways to enter the broadband business. The majority of these entities consider partnerships as an alternative to becoming an ISP. While there are no two partnerships that are exactly alike, today’s blog looks at the predominant types of partnerships that I see being created.

Operator. The simplest kind of partnership is for somebody to build a network and hire an ISP to operate it. Entities like cities are often leery about becoming an ISP and are a lot more comfortable building a fiber network if somebody with a proven track record operates the business.

In this kind of relationship, the operator is largely a vendor for hire and doesn’t invest in the business. The operator gets compensated through management fees for operating the business and often will also be compensated by some sort of profit-sharing.

This arrangement is attractive to some ISPs because they have no financial risks. Since the operator makes no investment, they are not going to have a downside if the business underperforms, other than reduced fees and profit-sharing. Perhaps the biggest advantage to an operator is that their existing business gains economy of scale. The operator can spread overhead costs over the new business and reduce the overheads that apply to other parts of their business.

In this arrangement, the network owner is responsible for all operating costs. Hiring an operator can be a costly alternative since network owners are on the hook to pay the operator even if the business underperforms. This business structure only makes financial sense for a business that will generate enough profit to be able to afford the extra payments to the operator.

Partner Covers Customer Costs. The most common kind of partnership I’m seeing is where one entity builds the core network and a partner pays for the capital cost of adding customers to the network. The biggest variable in this arrangement is how much cost the partner covers. At a minimum a partner would cover the cost of everything inside the customer premise. At the other extreme is a dark fiber network where the operating partner covers everything from the curb and also the cost of lighting the network.

This arrangement flips the responsibilities compared to the operator model. The ISP that builds at the home is normally responsible for all operating costs associated with customers, and for that risk, they collect all revenues. The network owner gets compensated by some sort of lease and might benefit at some point in profit sharing.

The stickiest issue for creating this kind of partnership is figuring out how to compensate the network owner during the first few years of the partnership until there are sufficient customer revenues to cover the full cost of financing the network. At the one extreme the network owner makes the early debt payment out of pocket. In the other extreme the operating ISP pays the early debt payments before there are revenues. In both cases, this big early cost is one of the biggest challenges in creating this kind of business structure.

Equal Partners. The least common kind of partnership is a true partnership where two entities form a partnership and fund and operate the network as full partners. This structure generally means forming a new corporation where an ISP and a city or a cooperative each own some share of the business. In this arrangement, the partners share in gains or losses.

Who operates the business is open to negotiation and there could be staff provided by both entities or the business could hire all new staff.

I think true partnerships are rare because it’s hard for disparate entities like cities and ISPs to govern a business together. A commercial ISP likely has different goals than a city or an electric cooperative. For example, a commercial ISP might want to flip the business in 7-10 years to realize a full return on their investment while cities and cooperatives are in the business for the long haul. In some states it’s a challenge for a city to own part of a commercial business. Cities can also be unreliable partners since they can change drastically with a change of administration.

It’s hard to manage this kind of business jointly. Cities and cooperatives typically aren’t as nimble in their ability to make quick business decisions that a commercial partner is going to expect. The partners are also likely to have different views on what to do with profits or for issues like setting rates.

I’ve found that a successful partnership requires partners that share the same vision for the business, and it’s hard to find a commercial ISP that can share a vision with a city or a cooperative. Over the years I’ve seen several such partnerships created that either became rancorous after only a few years or which split apart when it became obvious that the partners had a different view of operating a business.

The Myth of 5G and Driverless Cars

A colleague sent me an article that had been published earlier this year in MachineDesign magazine that predicts that driverless cars can’t be realized until we have a ubiquitous 5G network. When looking for the original article on the web I noticed numerous similar articles like this one in Forbes that have the same opinion.

These articles and other similar articles predict that high-bandwidth, low-latency 5G networks are only a few years away. I’m not quite sure who these folks think will invest the $100 billion or more that would likely be required to build such a wireless network along all of the roads in the country. None of the cellular carriers have such grandiose plans, and if they did their stockholders would likely replace a management team that suggested such an investment.

