Monthly Archives: July 2022

The Challenges for Broadband Grant Offices

I read an article recently in LightReading that discusses the efforts by the NTIA and the States to hire the people needed to administer the upcoming BEAD grant program. The article cites Commerce Secretary Gina Raimondo telling a Senate subcommittee that NTIA needs to hire 100 staff to administer the BEAD grants. Many states are starting from scratch to assemble a broadband office, and even states that have such a group are staffing up for the big crunch coming with the effort to award and administer billions of dollars of grants.

People might wonder why so many people are needed for the effort. I think that being in charge of a state broadband grant office has to be one of the toughest gigs in the country right now. The main purpose of today’s blog is to give folks an idea of the huge challenges facing each state broadband office over the next few years.

One of the first things each state will have to do is to develop a detailed broadband plan that describes how the BEAD grant program will work. The BEAD grant rules are complex. I have forty years of regulatory experience, and I see some new subtlety in the grant rules every time I read them. States somehow need to understand all of these subtleties and cobble together a state broadband grant plan that meets all of the requirements.

Each state grant office is required by the Congressional rules to reach into every niche and corner of the state to get input from constituents about what should be included in the state broadband plan. Anybody who has ever done that kind of outreach knows it’s hard – everybody in the state is going to want to be heard, even though most stakeholders will not understand the nuances of what the grants can and cannot accomplish. The demand for outreach meetings will require more hours than is available to hold meetings.

And then there is the politics. In some cases, the state legislatures have gotten involved and proposed laws that would modify or interfere with the grant process. But even when that isn’t the case, a broadband office is going to hear from every federal, state, and local politician who wants to make sure their constituency is taken care of. In many states, the governor’s office is going to have a heavy hand in the grant process.

At some point, the preliminary planning work will be done, a grant program will be put in place, and communities and ISPs will begin filing grant requests. The states will have a giant challenge of reviewing the grant requests. Most of the folks reviewing the grants will be relatively new to the broadband industry and will not find it easy to judge ISP business plans. Reviewing grants isn’t easy, even for people with many years of broadband experience. The grant review process has been made particularly complex by the NTIA rules that request a huge amount of input from a grant filer. It’s going to be hard for a grant reviewer to identify the half dozen most important facts in each grant request amongst the answers to hundreds of questions.

One of the biggest challenges of reviewing and choosing grant winners is that there are so many different uses for the funds – broadband last mile, anchor institutions, low-income apartments and neighborhoods, and various digital divide uses. States will somehow have to decide how to judge and balance grant awards between these various areas.

After awarding grants, the state broadband office will become the agency that will pay out grant funds. Grant funds are dispersed based upon real invoices, and a grant office will have to make the big pivot from reviewing grants to administering the funds and deciding if the submitted invoices match the intentions of an awarded grant. This is not an easy transition since the skill set for reviewing grant requests is different than the process of reviewing and verifying invoices.

After the grants are awarded, the grant offices will also require detailed status updates from each grant recipient, along with the obligation to somehow consolidate those updates into a report from each state to the NTIA. That’s a lot of paper to process every six months.

I wrote this blog because I’m not sure that many people in the industry appreciate the huge effort that will have to take place at the state grant offices behind the scenes. All of this workload comes with a shot clock ticking at all times and pre-determined deadlines that must be met. It’s hard to imagine that working in a state broadband office will be anything short of chaotic for the next four or five years.

I hope that industry folks grasp the complexity of the undertaking and are especially nice and understanding to the folks in the broadband grant offices – they are going to need it.

Any Relief from Buy America Requirements?

The USDA recently filed a request for a six-month waiver from the Build America, Buy America Act (BABA) – more colloquially referred to as the Buy American rules. The IIJA legislation updated the BABA rules to apply to all projects that receive federal funding for infrastructure as of November 18, 2021, the date the IIJA was published in the Federal Register. In the broadband world, this means the updated Buy American rules apply to federal grant programs administered by NTIA, USDA, EDA, and any other agency that awards a broadband infrastructure grant or loan.

