The Industry

Top Broadband Stories of 2021

Every year I write a blog talking about the trends that I think we’re likely to see in the coming year. But 2021 was such an unusual year for all of us that I thought it would also be useful to talk about what we accomplished in the industry over the last year while fending off a pandemic. All in all, it was quite a year.

Broadband Funding. This was the year when the federal government finally reacted to the poor broadband in many parts of the country and pulled the trigger on huge broadband grants. Before the year started, we saw funding through the CAREs funds in 2020. We saw money going to every community that can be used for broadband in the American Rescue Plan Act. This legislation also funded grant programs at the RUS and the NTIA. The big grant announcement was the $42.5 in broadband infrastructure funding from the Infrastructure Investment and Jobs Act. States across the country have chipped in with state broadband grants funded by legislatures. 2021 was the year when the funding spigots were opened wide.

Technology Getting Faster. 2021 was the year when XGS-PON became price competitive with GPON, and we’re starting to routinely talk about new FTTP networks as 10-gigabit capable. Fixed wireless technology has been improving, but the jury is still out on claims made in 2021 for being able to deliver rural gigabit wireless. Several cable companies did field trials of early DOCSIS 4.0 technology last year – the technology that will bring gigabit upload speeds to coaxial networks. Starlink showed us last year that satellite broadband doesn’t have to suck.

Supply Chain Becomes an Issue. I don’t recall ever hearing the term supply chain in the broadband industry before 2021 – and now it’s on everybody’s lips. Supply chain issues became real in 2021. ISPS ran into sudden long waits for basic electronics like switches and servers. During the year, the delivery times for fiber grew longer. And like always happens in times of shortages, by the end of the year, it became obvious that the biggest ISPs are still getting what they need while new ISPs at the bottom of the supply chain are told to wait a year to buy fiber.

BIG ISPs Interested in Rural America. I find it dismaying and somewhat ironic to see the big telcos and even a few of the big cable companies taking a sudden serious interest in serving rural America. The telcos started to ignore rural copper networks as far back as the 1980s, and their collective neglect led directly to the current dreadful state of rural broadband that we are now attempting to fix. The new interest in rural America is clearly due to the gigantic grant programs. Since the big grants are going to be funded through states, I guess we’ll find out if anybody wants to trust these companies yet another time.

Expansion of WiFi. When we look back twenty years from now, the expansion of WiFi spectrum might have been the most important development in 2021. The FCC originally voted to add 6 GHz spectrum to WiFi in April 2020, but the order was appealed by cellular carriers that wanted the spectrum for 5G. At the very end of 2021, the courts sided with the FCC and are allowing the use of 6 GHz WiFi to finally move ahead. WiFi is the wireless solution the world needs. You buy a box and can transmit wireless broadband around the home or office – the alternative is to buy subscriptions from cellular carriers. WiFi 6 and 6 GHz spectrum is going to take the technology to a new level.

Private Equity Finds Broadband. 2021 saw private equity money pouring into the broadband market. The big flashy announcement was when Apollo Global Management bought the copper assets of CenturyLink in twenty states. But more quietly, there is private equity money being used to buy smaller ISPs and to launch new fiber networks. It’s an interesting phenomenon when you consider that none of the fundamental aspects of the market has changed. Broadband networks are never likely to earn more than infrastructure returns, and the sudden interest in investing in low, slow return businesses is baffling.

Regulation Went Nowhere. There was big anticipation at the end of 2020 that a change of administration meant a new regulatory direction for the broadband industry. But inexplicably, almost all of 2021 went by without the White House naming a fifth FCC Commissioner or a new head of NTIA. 2021 was a year of regulatory status quo where the FCC concentrated on issues that have bipartisan support like awarding new spectrum and trying to fix robocalling.

Regulation - What is it Good For?

ARPA is Not Just for Rural Broadband

FCC Commissioner Brandon Carr released an extraordinary statement the other day that is worth reading. Carr is taking exception to the final rules from the Treasury Department concerning how communities can use the $350 billion in funding from the American Rescue Plan Act (ARPA). Carr is asking states to somehow intervene in the way that cities, counties, and towns elect to use these funds.