It’s easy to understand how this myth got started. When 5G was first discussed, the cellular companies listed self-driving cars as one of the reasons the government should support 5G. However, over time they’ve all dropped this application from their 5G message and it’s no longer a cellular company talking point.

The idea that 5G is needed for self-driving cars is bolstered by the belief that the computing power of a data center is needed to process the massive amounts of data generated by a self-driving car. That very well may be true, and the current versions of self-driving cars are essentially data centers on wheels that contain several fast computers.

The belief that 5G will enable self-driving cars also comes from the promise of low latency, near to that of a direct fiber connection. The folks that wrote these articles envision a massive 2-way data transfer happening constantly with 5G for every self-driving car. I can’t imagine they have ever talked to a network engineer about the challenge of creating 2-way wireless gigabit connections with hundreds of moving cars simultaneously on a freeway at rush hour. It’s hard to envision the small cell site and fiber infrastructure needed to handle that without hiccups. I also don’t know if the authors have recently driven down many rural reads recently to remind themselves of the huge challenge of implementing rural gigabit 5G.

The talk of using wireless for vehicles also ignores some fundamental issues. Wireless technologies are wonky in the real world. Radio waves do odd things in the wild and every wireless network has dead zones and places where the system mysteriously won’t work the way it’s supposed to. Worse, the dead spots and odd spots move around with changes in temperature, humidity, and precipitation.

Network engineers also would advise that for a critical task like driving at high speeds that every vehicle should have a redundant back-up connection, meaning a second wireless connection in case the first one has a problem. Anybody that puts critical tasks on a fiber network invests in such redundancy. Hospitals that use broadband as part of a surgical procedure or a factory that does precision manufacturing will have a second fiber connection to be safe. It’s hard to imagine a redundant connection for a moving car since the only place it can come from is the nearest cell sites that provide the primary connection.

I don’t know how other feel about this, but I’m not about to trust my life to a self-driving car that needs a connection to an external data center to be safe. I know too much about how broadband networks function to believe that 5G networks will somehow always make perfect connections when other fiber networks don’t.

One of the first things that came to my mind when I read these articles was to wonder what happens when there is a fiber outage on the network supporting the 5G cell sites. Do all of the self-driving cars just stop and wait for a broadband signal? I picture a city during an event like the 19-hour CenturyLink fiber outage a year ago and wonder if we are so stupid as to make our transportation systems reliant on external computing and external networks. I sure hope that we are not that dumb.

CoBank Supports Telemedicine

For those who don’t know CoBank, it’s a bank that specializes in loans to telecom and electric cooperative but which also has funded numerous rural fiber projects for other borrowers over the years. In August CoBank filed comments In FCC Docket 18-213 in support of expanded use of the Universal Service Fund for rural telemedicine. CoBank is a huge supporter of telemedicine and has made substantial grants to telemedicine projects dealing with diabetes management, opioid abuse, prenatal maternity care, and veteran care.

As part of that filing, CoBank discussed a telemedicine trial they had sponsored in rural Georgia. The trial was conducted in conjunction with Perry Health, a software provider and Navicent Health, a healthcare provider in Macon, Georgia.  The trial was for 100 low-income patients with uncontrolled Type 2 diabetes. These patients were on a path towards kidney failure, amputation, loss of vision, and numerous other major related health problems. These are patients who would normally be making numerous emergency room visits and needing other costly medical procedures.

In the trial, the patients were provided with tablets containing Perry Health software that provided for daily interaction between patients and Navicent. Patients were asked to provide daily feedback on how they were sticking to the treatment regimen and provided information like the results of blood sugar tests, the food they ate each day, the amount of daily exercise, etc. The tablet portal also provided for communication from Navicent asking patients how they generally felt and providing recommendations when there was a perceived need.