The updated Buy America rules include a specific list of materials and components that should be sourced to American companies, including steel, iron, manufactured products, non-ferrous metals, plastic and polymer-based products (including polyvinylchloride, composite building materials, and polymers used in fiber optic cables), glass (including optic glass), lumber, and drywall. That list covers almost every component of building a fiber network. Fiber optic glass must be American-made, as must be the material used in fiber-optic sheaths. Conduit must be American-made. The definition of ‘manufactured items’ in the Act would cover all electronics.

The IIJA goes on to define the specific rules for defining American-made. For manufactured goods (like electronics), at least 55% of the cost of components must be American-made. For construction materials like fiber optic cable and conduit, 100% of the product must be made in the U.S.

For broadband purposes, the USDA 6-month waiver, if awarded, would relax the rules for any ReConnect grants awarded by the agency during that time frame. It’s worth noting that the USDA waiver request covers a lot more than just the ReConnect grants. The agency administers 49 different programs that awarded $40 billion in 2021 for almost 170,000 loans, grants, and loan guarantees – with 82% of the awards being loans or loan guarantees. The USDA has three major programs that involve infrastructure spending – the Rural Housing Service, the Rural Business-Cooperative Service, and the Rural Utility Service. The waiver would apply to all of these USDA programs.

The USDA noted that immediate implementation of Buy American would have negative impacts on rural communities and the economy, such as:

  • Delayed deployment of critical broadband, water, and community infrastructure.
  • Reduced access to capital for rural businesses and critical community investments such as
    schools, hospitals, and first responder facilities.
  • Decreased investment for rural clean energy projects and transition away from fossil
  • Slowed participation in the new USDA food supply chain programs resulting in
    continued food supply chain gaps for the country.
  • Underinvestment in the upkeep and upgrading of multi-family housing facilities that
    house rural America’s most vulnerable residents.
  • Creation of significant barriers to the use of RD programs by socially vulnerable,
    distressed and high-poverty rural communities, including communities of color and Tribal

The six-month delay is interesting, and the agency explains the requested delay to provide time for the USDA to work with grant and loan participants to understand how to meet the Buy American requirements. The USDA is not seeking a permanent waiver from Buy American rules, and the White House made it clear earlier this year that it did not want to see a lot of waivers.

If the USDA is granted this waiver, then any winners of the last round of ReConnect (which should be awarded soon) might get some breaks from the Buy American rules. But the USDA waiver makes it clear to me that folks need to be braced for Buy America to apply to the upcoming BEAD grants. I’ve heard folks on industry panels predicting waivers for broadband projects, and my bet is that isn’t going to happen.

Grants and Upload Speeds

The NTIA set a new definition of broadband at 100/20 Mbps for purposes of the BEAD grants – if a customer fails that test they are considered either unserved or underserved. Everybody nationwide has been so focused on download speeds that we are largely ignoring the fact that a huge number of nationwide broadband customers are not getting upload speeds of 20 Mbps. All of the speed test efforts I’ve seen have focused on whether homes and businesses are receiving 100 Mbps download and have largely ignored any implications of customers not achieving the NTIA’s 20 Mbps upload stream to qualify for a broadband grant.

My consulting firm helps clients conduct a lot of speed tests, and I also have been poring through the large number of speed tests gathered by Ookla and MLabs. I mostly work in rural counties, county seats, and suburban cities. I would venture to say that the vast majority of speed tests we see from cable customers do not meet the upload speed. The same is true for a large percentage of WISPs.

Sometimes the evidence is overwhelming. I recently worked with a county seat of about 20,000 people and the only customer in the community seeing upload speeds of 20 Mbps or faster were those who subscribed to the cable company’s gigabit product. Not one other cable customer had a 20 Mbps, and most weren’t even close, with an average of 11 Mbps. This was true for customers buying both a 100 Mbps, 200 Mbps, and 400 Mbps download product.

This raises an interesting question, which I’m sure is going to be the core of the cable company’s response to this question. In that particular city, the gigabit customers were getting upload speeds between 30 Mbps and 40 Mbps. I’m sure the cable company will argue that since a few customers are getting speeds over 20 Mbps that the network is capable of faster speeds.

