Category Archives: Regulation – What is it Good For?

Ideas for Better Broadband Mapping

The FCC is soliciting ideas on better ways to map broadband coverage. Everybody agrees that the current broadband maps are dreadful and misrepresent broadband availability. The current maps are created from data that the FCC collects from ISPs on the 477 form where each ISP lists broadband coverage by census block. One of the many problems with the current mapping process (I won’t list them all) is that census blocks can cover a large geographic area in rural America, and reporting at the census block level tends to blur together different circumstances where some folks have broadband and others have none.

There have been two interesting proposals so far. Several parties have suggested that the FCC gather broadband speed availability by address. That sounds like the ultimate database, but there are numerous reasons why this is not practical.

The other recommendation is a 3-stage process recommended by NCTA. First, data would be collected by polygon shapefiles. I’m not entirely sure what that means, but I assume it means using smaller geographic footprints than census blocks. Collecting the same data as today using a smaller footprint ought to be more accurate. Second, and the best idea I’ve heard suggested, is to allow people to challenge the data in the mapping database. I’ve been suggesting that for several years. Third, NCTA wants to focus on pinpointing unserved areas. I’m not sure what that means, but perhaps it means creating shapefiles to match the different availability of speeds.

These ideas might provide better broadband maps than we have today, but I’m guessing they will still have big problems. The biggest issue with trying to map broadband speeds is that many of the broadband technologies in use vary widely in actual performance in the field.

  • Consider DSL. We’ve always known that DSL performance decreases with distance from a DSL base station. However, DSL performance is not as simple as that. DSL also varies for other reasons like the size of the gauge of copper at a customer or the quality of the copper. Next door neighbors can have a significantly different DSL experience if they have different size wires in their copper drops, or if the wires at one of the homes have degraded over time. DSL also differs by technology. A telco might operate different DSL technologies out of the same central office and see different performance from ADSL versus VDSL. There really is no way for a telco to predict the DSL speed available at a home without installing it and testing the actual speed achieved.
  • Fixed wireless and fixed cellular broadband have similar issues. Just like DSL, the strength of a signal from a wireless transmitter decreases over distance. However, distance isn’t the only issue and things like foliage affect a wireless signal. Neighbors might have a very different fixed wireless experience if one has a maple tree and the other has a pine tree in the front yard. To really make it difficult to define the speed, the speeds on wireless systems are affected to some degree by precipitation, humidity and temperature. Anybody who’s ever lived with fixed wireless broadband understands this variability. WISPs these days also use multiple spectrum blocks, and so the speed delivered at any given time is a function of the particular mix of spectrum being used.

Regardless of the technology being used, one of the biggest issues affecting broadband speeds is the customer home. Customers (or ISPs) might be using outdated and obsolete WiFi routers or modems (like Charter did for many years in upstate New York). DSL speeds are just as affected by the condition of the inside copper wiring as the outdoor wiring. The edge broadband devices can also be an issue – when Google Fiber first offered gigabit fiber in Kansas City almost nobody owned a computer capable of handling that much speed.

Any way we try to define broadband speeds – even by individual home – is going to still be inaccurate. Trying to map broadband speeds is a perfect example of trying to fit a round peg in a square hole. It’s obvious that we can do a better job of this than we are doing today. I pity a fixed wireless ISP if they are somehow required to report broadband speeds by address, or even by a small polygon. They only know the speed at a given address after going to the roof of a home and measuring it.

The more fundamental issue here is that we want to use the maps for two different policy purposes. One goal is to be able to count the number of households that have broadband available. The improved mapping ideas will improve this counting function – within all of the limitations of the technologies I described above.

But mapping is a dreadful tool when we use it to start drawing lines on a map defining which households can get grant money to improve their broadband. At that point the mapping is no longer a theoretical exercise and a poorly drawn line will block homes from getting better broadband. None of the mapping ideas will really fix this problem and we need to stop using maps when awarding grants. It’s so much easier to decide that faster technology is better than slower technology. For example, grant money ought to be available for anybody that wants to replace DSL on copper with fiber. I don’t need a map to know that is a good idea. The grant process can use other ways to prioritize areas with low customer density without relying on crappy broadband maps.

We need to use maps only for what they are good for – to get an idea of what is available in a given area. Mapping is never going to be accurate enough to use to decide which customers can or cannot get better broadband.

Regulatory Sleight of Hand

I was looking through a list of ideas for blogs and noticed that I had never written about the FCC’s odd decision to reclassify commercial mobile broadband as private mobile broadband service in WC Docket No. 17-108 – The Restoring Internet Freedom order that was used to kill net neutrality and to eliminate Title II regulation of broadband. There was so much industry stir about those larger topics that the reclassification of the regulatory nature of mobile broadband went largely unnoticed at the time by the press.

The reclassification was extraordinary in the history of FCC regulation because it drastically changed the definition of one of the major industries regulated by the agency. In 1993 the Congress had enacted regulatory amendments to Section 332 of the FCC’s rules to clarify the regulation for the rapidly burgeoning cellular industry.