As a reminder, the $350 billion he is talking about is funding that is being given directly to states, cities, counties, and townships. The money is not just for broadband and is intended to help local governments combat issues related to the pandemic.

Broadband is listed as an acceptable use of these funds since most communities had broadband-related problems during the pandemic as many millions were sent to work and school from home. But the money can also be used for many other purposes such as supporting the public health response to the pandemic, addressing negative economic impacts, replacing lost local government tax revenues that came as a result of the pandemic, covering premium pay for essential workers, and making investments in water and sewer infrastructure. The large majority of this funding is going to go to needs other than broadband.

Commissioner Carr starts with the statement that “the Administration’s rules green-light spending to overbuild existing, high-speed networks in communities that already have fast Internet service, rather than directing those dollars to the rural and other communities that lack access to any broadband service today.”

I take exception to this sentence for several reasons. First, I think the final Treasury rules are following the intent of Congress that wrote the enabling legislation. Congress included broadband as a possible use for the funds. If Congress had intended this funding to be used only for rural broadband, the legislation would have said so. But broadband is listed as an acceptable use for every community, including cities. I’m not sure how Commissioner Carr thinks that ARPA money given to Detroit, Baltimore, or New York City could be used to support rural broadband.

A lot of the funding is going to rural communities and I know many communities are aiming this funding to help areas with poor broadband. But I think cities contemplating using this funding also think they are helping to solve the digital divide. In every city, there are places where cable companies never built broadband, and there are many millions more homes that can’t afford broadband. Most of the urban initiatives I’ve seen for using ARPA funding are aimed at building infrastructure to serve public housing or for bringing broadband to students that don’t have home broadband. Commissioner Carr says those kinds of projects deviate from the intent of ARPA, and I have to disagree.

Commissioner Carr also doesn’t think this money should be used for overbuilding. I always get my hackles up when I hear that word, because the big ISPs have been using the word overbuilding as a pejorative for many years. Looking back to the days when there were federal grants that were earmarked to bring better broadband to areas with broadband speeds under 10/1 Mbps, the big ISPs fretted that the money would be used to overbuild existing rural ISPs. The big ISPs don’t think any federal funding should be used to ever overbuild any existing ISP – the big ISPs are in favor of maintaining monopolies. Whenever I see the word overbuild coming from a big ISP I just substitute the correct word – competition. When Congress added broadband as an acceptable use for the ARPA funding, it obviously intended that the money could be used to compete (overbuild) against ISPs that weren’t delivering the broadband households needed during the pandemic.

I must admit that I got a good laugh out of Commissioner Carr’s warning that “the Treasury rules allow these billions of dollars to be spent based on bad data.” The final Treasury rules allow the exact opposite by allowing communities to ignore the FCC’s notoriously bad broadband data when determining where to spend the money.

I opened the blog by calling this an extraordinary statement because I’m not sure why he wrote it. Commissioner Carr’s plea to the states doesn’t mean much since local communities are free to use the ARPA funds without any approval from the states. It’s just a guess, but perhaps Commission Carr is upset that the FCC has no role in this spending. This funding was created by Congress and given to the Treasury Department and to communities directly in what looks like a deliberate snub of the FCC. The FCC got snubbed again more recently when Congress decided to send the $42.5 billion in BEAD grants to the states to spend.

Technology The Industry

When Will We See Real 5G?

The non-stop wireless industry claims that we’ve moved from 4G to 5G finally slowed to the point that I stopped paying attention to it during the last year. There is an interesting article in PC Magazine that explains why 5G has dropped off the front burner.

The article cites interviews with Art Pouttu of Finland’s University of Oulu about the current state and the future of 5G. That university has been at the forefront of the development of 5G technology and is already looking at 6G technology.

Pouttu reminds us that there is a new ‘G” generation of wireless technology about every ten years but that it takes twenty years for the market to fully embrace all of the benefits of a new generation of wireless technology.

