Category Archives: Regulation – What is it Good For?

FCC Maps and Professional Engineers

When the FCC first adopted the new broadband data collection and mapping rules, the FCC had a requirement that ISPs must get FCC mapping data certified by a professional engineer or by a corporate officer that meets specific qualifications to make the certification. The genesis of this ruling was fairly clear – the FCC has taken a lot of flak about ISPs that have been submitting clearly inaccurate data about broadband coverage. To some degree, this was the FCC’s fault because the agency never reviewed what ISPs submitted, and there was no feedback or challenge mechanism for outsiders to complain about the maps – even though the FCC heard repeatedly about the poor quality of the maps. The FCC now wants an engineer to bless the coverage area for every ISP that submits broadband mapping data.

In July, the FCC temporarily backed off from that ruling since many ISPs are unable to find a professional engineer to bless its FCC reporting for the upcoming new mapping deadline in September. The FCC will allow ISPs to get coverage data certified by an experienced engineer for the first three FCC data collection cycles meaning that ISPs must comply with the original order by two years from now.

I think the FCC ruling is going to be harmful to small ISPs, and I’ll describe why below. But first, I want to highlight what ISPs must do for the current 477 mapping data due next month. ISPs still need to get somebody who is qualified to certify the broadband coverage area. Note that an engineer is not certifying the broadband speeds – the mapping issue that matters the most. ISPs have three choices of folks who can provide the certification:

  • They can get the coverage area certified by a professional engineer.
  • They can get the data certified by an engineer who meets the following qualifications: 1) a degree in electrical engineering, electronic technology, or similar technical degree along with seven years of experience in broadband network design and/or performance, or 2) somebody with specialized training relevant to broadband network engineering and ten years of experience in the field.
  • A corporate office of the ISP who has a degree in engineering and who also has direct knowledge of the network design. Note that this person must be a corporate officer and not just an employee of the ISP. ISPs cannot satisfy the future requirement by hiring a professional engineer unless that person also becomes a corporate officer. I’ll have to leave it up to lawyers to define what a corporate officer is, but I’m guessing a CTO is not a corporate officer.

The requirement to certify the biannual 477 data filings is going to be a burden for small ISPs for several reasons. First, as the FCC acknowledges in the recent ruling, there is a shortage of professional engineers in the broadband industry. I think this shortage is a lot more acute than the FCC understands. Big ISPs will have no problem meeting this requirement because these ISPs will meet the requirement with either a corporate officer with an engineering degree or by hiring a professional engineer.

The problem comes from the many small ISPs that don’t have a relationship with a professional engineer. Most small ISPs take great pride in that they’ve built the network themselves without paying for expensive external engineering or consulting help. Small ISPs must be frugal if they want to survive I’ve talked to several engineering companies in the industry, and they have zero interest in taking on new clients who only need them to certify FCC 477 filings. Engineering firms in the country are already working at full capacity due to the explosion of broadband grants and the general expansion of fiber networks. They view helping somebody with mapping to be busy paperwork rather than useful engineering. When the temporary FCC waiver is over, I don’t think little ISPs will find professional engineers willing to help them.

I also don’t think the FCC understands what it is requesting from a professional engineer. The FCC is asking the P.E. to certify that the ISP network reaches everywhere claimed in the 477 mapping data. Engineers are not going to be willing to sign a 477 certification without having done the research to fully understand the network. I can picture that easily costing $10,000 to $50,000, depending upon the complexity of the network. It’s clear in the mapping order that the FCC is counting on professional engineers to do that research – but I don’t think they understand how much this will cost a small ISP. Engineers are not going to certify a network without this research since they are putting their license on the line if they certify a network based solely on what an ISP tells them. As an aside, this requirement gets even more onerous if the P.E. must be certified in the same state as the ISP – some states have a major engineer shortage.

Second, I’m not sure that an engineer exists who can certify a WISP network with multiple radio sites. There are propagation models available that estimate the coverage of a given radio, and the FCC has suggested that those are an acceptable tool for understanding the reach of a given radio. But every engineer understands that propagation studies are largely fantasy after a short distance from a transmitter. There are local conditions like trees, buildings, and other impediments that can affect the reach of a radio that are not reflected in the propagation studies. WISPs usually don’t know if they can connect to a new customer until they visit the customer’s house and try to connect. How can an engineer certify the reach of a WISP network when a WISP doesn’t understand it?

I know that the FCC is trying to avoid the blame it has taken over the years for producing dreadful broadband maps. But in this case, the industry told the FCC why its requirements can’t work, and the agency ignored what they were told. Unfortunately, the FCC didn’t hear directly from the small ISPs – because it never does. These little companies don’t know what’s going on at the FCC and don’t make comments in dockets, even those that matter. For now, the FCC has booted this issue two years down the road – but I can promise that the same issues will exist then that exist now, and small ISPs will be unable to comply with this requirement, even if they want to.