I’ve talked to several knowledgeable engineers on the topic, and they tell me that the cable company in this case could not give faster speeds to everybody – or they would. The cable company is somehow giving a preference for gigabit customers at the expense of everybody else. If the cable operator opened the gates for everybody to get the fastest upload speed possible, the likely outcome would be that the gigabit customer speeds would drop to match everybody else’s speeds – the other customers would not get any faster.

This is an interesting question for state broadband grant offices to consider because it’s inevitable that people are going to seek grants where there is a cable company operating, using the argument that the cable company doesn’t meet the NTIA’s definition of broadband.

It makes sense to me that an ISP must meet both components of the speed definition to be considered as served. It shouldn’t matter if an ISP misses on the download or upload speed – if it fails one of the two benchmarks, it is not meeting the NTIA’s definition of served. If you don’t believe that logic, consider an ISP that is delivering 50/20 Mbps on licensed fixed wireless. I think there would be a consensus that this customer is not served since it is achieving only half of the definition of download speeds. But isn’t the same true for an ISP that is delivering 120/10 Mbps broadband?

To be fair to cable companies, they deliver speeds greater than 20 Mbps in many markets. I buy 400 Mbps download from Charter and routinely see upload speeds of 30 Mbps. But we all know that the performance of cable companies varies widely from town to town, and often inside of a town.

I had to laugh last year when the big cable companies fought so hard to reduce the definition of served from 100/100 Mbps to 100/20 Mbps. I knew then that this battle would be coming since the majority of cable customers, at least in the markets I have studied, are not seeing upload speeds of 20 Mbps.

One thing I think we can all count on is that if any grant office awards funding to overbuild a cable company because of this issue, we’re going to see the cable industry go ape. They’ve been quiet about the poor upload speeds, but they won’t stay that way if they see grant money coming to overbuild them.

BEAD Funding for Anchor Institutions

One of the aspects of the $42.5 billion BEAD program that many communities might have overlooked is that communities can request grants to bring fast broadband or improve existing broadband to anchor institutions.

Section I.C.f. of the BEAD Notice of Funding Opportunity (NOFO) defines a community anchor institution as an entity such as a school, library, health clinic, health center, hospital or other medical provider, public safety entity, institution of higher education, public housing organization, or community support organization that facilitates greater use of broadband service by vulnerable populations, including, but not limited to, low-income individuals, unemployed individuals, children, the incarcerated, and aged individuals. An Eligible Entity (the State Broadband Office) may propose to NTIA that additional types of institutions should qualify as CAIs within the entity’s territory.

The first thing to note is that this expands the definition of anchor institution beyond the traditional list by adding organizations that facilitate the use of broadband by vulnerable populations. This means that the grants can be used to bring better broadband to organizations that want to help low-income individuals or others who need better broadband. This is an interesting concept that makes it possible to build broadband facilities to the offices of non-profits or perhaps a computer training center. My interpretation of the BEAD rules is that the grant funding could also be used to construct a training center and buy the needed computers.

This is one of the more interesting sections of the BEAD program because it doesn’t seem to be restricted to only anchor institutions that can’t already buy broadband with 100/20 Mbps speeds. We’ll have to see how states interpret the rules, but it seems like funding could be used to upgrade speeds to anchor institutions. It might also be possible to use this funding to add anchor institutions to a fiber network that would eliminate the need for having to buy commercial broadband – much like school systems often build private networks.

I must be honest in that I historically disliked grant programs that were built only for anchor institutions. The 2009 BIP and BTOP grants were used to build many middle-mile fiber routes across the country. Those grants required grant winners to drop off of the middle-mile routes to serve any anchor institutions in rural areas. This meant that fiber was often built into small rural towns to serve only the city hall and the library and nothing else. Certainly, these anchor institutions needed broadband, but so did all of the residents and businesses in these towns. In actual practice, delivering broadband to only anchor institutions made it harder to justify a rural broadband build to reach everybody else since the anchor institutions were no longer potential customers.

I think the BEAD grants are different. The BEAD grants are aimed at building broadband across large rural areas and will be required to serve everybody in those areas, including anchor institutions. I interpret the anchor institution language to be aimed at towns and cities and not rural areas.