The results of the trial were hugely positive. In the trial of 100 patents, 75% of the patients in the trial showed a marked improvement in their condition compared to the average diabetes patient. The improvements for these patients equated to reduced health care costs of $3,855 per patient per year through reduced doctor visits and reduced needs to make emergency room visits. The American Diabetes Association says that patients with Type 2 diabetes have 2-3 times the normally expected medical costs, which they estimate totals to $327 billion per year.

Patients in the trial liked the daily interaction which forced them to concentrate on following treatment plans. They felt like their health care provider cared about how they were doing, and that led them to do better. After the trial, Navicent Health expanded the telemedicine plan to hundreds of other patients with Type 2 diabetes, heart failure, and Chronic Obstructive Pulmonary Disease (COPD).

One of the interesting outcomes of the trial was that patents preferred to use cellphones rather than the special tablets. The trial also showed the need for better broadband. One of the challenges of the trial was the effort required by Navicent Health to make sure that a patient had the needed access to broadband. To some degree using cellphones gives patients easier access to broadband. However, there are plenty of rural areas with poor cellular data coverage, and even where patients can use cellular data, the cost of cellular data can be prohibitive if heavily used. Landline broadband is still the preferred connection to take advantage of unlimited WiFi connections to the healthcare portal.

One thing that struck me about this study is that this sounds like it would be equally useful in urban areas. I’ve read that a lot of healthcare costs are due to patients who don’t follow through on a treatment plan after they go home after a procedure. The Navicent Health process could be applied to patients anywhere since the biggest benefit of the trial looks to be due to the daily interface between patient and doctor.

The FCC has already pledged to increase funding for the rural medicine component of the Universal Service Fund. However, that funding is restricted. For example, funding can only be granted to rural non-profit health care providers.

Telemedicine has been picking up steam and is seeing exponential growth. But telemedicine still only represents just a few percentages of rural healthcare visits. The primary barrier seems to be acceptance of the process and the willingness of health care providers to tackle telemedicine.

The Market Uses for CBRS Spectrum

Spencer Kurn, an analyst for New Street Research recently reported on how various market players plan to use the 3.5 GHz CBRS spectrum recently approved by the FCC. I described the FCC’s order in this recent blog. As a quick refresher, this is a large swath of spectrum and the FCC has approved 80 MHz of spectrum for public use and will be auctioning 70 MHz of the spectrum in 2020.

Cellular Bandwidth. Kurn notes that Verizon plans to use the new spectrum to beef up 4G bandwidth now and eventually 5G. Verizon plans to use the spectrum in dense markets and mostly outdoors. Cable companies like Comcast and Charter that have entered the wireless business are also likely to use the spectrum in this manner.

I’ve been writing for a while about the crisis faced by cellular network. In urban areas they are seeing broadband usage double almost every two years and keeping up with that growth is a huge challenge. It’s going to require the combination of new spectrum, more cell sites (mostly small cells), and the improvements that come with 5G, mostly the frequency slicing.

It’s interesting that Verizon only sees this as an outdoor solution, but that makes sense because this spectrum is close in characteristics as the existing WiFi bands and will lose most of its strength in passing through a wall. It also makes sense that Verizon will only do this in metro areas where there is enough outdoor traffic for the spectrum to make a difference. I’ve seen several studies that say that the vast majority of cellular usage is done indoors in homes, businesses, and schools. But this spectrum still becomes one more piece of the solution to help relieve the pressure on urban cell sites.

For this to be of use the spectrum has to be built into cellular handsets. Apple recently announced that they are building the ability to receive Band 48 of CBRS into their new models. They join the Samsung Galaxy S10 and the Google Pixel 3 with the ability to use the spectrum. Over time it’s likely to be built into many phones, although handset manufacturers are always cautious because adding new spectrum bands to a handset increases the draw on the batteries.