Who Should Report to the FCC Mapping?

I think there are a lot of ISPs that are not participating in the FCC data collection effort that the industry refers to as the broadband maps. In almost every county I’ve ever worked in, I run across a few ISPs that are not reporting broadband usage. There are several categories of ISPs in this category.

I often run across small regional WISPs and occasionally across fiber overbuilders that are not listed in the database. I know these ISPs are there because people claim them as their ISP when we do a broadband survey. These ISPs generally have a website that lists broadband rates and coverage areas – but for whatever reason, these ISPs do not participate in the FCC mapping database.

My guess in most cases is that these small ISPs don’t think they are required to report – they either don’t even know about the database, or they don’t fear any repercussions for not reporting. These are generally small single-owner or family businesses, and the owners might think that broadband isn’t regulated. Some of these ISPs have operated for years, and nobody has ever knocked on their doors about regulation, so they remain either blissfully unaware of their obligation to report or they don’t think it is important.

Another category that often doesn’t report is local governments that provide the fiber connectivity to their own buildings and sometimes to a few key businesses in town. These are not always small, and there are municipal networks in larger cities that are not included in the FCC database. Many cities don’t think they are ISPs even if they perform all of the ISP functions. They provide bandwidth to and from the Internet using facilities that they have built to connect to users. In some cases, there is an underlying ISP serving the city, but often there is not. Another similar category is school networks that buy wholesale bandwidth and do all of the ISP functions.

These local governments are doing themselves a disfavor by not reporting because their government buildings are not listed as being served by fiber. That could open up the door for some other ISP to ask for grant funding to serve the anchor institutions in the region that are already served.

Another interesting group of ISPs that often doesn’t report to the FCC is companies that buy wholesale loops from an open-access or leased loop environment. Generally, these loops are pure transport, and the ISP has to handle the functions of routing traffic to and from the Internet. These folks also often don’t think they are ISPs because they don’t own the fiber loop – but the entity that performs the ISP functions for a customer is the ISP and should be reporting to the FCC. These are often small companies that tackle being an ISP as a sideline business and I would guess they don’t think they are regulated.

The group that mystifies me the most are some of the big national ISPs. There are ISPs who have nationwide contracts to serve all branches of national chains like hotels, banks, etc. In a city of 20,000 or larger, there are often a half dozen such ISPs serving one or more businesses. But I regularly find that a few big ISPS are not reporting to the FCC. I’ve always wondered if some other big ISP includes these customers in its reporting, but when I look at the granular data, it often looks like many of the national chains served by fiber are not claimed by any ISP. The new FCC mapping is going to get a lot more granular and maybe we’ll finally be able to see if such connections are reported by somebody.

Adding together all of the ISPs that don’t report is likely only a minuscule sliver of the ISP market. However, these are often some of the most important connections in a city since they are the customers served with fiber. A small-city fiber network might be bringing multi-gigabit broadband to city buildings or a handful of businesses, and nobody knows about it.

I don’t know that the FCC has any hope of uncovering these small ISPs, and it’s not worth the investigative effort to identify them. But at least part of the blame for this lies at the FCC. The agency doesn’t have clear guidelines in plain English defining who is an ISP, with examples. But it might not help even if the FCC did, since it seems that many small ISPs barely know the FCC exists.

FCC Nixes Starlink and LTD Broadband

On August 10, the FCC issued a press release denying the long-form applications of Starlink and LTD Broadband in the RDOF reverse auction. This is big news because these are two of the biggest winners of the reverse auction. LTD Broadband was the largest winner of the auctions at $1.32 billion while Starlink had claimed over $885 million in the auction.

The FCC press release quoted FCC chairman Jessica Rosenworcel asking why the FCC should subsidize Starlink since it’s a “still developing technology” that requires customers to pay for a $600 dish, even with the FCC subsidy. I have to imagine that the FCC was relying, at least in part, on Ookla speed tests that show that Starlink’s performance has been worsening over time as more customers come onto the network. The speed tests also show that Starlink doesn’t meet the 20 Mbps upload speed that Starlink pledged to meet in the auction. We may not know the full reasoning behind the rejection unless the FCC follows this press release with a longer document.