Larger towns and cities got broadband networks constructed to serve anchor institutions in the 1970s by cable companies that provided broadband as a condition for granting a cable franchise. However, these networks are either no longer free or have been discontinued as cable companies have lost nearly twenty million customers in just the last few years. The BEAD grants hold out the possibility for a community to construct a new government network to replace the old networks that were once provided by the cable companies – and to a large universe of eligible anchor institutions.

I would hope that cities will not repeat the sins of BTOP and build a broadband network in such a way as to ignore the rest of the community. For example, another provision of BEAD allows funding to be used to bring better broadband to low-income apartment buildings or complexes, and I hope any urban networks will address multiple needs.

This is one of the pieces of BEAD funding that I don’t think is automatic. It’s up to states to put some muscle behind this possibility if it wants to see these kinds of grant awards. I have no doubt that the large ISPs are going to hate this provision since it could fund fiber networks in urban areas. And I am certain that some states will follow the lead of the big ISPs and make it hard to qualify for this kind of grant.

However, the BEAD rules allow for these kinds of projects, and communities should assess their broadband needs for anchor institutions and begin the process of lobbying the State broadband offices to make such grants available. While the big ISPs might hate this idea, there is no reason that this kind of grant can be used to create a public-private partnership with a big ISP or somebody else. I think cities are going to have to be creative to win and implement these grants – but it is well worth the effort.

Is Broadband Recession-proof?

It’s been a while since I’ve been asked this question of whether broadband is recession-proof. The question was prompted for me when I saw recent quotes from Lumen and Altice executives saying they don’t fear any downside of fiber broadband customers during an economic slowdown. The last ‘normal’ recession we had was from 2007 to 2009, and I remember this being a topic of conversation then. We recently made it through one of the most unusual recessions ever during the pandemic, but this question didn’t seem relevant then since the pandemic forced everybody to shelter, work, and school from home, making broadband subscriptions soar.

But there are new predictions of a possible coming recession, and it’s fair to ask if ISPs should be worried about it. There are some businesses that have always been cited as recession-proof, like grocery stores, health care facilities, liquor stores, discount retailers, pet food makers, and candy companies. Has broadband joined that list of recession-proof businesses? If people start losing jobs, do they now consider broadband to be a necessity that they hang onto over other expenses?

I heard some talk of broadband being recession-proof during the 2009 recession. I think the question was prompted by new services hitting the web – Spotify had started in 2006, and Netflix had moved content online starting in 2007. People suddenly had more uses for broadband than just social media and email. Since 2009, broadband has grown in importance in many people’s daily life. A huge percentage of people now watch video online, and music has largely moved online. Gaming has largely moved online. Video calls have become commonplace, and not just for work. A lot of people get news and weather online. We use digital assistants to play music, turn on the lights, and to answer basic questions. Our appliances have all gone online, although I’m still trying to figure out why. We deploy security cameras outdoors and nanny and pet cameras indoors to check on our homes when we are away. Shopping has largely gone online for a lot of households. Schoolwork, including homework, advanced placement classes, and undergraduate and graduate college courses are now online. Telemedicine has gone online, particularly meetings with counselors and therapists. Many millions of people now make a living working at home and sitting at a computer – more than ever before.

The question of whether broadband is recession-proof is really asking if people will willingly give up the many things that they do online. Is there a point in people’s lives where broadband becomes a necessity that they will fight to keep when times get tough?

Even if broadband is recession-proof doesn’t mean that people will continue to pay high prices for broadband. I wonder about the big ISPs who think that fiber is safe. It’s not hard to imagine a lot of people downsizing to cellular FWA service as long as it is good enough to get by.

Will homes drop traditional cable TV before they ditch broadband? A recession might drive another nail in the coffin for traditional cable TV. One of the best ways to save money is to drop the $100 cable plan. The overall cable industry penetration rate is now just barely over 50% and dropping like a rocket. I have to think that a recession will drive even more millions to drop cable – especially if that enables them to keep good broadband.

Of course, a recession is not inevitable and may not happen this year or next. The post-pandemic economy looks to be something new with a lot of people making a living in non-traditional ways. It’s possible that the traditional paradigms of what defines a recession no longer apply. If the economy retracts, it’s likely to do so in new ways we haven’t seen before.

