Let’s Bring Telecom Manufacturing Back to the US

President Biden recently signed an executive order that will require that the federal government buys more goods produced in the United States. This was done to promote American jobs and to keep profits at home. It’s a great idea, but it suffers from one big flaw – we don’t manufacture a lot of things in the US anymore. Statistics are hard to pin down, but something like 40,000 US factories have shut down over the last decade.

We’ve tried to implement this rule with telecom before. The American Recovery and Reinvestment Act of 2009 funded billions in fiber projects. One requirement of those grants was that newly built networks had to buy American whenever possible. I worked with clients who tried to find American electronics to no avail – they largely did not exist. Even the electronics made by US manufacturers were all built overseas.

It’s time we have a serious discussion about bringing telecom manufacturing back to the US. We learned during the pandemic that the US is totally dependent on other countries for basic goods – countries that in many cases are not our allies.

And a lot has changed since we’ve shipped electronics manufacturing overseas. Consider if we wanted to start manufacturing fiber ONTs in the US. This is the device that terminates fiber to a home or business. US ISPs are likely to buy a hundred million such devices over the next decade, not counting the demand in nearby Canada and Mexico. That is more than enough demand to justify building a US factory to make these devices. Even more basic than ONTs is fiber lasers – is there any reason we can’t build fiber lasers in the US?

The most important change that can reinvigorate US manufacturing is robotized factories. A modern factory can compete in cost and efficiency with the lower labor costs in places like Wuhan Province, China, where a lot of the ONTs are manufactured today. Where an older factory making ONTs in the past might have had thousands of jobs, a robotized factory might have only have 500 jobs – but good-paying technical jobs.

We know this idea can work because we see it in action. Germany decided a long time ago that it needed to keep manufacturing jobs at home, while also paying good wages. Germany passed legislation that encouraged manufacturing at home. This meant tax breaks for factories. It also meant big penalties for companies that used foreign goods when domestic ones were available.

It may turn out that we can’t make an ONT for $100. But our economy is is far better off if we can make one for $110 or $120 and if we buy all of the ONTs from a supply chain wholly inside the US. However, I’m betting that our smart engineers can design an efficient factory that can meet and beat the cost of overseas ONTs.

What is needed to make this happen is the will to do so. We need changes in laws that heavily favor using US manufacturing and that reward owners for building modern robotized factories. There are tens of thousands of empty factories around the country and communities that will welcome new manufacturers with open arms.

It’s one thing to issue a call to buy American. I can remember a similar government rule several times during my career. What’s needed instead is a government call to move US manufacturing back to our shores. We have the smart technical people who can make this happen and we have a lot of workers eager to return to good-paying factory jobs. I hope that ‘Buy American’ finally becomes more than a feel-good slogan.

Solving the Urban Digital Divide


We suddenly have a new way to tackle the urban digital divide. The Consolidated Appropriations Act of 2021 allocated $3.2 billion to bring broadband to homes that need it during the pandemic. Further, a recent editorial in the Washington Post suggests that we expand this program and make it permanent. I have conflicted feelings about the plan.

It’s wonderful for the federal government to finally recognize that there is a huge digital divide in urban America. The FCC has rightfully concentrated its effort on rural homes that have no broadband option, but this means there is barely any official acknowledgement that an urban digital divide even exists. Finally recognizing the issue is a great step towards starting the process of finding permanent solutions to the problem.

This feels like the absolute right solution for 2021 while we are still under the pandemic. The proposed solution would pay $50 for a home broadband connection for homes that need it. There are still millions of homes with students struggling with schooling from home and millions more were sent home to work. Broadband is also essential for the millions who have lost jobs during the pandemic. $3.2 billion will pay for broadband to 10 million homes for six months or 20 million homes for three months. I wonder if anybody even knows how many homes need broadband right now – I’m guessing it’s far more than 10 million.

But I can’t help feeling like this is a big giveaway to the biggest ISPs which are likely to claim most of this money. It’s impossible for Washington DC outsiders to understand where ideas like this came from. I’d feel better about this idea if it came from digital divide advocates than if this idea was hatched by big ISP lobbyists who see a way to snag billion in federal money.