We are just now entering the heyday of 4G. The term 4G has been bantered around by wireless marketing folks for so long that it’s hard to believe that we didn’t see a fully-functional 4G cell site until late in 2018. Since then, the cellular companies have beefed up 4G in two ways. First, the technology is now spread through cell sites everywhere. But more importantly, 4G systems have been bolstered by the addition of new bands of cellular spectrum. The marketing folks have gleefully been labeling this new spectrum as 5G, but the new spectrum is doing nothing more than supporting the 4G network.

I venture to guess that almost nobody thinks their life has been drastically improved because 4G cellphone speeds have climbed in cities over the last few years from 30 Mbps to over 100 Mbps. I can see that faster speed on my cellphone if I take a speed test, but I haven’t really noticed much difference between the performance of my phone today compared to four years ago.

There are two major benefits from the beefed-up 4G. The first benefits everybody but has gone unnoticed. The traditional spectrum bands used for 4G were getting badly overloaded, particularly in metropolitan areas. The new bands of spectrum have relieved the pressure on cell sites and are supporting the continued growth in cellular data use. Without the new spectrum, our 4G experience would be deteriorating.

The new spectrum has also enabled the cellular carriers to all launch rural fixed cellular broadband products. Before the new spectrum, there was not enough bandwidth on rural cell sites to support both cellphones and fixed cellular customers. The many rural homes that can finally buy cellular broadband that is faster than rural DSL are the biggest winners.

But those improvements have nothing to do with 5G. The article points out what has always been the case. The promise of 5G has never been about better cellphone performance. It’s always been about applications like using wireless spectrum in complex settings like factories where feedback from huge numbers of sensors needs to be coordinated in real-time.

The cellular industry marketing machine did a real number on all of us – but perhaps most of all on the politicians. We’ve had the White House, Congress, and State politicians all talking about how the U.S. needed to win the 5G war with China – and there is still some of that talk going around today. This hype was pure rubbish. What the cellular carriers needed was more spectrum from the FCC to stave off the collapse of the cellular networks. But no cellular company wanted to crawl to Congress begging for more spectrum, because doing so would have meant the collapse of cellular company stock prices. Instead, we were fed a steady diet of false rhetoric about how 5G was going to transform the world.

The message from the University of Oulu is that most 5G features are probably still five or six years away. But even when they finally get here, 5G is not going to bring much benefit or change to our daily cellphone usage. It was never intended to do that. We already have 100 Mbps cellular data speeds with no idea how to use the extra speed on our cellphones.

Perhaps all we’ve learned from this experience is that the big cellular companies have a huge amount of political and social clout and were able to pull the wool over everybody’s eyes. They told us that the sky was falling and could only be fixed with 5G. I guess we’ll find out in a few years if we learned any lesson from this because we can’t be far off from hearing the hype about 6G. This time it will be 100% hype because 6G deals with the use of extremely short frequencies that will never be used in outdoor cellular networks. But I have a feeling that we’ll find ourselves in a 6G war with China before we know it.

Regulation - What is it Good For?

Challenges to Broadband Grants

One of the most annoying aspects of the current federal broadband grants is the ability of incumbent ISPs to challenge the validity of grant requests. In the typical challenge, the incumbents claim that they are offering fast broadband and that an applicant should not be able to overbuild them.

This is another issue that can be laid squarely at the feet of the lousy FCC broadband maps. ISPs are largely free to claim any broadband speeds they want, and grant challenges give them a lever in situations like these grants. The challenges put a burden on anybody filing for a grant since they must somehow prove that incumbent broadband speeds are slower than 25/3 Mbps.

This is not new behavior by the incumbents. You might recall that before the RDOF auction in 2020 that Frontier and CenturyLink together tried to claim they were delivering speeds of at least 25/3 Mbps to tens of thousands of additional Census blocks. The goal was to eliminate these locations from the RDOF auction so that the telcos could preserve their broadband monopoly. The FCC largely rejected the last-minute changes by the telcos. There were already huge areas where telco speed capabilities were overstated before RDOF, with the result that a huge number of Census blocks were incorrectly kept out of the RDOF auction.