At that time there were about 16 million cellular subscribers that used the public switched telephone network (PSTN) and another two million private cell phones that used private networks primarily for corporate dispatch. Congress made a distinction between the public and private use of cellular technology and coined the term CMRS (Commercial Mobile Radio Service) to define the public service we still use today for making telephone calls on cell phones. That congressional act defined CMRS service as having three characteristics: a) the service is for profit, b) it’s available to the entire public, and c) it is interconnected to the PSTN. Private mobile service was defined as any cellular service that didn’t meet any one of the three tests.

The current FCC took the extraordinary step of declaring that cellular broadband is private cellular service. The FCC reached this conclusion using what I would call a regulatory sleight-of-hand. Mobile broadband is obviously still for profit and also available to the public, and so the FCC tackled the third test and said that mobile broadband is part of the Internet and not part of the public telephone network. It’s an odd distinction because the path of a telephone call and a data connection from a cellphone is usually identical. A cellphone first delivers the traffic for both services to a nearby cellular tower (or more recently to pole-mounted small cell sites). The traffic for both services is transported from the cell tower using ethernet transport that the industry calls trunking. At some point in the network, likely a switching hub, the voice and data traffic are split and the voice calls continue inside the PSTN while data traffic is peeled off to the Internet. There is no doubt that the user end of every cellular call or cellular data connection uses the network components that are part of the PSTN.

Why did the FCC go through these mental gymnastics? This FCC had two primary goals of this particular order. First, they wanted to kill the net neutrality rules established by the prior FCC in 2015. Second, they wanted to do this in such a way as to make it extremely difficult for a future FCC to reverse the decision. They ended up with a strategy of declaring that broadband is not a Title II service. Title II refers to the set of rules established by the Telecommunications Act of 1934 that was intended as the framework for regulating common carriers. Until the 2017 FCC order, most of the services we think of as telecommunications – landline telephone, cellular telephones, and broadband – were all considered as common carrier services. The current FCC strategy was to reclassify landline and mobile broadband as a Title I information service and essentially wash their hands from regulating broadband at all.

Since net neutrality rules applied to both landline and mobile data services, the FCC needed to first decree that mobile data was not a public and commercial service before they could remove it from Title II regulation.

The FCC’s actions defy logic and it’s clear that mobile data still meets the definition of a CMRS service. It was an interesting tactic by the FCC and probably the only way they could have removed mobile broadband from Title II regulation. However, they also set themselves up for some interesting possibilities from the court review of the FCC order. For example, a court might rule that mobile broadband is a CMRS service and drag it back under Title II regulation while at the same time upholding the FCC’s reclassification of landline broadband.

Why does this matter? Regulatory definitions matter because the regulatory process relies on an accumulated body of FCC orders and court cases that define the actual nature of regulating a given service. Congress generally defines regulation at a high level and later FCC decisions and court cases better define issues that are disputed. When something gets reclassified in this extreme manner, most of the relevant case law and precedents go out the window. That means we start over with a clean slate and much that was adjudicated in the past will likely have to be adjudicated again, but now based upon the new classification. I can’t think of any time in our industry where regulators decided to arbitrarily redefine the basic nature of a major industry product. We are on new regulatory ground, and that means uncertainty, which is never good for the industry.

New European Copyright Laws

I’ve always kept an eye on European Union regulations because anything that affects big web companies or ISPs in Europe always ends up bleeding over into the US. Recently the EU has been contemplating new rules about online copyrights, and in September the European Parliament took the first step by approving two new sets of copyright rules.

Article 11 is being referred to as a link tax. This legislation would require that anybody that carries headlines or snippets of longer articles online must pay a fee to the creator of the original content. Proponents of Article 11 argue that big companies like Google, Facebook and Twitter are taking financial advantage of content publishers by listing headlines of news articles with no compensation for the content creators. They argue that these snippets are one of the primary reasons that people use social media and they browse articles suggested by their friends. Opponents of the new law argue that it will be extremely complicated for a web service to track the millions of headlines listed by users and that they will react to this rule by only allowing headline snippets from large publishers. This would effectively shut small or new content creators from gaining access to the big platforms – articles would be from only a handful of content sources rather than from tens of thousands of them.

Such a law would certainly squash small content originators like this blog. Many readers find my daily blog articles via short headlines that are posted on Twitter and Linked-In every time I release a blog or when one of my readers reposts a blog. It’s extremely unlikely that the big web platforms would create a relationship with somebody as small as me and I’d lose my primary way to distribute content on the web. I guess, perhaps, that the WordPress platform where I publish could make arrangements with the big web services – otherwise their value as a publishing platform would be greatly diminished.

This would also affect me as a user. I mostly follow other people in the telecom and the rural broadband space by browsing through my feed on Twitter and LinkedIn to see what those folks are finding to be of interest. I skip over the majority of headlines and snippets, but I stop and read news articles I find of interest. The beauty of these platforms is that I automatically select the type of content I get to browse by deciding who I want to follow on the platforms. If the people I follow on Twitter can’t post small and obscure articles, then I would have no further interest in being on Twitter.