That’s a legitimate concern because this plan largely ignores the other two issues faced by homes without broadband. Many such homes don’t have a computer and many people don’t know how to use computers. Urban digital divide proponents will tell you that we need to solve all three issues before a home can meaningfully take advantage of getting broadband.

I also hope that any money used this way goes towards real broadband. It will be maddening if Comcast can charge the federal $50 monthly for what it already provides with its $9.95 Internet Essentials program. Comcast has crowed loudly about the good done by this program, but Comcast recently announced it is upgrading the program for 25/3 to 50/5 Mbps – a speed that is still inadequate for multiple people to use at the same time. I thought that was a decent program before the pandemic, but it no longer delivers what a home needs to stay connected during the pandemic.

I also hope that none of this money goes to AT&T DSL since the company stopped offering DSL to the public in October. None of this money should go to DSL in general since most DSL connections have upload speeds even slower than the Comcast Essentials.

I have reservations against making this a permanent solution. I might be wrong about this and perhaps I can be convinced that this is the best solution for the urban digital divide. I can’t help but wonder about what happens the day this subsidy ends and millions of homes lose their broadband connection. Perhaps the big ISPs already envision that day and know the temptation will be for the government to continue funding the program endlessly. My other big concern is that if this is made permanent that it will always be an annual target for politicians to eliminate.

My gut tells me that billions could be better spent by building a permanent broadband solution for poor urban neighborhoods. Before we make $50 payments into a permanent solution, as has been proposed by the Washington Post, I’d like to at least explore using federal funds to create urban broadband cooperatives or non-profit ISPs that could bring permanent broadband to neighborhoods that most need it. We already have a great historical example of how this can work. Rural America basically got electricity because the federal government loaned money to cooperatives to build electric networks. My guess is that we’d see the same thing happen in urban America if the government offered the oans. It makes a lot more sense to loan the money needed to let neighborhoods help themselves than to create a permanent subsidy.

The Consolidated Appropriations Act of 2021

The headlines claimed that the most recent $900 billion COVID-19 relief package includes nearly $7 billion in funding for broadband. That is a lot of money and is one of the biggest awards ever aimed at broadband. Following in my first impressions about the usefulness of the funding.

Replace Chinese Electronics – $1.98 billion. Over a quarter of the funding is being used to ‘rip and replace’ electronics from Huawei and other Chinese manufacturers. This money doesn’t bring any broadband benefit, so it’s disingenuous to call this broadband funding. I’ve wondered about this concept from day one. Network engineers tell me that it would not be hard to firewall this equipment and eliminate any risks that such equipment is spying on us – so this feels more like a political gimmick than anything that’s really needed.

Subsidize Low-Income Connections – $3.2 billion. This provides $50 per month to low-income homes to get a broadband connection. I’m really torn on this one. First, this seems like a big victory in that it’s the first time that the federal government has recognized that there is an urban digital divide. It still looks like the pandemic will be with us for much of this year and this funding can get broadband to homes that really need it.

But at the same time, this also feels like a giveaway to the big ISPs. For instance, Comcast already has a low-income program that provides inferior broadband for $9.95 per month. Does this bill let them bill the federal government $50 for that same program? I also worry that some of this money will go to DSL. AT&T doesn’t deserve a penny of this money after walking away from DSL in October. DSL in general should not be funded since DSL upload speeds are generally set at 1 Mbps or less – which makes the technology worthless for working or schooling from home.

I also worry about what happens when this funding ends. This could fund broadband to 10 million homes for six months or 20 million homes for 3 months and then the program will run out of money. What happens to these homes then? This is a lot of money to spend on a temporary program.