I suspect most of the people who read this blog think that broadband is essential for daily life. But the big question that will have to be answered is how many others find broadband to be indispensable. It’s easy for those of us live and breathe broadband to suppose that more people each year are finding broadband to be a necessity – but that still doesn’t mean that enough people feel that way that we can declare broadband to be recession-proof.

BEAD Reporting Requirements

I’ve already written about the complexity of applying for the BEAD grants. Unfortunately, the paperwork doesn’t stop there. There are reporting requirements both for States and for grant recipients that begin when grant funds have been awarded that ask for a lot more information than any other grant I can recall.

The requirements for States matter because States will likely request much of the same information from each grant recipient. Starting one year after getting the funding, then every six months, each State must report the following:

  • The State must describe to the NTIA how it expended funds.
  • The State must describe each service provided with the grant funds.
  • The State must describe the number of locations at which broadband service was made available using the grant funds, the number of those locations at which broadband service was utilized, and the comparative demographics of those served. I find the last requirement to be troubling, and I don’t know any ISP that asks about the demographics of its customers, whatever that means. I don’t know how ISPs will gather such information. I suspect most people are like me and would not provide any demographic data to an ISP like household income, number of people in the home, etc. – it’s none of the ISP’s business.

Grant recipients also have a long list of reporting requirements. A grant recipient must report to the State every six months until the grant funds have been fully spent. The specific reporting requirements include:

  • A description of the type of infrastructure that has been constructed and installed.
  • A list of addresses or locations that can be served by the network being constructed. The ISP must note if each address is residential, commercial, or an anchor institution.
  • The aggregate customer penetration rate for the grant locations.
  • The broadband speed available to a customer. This includes describing the actual peak and off-peak speeds of the broadband being delivered as well as the maximum advertised
  • A description of all non-promotional prices and fees.
  • A list of all interconnection agreements it has in place and the status of each. This does not mean the traditional interconnection agreements that telephone companies use to interexchange data, but connections from the ISP to the Internet.
  • The number and the dollar amounts of contracts and subcontracts awarded that were given to minority-owned or women-owned businesses.
  • The same information that is provided to the FCC for mapping reporting.
  • An updated Form SF-425 which reconciles all expenditures to date by category.
  • For projects over $5,000,000, the ISP must provide certifications regarding the laborers and mechanics employed by contractors or subcontractors working on the project. If such certification is not provided, the ISP must provide a project employment and local impact report and a project workforce continuity plan.
  • Anything else that the State or NTIA adds to this list in the future.

There are a few things not listed in the NOFO that I expect. I fully expect the NTIA to require that ISPs undergo periodic speed testing on completed networks to verify that the speeds actually being delivered are what the ISP is claiming. They might not wait until a project is completed if it’s going to be constructed over multiple years. I also fully expect the NTIA to develop some form of annual reporting on the status of the grant project areas that extends after the funds have been used.

I fully understand the NTIA’s desire for detailed reporting. The agency is trying to avoid the criticism leveled at the FCC for having almost non-existent reporting for some FCC subsidy programs like CAF II. The big telcos supposedly didn’t make the needed upgrades in many areas, but the FCC never got a detailed look at how the funds were expended.

The reporting workload is not as onerous as the original grant application but only by degree. If an ISP isn’t tracking spending and customers carefully from the first day of the grant cash flow, this reporting could become overwhelming. I also expect there will be audits to see if everything was reported accurately. Anybody who has ever been through a grant audit can tell you how ghastly the process can be.

The bottom line is that any ISP who takes the BEAD grants needs to recognize that there is going to be a major ongoing reporting effort – and it will happen at the same time that you’re still busy building the network. These reporting requirements are going to require ISPs to keep track of and compile a lot more data about the customers on a grant network than what ISPs have ever done in the past. As someone who has seen the books and records of hundreds of ISP, I can tell you that a lot of ISPs are not ready to keep records in the needed detail for this reporting. If you take the grant money, you better get ready.

ACA Connects Plea – Don’t Regulate Us

I’m starting to wonder if big cable companies and telcos are assuming that a fifth FCC Commissioner will soon be seated because the lobbying arms of these companies have been publishing documents that are an open plea to not regulate them. The latest comes in the form of a whitepaper from ACA Connects, which represents the mid-sized ISPs like Cable ONE, WOW! Internet, Mediacom, TDS, Armstrong, Hotwire, and ISPs of a similar size.