A recent article by Karl Bode for Community Networks highlights some specific examples of challenges bogging down the current round of NTIA broadband grants. He cites the example of a grant application made in Grafton County, New Hampshire, where the incumbents challenged the speeds for 3,000 Census blocks in a grant covering 4,000 blocks.

Grafton County had collected speed tests that showed that existing broadband speeds are mostly far below the 25/3 Mbps threshold. But this still puts the burden on the grant applicant to somehow document broadband speeds for each of the many Census blocks. The incumbents are using the challenges to weaponize the lousy data included in the FCC’s broadband maps.

This is often a ludicrous situation. Applicants like Grafton County are seeking to build fiber broadband because it has already heard repeatedly from residents about the poor broadband in the area.

There are easy and obvious fixes to this. One simple fix would be that grants that ask to build fiber over existing DSL should be free from challenges. There is no place in rural America where DSL is delivering adequate broadband.

Another easy fix would be to stop talking about 25/3 Mbps as a meaningful definition of broadband. If these grants only allowed challenges for claims of 100/20 Mbps, then all of the challenges from telcos would be neutered. But there would still be battles like seen by Grafton County, where the cable companies are delivering slow speeds and challenging the grants. Setting the definition of broadband to a faster speed, even if only for the purposes of these grants, would eliminate the wasted energy being taken in handing out grant funding. The folks taking the most of brunt of these challenges are the folks in the various broadband grant offices. The shame of the challenge process is that there probably are some legitimate challenges being made, but they get lost in the huge volume of harassment challenges.

Unfortunately, these challenges are in place for a reason that surprises nobody. When the legislation enabling grants comes through Congress, the incumbents get to sneak innocuous-sounding language into the grant rules that is then manifested in chaos during the grant process. Unfortunately, the upcoming BEAD grant rules include a challenge process, so we’re going to get to see this process repeated. If there were a huge number of challenges in the $288 million NTIA grant program, it’s hard to imagine what we’re going to see with the $42.5 billion BEAD grant program that’s granting 150 times more in funding.

The Industry

Is Space Getting Too Busy?

Satellite broadband made the news again recently when the Chinese government said it had to adjust the orbits of the Chinese space station to avoid collisions with Starlink satellites. China claims it had to make adjustments in July and October of last year.

The Chinese are not the only ones making this claim. In 2020, the CEO of Rocket Lab said that it is becoming increasingly difficult to plot a clear trajectory when launching a rocket. The head of the European space agency recently accused Starlink of “making the rules” for everybody else in the way the company is launching satellites. The recent reaction by Elon Musk to these criticisms is that space is huge and can accommodate tens of billions of satellites.

What seems to be in play here is that there are no international regulations in place to define parameters for space launches. The last international treaty on space is over fifty years old and never envisioned the huge number of satellites we’re already starting to see. Starlink alone already has over 1,700 satellites and plans to launch new satellites twice per month throughout 2022. One earlier Starlink business plan called for over 30,000 satellites.

There have already been a few notable collisions between satellites. The most recent was when the Yunhai-1 Chinese satellite was apparently destroyed in March 2021 from pieces of debris from a Russian Satellite. There is a huge amount of space debris. There are over a million pieces of debris between 1 and 10 centimeters (4 inches) in size. The U.S. Space Surveillance Network was actively tracking 15,000 objects larger than 4 centimeters as of November 2021.

Debris matters because orbiting objects are moving fast – at 150 miles above the earth, a satellite needs to be going 17,500 miles per hour to maintain orbit. A collision with even a small object can be devastating.

Scientists have been warning about space debris for a long time. In 1978, NASA scientist Donald Kessler warned that collisions in space could result in a cloud of debris that would create an effective barrier to launching rockets or sending people into space.

This is no longer a theoretical problem since much of what we do on earth is now reliant on satellites. Most of our cable TV signals are launched from space. GPS relies on a series of satellites. Ships and airplanes navigate with support from satellites. Satellites are used to track weather patterns. There are now satellites tracking and monitoring everything from the movement of foreign armies to the water temperature of the oceans.  There will soon be millions of broadband customers using low-orbit satellites.