Infrastructure and Adoption in Tribal Areas – $1 billion. This is my favorite part of the funding package because this can lead to building a permanent broadband solution. But this funding has two caveats that could be gotchas. First, the funding can’t be used any place where other federal funding was already assigned. Unfortunately, the FCC has previously funded stupid solutions like Viasat satellite broadband in some tribal areas, and hopefully that can be ignored. This funding also comes with a ticking clock and needs to be spent by the end of 2021. If a broadband project is not already shovel-ready this is going to be a challenge to use.

Digital Inclusion in Minority Communities – $285 million. This money is being earmarked to historic black university and colleges, tribal colleges, and similar institutions. Again, this item seems to be a victory in that the FCC is finally recognizing that broadband has bypassed inner cities and tribal areas. This money could do a lot of good if it goes towards establishing permanent programs. But it also runs the risk of being wasted if the money goes to conducting studies instead of creating programs that will continue to help solve the digital inclusion gap.

FCC Broadband Mapping – $98 million. Everybody has been calling on the FCC to fix the damned FCC broadband maps. But as a consultant, this seems like an extraordinarily large amount of money to get this done. I’m frankly surprised that this couldn’t be done for a tiny fraction of this money – some handful of consultants are going to have a very good year.

Other Awards. Probably the best of the other awards is $300 million for rural infrastructure projects not covered by other specific awards. I would hope the NTIA will use this wisely and award broadband grants to areas that have been misclassified by the FCC maps as having broadband. There is also $250 million to bolster the FCC’s COVID-19 Telehealth grants. Hopefully, that money is mostly used to bring a permanent fiber connection to rural hospitals and health clinics.

Bottom Line. Overall, this funding is disappointing in that it doesn’t live up to the hype that hit the press the day after the funding was announced. But there are good things in here, and hopefully, some of this money helps to fund permanent solutions. But I feel like the money could have been used more wisely than for the big-ticket items like ripping and replacing Chinese electronics or of like overpaying big ISPs to provide low-income broadband. This doesn’t feel like we’re getting $7 billion of value.

How Secure is Our Telecom Infrastructure?

The recent bombing in Nashville is a reminder that our telecom infrastructure is always at risk from terrorism or major natural disasters. The Nashville bombing is a telecom company’s worst nightmare where a deranged bomber parked a powerful bomb outside of the building with the express intent to wipe out the AT&T communication hub. We’ll have to wait to hear the full details of the damage done, but it seems that AT&T was able to restore most local service within three or four days.

We’ve had other major outages. The biggest came on 911, 2001 when terrorists knocked down the World Trade Center towers. This had a secondary impact of damaging the major Internet hub located across the street from the towers. This was a major Verizon tandem office along with being a CLEC hotel and a switching point for the Internet. The collapsing towers not only damaged some of the electronics at the site, but the continuing power outages eventually resulted in overheated equipment and continuing failures.

The third big disaster I recall was the Howard Street Tunnel fire in Baltimore in 2001. A rail crash inside the tunnel resulted in an intense fire that melted the fiber optic cables that delivered Internet traffic between Washington DC and the northeast corridor.

In addition to these major news-event outages, I’ve seen numerous smaller outages caused by hurricanes, floods, and tornadoes where telecom buildings and huts were largely obliterated. The most unusual outage I recall was when brazen thieves stole several miles of large copper wiring off the poles near Sugar Land, Texas.

Anybody who works in a telecom network understands how fragile the network is, at least locally. We do our best to hide electronics inside buildings or behind fences. We’re careful not to create maps showing the locations of key switching and fiber connection sites. But the fact is that a determined person that understands a network can do a huge amount of damage in a single night in most cities. They wouldn’t need a camper full of explosives to cause major damage.

We’ve come a long way since 2001 in planning ahead of time for major disasters. From what I’ve read about Nashville, AT&T brought in a few dozen temporary cell sites to restore cellular coverage quickly. In 2001 I recall that Verizon was proud about delivering a portable switch inside of a trailer – but it took weeks to restore phone service to the cables that hadn’t been damaged.