You might recall that the giant ISPs put out a whitepaper through USTelecom that made the silly argument that broadband is getting cheaper, with the punch line being, “Don’t regulate us”. The ACA paper takes a different tactic and argues that most of the country already is, or will soon have competition, with the same punch line. It’s important to understand that these papers are not written for the general public so much as for the politicians in Washington D.C. The average consumer knows that broadband is not getting cheaper, and most know they have only one realistic choice of fast ISP.

The opening sentence sums up the point of the whitepaper clearly: ACA Connects uses FCC data to demonstrate that fixed broadband competition is thriving in the United States and will become only more intense in the near future. Industry insiders instantly go on the alert with any statements drawn from the faulty FCC mapping data. It’s clear that data significantly overstates broadband speeds and availability in the country.

The paper then marches out arguments about the current effectiveness of competition. Let’s start with the facts touted in the paper. The whitepaper suggests the following statistics for June 2022:

  • 93.6% of homes have access today to at least two ISPs that offer speeds of 25/3. The key word in that definition is that the speeds are offered, which is far different than what is being delivered. We know there is still a huge amount of DSL and fixed wireless in the country that is reported to the FCC as capable of 25/3 Mbps but which delivers far slower speeds.
  • 91% of households today have one provider that offers speeds of at least 100/20 Mbps and another that offers 25/3 Mbps. The 100/20 provider in most markets is the cable company or a fiber provider. This conveniently doesn’t acknowledge that most cable subscribers don’t receive upload speeds of 20 Mbps.
  • 63.6% of homes today have at least two providers that offer speeds of at least 100/20 Mbps. For most of these homes, one provider is a cable company, and the other provider is either a fiber provider or an FWA wireless provider like T-Mobile, or a WISP offering fast speeds. I have no doubt that this is probably close to what the current FCC data shows. I just know that in every county where I’ve dug deeper, the FCC speeds and coverage are overexaggerated.

The whitepaper goes on to claim that the vast amounts of investments that are pouring into the industry are going to increase these numbers significantly. The paper says that the number of homes with one ISP offering at least 100/20 Mbps will grow to 95%, while the percentage of folks who will have two providers offering 100/20 Mbps will grow to 73.9%.

The timing was right to publish this paper now before we get new FCC maps. While I think the new maps might need a cycle or two to get rid of the worst exaggerations, it’s not going to produce nearly as high of numbers for 2022 as cited by the ACA.

There is one statement in the whitepaper that accidentally told the truth (oops). It says that ISPs have very powerful incentive to steal customers from one another, because almost all of the incremental revenue associated with a new customer is profit. This is something that industry insiders understood well but never say out loud. If a new customer is almost all profit, that means that existing ISP customers are also almost all profit. I don’t know that I’ve ever seen a trade association make such a strong case for price regulation.

One last argument made against regulation is that the ACP program is giving a $30 discount to low-income households, thus taking the pressure off of the big ISPs to have affordable rates.

I could write twenty pages commenting on the many things said in the whitepaper that stretch the truth a bit – but it seems unnecessary since the whole point of the paper is to plant that seed that ISPs are taking care of the business of broadband and don’t need to be regulated. The conclusion of the paper aimed at Washington D.C. is there is no need to impose additional heavy-handed common-carrier-style regulation on fixed broadband providers as a whole. Doing so would yield few, if any, tangible benefits while discouraging entry, investment, and innovations, to the detriment of consumers. Finally, a strong case can be made for exempting smaller providers from such regulation even if it were to be imposed on larger providers. I love the sentiment – the large carriers in ACA Connects are willing to throw Comcast, Charter, AT&T, and Verizon under the bus if needed.

Local Coordination Requirements for BEAD

One of the more interesting requirements of the BEAD grant process is that States must reach out to communities and stakeholders to make sure that everybody gets a voice in setting the state grant rules. This is something that communities of all kinds should be participating in.