The second law, Article 13 is being referred to as the upload filter law. Article 13 would make a web platform liable for any copyright infringements for content posted by users. This restriction would theoretically not apply to content posted by users as long as they are acting non-commercially.

No one is entirely sure how the big web platforms would react to this law. At one extreme a platform like Facebook or Reddit might block all postings of content, such as video or pictures, for which the user can’t show ownership. This would mean the end of memes and kitten videos and much of the content posted by most Facebook users.

At the other extreme, this might mean that the average person could post such links since they have no commercial benefit from posting a cute cat video. But the law could stop commercial users from posting content that is not their own – a movie reviewer might not be able to include pictures or snippets from a film in a review. I might not be able to post a link to a Washington Post article as CCG Consulting but perhaps I could post it as an individual. While I don’t make a penny from this blog, I might be stopped by web platforms from including links to news articles in my blog.

In January the approval process was halted when 11 countries including Germany, Italy, and the Netherlands said they wouldn’t support the final language in these articles. EU law has an interesting difference from US law in that for many EU ordinances each country gets to decide, within reason, how they will implement the law.

The genesis of these laws comes from the observation that the big web companies are making huge money from the content created by others and not fairly compensating content creators. We are seeing a huge crisis for content creators – they used to be compensated through web advertising ‘hits’, but these revenues are disappearing quickly. The EU is trying to rebalance the financial equation and make sure that content creators are fairly compensated – which is the entire purpose of copyright laws.

The legislators are finding out how hard it will be to make this work in the online world. Web platforms will always try to work around laws to minimize payments. The lawyers of the web platforms are going to be cautious and advise the platforms to minimize massive class action suits.

But there has to be a balance. Content creators deserve to be paid for creating content. Platforms like Facebook, Twitter, Reddit, Instagram, Tumblr, etc. are popular to a large degree because users of the platforms upload content that they didn’t create – the value of the platform is that users get to share things of interest with their friends.

We haven’t heard the end of these efforts and the parties are still looking for language that the various EU members can accept. If these laws eventually pass they will raise the same questions here because the policies adopted by the big web platforms will probably change to match the European laws.

Streamlining Regulations

Jonathan Spalter of USTelecom wrote a recent blog calling on Congress to update regulations for the telecom industry. USTelecom is a lobbying arm representing the largest telcos, but which also still surprisingly has a few small telco members. I found the tone of the blog interesting, in that somebody who didn’t know our industry would read the blog and think that the big telcos are suffering under crushing regulation.

Nothing could be further from the truth. We currently have an FCC that seems to be completely in the pocket of the big ISPs. The current FCC walked in the door with the immediate goal to kill net neutrality, and in the process decided to completely deregulate the broadband industry. The American public hasn’t really grasped yet that ISPs are now unfettered to endlessly raise broadband prices and to engage in network practices that benefit the carriers instead of customers. Deregulation of broadband has to be the biggest regulatory giveaway in the history of the country.

Spalter goes on to praise the FCC for its recent order on poles that set extremely low rates for wireless pole connections and which lets wireless carriers place devices anywhere in the public rights-of-way. He says that order brought “fairness’ to the pole attachment process when in fact the order was massively unbalanced in favor of cellular companies and squashes any local input or authority over rights-of-ways – something that has always been a local prerogative. It’s ironic to see USTelecom praising fairness for pole attachments when their members have been vehemently trying to stop Google Fiber and others from gaining access to utility poles.

To be fair, Spalter isn’t completely wrong and there are regulations that are out of date. Our last major telecom legislation was in 1996, at a time when dial-up Internet access was spreading across the country. The FCC regulatory process relies on rules set by Congress, and since the FCC hasn’t acted since 1996, Spalter accuses Congress of having “a reckless abdication of government responsibility”.

I find it amusing that the number one regulation that USTelecom most dislikes is the requirement for the big telcos make their copper wires available to other carriers. That requirement of the Telecommunications Act of 1996 was probably the most important factor in encouraging other companies to compete against the monopoly telephone companies. In the years immediately after the 1996 Act, competitors ordered millions of wholesale unbundled network elements on the telco copper networks.

There are still competitors that using the telco copper to provide far better broadband than the telcos are willing to do, so we need to keep these regulations as long as copper remains hanging on poles. I would also venture a guess that the telcos are making more money selling this copper to the competitors than they would make if the competitors went away – the public is walking away from telco DSL in droves.

I find it curious that the telcos keep harping on this issue. In terms of the total telco market the sale of unbundled elements is a mere blip on the telco books. This is the equivalent to a whale complaining about a single barnacle on his belly. But the big telcos never miss an opportunty to harp about the issue and have been working hard to eliminate sale of copper to competitors since the passage of the 1996 Act. This is not a real issue for the telcos – they just have never gotten over the fact that they lost a regulatory battle in 1996 and they are still throwing a hissy fit over that loss.