It’s hard for any layman to understand the real risks. Some of the controversy likely stems from international wrangling between nations. But there are also a lot of notable scientists that are worried that we might make space unusable.

It will be ironic if the world solves rural broadband with satellites only to find one day that there is too much debris to launch more satellites. It seems like a remote possibility, but some scientists say it’s possible. It makes sense for the international community to come together and work out rules that everybody can agree to.

The Industry

Pushing Back Against Municipal Broadband

As a cautionary tale to any city that provides broadband, the incumbent ISPs are always going to push back on city initiatives. The following is a story from the summer that slipped off my radar. The city of Tucson, Arizona, launched a free wireless network to bring broadband to students in homes without broadband. As would be expected, the incumbent cable company, Cox Communications, fought against the city-provided broadband.

The city recognized the need for the network when it got requests for over 7,000 wireless access points from students during the pandemic. The city decided that the best long-term solution to the large numbers of unserved students was to create a private network using CBRS spectrum. We tend to think of municipal wireless networks as slow, but the city’s network rivals the broadband speeds offered by other cellular carriers in the city.

The city is using 4G LTE technology, which provides for the same indoor coverage as received by cell phones. The city identified 20 square miles of the city with the greatest number of students without home broadband. The initial network consisted of 40 small cell sites, and there are plans to add more. Broadband is received in the home through a typical cellular receiver and a SIM card that identifies the network. Broadband speeds are more than adequate to support a single student with download speeds over 50 Mbps and upload speeds over 3 Mbps. This network avoids the problem of having multiple students in a household sharing the network because it provides a receiver for each student.

The network has some interesting features. It supports basic network slicing which gives the school board the ability to prioritize school broadband traffic over other uses by students. The city is now looking at how to use this network for smart city purposes since the network provides broadband everywhere. The city is considering using the technology for monitoring the water system (critical infrastructure in arid Tucson), for providing ubiquitous broadband in parks, for connecting to all firefighters and other first responders, and for controlling traffic lights.

As might be expected, Cox Communications, the incumbent cable company, pushed back against the city network. When the wireless network was first discussed publicly, Cox made a proposal to provide 10 Mbps broadband to students in some selected parts of the city. When told that the wireless network would be delivering speeds of at least 50 Mbps, Cox countered that it would also be able to match the higher speed. But the first Cox offer is typical of most cable company low-income broadband programs – the speeds offered are far slower than what is delivered to a basic broadband customer.

Cox also sent a letter to the Tucson city council that warned about the problems that would be caused by broadband competition from the city. The letter included the same refrains we have seen elsewhere. The city shouldn’t be competing against the public sector. Cox warned that the city would have a hard time maintaining its new network. Cox also offered to partner with the city to build broadband in parts of the city not reached by Cox (with the city paying for the expansion).

I’m not sure that we should expect incumbents to act differently. As the cable company, Cox has a virtual monopoly on broadband since Cox largely competes only against DSL – and monopolies always fight to maintain monopoly power. Cable companies fight against all competition. They try every trick in the book to delay new commercial ISPs from building networks. But cable companies roll out a full press against city initiatives because they hope there is a political pressure point that will cause the city to reconsider. They know it’s a smart tactic because there are many cities that have canceled broadband plans after heavy lobbying by the incumbents.

In this case, the city didn’t back down and has launched the first phase of the wireless network. This became much easier for the city to finance after it received ARPA money from Congress that can be used to pay for broadband infrastructure. I am positive that the city will derive huge benefits from this network far past the day when the pandemic is behind us.


Fixed Cellular Broadband Performance

One of the first in-depth reviews I’ve found for T-Mobile’s fixed cellular broadband was published in the Verve. It’s not particularly flattering to T-Mobile, and this particular customer found the performance to be unreliable – fast sometimes and barely functioning at other times. But I’ve seen other T-Mobile customers raving about the speeds they are receiving.

We obviously can’t draw any conclusions based upon a single review by one customer, but his experience and the contrasting good reviews by others prompted me to talk about why performance on cellular broadband networks can vary so significantly.