We’ve also become adroit at quickly switching traffic around damaged facilities. The 2001 tunnel fire destroyed fibers for which there was no alternate routing. Today, most carriers have multiple routing options and the ability to electronically divert traffic away from outages. We now have companies like Cloudflare and ThousandEyes which can react instantly to network problems and reroute traffic as needed. We had nothing like this in 2001.

But the Nashville bombing reminds us that we can’t forget about security when designing networks. I know of fiber networks where large OLT huts are sitting unprotected and open to the public – the network owner is largely counting on the fact that nobody knows what the hut is for. To save money and speed up construction we’ve changed from using concrete block buildings with secure doors to smaller and more fragile metal cabinets.

The damages in Nashville ought to be a reminder to network owners to review the physical safety of their network. Little steps like physical barriers like fences and hedges can make a difference. In today’s world, there is no reason not to have security systems with cameras and motion detectors that can notify law enforcement when somebody is visiting a hut in the middle of the night. We don’t need to be paranoid about security – we have hundreds of thousands of telecom sites that are safe and undisturbed day after day. But the Nashville bombing is a reminder that somebody with a grudge or a nutty idea can cause a lot of damage to our networks, which are a lot more fragile than we want to admit.

Charter Increasing Broadband Speeds

Charter announced that new customers will now be getting 200 Mbps as the basic broadband download speed, increased from 100 Mbps. During the first quarter the company also will be increasing speeds for existing customers in seventeen markets including  Palm Springs, CA; Orlando, FL; Tampa, FL; Savannah, GA; Lexington, KY; Rochester, MN; Columbia, MO; Springfield, MO; Albany, NY; Buffalo, NY; Elmira, NY; Rochester, NY; Syracuse, NY; Chattanooga, TN; Tri-Cities, TN; Beaumont, TX, and Cheyenne, WY.

Like all of the big cable companies, Charter periodically increase speeds across the board. The company raised speeds in 2014 from 30 Mbps to 60 Mbps. In 2017 the company increased speeds to 100 Mbps download.

Charter will likely eventually increase speeds in most other markets, subject to technical capability. The company says it has implemented DOCSIS 3.1 technology nationwide, but overall system capacity can still be limited by other local factors such as the overall bandwidth of the network, the configuration of electronics, and the age and quality of the coaxial plant. Like all cable companies, Charter sells bandwidth that is ‘up to’ the advertised speeds and there will be customers in the upgraded markets that will get faster broadband but who may never hit 200 Mbps target.

Charter is upgrading major markets but seems to be going first to places where it has competition. Chattanooga has a citywide municipal fiber network. CenturyLink is in the process of building fiber citywide in Springfield, MO. The New York markets have Verizon FiOS while markets like Tampa and Palm Springs have FiOS provided by Frontier.

The company says it’s not increasing upload speeds with the upgrade. Most Charter markets we’ve studied have upload speeds between 10 Mbps and 15 Mbps for the 100 Mbps download product. During the pandemic, the number one complaint about cable company broadband has been the inability of multiple family members to make school and work connections at the same time. While moving to 200 Mbps will be welcomed by many homes, this upgrade will not change the ability to work from home.

One interesting way to look at the upgrades is that it’s a way to reduce network congestion. It’s unlikely that upgrading a customer from 100 Mbps to 200 Mbps per second is going to have much impact on customer usage – but downloads get done faster, freeing up the network. Faster speeds should reduce contention on the network during most times of the day.

The biggest losers from increased cable company broadband speeds are the telcos. The typical urban DSL speeds of 15 – 30 Mbps download look comparatively slower with each cable company upgrade. AT&T is the incumbent telco in some of the listed markets, and since the telco has stopped installing new DSL customers, faster broadband is going to be useful to lure even more customers from the obsolete AT&T DSL service. Unfortunately for customers, AT&T’s departure as a broadband option is handing a true monopoly to cable companies like Charter in markets where there is no fiber competitor.

I have to wonder where the cable companies will go from here. With DOCSIS 3.1 the cable companies can theoretically provide speeds up to a gigabit in most markets, depending upon local capacity limitations. Charter has been increasing speeds across-the-board every three or four years. With this speed increase Charter is now ten times faster than DSL, and from a marketing perspective allows the company to sound as fast as a fiber competitor (as long as nobody asks about upload speeds).