The reality is that big telcos are less regulated than ever before. Most states have largely deregulated telephone service. The FCC completely obliterated broadband regulation. While there are still cable TV regulations, the big telcos like AT&T are bypassing those regulations by moving video online. The big telcos have already won the regulatory war.

There are always threats of new regulation – but the big telcos always lobby against new rules far in advance to weaken any new regulations. For example, they are currently supporting a watered-down set of privacy rules that won’t afford much protection of customer data. They have voiced support for a watered-down set of net neutrality rules that doesn’t obligate them to change their network practices.

It’s unseemly to see USTelecom railing against regulation after the telcos have already been so successful in shedding most regulations. I guess they want to strike while the iron is hot and are hoping to goad Congress and the FCC into finishing the job by killing all remaining regulation. The USTelcom blog is a repeat of the same song and dance they’ve been repeating since I’ve been in the industry – which boils down to, “regulation is bad”. I didn’t buy this story forty years ago and I still don’t buy it today.

The American Broadband Initiative

On February 13 the Secretary of Commerce Wilbur Ross led a group of more than 20 federal agencies in announcing what the administration is calling the American Broadband Initiative (ABI). The stated purpose of this initiative is to promote broadband deployment. This was accompanied by this Milestones Report that lists numerous specific federal initiatives and associated timelines. The stated purpose of the ABI is to streamline the federal permitting process and to leverage federal assets to lower the cost of deploying broadband.

Big announcements of this sort are usually mostly for public relations purposes rather than anything useful, and this is no exception. The main purpose of ABI seems to be to show rural America that the federal government cares about the lack of rural broadband. Unfortunately, this kind of PR effort works, as evidenced by a conversation I had with rural politician soon after the ABI announcement who hoped this would mean real movement towards broadband deployment in his region. I felt bad when I told him that I see nothing new or of consequence in the ABI announcement, and nothing that I thought would improve broadband in his area.

This is not to say that there was nothing of importance in the ABI. However, the most important initiatives included in the ABI are repeats of previous announcements. For example, the leading bullet point in the ABI is the announcement of the $600 million e-connectivity grant/loan program – something that everybody in the industry has known about since last fall. There were a few other repeats of past announcement such as the intention to ease the permitting process on federal land.

A lot of the announcements have to do with the permitting for broadband facilities and access to public land, including:

  • The U.S. Department of Interior will make it’s 7,000+ towers available to carriers and will publish a map. Any tall towers in this list are already included in the FCC tower database.
  • The NTIA is creating a web site that will centralize the information needed to get permits to place telecom assets on public land.
  • The GSA is undertaking an effort to document flow charts of the process required to get a permit for the use of federal land or federal towers.
  • The GSA will also tackle simplifying the permitting application forms.
  • The GSA is soliciting comments from the public to identify areas with poor cellular coverage, with the hope that the GSA can then identify public assets that might help alleviate lack of cellular coverage.

There are a few other announcements that could be beneficial such as streamlining the environmental and historic preservations reviews on public properties. Those requirements are a definite roadblock to using public land, but streamlining is not the same thing as eliminating, so I’d have to see what this means in practice to know if this is an actual improvement.

I have no doubt that these efforts will help a few broadband projects. However, federal lands tend to be lightly populated and I have to wonder how many broadband projects want to use federal lands? In the hundreds of broadband projects I’ve been involved in I can count on one hand the times when federal rights-of-way were an issue.

There is one situation this could be a benefit – the siting of antennas on top of federal buildings. In many small towns the court house is the tallest structure and has largely been unavailable to wireless providers. But until I see this work easily in real life I’m going to remain skeptical.

The ABI report is mostly fluff. It seems obvious that all cabinet agencies were asked to provide a list of ways they can help broadband, and they all scrambled to come up with something to report. While a few of the announced initiatives might help a handful of projects, for the most part the initiatives listed in the ABI aren’t going to help anybody. If the administration really wanted to help brpadband, they can create grant programs that don’t have forced ties to RUS loans than many ISPs can’t accept, or they would eliminate the inane requirement that federal grants can only be used where homes don’t have 10/1 Mbps speeds.

The Cost of Siting Small Cells

One of the more unusual things ordered by the current FCC was setting a low cap on local fees that a City can charge to review an application for placing a small cell site. The FCC capped the application fee at up to $500 for a request to up to five small cell sites and $100 per site after that. The FCC also set a cap of $270 for an annual fee to use the rights-of-way for each small cell site.

Cities have an option to charge a more and can bill a ‘reasonable approximation’ of actual costs, but a City can expect a legal fight from wireless carriers for fees that are much higher than the FCC caps.

It’s worth looking back at the history of the issue. Wireless carriers complained to the FCC that they were being charged exorbitant fees to put equipment on utility poles in the public rights-of-way. The wireless carriers cited examples of having to pay north of $10,000 per small cell site. In most cases, fees have been far smaller than that, but citing the worst examples gave cover to the FCC for capping fees.