I’ve always used the word wonky to describe cellular performance. It’s something I’ve tracked at my own house, and for years the reception of the cellular signal in my home office has varied hour-by-hour and day-by-day. This is a basic characteristic of cellular networks that you’ll never find the cellular carriers talking about or admitting.

The foremost issue with cellular signal strength is the distance of a customer from the local cellular tower. All wireless data transmissions weaken with distance. This is easy to understand. Wireless transmissions spread after they leave a transmitter. The traditional way we depict a wireless transmission shown in the diagram below demonstrates the spread. If two customers have the same receiver,  a customer who is closer to the tower will receive more data bits sooner than somebody who is further after the signal has spread. The customer in the bad review admitted he wasn’t super close to a cell tower, and somebody in his own neighborhood who lives closer to the cell site might have a stronger signal and a better opinion of the product.

There are other factors that create variability in a cellular signal. One is basic physics and the way radio waves behave outdoors. The cellular signal emanating from your local cell tower varies with the conditions in the atmosphere – the temperature, humidity, precipitation, and even wind. Things that stir up the air will affect the cellular signal. A wireless signal in the wild is unpredictable and variable.

Another issue is interference. Cellular companies that use licensed spectrum don’t want to talk about interference, but it exists everywhere. Some interference comes from natural sources like sunspots. But the biggest source of interference is the signal from other cell towers. Interference occurs any time there are multiple sources of the same frequency being used in the same area.

The customer in the review talks about the performance differing by the time of day. That is a phenomenon that can affect all broadband networks and is specific to the local robustness of the T-Mobile network. Performance drops when networks start getting too busy. Every DSL customer or cable company broadband customer has witnessed the network slowing at some times of the day. This can be caused by too many customers sharing the local network – in this case, the number of customers using a cell tower at the same time. The problem can also because caused by high regional usage if multiple cell towers share the same underlying broadband backbone.

The final issue that is somewhat unique to cellular networks is carrier priority. It’s highly likely that T-Mobile is giving first priority to customers using cell phones. That’s the company’s primary source of revenue, so cell phones get first dibs at the bandwidth. That means in busy times that the data left over for the fixed cellular customers might be greatly pinched. As T-Mobile and other carriers sell more of the fixed product, I predict the issue of having second priority will become a familiar phenomenon.

This blog is not intended to be a slam against fixed cellular broadband. The customer that wrote the review switched to cellular broadband to get a less expensive connection than from his cable company. This customer clearly bought into the T-Mobile advertising hype because a cellular broadband signal will never be as reliable as a signal delivered through wires.

We can’t forget the real promise of fixed cellular broadband – bringing broadband to folks who have no alternatives. Somebody that switched to T-Mobile from a 1 Mbps rural DSL product would have written a different and more glowing review of the same product. The bottom line is that anybody buying cellular broadband should recognize that it’s a wireless product – and that means the product comes with the quirks and limitations that are inherent with wireless broadband. I imagine that we’re going to continue to see bad reviews from customers who want to save money but still want the performance that comes with wired broadband. This is another reminder that it’s a mistake to judge a broadband product strictly by the download speed – a 100 Mbps cellular broadband product is not the same as a 100 Mbps cable company connection.

Regulation - What is it Good For?

Courts Uphold 6 GHz WiFi Order

The right to use spectrum is turning into one of the most valuable pieces of real estate in the country. Cellular carriers have been paying huge sums in FCC auctions to get the rights to use spectrum. Perhaps the biggest sign of the value of spectrum is that there is seemingly a lawsuit every time the FCC makes a spectrum decision by those who want to see the spectrum used in other ways.

The United States Court of Appeals for the District of Columbia recently upheld the FCC’s April 2020 order that assigned 1,200 MHz of the 6 GHz spectrum band for public use. That order was challenged by a coalition of Apple and cellular carriers like AT&T. The challengers wanted some of the 6 GHz spectrum to be auctioned to those willing to pay the most for it – presumably the cellular carriers. Not surprisingly, the intervenors supporting the FCC decision were the big cable companies who take the most advantage of WiFi.