Charter is the most aggressive large ISP right now and is growing the fastest. This upgrade will give the company a big marketing boost. Charter is also expanding its footprint into areas surrounding its market, including accepting a grant of over $1 billion in the recent RDOF grant to bring broadband to rural areas. It’s good for the country to get faster broadband speeds, and I’m sure the FCC will somehow take credit for speeds getting faster (although they have no role in upgrades like this one).

A Look at the Big Guys

You can’t put the telecom sector into perspective without looking at the performance of the biggest players in the industry. The pandemic has been an interesting year for both big ISPs and telecom vendors. Smaller ISPs should care about big ISP performance for many reasons. For many smaller companies, the big companies are the competition and strength or weakness of the big providers can foretell stiffened competition or increased opportunity. The big ISPs also drive the overall industry and impact the availability of everything from fiber, electronics, and available construction crews.

Comcast. The company’s financial results are interesting. Revenues for the whole corporation for 3Q 2020 dropped 4.8% compared to a year earlier, EBITDA dropped 11.3%, and net income dropped 37.2%. The big drops are due to the entertainment parts of the company and Comcast did well in the telecom space. The company added 323,000 new broadband customers in the third quarter but lost 478,000 cable customers. Telecom EBITDA grew by 10.5%, demonstrating the big difference in margin between broadband and cable customers.

AT&T. Revenues dropped 5.2% compared to the third quarter of 2019. AT&T did a good job of managing expenses and margins dropped from 22.2% to 19.4%. The company added over 1 million net new wireless customers. AT&T reported something that we need to remember about the whole ISP industry this year – it added 357,000 customers to fiber, but only 28,000 are paying customers. AT&T, like other ISPs provided some free connections for students and also is not disconnecting customers for non-pay. The company lost over 800,000 video customers, mostly at DirecTV, but is seeing good growth with AT&T TV and HBO.

Charter. The company weathered COVID better than most other telecom companies. Revenues were up 5.1% compared to a year earlier. This was driven by an increase of 850,000 broadband customers and an increase of 94,000 cable customers. Not all of the broadband customers are paying and the company claims 537,000 net gains in paying customers. Charter also added 363,000 cellular customers during the quarter.

Verizon. Revenues are down 4.1% compared to a year earlier. Overall earnings were down 4.3%. The company added over 400,000 wireless customers. The company added 144,000 net customers to FiOS fiber, the biggest quarterly gain since 2014. Unlike Comcast and AT&T, the company didn’t have a non-telecom business pulling down the bottom line.

Telco Vendors. There were mixed results for worldwide telco vendors. Capital spending by the big telcos dropped, resulting in overall lower revenue for many vendors. However, Huawei and ZTE revenues were up 26%, driven by the Chinese governments spending for 5G. All other vendors collectively saw a 1% drop in revenues for the quarter. Fujitsu revenues were up 12% for the quarter, representing continued big growth for fiber backhaul. Ericsson was up 9%, driven by 5G electronics. Intel was up 4%, driven largely by sales of smartphone chips. But other vendors weren’t so lucky. Corning revenues were down 4%. Cisco sales were down 6%, and CommScope sales were down 11%. Samsung was down almost 15%.

Upcoming Trends. Analysts predict some of the following trends for the big players in the industry:

  • Fiber buildout to small cells should pick up again in 2021 to pre-pandemic levels.
  • Sales of operating software will grow faster than sales of hardware.
  • Most big telcos are likely to reduce staff in 2021.
  • Overall capital spending is likely to grow around 4%, bringing the industry back to pre-pandemic levels.
  • Telcos will pause to investigate before stepping into open RAN.
  • While there will be continued spending on 5G infrastructure, there is no expectation of net revenue increases due to 5G technology.