Point-to-Multipoint Broadband. Numerous WISPs and other rural ISPs have been lobbying for the use of the spectrum since it can beef up point-to-multipoint broadband networks. These are networks that put a transmitter on a tower and then beam broadband to a dish on a subscriber premise. This technology is already widely in use mostly using the 2.4 GHz and 5.0 GHz WiFi spectrum. Layering on CBRS will beef up the broadband that can be delivered over a customer link.

It will be interesting to see how that works in a crowded competitive environment. I am aware of counties today where there are half a dozen WISPs all using WiFi spectrum and the interference degrades network performance for everybody. There are five SAS Administrators named by the FCC that will monitor bandwidth usage and who also will monitor interference. The FCC rules don’t allow for indiscriminate deployment of public CBRS spectrum and we’ll have to see how interference problems are dealt with.

One interesting player in the space will be AT&T who intends to layer the frequency onto their fixed wireless product. AT&T widely used the technology to meet their CAF II buildout requirements and mostly has used PCS spectrum to meet the FCC requirement to deliver at least 10/1 Mbps speeds to customers. Adding the new spectrum should significantly increase rural customer speeds – at least for those with a few miles of AT&T towers.

Cable Company Edge-out. The most interesting new players considering the market are the cable companies. Kurn believes that the big cable companies will use the spectrum to edge out to serve rural customers with fixed wireless around their existing cable networks. He says the cable networks could theoretically pass 6 – 7 million new homes if this is deployed everywhere. This is an ideal application for a cable company because they typically have fiber fairly close the edge of their service areas. The point-to-point wireless product operates best when the radios are fiber-fed and cable companies could deliver a product in the 50-100 Mbps range where they have line-of-sight to customers.

We’ve already seen one cable company tackle this business plan. Midco was awarded $38.9 million in the CAF II reverse auctions to deploy 100 Mbps broadband in Minnesota and the Dakotas. Midco is going to need this spectrum, and probably even more to deliver 100 Mbps to every customer. Their deployment is not really an edge-out, and the company plans to build networks that will cover entire rural counties with fixed wireless broadband.

Court Upholds Repeal of Net Neutrality

The DC Circuit Court of Appeals ruled on the last day of September that the FCC had the authority to kill Title II regulation and to repeal net neutrality. However, the ruling wasn’t entirely in the FCC’s favor. The agency was ordered to look again at how the repeal of Title II regulation affects public safety. In a more important ruling, the courts said that the FCC didn’t have the authority to stop states and municipalities from establishing their own rules for net neutrality.

This court was ruling on the appeal of the FCCs net neutrality order filed by Mozilla and joined by 22 states and a few other web companies like Reddit and Etsy. Those appeals centered on the FCC’s authority to kill Title II regulation and to hand broadband regulation to the Federal Trade Commission.

Net neutrality has been a roller coaster of an issue. Tom Wheeler’s FCC put the net neutrality rules in place in 2015. An appeal of that case got a court ruling that the FCC was within its power to implement net neutrality. After a change in administration, the Ajit Pai FCC killed net neutrality in 2017 by also killing Title II regulation. Now the courts have said that the FCC also has the authority to not regulate net neutrality.

The latest court order will set off another round of fighting about net neutrality. The FCC had quashed a law in California to introduce their version of net neutrality and this order effectively will allow those California rules to go into effect. That battle is far from over and there will be likely new appeals against the California rules and similar rules enacted in Washington. It wouldn’t be surprising to see other states enact rules in the coming year since the net neutrality issue is overwhelmingly popular with voters. It’s possibly the worst of all worlds for big ISPs if they have to follow different net neutrality rules in different states. I think they’d much prefer federal net neutrality rules rather than different rules in  a dozen states.

The reversal of net neutrality rules only went effect in June of 2018 and there have been no major violations of the old rules since then. The ISPs were likely waiting for the results of this court ruling and also are wary of a political and regulatory backlash if they start breaking net neutrality rules. The closest thing we had to a big issue was mentioned in this ruling. Verizon had cut off broadband for firemen in California who were working on wildfires after the firemen exceeded their monthly data caps. It turns out that wasn’t a net neutrality violation, but rather an enforcement issue on a corporate cellular account. But the press on that case was bad enough to prompt the courts to require the FCC to take another look at how ISPs treat public safety.