The original FCC order clearly supports the idea that the public needs better WiFi. The 6 GHz spectrum band will revolutionize the way we use WiFi in homes and businesses. WiFi performance is already slated to improve due to the new WiFi 6 technology. But adding the 6 GHz spectrum will drive performance to yet another level by adding seven 160 MHz channels to the WiFi environment.

The legal challenge followed the lines of other recent spectrum challenges that question the FCC’s technical assumptions used in making the order. Since this new spectrum band is open to everybody, including the cellular carriers – the challengers argued, among other technical points, that there will be too much interference to make the spectrum useful for cellular data.

The Court came down clearly on the side of the FCC. The court said that the courts owe ‘significant deference’ to the FCC and its technical staff in deciding complicated technical issues. Intervenors had raised the same interference issues at the FCC during the deliberation of the issue – and the courts were not having any rehashing of issues that the FCC had already considered.

The court did remand one minor issue related to interference back to the FCC raised by the National Association of Broadcasters about interference in the 2.4 GHz WiFi band. The FCC will revisit that issue.

The court decision finally frees up the 6 GHz spectrum for WiFi use. Vendors have assumed this would be ordered and have been building the capability to use the spectrum into devices over the last few years.

I think we’re going to look back at the FCC’s decision to expand WiFi and the Court’s backing of that order as the most important spectrum decision of our time. The current WiFi spectrum is overtaxed and growing busier by the day. This new spectrum will revitalize the WiFi distribution of bandwidth around the home and the office that we’ve all been wanting.

Industry vendors haven’t been sitting still and have already started to develop the next generation of WiFi that will create another big leap in performance.

The Industry

The Fixation with Broadband Speeds

Leichtman Research Group recently conducted a nationwide poll of 2,000 households asking about broadband usage. LRG has been tracking broadband for many years and reports that overall broadband subscriptions are at 87% of all households in 2021, up from 83% in 2016, and 69% in 2006. There are a few results of the survey that I think warrant additional examination.

According to the LRG survey, 63% of broadband subscribers rate the speed of their Internet connection as 8 to10 on a 10-point scale with 10 being excellent. In a similar question, 69% of respondents who subscribe to speeds of at least 100 Mbps are satisfied with their broadband service.

The big news here isn’t that many homes are satisfied with broadband speeds – it’s that one-third of all households don’t think their broadband speeds are great. The news is that over 30% of homes with speeds over 100 Mbps are not satisfied with their broadband.

My consulting firm conducts surveys at the community level, and I often see similar results. LRG only released the high-level summary responses to the survey, so we don’t know all of the questions they asked. But if LRG only asked about broadband speeds, they asked the wrong question. This was borne out by the response to a different survey question where 45% of the respondents in the LRG poll don’t even know their subscribed broadband speed.

What I’ve found through surveys is that people don’t really care about broadband speeds – they care if their broadband connection works. Most people haven’t the slightest idea at any given time how much broadband speed is being delivered to their home. I sometimes hear dismay when people finally take a speed test and find out that they are only receiving a portion of what they are paying for – but even these people might not be unhappy with broadband if it works.

Here are the things I hear from the public when we ask the same kinds of questions that LRG asked:

  • One of the most common complaints I hear about big cable company broadband is outages. The issue in most markets is not big hours-long outages but frequent small outages of a few minutes in duration. These small drive people mad because it invariably disrupts whatever they were doing with the broadband.
  • Right behind unhappiness with outages is unhappiness with slowdowns. The complaint I hear is that broadband works most of the time but then gets maddingly slow at times. It’s almost as disruptive as an outage when broadband slows to a crawl.
  • The other big recurring complaint I hear is when broadband won’t perform an expected function. People become quickly unhappy with their broadband connection when they can’t do something like maintain a Zoom call or if they get kicked off a school or office connection. Somebody might have no trouble streaming Netflix movies but find that they can’t stream the more demanding live sports broadcasts.

This survey reminded me of something that has become clear to me over the last year – policymakers are fixated on broadband speeds but people care about broadband performance. These are not the same thing. I’ve never talked to anybody outside the industry who cares one iota about the definition of broadband – they only care if everybody in the household can use the Internet at the same time.