However, some of the examples of high fees cited by the carriers were for installations that would not be considered as a small cell. I’ve seen applications requests for hanging devices the size of a refrigerator on poles and also placing large cabinet on the sidewalk under a pole. The FCC acknowledged this in their order and set a size limit on what constitutes a small cell as a device occupying something less than 28 cubic feet.

It’s worth noting that much of the FCC’s order for small cell sites are under appeal. The most controversial issues being challenged are aspects of the order that stripped cities of the ability to set local rules on what can and cannot be hung on poles. The FCC basically said that cellular carriers are free to do what they want anywhere in the public rights-of-way and cities are arguing that the order violates the long-standing precedent that rights-of-ways issues should be decided locally.

Communities all over the country are upset with the idea that they have to allow a small cell site any place that the carriers want to put one. There are also active citizen’s groups protesting the implementation of millimeter wave cell sites due to public health concerns. A lot of the prominent radio scientists from around the world have warned of the potential public health consequences for prolonged exposure to the millimeter wave spectrum – similar to the spectrum used in airport scanners, but which would be broadcast continuously from poles in front of homes. There is also a lot of concern that carriers that hang millimeter wave transmitters are going to want aggressive tree trimming to maintain lines-of-sight to homes. Finally, there are concerns about the wild proliferation of devices if multiple wireless providers install devices on the same street.

The cap on local fees has already been implemented and cities are now obligated to charge the low rates unless they undertake the effort (and the likely legal fight) for setting higher fees. It is the setting of low fees that is the most puzzling aspect of the FCC order. It seems that the FCC has accepted the wireless carrier’s claim that high fees would kill the deployment of 5G small cell sites everywhere.

I live in a city that is probably pretty typical and that has an application process and inspectors for a huge range of processes, from building inspection, restaurant inspections, electrical and gas installation inspections and inspections of anything that disturbs a city street surface or is hung in the public rights-of-way. The city takes a strong position in assuring that the public rights-of-way are maintained in a way that provides the best long-term opportunity for the many uses of the rights-of-way. They don’t let any utility or entity take steps that make it harder for the next user to gain the needed access.

The $100 fee is to compensate the city for processing the application for access, to survey the site of the requested access and to then inspect that the wireless carrier really did what they promised and didn’t create unsafe conditions or physical hindrances in the right-of-way. It’s hard to think that $100 will compensate any city for the effort required. It will be interesting to see how many cities acquiesce to the low FCC rates instead of fighting to implement fair rates. Cities know that fights with carriers can be costly and they may not be willing to tackle the issue. But they also need to realize that the wireless carriers could pepper their rights-of-ways with devices that are likely to hang in place for decades. If they don’t tackle the issue up front they will have no latitude later to rectify small cell sites that were hung incorrectly or unsafely. I’ve attended hundreds of city council meetings and have always been amazed at the huge number of different issues that local politicians have to deal with. This is just one more issue added to that long list, and it will be understandable if many cities acquiesce to the low fees.

Excess Dark Fiber

A few weeks ago I wrote about a recommendation from one of the BDAC subcommittees to expand the base for the fees collected to fund the Universal Service Fund. BDAC is the acronym for the Broadband Deployment Advisory Committees created by FCC Chairman Ajit Pai to advise on ideas to promote better broadband.

That BDAC subcommittee is the one that is tasked with developing Model State Codes – ideas for states to consider in legislation. The subcommittee came up with another real doozy of an idea. In their latest draft report to the FCC in Article 4 – Rights to Access to Existing Network Support Infrastructure,  the group suggests that broadband could be more affordably expanded if excess fiber built by municipalities was made available to commercial providers for cheap prices.

The BDAC subcommittee suggests that any excess municipal fiber that is not in a 50-year fiber plan must be made available for lease to other carriers. The group also oddly proposes that this would also apply to municipal buildings, I guess to save carriers from having to build huts. I can think of a hundred reasons why forcing government buildings to house carriers is an extremely dumb idea, but let’s look closer at the fiber idea.

The BDAC suggestion clearly comes from the big ISPs who would love to get their hands onto municipal fiber for a bargain price. The way I know that the idea comes from the big ISPs is that they are suggesting that this would only be applied to municipal fiber. If the group had been looking for ways to improve broadband deployment they would have expanded this idea to include all excess dark fiber, regardless of the owner.

I always hear that one of the reasons we don’t have more fiber-to-the-home is that there is not enough fiber already in our communities. I don’t think that’s true. If I look at my city of Asheville, NC I would bet there is already fiber within a quarter mile of everybody in the City. The City might own fiber to connect schools or other government buildings. There is probably some fiber that supports public-safety networks and traffic lights. The incumbent cable company and telco deploys fiber to get to neighborhood nodes. There is fiber built to reach to large businesses. There’s fiber built to get to cellular towers. There is certainly fiber built to places like our large regional hospital complex, the universities, and various federal government office buildings. There is fiber owned by the electric company, and perhaps also by the gas and water companies. And as a regional hub at the nexus of a few major highways, there is likely long-haul fiber passing through here on the way to somewhere else, plus NCDOT fiber used for more local uses.