This issue is also far from over politically. Most of the democratic presidential candidates have come out in favor of net neutrality and if Democrats win the White House you can expect a pro-net neutrality chairman of the FCC. Chairman Pai believes that by killing Title II regulation that a future FCC will have a harder time putting the rules back in place. But the two court appeals have shown that the courts largely believe the FCC has the authority to implement or not implement net neutrality as they see fit.

While net neutrality is getting all of the press, the larger issue is that the FCC has washed its hands of broadband regulation. The US is the only major economy in the world to not regulate the broadband industry. This makes little sense in a country where are a large part of the country is still controlled by the cable/telco duopoly, which many argue is quickly becoming a cable monopoly. It’s easy to foresee bad behavior from the big ISPs if they aren’t regulated. We’ve seen the big ISPs increase broadband rates in the last few years and there is no regulatory authority in the country that can apply any brakes to the industry. The big ISPs are likely to demand more money out of Google, Facebook and the big web companies.

The FCC handed off the authority to regulate broadband to the Federal Trade Commission. That means practically no regulation because the FTC tackles a single corporation for bad behavior but does not establish permanent rules that apply to other similar businesses. The FTC might slam AT&T or Comcast from time to time, but that’s not likely to change the behavior of the rest of the industry very much.

There is only one clear path for dealing with net neutrality. Congress can stop future FCC actions and the ensuing lawsuits by passing a clear set of laws that either implements net neutrality or that forbids it. However, until there is a Congress and a White House willing to together implement such a law this is going to continue to bounce around.

The big ISPs and Chairman Pai argued that net neutrality was holding back broadband investments in the country – a claim that has no basis when looking at the numbers. However, there is definitely an impact in the industry from regulatory uncertainty, and nobody is benefitting from an environment where subsequent administrations alternately pass and repeal net neutrality. We need to resolve this once way or the other.

Broadband on Tribal Lands

The American Indian Policy Institute recently issued a report titled Tribal Technology Assessment – The State of Internet Service on Tribal Lands. The report looks in-depth at broadband issues concerning tribal lands and reports on a survey of tribal members that is the first attempt ever of quantifying the issues of Internet access on tribal lands.

The FCC has often noted in various reports that tribal areas suffer from poor broadband. However, the FCC has been relying on the same faulty data to describe tribal lands that is used to look at rural broadband in general. The data collected from ISPs in the Form 477 process has been discredited in numerous ways, the latest being a test of the FCC data in Virginia and Missouri by USTelecom that showed that the 477 data had underestimated unserved homes by 38%. This AIPI report takes the first stab ever at understanding the real nature of broadband on tribal lands.

According to the FCC’s 2018 Broadband Progress Report, 35% of the 1.5 million people living on tribal lands lack access to 25/3 Mbps broadband, compared to 8% for the country as a whole. The older 2016 Broadband Progress Report showed that 41% of tribal lands lacked access to 25/3 Mbps compared to 10% of the whole country. Not all tribal lands are rural, and the FCC report showed that 72% of rural tribal residents in the lower 48 states lack broadband access while 33% of urban ones lack access. It showed that 70% of rural tribal lands in Alaska lack broadband access while 15% of urban areas there lack access.

The AIPI study included a survey of numerous tribal members from around the country. Following is a small sample of the responses to the survey, which are covered in more depth in the report.

  • 35% of respondents own or use a smartphone. 24% own or use a desktop or laptop computer. 16% own or use a tablet. All of these results are far lower than the US average.
  • For survey respondents with access to the internet, 36% have a connection through a telco like CenturyLink, Frontier or Windstream, 29% use a cellphone, 12% buy broadband from a cable company, six percent use satellite, and 1% still use dial-up. The rest of the respondents get access to the Internet at work, from libraries or at public hotspots.
  • Only 47% of respondents subscribe to a cellular plan, far below the 94% penetration for the country as a whole. 22% of respondents said that they have spotty access to home cellular coverage and 6% said they have no home cellphone coverage.
  • 50% of respondents said they feel limited by the broadband choices available to them.