From a policy perspective, it seems like we’ve decided that there are no urban broadband problems because everybody can buy Internet faster than 100 Mbps download. Even if we set aside the issue that many homes can’t afford broadband, this survey points out that a lot of urban households find their broadband connection to be inadequate.

Our policies are all due to the fixation with broadband speeds. Concentrating on speeds as the only way to measure broadband means that policymakers can yield to cable company lobbying that says we have no urban broadband issues.

I am absolutely thrilled that we are finally going to use some money to bring faster broadband to rural areas that have little or no broadband. But policymakers need to understand that this will not eliminate broadband problems elsewhere. A huge number of people in urban areas are still not happy with their broadband connection – and that’s a problem that’s not going to go away by throwing grant money at rural markets. If anything, building rural fiber is going to remind urban residents that they have something of lesser quality.

Regulation - What is it Good For?

Final Treasury Rules for ARPA

The U.S. Department of the Treasury released the final rules applicable to using ARPA funding. This was the giant pile of $350 billion that was paid out to local governments, counties, and states to address issues related to the pandemic. These rules take effect on April 1, 2022. As usual, this is not a simple document and is 437 pages long.

There has been a lot of confusion in cities and counties about how they can use these funds. This final rule should answer any open questions about broadband because the final rules are clear about how these funds can be used. Following are the most important provisions of the final rules that relate to building broadband infrastructure.

Broadband Speed Tests. The Interim Treasury rules had included requirements that broadband could only be constructed to areas that were considered as unserved or underserved using the typical definitions of 25/3 Mbps or less to be unserved. The final rules eliminate any consideration of existing broadband speeds. The final rules allow broadband to be constructed to reach households and businesses with an identified need for additional broadband infrastructure investment.

There still must be a justification that the project addresses a problem highlighted by the pandemic. But rather than relying on speed as the justification, localities can consider broadband reliability, affordability, or access to a connection that meets or exceed symmetrical 100 Mbps. Localities can document this need using any available data, including local speed tests, federal or state data, interviews with residents and businesses in the affected areas, and just about any other way that proves there is an existing broadband need.

This is an important clarification because it means local governments don’t have to spend the energy interpreting and fighting incumbent ISPs and the FCC maps.

Matching Funds. As is usual, the rules are written by lawyers and are never crystal clear. Following is the specific language in the order specific to using ARPA as matching for other grants:

Given the final rule’s revised requirements on eligible areas for investment, the final rule also modifies the interim final rule’s requirements around duplication of resources. Since recipients must ensure that the objective of the broadband projects is to serve locations with an identified need for additional broadband investment, the final rule provides that, to the extent recipients are considering deploying broadband to locations where there are existing enforceable federal or state funding commitments for reliable service at speeds of at least 100 Mbps download speed and 20 Mbps upload speed, recipients must ensure that SLFRF funds are designed to address an identified need for additional broadband investment that is not met by existing federal or state funding commitments. Recipients must also ensure that SLFRF funds will not be used for costs that will be reimbursed by the other federal or state funding streams.

I read this to mean that ARPA (SLFRF) can be used for matching, but with some important caveats. There is a two-part test for using ARPA along with another grants. ARPA must address a need not met by the existing federal or state grants, and second, it must not duplicate any payments for the same infrastructure.

The second test is the easy one to make and applies universally to all matching grants. For example, if one grant pays for 50% of an asset, the matching can be used to pay for the remainder – but the two grants together can’t pay more than 100% of the cost of the asset.

But the first test is going to require some legal gymnastics. The obvious justification for using ARPA is that the project won’t work without it. But there are easier ways to make this work that more easily meet the final rules. If ARPA is used for assets not included in the original state or federal grant, there is no duplication. That might mean using ARPA to build to additional households or using the original grant to build last-mile but ARPA to build drops. Folks are going to have to get creative to use ARPA money as matching – and this language lays out how to do so.

Low-Income. The final rules require ARPA-funded ISPs to participate in the Affordable Connectivity Program.