I’m positive that if all of this fiber was mapped that Asheville would look like a fiber-rich City – as would many places. Even rural counties often have a surprising amount of existing fiber that satisfies these same kinds of purposes. Yet most existing fiber was built to satisfy a single purpose and isn’t available for all of the other ways that fiber could benefit a community. Asheville might be fiber rich, but that fiber is off-limits to somebody interested in building fiber-to-the-home.

That’s the implied justification for the BDAC suggestion – that excess fiber shouldn’t sit idle if it could benefit better broadband. That’s also the basis for my suggestion of expanding this concept to all fiber, not just to government fiber. If AT&T builds a 24-fiber cable to a cell tower and will never use more than a few strands, then why shouldn’t they be required to sell the excess fiber capacity for cheap if it benefits the community?

The idea of forcing big ISPs to make fiber available is not a new one. In the Telecommunications Act of 1996, Congress required the big telcos to unbundle their excess dark fiber and make it available to anybody. However, the telcos actively resisted that order and began immediately to petition the FCC to soften the requirement, and as a consequence, very little dark fiber has ever been provided to others. I helped a few dozen companies try to get access to telco dark fiber and only a few succeeded. However, Congress was on the right track by recognizing that idle dark fiber is a valuable asset that could benefit the larger community.

I wrote a blog a few weeks back that talked about how Romania has the best broadband in Europe based upon hundreds of small ISPs that have built fiber just in their immediate neighborhood. I think that if all of the excess fiber capacity in a city was made available that it would unleash all sorts of creative entrepreneurs to do similar things. I know I would consider building a fiber network in my own neighborhood if there was a way for me to backhaul to a larger partner ISP.

However, the BDAC suggestion is not quite as altruistic as it might sound – the BDAC subcommittee is not worried that the public is missing out on the benefits from excess dark fiber. Remember that the big ISPs largely control the BDAC committees and I think this suggestion comes from AT&T and Comcast that want to punish any city with the audacity to build fiber to compete with them. This requirement would allow the big ISPs to take advantage of those competitive networks to effectively squash municipal competition.

But we shouldn’t let the vindictive nature of the suggestion erase the larger concept. I’ve rarely gotten a chance in our industry to say that, “What’s good for the goose is good for the gander” – but this is that opportunity. The BDAC has correctly identified the fact that broadband deployment would be easier everywhere if we could unleash the capacity of unused dark fiber. The BDAC subcommittee just didn’t take this idea to the natural conclusion by applying it to all existing fiber. I’m certain that if a state embraced applying this concept to all fiber that we’d see the big ISP screaming about confiscation of capital – which is exactly what it is.

New Net Neutrality Legislation

On February 7, as hearings were being held on net neutrality, Congressional Republicans said they were going to offer up three different versions of a bill intended to reinstate net neutrality principles. The newest bill, the Open Internet Act of 2019, was introduced by Rep Bob Latta of Ohio. They also offered up bills previously introduced by Rep. Greg Walden of Oregon and Sen John Thune of South Dakota.

All three bills would reestablish rules against ISP blocking web traffic, throttling customers or implementing paid-prioritization, which has been referred to as creating fast lanes that give some web traffic prioritization over other traffic. Hanging over all of these bills is a court review of a challenge of the FCC’s right to kill net neutrality – a successful challenge would reinstate the original FCC net neutrality rules. There are also a number of states poised to introduce their own net neutrality rules should the court challenge fail.

The court case and the threat of state net neutrality rules are prodding Congress to enact net neutrality legislation. Legislation has always been the preferred solution for imposing any major changes in regulation. When there’s no legislation, then rules like net neutrality are subject to being changed every time there is a new FCC or a new administration. Nobody in the country benefits – not ISPs and not citizens – when policies like net neutrality change every time there is a new administration.

These three bills were clearly influenced by the big ISPs. They include nearly the identical talking points that are being promoted by NCTA, the lobbying arm of the largest ISPs, headed by ex-FCC Commissioner Michael Powell. There are two primary differences in these bills and the original net neutrality rules that were established by the last FCC.

The first is a provision that the legislation would allow the ISPs to stray from the net neutrality principles if there is a ‘public benefit’ from doing so. That would allow ISPs to adopt any web practice they want as long as they can concoct a story about how the practice creates a public benefit. Since there are winners and losers from almost any network practice of ISPs, it wouldn’t be hard to identify those that benefit from a given practice. From a regulatory perspective, this is as close as we can come to a joke. If a regulated entity gets to decide when a regulation applies, then it’s not really a regulation.

The other big difference from the proposed legislation and the original net neutrality order is the lack of what is called a ‘general conduct standard’. The original net neutrality order understood that the Internet is a rapidly evolving and that any specific rules governing Internet behavior would be obsolete almost as soon as they are enacted. ISPs and the other big players on the web are able to design ways around almost any imaginable legislative rules.