Why I am Thankful for 2020

Every year I write a blog at Thanksgiving talking about the things in our industry for which I am thankful. Most years it’s not hard to do this because there are always a lot of great things happening in the broadband industry. But 2020 has been hard on the broadband industry just like it’s been hard on all of us. I had to reach a little deeper this year to make a list. Please feel free to comment on this blog with things you are thankful for this year.

Response to the Pandemic. To me, the big story of the year is the way that local officials and local ISPs quickly responded to the pandemic. It was a shock sending kids home to do schoolwork who didn’t have computers or home broadband connections. I’ve talked to dozens of school districts that scrambled and found hot spots and computers so that within a short time kids had some options.

Unfortunately, this wasn’t always easy. For instance, there are a lot of rural places with poor cellular coverage where sending home a wireless hotspot wasn’t a viable solution. Communities and ISPs found ways to install public hot spots at schools, parked school buses, restaurants, fire stations – any place where people could park cars and where ISPs could get a broadband signal. I’m thankful for the thousands of people who mobilized quickly to make this happen.

Rural Broadband Problems Got Noticed. Politicians at every level heard from angry constituents who will no longer tolerate the sad state of rural broadband. All of a sudden, almost every politician is talking about solving the rural broadband problem. We’ll have to see how this translates into action when the pandemic is over, but there is no mistake that rural residents were finally heard loud and clear.

Rural Spectrum. Probably the brightest broadband news this year is that the FCC released a ton of new spectrum that can be used for rural broadband. Broadband purists want everybody in America to have fiber, but until we figure out how to pay for that, today’s wireless technology can deliver 50 Mbps to 100 Mbps broadband in rural areas and is a badly-needed solution. The new spectrum gives WISPs a chance to step up their game.

Better WiFi on the Way. The industry released the WiFi 6 standard and the FCC approved 6 GHz spectrum for WiFi use. These two innovations are going to revolutionize WiFi. A lot of the problems that homes cite with broadband performance can be blamed on our currently overloaded WiFi spectrum bands. Within a few years, most of these problems should melt away with new WiFi gear.

A New FCC Coming. While this FCC did some positive things, they have gone too far in the direction of catering to the big ISPs at the expense of the public good. The ideal FCC balances the needs of the industry and the needs of the public. I expect a new FCC is going to swing the regulatory pendulum away from a carrier emphasis back closer to where the FCC ought to be.

Cybersecurity Getting Better. Early news reports say there was no apparent tampering of voting machines in the recent elections. That’s great news and is a reminder that cybersecurity has quietly gotten a lot better at protecting computer networks. There hasn’t been a big hack of corporate or government networks announced for a while. The biggest threats to computer networks continue to come from disgruntled employees or employees that inadvertently let bad actors into networks.

Growth of Video Conferencing. I don’t know how others feel, but I like video conferencing. I find it refreshing to see who I’m talking to. As a lifetime road warrior, I really like not getting on an airplane to make a presentation. We’ve learned this year that people can communicate well from a distance. I don’t know about the rest of the world, but I won’t be flying across the country without a very good reason when the pandemic is finally over – and for that I’m thankful.

It’s Almost 2021. Perhaps the best thing about 2020 is that it’s almost over and we’ll soon get a new year, and hopefully a reset. May 2021 be better for you all.

Quantum Encryption

Verizon recently conducted a trial of quantum key distribution technology, which is the first generation of quantum encryption. Quantum cryptography is being developed as the next-generation encryption technique that should protect against hacking from quantum computers. Carriers like Verizon care about encryption because almost every transmission inside of our communications paths are encrypted.

The majority of encryption today uses asymmetric encryption. That means encryption techniques rely on the use of secure keys. To use an example, if you want to send encrypted instructions to your bank (such as to pay your broadband bill), your computer uses the publicly available key issued by the bank to encode the message. The bank then uses a different private key that only it has to decipher the message.

Key-based encryption is safe because it takes immense amounts of computing power to guess the details of the private key. Encryption methods today mostly fight off hacking by using long encryption keys – the latest standard is a key consisting of at least 2048 bits.