It’s easy to think of the $42.5 billion BEAD grants as only for rural broadband. But the grant money can be used for a lot more purposes, such as bringing broadband to anchor institutions, bringing broadband to apartment buildings in low-income neighborhoods, funding broadband devices, training and workforce development, and for digital equity programs. This means there are a lot more opportunities for funding than just last-mile broadband, and any community interested in any of those areas should make sure that your State hears from you.

There is always a danger that states will merely give lip service to the local coordination process in order to check off a box at the NTIA. It’s up to communities and stakeholders to make it more than that.

The NTIA rules require states to reach out to the public and key stakeholders. The State must reach into all geographic corners. The NTIA rules require ‘meaningful’ engagement and dialog, whatever that means. States must utilize multiple awareness and participation mechanisms as part of the outreach. States are specifically tasked with reaching out to unserved and underserved communities, including underrepresented and marginalized groups. States are also required to document the outreach process.

I expect that outreach is going to happen in several ways. States will certainly announce in various ways that they want to hear from everybody in the state about the grants. States will likely request both written comments on its plans while also meeting with stakeholder groups. States might establish surveys to hear directly from the public. If a State fully follows the NTIA guidelines, it will also reach out somehow to unserved and marginalized stakeholders.

If a community wants to have any meaningful interaction with the State broadband folks, it must have a clear message of the issues that are most important. That makes it vital that local communities start holding conversations about what they hope to see out of the grant process.

Feedback from communities and stakeholders could cover anything having to do with the BEAD grants. If a County government believes the State won’t allow grants for government entities, this is the place to lodge a protest. If a city wants to make sure that low-income neighborhoods are not forgotten, this is the forum to give that voice. If a community is worried that the FCC mapping or unresolved RDOF grants will leave them behind, this is the forum to be heard.

In all cases, a community ought to clearly state what it wants to see out of the grants. Are there grant rules that must be more clearly spelled out in the State broadband proposal to the NTIA? Are there specific rules that the state should adopt, such as in important steps like how to handle challenges to the FCC maps? Are there rules the State is considering that a community finds unacceptable?

I know the nuances of the BEAD grants are probably hard for local communities and small stakeholders to understand. It’s hard to know if this is on purpose, but a lot of the complexity comes directly out of the legislation that enabled the grants – but the NTIA has layered on additional complexity. With that said, if a community doesn’t speak up during this process, you might have lost the chance to influence the way your state will administer the BEAD grants. It will be easy for states to concentrate on last-mile broadband and ignore the other many ways this money can be used – especially if they don’t hear from the public.

How Fast is Starlink Broadband?

We got a recent analysis of Starlink broadband speeds from Ookla, which gathers huge numbers of speed tests from across the country. The U.S. average download speeds on Starlink have improved over the last year, from an average of 65.72 Mbps in 1Q 2021 to 90.55 Mbps in 1Q 2022. But during that same timeframe, upload speeds got worse, dropping from an average of 16.29 Mbps in 1Q 2021 to 10.70 Mbps in 1Q 2022.

It’s likely that some of this change is intentional since ISPs have a choice for the amount of bandwidth to allocate to download versus upload. It seems likely that overall bandwidth capacity and speeds are increasing due to the continually growing size of the Starlink satellite constellation – now over 2,500. Starlink subscriptions are climbing quickly. The company reported having 145,000 customers at the start of the year and recently announced it is up to 400,000 customers worldwide. This fast growth makes me wonder when Starlink will stop calling the business a beta test.

These speed tests raise a few interesting questions. The first is if these speeds are good enough to qualify Starlink to be awarded the RDOF awards that have now been pending from the FCC for over a year and a half. While these speeds are now approaching the 100 Mbps speed promised by Starlink in its RDOF bids, it’s worth noting that the 90 Mbps number is an average. There are some customers seeing speeds of over 150 Mbps while others are seeing only 50 Mbps or even less. I’ve talked to a number of Starlink customers and what they’ve told me is that Starlink needs a view of the ‘whole sky’ from horizon to horizon to operate optimally, and many homes don’t have the needed view. This doesn’t bode well for the Starlink RDOF awards areas of heavy woods and hills like the awards in western North Carolina.

There is a lot of speculation that Starlink is limiting the number of subscribers in a given geographic area in order to not dilute speed and performance. The RDOF awards require any winning ISP to serve everybody, and there is still a big question about the kinds of speeds that can be delivered for a geographic area that has a lot of subscribers.

