The Industry

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.

Regulation - What is it Good For?

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.

Regulation - What is it Good For?

Maine Legislates a la Carte Programming

The Maine legislature passed a law that would create a la carte cable TV programming in the state. Titled “An Act to Expand Options for Consumers of Cable Television in Purchasing Individual Channels and Programs”, the act would require cable companies to offer individual channels to consumers starting September 19.

Comcast, and many of the primary programmers like A&E, C-Span, CBS, Discovery, Disney, Fox, Viacom, and New England Sports Network recently went to court to try to stop implementation of the law.

Consumers have been asking for a la carte programming for decades. People don’t like the idea of having to pay for channels they don’t watch. The cost of a cable subscription is the number one issue mentioned by the majority of the several million cord cutters that are now dropping cable every year.

It’s hard to think that the law can stand up to a legal challenge. There is a question of jurisdiction since Congress has enacted numerous laws governing cable TV that are still on the books and still enforced by the FCC. Those laws require cable companies to offer several tiers of programming for cable companies that have enough capacity to carry a lot of channels. The courts will have to decide if the Maine legislature can override federal law.

Probably more salient are the contracts between programmers and cable companies. Those contracts are extremely specific about how the cable companies must carry their content. Any cable company that tries to enforce the law will be in direct conflict with those contracts. Laws often preempt contracts, but I find it likely that the programmers would yank programming from Maine cable companies rather than see a la carte programming go into effect. If this law is allowed to stand in Maine it would likely quickly appear in other states as well.

The next problem is technical. Cable companies would find it difficult to deliver only those channels a customer wants. Cable TV networks act like a big radio system and every channel on a cable system is broadcast to every home on the network. A cable company uses filters to block channels that a customer doesn’t subscribe to. This is fairly easily done today because channels are delivered in large blocks. If a customer doesn’t want to pay for a digital programming tier the cable company blocks that whole tier. From my understanding, the blocking software used today doesn’t provide the ability to establish a custom blocking screen for each customer. This could probably be made to work with some assistance from the manufacturers of headend and from Cable Labs, but nobody has ever created the software to allow for custom blocking down to the individual channel level – it’s never been needed.

Individual channels are more easily delivered by companies that deliver cable TV on an all-digital network like fiber or DSL. This technology for delivering cable TV on these technologies is IPTV, and with this technology the cable provider only broadcasts one channel at a time for whatever customers want to watch. But even IPTV providers would need to buy modified software to give each customer a custom choice of channels.

It’s worth noting that idea has been tried in a controlled way. Last year Charter offered what they call Spectrum TV Choice where customers can pick ten channels out of a list of 65 choices and bundle them with local channels. This package is priced at $25. Charter is able to provide this product because they step outside of their normal network topology and deliver the channels over the customer broadband connection using a Roku box at the customer end. Charter has not reported on the success of this package and I’ve not seen it advertised for a while.

The final issue to consider is the price. Even if a cable company unbundles channels, they would likely charge a lot per channel. Are consumers going to be better off if they buy a dozen unbundled channels priced at $5 each for $60 or get a 150-channel bundle of channels for that same price? I believe that the cable companies would make buying single channels a costly endeavor.

It’s easy to understand why Maine legislators crafted this law. Cable programming has been increasing in price for years and is growing out of the range of affordability for many homes. Many homes don’t have sufficient broadband to cut the cord and feel trapped by the expensive cable options available to them. Surveys have also shown that the average home watched a dozen or fewer channels. My bet is that the legislation won’t survive a legal challenge, but I guess that’s why they have lawsuits.