The original net neutrality order took the tactic of establishing the three basic net neutrality principles but didn’t provide any specific direction on how the FCC was supposed to enforce them. The concept of the general conduct standard is that the FCC will look at each bad practice of an ISP to see if it violates the net neutrality principles. Any FCC ruling would thus be somewhat narrow, except that a ruling against a specific ISP practice would generally apply to others doing the same thing.

The original net neutrality order envisioned a cycle where the FCC rules against bad practices and the ISPs then try to find another way to get what they want – so there would be a continuous cycle of ISPs introducing questionable behavior with the FCC deciding each time if the new practice violates the intent of the net neutrality principles. This was a really clever solution for trying to regulate an industry that changes as quickly as the ISP and web world.

The proposed legislation does away with the general conduct standard. That means that the FCC would not have the ability to judge specific ISP behavior as meeting or not meeting the net neutrality standards. This would take all of the teeth out of net neutrality rules since the FCC would have little authority to ban specific bad practices. This was summarized most succinctly by former FCC Chairman Tom Wheeler who testified in the recent Congressional hearings that if Congress established net neutrality rules it ought to allow for “a referee on the field with the ability to throw the flag for unjust and unreasonable activity.”

The bottom line is that the proposed legislation would reintroduce the basic tenets of net neutrality but would give the FCC almost no authority to enforce the rules. It’s impossible to imagine these bills being passed by a divided Congress, so we’re back to waiting on the Courts or perhaps on states trying to regulate net neutrality on their own – meaning a long-term muddled period of regulatory uncertainty.

The Status of the CAF II Deployments

The Benton Foundation noted last month that both CenturyLink and Frontier have not met all of their milestones for deployment of CAF II. This funding from the FCC is supposed to be used to improve rural broadband to speeds of at least 10/1 Mbps. As of the end of 2018, the CAF II recipients were to have completed upgrades to at least 60% of the customers in each state covered by the funding.

CenturyLink took funding to improve broadband in 33 states covering over 1 million homes and businesses. CenturyLink claims to have met the 60% milestone in twenty-three states but didn’t make the goal in eleven states: Colorado, Idaho, Kansas, Michigan, Minnesota, Missouri, Montana, Ohio, Oregon, Washington, and Wisconsin.

Frontier received CAF II funding to improve broadband to over 774,000 locations in 29 states. Frontier says they’ve met the milestone in 27 states but haven’t reached the 60% deployment milestone in Nebraska and New Mexico.  There were a number of other large telcos that took CAF Ii funding like AT&T, Windstream, and Consolidated, and I have to assume that they’ve reported meeting the 60% milestone.

Back in 2014 when it looked like the CAF II program might be awarded by reverse auction, we helped a number of clients take a look at the CAF II service areas. In many cases, these are large rural areas that cover 50% or more of most of the rural counties in the country. Most of my clients were interested in the CAF II money as a funding mechanism to help pay for rural fiber, but all of the big telcos other than AT&T announced originally that they planned to upgrade existing DSL. AT&T announced a strategy early on to used fixed cellular wireless to satisfy their CAF II requirements. Since then a few big telcos like Frontier and Windstream have said that they are also using fixed wireless to meet their obligations.

To us, the announcement that the telcos were going to upgrade DSL set off red flag alarms. In a lot of rural counties there are only a small number of towns, and those towns are the only places where the big telcos have DSLAMs (the DSL hub). Rural telephone exchanges tend to be large and the vast majority of rural customers have always been far out of range of DSL that originates in the small towns. One only has to go a few miles – barely outside the towns – to see DSL speeds fall off to nothing.

The only way to make DSL work in the CAF II areas would be to build fiber to rural locations and establish new DSL hub sites. As any independent telco can tell you who deployed DSL the right way, this is expensive because it takes a lot of the rural DSLAMs to get within range of every customer. By electing DSL upgrades, the big telcos like CenturyLink and Frontier had essentially agreed to build a dozen or more fiber DSLAMs in each of the rural counties covered by CAF II. My back-of-the-envelope math showed that was going to cost a lot more than what the companies were receiving from the CAF fund. Since I knew these telcos didn’t want to spend their own money in rural America, I predicted execution failures for many of the planned DSL deployments.

I believe the big telcos are now facing a huge dilemma. They’ve reached 60% of customers in many places (but not all). However, it is going to cost two to three times more per home to reach the remaining 40% of homes. The remaining customers are the ones on extremely long copper loops and DSL is an expensive technology use for reaching these last customers. A DSLAM built to serve the customers at the ends of these loops might only serve a few customers – and it’s hard to justify the cost of the fiber and electronics needed to reach them.

I’ve believed from the beginning that the big telcos building DSL for the CAF II program would take the approach of covering the low hanging fruit – those customers that can be reached by the deployment of a few DSLAMs in a given rural area. If that’s true, then the big telcos aren’t going to spend the money to reach the most remote customers, meaning a huge number of CAF II customers are going to see zero improvements in broadband. The telcos mostly met their 60% targets by serving the low-hanging fruit. They are going to have a huge challenge meeting the next milestones of 80% and 100%.