The report makes specific recommendations for getting better broadband to tribal lands. Some of the recommendations include:

  • The FCC should earmark and prioritize some of the funding from the Universal Service Fund to solve the tribal broadband shortfalls instead of generically targeting hard-to-serve areas.
  • The RUS and USDA should identify and recommend pathways for Tribes to create rural cooperatives, consortia or creative partnerships to provide affordable broadband.
  • The FCC should prioritize spectrum licensing directly to Tribes or those who want to serve tribal lands.
  • Tribes should be allowed to challenge Form 477 data that misstates the broadband available on tribal lands.
  • Congress should provide an annual budget and provide more independence to the Office of Native Affairs and Policy at the FCC.

The report also includes numerous other recommendations for Congress, the FCC, large telcos and service providers, and tribal governments.

It’s clear that in aggregate that tribal lands are more poorly served than rural America as a whole. The report describes a broadband environment on tribal lands that lacks in both landline and cellular broadband.  I’ve seen numerous papers and articles on the topic over the years, but this report goes into more depth than anything else I’ve read on the topic.

Welcome, Merit Network!

The rural broadband community has a new ally in Merit Network of Michigan. Merit Network is a non-profit network that is governed by Michigan’s public universities. The organizations was founded in 1966 and was an early player that helped to develop some of the practice and protocols still used on the Internet. Their early mission was to seek ways for universities to network together, something that they accomplished by connecting Michigan and Michigan State in 1971. Merit went on to manage NSFNET, a nationwide network sponsored by the National Science Foundation, that was used to connect advance research labs and universities.

Over time, the company also collaborated with the Internet 2 project but also turned its attention to Michigan where it cobbled together a network comprised or owned and leased fibers used to provide bandwidth to K-12 schools around the state.

In the last year, Merit decided to further expand their mission. They now see that the biggest problem in Michigan education is the lack of home broadband for students. 70% of the teachers in Michigan assign computer-based homework, and yet 380,000 homes in Michigan don’t have a broadband connection. They are convinced, like many of us, that this homework gap is creating permanent harm and disadvantaging students without broadband.

The organization recently held their first statewide broadband summit and invited communities, service providers, anchor institutions, and broadband ‘activists’ to attend the summit. I’m pleased to have been invited to be a speaker. The goal of the conference was to describe the homework gap and to talk about real solutions for solving the problem in the state. The summit hoped to bring together stakeholders in rural broadband to form alliances to tackle the problem.

Merit has also taken several extraordinary steps that is going to make them a major player in the national effort to solve the homework gap. They’ve undertaken what they call Michigan Moonshot. This is an intensive effort to map and understand the availability of broadband around the state. The effort is being undertaken in collaboration with M-Lab and the Quello Center of Michigan State University. The concept is to encourage state educators to get students to take a specific speed test and to pair that effort with a program that teaches students about gathering scientific data.

The Moonshot effort is also going to correlate student test scores with broadband availability. This will be done in such a way as to guarantee student anonymity. This has been done before, but not on such a large scale. The project solicited participation from several school districts in Spring 2019 but expects to include many more in the future. The results of the data collection will be analyzed by scientists at Michigan State. The results of Moonshot studies should be of interest to educators and rural broadband proponents all over the country. Preliminary results show that it’s likely that there will be a strong measurable negative impact for students without home broadband. This study will provide peer-reviewed statistical evidence of that impact and should be a useful tool to educate legislators and to goad communities into action to find a broadband solution.