The BEAD grant rules also open the door for Starlink and other satellite providers to some extent. While satellite technology is not deemed reliable enough to directly be used for grant awards, the NTIA has also opened the door to using alternate technologies like satellite and fixed wireless using unlicensed spectrum in areas where landline technologies are too costly. Each state will have to decide if grants can be awarded for satellite broadband in such cases, and it seems likely that some states will allow this.

The Ookla article also shows the Starlink average speeds around the globe. Some of the average speeds are much faster than U.S. speeds, and this might be due to smaller countries that cover a smaller and less diverse terrain than the U.S. Here, speeds are likely much higher in the open plains states than for customers located in hills, mountains, and woods. There can’t be a technology difference since the same satellites serve around the globe.

There is an interesting app that shows the location of the Starlink satellites. It’s fascinating to watch how they circle the globe. What is most striking about the world map is how few satellites there are over the U.S. at any given time. The app shows a few closely packed strings of satellites that are recent launches that haven’t yet been deployed to their final orbits.

The skies are going to soon get a lot busier. The original business plan for Starlink was to deploy 11,000 satellites. Jeff Bezos and Project Kuiper have FCC permission to deploy satellites, with launches starting this year. OneWeb, which is now aiming to serve business and government customers, has much of its constellation launched but has yet to begin delivering services. Telesat is still marching slowly forward and has fallen behind due to supply chain issues and funding concerns – but still has plans to have a fleet in place in the next few years. I would imagine that in a few years, we’ll see Ookla reports comparing the different constellations.

Cable Subscriptions Continue to Dive

Leichtman Research Group recently released the cable customer counts for the largest providers of traditional cable service at the end of the first quarter of 2022. LRG compiles most of these numbers from the statistics provided to stockholders, except for Cox, which is privately held and estimated. Leichtman says this group of companies represents 96% of all traditional U.S. cable customers.

The industry continues to bleed customers, losing over 1.4 million customers in the fourth quarter, up from 1.3 million customers the previous quarter. Overall, the traditional cable providers lost almost 15,900 customers every day during the quarter.

1Q 2022 Change Change
Comcast 17,664,000 (512,000) -2.8%
Charter 15,721,000 (112,000) -0.7%
DirecTV 14,300,000 (300,000) -2.1%
Dish Network 7,993,000 (228,000) -2.8%
Verizon 3,566,000 (78,000) -2.1%
Cox 3,310,000 (80,000) -2.4%
Altice 2,658,700 (73,600) -2.7%
Mediacom 555,000 (17,000) -3.0%
Frontier 363,000 (17,000) -4.5%
Breezeline 339,021 (7,708) -2.2%
Cable ONE 238,000 (23,000) -8.8%
   Total 66,707,721 (1,448,308) -2.1%
Hulu Live 4,100,000 (200,000) -4.7%
Sling TV 2,252,000 (234,000) -9.4%
FuboTV 1,056,245 (73,562) -6.5%
Total Cable 40,485,721 (825,308) -2.0%
Total Telco / Satellite 26,222,000 (623,000) -2.3%
Total vMvPD 7,408,245 (507,562) -6.4%

It doesn’t look like people are replacing traditional cable with an online alternative like Hulu and Sling TV – which are also losing customers. A few major online alternatives like YouTube TV aren’t on the list, but the loss in traditional cable far surpasses any net gain for the online cable alternatives.

Charter is still losing customers at a slower rate than everybody else in the industry and has for the past several years. Charter CEO Tom Rutledge explains this by Charter’s willingness to move cable subscribers to less expensive tiers, such as the $44.99 Spectrum TV Select product. He says that Charter actively points out to customers that the online alternatives cost more. The rest of the industry seems resigned to letting cable customers go.

This drops the overall penetration rate of traditional TV to just above 51% of households. The industry has lost over fifteen million customers since the end of 2017 when traditional cable was in over 73% of homes.

One of the consequences of the rapid drop in cable customers is that cable companies are losing the power of the bundle. The traditional cable industry has lost almost one-third of all cable customers since 2017, greatly reducing opportunities to retain customers with bundling discounts.