Probably because I write this blog, I hear from folks at all levels of the industry about rural broadband. I’ve heard a lot of stories from technicians telling me that some of the big telcos have only tackled the low-hanging fruit in the CAF builds. I’ve heard from others that some telcos aren’t spending more than a fraction of the CAF II money they got from the FCC and are pocketing much of it. I’ve heard from rural customers who supposedly already got a CAF II upgrade and aren’t seeing speeds improved to the 10/1 threshold.

The CAF II program will be finished soon and I’m already wondering how the telcos are going to report the results to the FCC if they took shortcuts and didn’t make all of the CAF II upgrades. Will they say they’ve covered everybody when some homes saw no improvement? Will they claim 10/1 Mbps speeds when many households were upgraded to something slower? If they come clean, how will the FCC react? Will the FCC try to find the truth or sweep it under the rug?

ISPs Are Violating the Old Net Neutrality Rules

It’s been just over a year since the FCC repealed net neutrality. The FCC’s case is being appealed and oral arguments are underway in the appeal as I write this blog. One would have to assume that until that appeal is finished that the big ISPs will be on their best behavior. Even so, the press has covered a number of ISP actions during the last year that would have violated net neutrality if the old rules were still in place.

It’s not surprising that the cellular carriers were the first ones to violate the old net neutrality rules. This is the most competitive part of the industry and the cellular carriers are not going to miss any opportunity to gain a marketing edge.

AT&T is openly advertising that cellular customers can stream the company’s DirecTV Now product without it counting against monthly data caps. Meanwhile, all of the competing video services like Sling TV, Paystation Vue, YouTube TV, Netflix or Amazon Prime count against AT&T data caps – and video can quickly kill a monthly data plan download allotment. AT&T’s behavior is almost a pure textbook example of why net neutrality rules were put into place – to stop ISPs from putting competitor’s products at an automatic disadvantage. AT&T is the biggest cellular provider in the country and this creates a huge advantage for DirecTV Now. All of the major cellular carriers are doing something similar in allowing some video to not count against the monthly data cap, but AT&T is the only one pushing their own video product.

In November a large study of 100,000 cellphone users by Northeastern University and the University of Massachusetts showed that Sprint was throttling Skype. This is not something that the carrier announced, but it’s a clear case of pushing web traffic to the ‘Internet slow lane’. We can only speculate why Sprint would do this, but regardless of their motivation this is clearly a violation of net neutrality.

This same study showed numerous incidents where all of the major cellular carriers throttled video services at times. YouTube was the number one target of throttling, followed by Netflix, Amazon Prime, and the NBC Sports app. This throttling wasn’t as widespread as Sprint’s throttling of Skype, but the carriers must have algorithms in their network that throttles specific video traffic when cell sites get busy. In contrast to the big carriers, the smaller independent cellular carrier C.Spire had almost no instances of differentiation among video streams.

Practices that might violate net neutrality were not limited to cellular carriers. For example, Verizon FiOS recently began giving free Netflix for a year to new broadband customers. AT&T also started giving out free HBO to new customers last year. This practice is more subtle than the cellular carrier practice of blocking or throttling content. One of the purposes of net neutrality was for ISPs to not discriminate against web traffic. By giving away free video services the landline broadband companies are promoting specific web services over competitors.

This doesn’t sound harmful, but the discussions in the net neutrality order warned about a future where the biggest ISPs would partner with a handful of big web services like Facebook or Netflix to the detriment of all smaller and start-up web services. A new video service will have a much harder time gaining customers if the biggest ISPs are giving away their competitors for free.

There are probably more bad practices going on that we don’t know about. We wouldn’t have known about the cellular throttling of services without the big study. A lot of discrimination can be done through the network routing practices of the ISPs, which are hard to prove. For example, I’ve been seeing a growing number of complaints from consumers recently who are having trouble with streaming video services. If you recall, net neutrality first gained traction when it became known that the big ISPs like Comcast were blatantly interfering with Netflix streaming. There is nothing today to stop the big ISPs from implementing network practices that degrade certain kinds of traffic. There is also nothing stopping them from demanding payments from web services like Netflix so that their product is delivered cleanly.

Interestingly, most of the big ISPs made a public pledge to not violate the spirit of net neutrality even if the rules were abolished. That seems to be a hollow promise that was to soothe the public that worried about the end if net neutrality. The FCC implemented net neutrality to protect the open Internet. The biggest ISPs have virtual monopolies in most markets and public opinion is rarely going to change an ISP behavior if the ISP decides that the monetary gain is worth the public unhappiness. Broadband customers don’t have a lot of options to change providers and Cable broadband is becoming a near-monopoly in urban areas. There is no way for a consumer to avoid the bad practices of the cellular companies if they all engage in the same bad practices.

There is at least some chance that the courts will overturn the FCC repeal of net neutrality, but that seems unlikely to me. If the ISPs win in court and start blocking traffic and discriminating against web traffic it does seem likely that some future FCC or Congress will reinstitute net neutrality and starts the fight all over again. Regardless of the court’s decision, I think we are a long way from hearing the last about net neutrality.