Unfortunately, the current decryption methods won’t stay safe for much longer. It seems likely that quantum computers will soon have the capability of cracking today’s encryption keys. This is possible since quantum computers can perform thousands of simultaneous calculations and could cut down the time needed to crack an encryption key from months or years down to hours. Once a quantum computer can do that, then no current encryption scheme is safe. The first targets for hackers with quantum computers will probably be big corporations and government agencies, but it probably won’t take long to turn the technology to hack into bank accounts.

Today’s quantum computers are not yet capable of cracking today’s encryption keys, but computing experts say that it’s just a matter of time. This is what is prompting Verizon and other large ISPs to look for a form of encryption that can withstand hacks from quantum computers.

Quantum key distribution (QKD) uses a method of encryption that might be unhackable. Photons are sent one at a time through a fiber optic transmission to accompany an encrypted message. If anybody attempts to intercept or listen to the encrypted stream the polarization of the photons is impacted and the recipient of the encrypted message instantly knows the transmission is no longer safe. The theory is that this will stop hackers before they know enough to crack into and analyze a data stream.

The Verizon trial added a second layer of security using a quantum random number generator. This technique generates random numbers and constantly updates the decryption keys in a way that can’t be predicted.

Verizon and others have shown that these encryption techniques can be performed over existing fiber optics lines without modifying the fiber technology. There was a worry in early trials of the technology that new types of fiber transmission gear would be needed for the process.

For now, the technology required for quantum encryption is expensive, but as the price of quantum computer chips drops, this encryption technique ought to become affordable and be available to anybody that wants to encrypt a transmission.

The Working-from-home Migration

Upwork, a platform that supports freelancers conducted a major survey of more than 20,000 adults to look at the new phenomenon of people moving due to the pandemic, with questions also aimed at understanding the motivation for moving. Since Upwork supports people who largely work out of their homes, the survey concentrated on that issue.

What the survey verified what is already being covered widely by the press – people are moving due to the pandemic in large numbers. The survey found that the rate of migration is currently three to four times higher than the normal rate from recent years.

The key findings from the survey are as follows:

  • Between 6.9% and 11.5% of all households are considering moving due to the ability to work remotely. That equates to between 14 and 23 million people. It’s a pretty wide range of results, but likely a lot of people that want to move will end up not moving.
  • 53% of people are moving to find housing that is significantly less expensive than their current home.
  • 54% of people are moving beyond commuting distance and are moving more than a two-hour drive away from their current job.
  • People are moving from large and medium cities to places with lower housing density.

These findings are corroborated by a lot of other evidence. For example, data from Apartments.com show that rental occupancy and rates in cities are falling in the most expensive markets compared to the rest of the country. Realtors in smaller markets across the country are reporting a boom of new residents moving into communities.

Economic disruption often causes big changes in population migration and we saw spikes in people moving during the last two economic downturns. In those cases, there was a big shift in people moving from rural areas to cities and in people moving from the north to the south to follow job opportunities.

Interestingly, this new migration might reverse some of those past trends. Many rural communities have been losing population over the last few decades and the new migration patterns might reverse some of that long-term trend. People have been leaving rural parts of states to get jobs in urban centers and working from home is going to let many of these same people move back to be closer to families.

Of course, one of the issues that a lot of folks moving away from cities are going to face is that the broadband is often not as good where they want to move. The big cable companies have better networks in big cities than in smaller markets. You don’t have to move far outside of suburbs or rural county seats to find homes with little or no broadband. Even cellular coverage is a lot spottier outside of cities. I’ve seen local newspaper stories from all over the country of people who have bought rural homes only to find out that there was no broadband available.

But this isn’t true everywhere. There are some smaller towns with fiber to every home. There are rural areas with fiber to the farms. Rural communities that have fiber ought to be advertising it far and wide right now.

As a thought experiment, I looked at the states around me to see if I could identify areas that have fiber. The search was a lot harder than I thought it should be. States ought to have an easy-to-find map showing the availability of fiber because those communities are going to move to the top of the list for people who want a rural setting and who will be working from home.