Merit is also nearing completion of a lengthy document they call the Michigan Moonshot Broadband Framework, which they hope will be a living document (meaning that collaborators can make edits) that lays forth a guide for communities that want to find a local broadband solution. This document is a step-by-step roadmap for how a community can tackle the lack of broadband.

It’s always good to have another major player in the national battle to tackle the lack of household broadband. I have high hopes that Merit Network will spur finding broadband solutions for rural and urban students in Michigan.

FCC Modifies CBRS Spectrum Rules

The FCC adopted Report and Order 18-149 that modifies the rules for using the 3.5 GHz spectrum band known as the Citizens Broadband Radio Service or CBRS. This is a huge swath of spectrum covering 150 MHz between 3550 and 3700 MHz. This order initiates the process of activating the spectrum for widespread use. This spectrum sits in the middle between the two WiFi bands and has great operating characteristics for wireless broadband.

The FCC plans to auction 70 MHz of the spectrum in June 2020 while authorizing the remaining 80 MHz for public use. In all cases, the spectrum must be shared with the military, which gets priority access to the spectrum at any time.

The spectrum also must be shared among users – something that will be monitored by authorized SAS administrators. The FCC named five administrators in the docket: Amdocs, CommScope, Federated Wireless, Google, and Sony. The administrators must report back to the FCC after 30 days to report how their software is handling the tracking and sharing of the spectrum.

The FCC changed their original plans for the auction and use of the spectrum that was originally proposed in 2015. The size of a license footprint is now set at the county level rather than the smaller census blocks. Licenses will now be issued for 10 years with a provision to renew instead of 3 years. Small businesses and rural bidders can get bidding credits. The FCC is also establishing a secondary market by allowing license holders to sell or lease the spectrum to others.

Of most interest to rural carriers are the bidding credits. Small businesses with gross revenues less than $55 million will get a 15% bidding credit. Very small businesses with annual gross revenues under $20 million will get a 25% bidding credit. Rural carriers with less than 250,000 customers will get a 15% credit. There will be additional credits given for serving tribal lands.

Much of the public comments in the docket centered on the size of the service areas. The FCC had originally considered using census blocks, reasoning that rural carriers could pursue reasonably small licenses for offering rural fixed wireless. The cellular carriers wanted much larger areas referred to as partial economic areas (PALs). The FCC finally chose a license size in the middle, using county borders.

The spectrum in each county will be auctioned off in seven 10-MHz bands. Any bidder will be limited to using no more than 4 of the bands, or 40 MHz of spectrum. Interestingly, the ability to lease spectrum from others might mean that a wireless carrier could put together even a bigger swath of the spectrum.

The auction is going to be interesting to watch to see who shows up to bid. The cellular carriers have said that this spectrum is key to their mid-band 5G plans. The industry was already anticipating this order and this spectrum is already built into the new iPhone and a few other devices. The cellular carriers have plans to heavily use the 80 MHz of public spectrum, and they will certainly also chase the licensed spectrum in urban counties. We’ll have to see if they have any need or interest to pursue the licensed spectrum in rural counties, where one might think that the public bands of CBRS ought to satisfy their needs. If the big companies pursue the rural bands, they can drive prices up, even considering the rural company bidding credit.

Spectrum licenses have historically been awarded for much larger footprints and it will be interesting to see how awarding spectrum at the county level will impact the auction. There are already rural carriers using the public portions of the spectrum for fixed wireless service. What is unknown is how much the cellular carriers will also use the public spectrum in rural places, perhaps making the public band too crowded for getting the best use of fixed wireless. WISPs will likely prefer licensed spectrum if they can get it affordably since there will be zero interference. We’ll also have to see if many WISPs will have the financial wherewithal to pursue licensed spectrum.

One of the most interesting aspects of the order is allowing spectrum buyers to lease or sell spectrum. I fear this provision will attract speculators to the auction, which could drive up the cost of buying spectrum and also then drive up the cost of leasing the spectrum. But this also might give small ISPs that couldn’t qualify for the auction the ability to use licensed spectrum.