I’ve worked from home for twenty years and I’m happy to see this opportunity open for millions of others. It gives you the freedom to live where you want and to choose where to live for reasons other than a job. It’s going to be an interesting decade ahead if people can move to where they want to live. I just have to warn local elected officials that new people moving to your community are going to be vocal about having great broadband.

The Race to Bury Net Neutrality

The Internet is currently full of news articles describing how the FCC will soon be putting to bed the last vestiges of its order a few years ago to eliminate net neutrality rules. The order that is widely being called the net neutrality ruling was a far-reaching change at the FCC that essentially wrote the FCC out of any role in regulating broadband.

Eliminating net neutrality rules was only a small part of that order. Net neutrality is a set of principles that describe how ISPs and network owners are to not discriminate between bits carried over the Internet. Most of the largest ISPs said that they could live with the net neutrality principles, and eliminating net neutrality was not a high priority for companies like AT&T and Comcast. The real priority for the big ISPs was to take advantage of a friendly FCC that was open and willing to deregulated broadband – particularly willing to eliminate any threat of broadband rate regulation.

So when you read the flood or articles this month talking about net neutrality, you need to substitute the term ‘net neutrality’ with ‘regulating broadband’ as you read articles on the topic. The FCC chose to disguise their attempt to kill regulation under the moniker of net neutrality and was successful since the average American probably has no idea that the FCC no longer regulates ISPs and broadband.

The FCC is holding a vote on October 27, just before the presidential election to cement the last open pieces from the FCC’s order to eliminate broadband regulation. The FCC’s order to write the agency out of broadband regulation was challenged in federal court. The court basically said that the FCC had the regulatory authority to either change the rules (or not change the rules) to walk away from broadband regulation.

However, the court said that the FCC needs to demonstrate that eliminating regulatory authority over broadband didn’t impact three areas negatively. The FCC was asked to clarify:

  • How eliminating broadband regulation impacts public safety;
  • How the FCC can still regulate pole attachments if it doesn’t regulate broadband;
  • If walking away from regulation negatively impacts the FCC’s ability to offer the FCC Lifeline programs that benefit low-income Americans.

On October 27 the FCC is going to take a vote to say that it’s earlier order doesn’t negatively impact any of these issues. It’s clear that that the FCC wants to finish the elimination of broadband regulation before the election on the chance that a new Democratic president will mean a new head of the FCC. The FCC has openly said that it changed the rules on broadband regulation in such a way that will make it hard for a future FCC to overturn its order.

A new FCC can obviously undo anything that was done by a previous FCC. However, the net neutrality order was done in such a way that a new FCC would have to go through the full cycle of the FCC’s processes that including various cycles of notices of proposed rulemaking, a final rulemaking, and then the inevitable court challenges to any attempt to reregulate broadband – all done with vigorous opposition from the big ISPs. The process of reversing the deregulation of broadband would likely stretch over many years.

However, there is a much shorter and quicker path for reversing the FCC’s order. Congress is free to reset the FCC rules in any way it seems fit, and Congress could finally pass a new telecom act. There hasn’t been any major telecom legislation out of Congress since 1996 – during the heyday of dial-up Internet. In today’s political environment it would take a Democratic sweep of the White House and both houses of Congress to get new telecom legislation passed.

Even should that happen with the election, the new Democratic majority would have to agree on what is contained in a new telecom act. I can’t foresee that being an easy or quick process. There is an accumulation of topics in addition to broadband regulation that would benefit from Congressional clarification including privacy, regulation of web companies, solving the digital divide, elimination of outdated cable TV and telephone regulations, a national policy on spectrum, regulation of low orbit satellites, and a host of smaller issues.

If the Democrats don’t make a clean sweep of Congress and the White House, then the current FCC will largely have succeeded and it might be many years until a determined FCC could reestablish any regulatory authority over broadband. What is clear to somebody who closely watches industry regulation – it’s going to be interesting few years ahead of us in this industry regardless of what happens at the polls in November.