The release says that the FCC rejected LTD Broadband because the agency deemed that the company was not capable of deploying a network of the scope, scale, and size required to satisfy the RDOF buildout requirements. This is not surprising since LTD is a small regional WISP in Minnesota that promised to build a fiber network that would cost many billions of dollars. LTD has already been having problems and had failed to win state approval for Eligible Telecommunications Carrier status in seven of the fifteen states where the company won the RDOF auction. There is also an open proceeding at the Minnesota Public Service Commission asking to revoke the existing ETC status.

These two cancellations of RDOF will have a significant ripple effect through the rest of the carrier world. The areas that were claimed in the RDOF auction have been off-limits for other federal grants like ReConnect. This ruling means that any areas that were claimed by these two companies can now be included in future federal grants.

The other issue caused by RDOF is that the awards were by Census block, and this resulted in award areas that have been described as swiss cheese. This meant that the RDOF awards were not contiguous but were often a scattering of Census blocks mixed in with areas that seemed to be identical but were mysteriously not included in RDOF – fully as a result of faulty FCC maps. This made it nearly impossible in some cases for other ISPs to seek grants for the areas not covered by RDOF since the areas are scattered.

I’m only speculating, but I suspect that the pending BEAD grants have a lot to do with the FCC decision. If the FCC had awarded the RDOF, then folks living in the Starlink areas would have been precluded from getting fiber or other broadband that is faster than Starlink. This was a particularly troublesome situation in my part of the world, where Starlink won the RDOF reverse auction in some of the western mountainous wooded counties in North Carolina. We now have a lot of evidence that Starlink struggles in heavily wooded areas.

The risk of awarding the RDOF to LTD Broadband is that the company would fail to execute on the fiber buildout. It wouldn’t be evident for a number of years if the buildout wasn’t going to succeed, and by that time, all of the current state and federal broadband grants would be long gone. I think this rejection shows that the federal government is really hoping that the BEAD grants will bring broadband to all rural areas.

There are still a few other large RDOF winners that have not been awarded. These are companies that are proposing gigabit wireless capability. The FCC is obviously not yet ready to make the awards to these companies, but it’s also apparently not ready to reject them. The clock is ticking for these areas. ISPs and local governments need to know if these areas won’t get RDOF since it takes time to plan for the BEAD grants, so it’s important for the FCC to make or reject the remaining RDOF applications soon.

Licensed Spectrum and Broadband Mapping

As I work with clients who are thinking about applying for the BEAD grants, I keep stumbling across new issues that I see as problems. Today’s blog talks about how the BEAD grants in a given location could go sideways because of the NTIA’s decision to declare facility-based wireless technologies that use licensed spectrum to be considered as a reliable technology that is eligible for BEAD grants. I can foresee two different problems that might result from this decision.

There are two kinds of wireless carriers that could qualify under this new definition. First, cellular carriers like T-Mobile and Verizon are aggressively marketing FWA fixed wireless for homes using licensed spectrum. In the not-too-distant future, we can expect AT&T, Dish Network, and probably many of the smaller cellular carriers like U.S. Cellular to deploy the technology using licensed spectrum. The carriers are largely advertising this as 5G, but the actual technology being used for now is still 4G LTE.

The other set of facility-based wireless providers are the fixed wireless WISPs that use a mix of licensed and unlicensed spectrum to deliver broadband from towers. Most of these WISPs are using the licensed portion of Citizen Band Radio Spectrum (CBRS), but they can use other licensed spectrum like 700 MHz or other cellular spectrum purchased at auction in the past.

The first problem I foresee is that these wireless carriers can use the upcoming FCC broadband mapping update to lock down huge areas of real estate from eligibility for BEAD grants. Anywhere that these carriers claim speeds of 100/20 Mbps in the next set of FCC maps will be initially declared by the BEAD rules to be served and ineligible for grants.

Unfortunately, the new mapping rules allow for this since ISPs can claim marketing speeds in the FCC mapping. I’m positive that many WISPs will declare the speeds that will classify their areas as served, because many of them already have been reporting these speeds in the past. In just the past year, I’ve worked with at least thirty counties where at least one wireless ISP claimed countywide coverage with broadband  – in some cases at speeds of 100 Mbps or faster. These WISPs might have the 100/20 Mbps capability for some customers close to a tower, but it’s impossible to be able to deliver those speeds to everybody across an entire county.

To use an example, I talked to a farmer recently who is thrilled to get the new T-Mobile FWA product at the farm. The tower is on his property, and he is getting 200 Mbps downloads. But the stories from his neighbors are quite different. One neighbor less than a mile away is seeing 75 Mbps download speeds. A few other neighbors two miles or more away claim the broadband is unusable. If T-Mobile was to claim a fairly wide coverage for this technology in the FCC maps, it would be blocking BEAD grant money inside whatever areas it claims.

But let’s say that T-Mobile reports honestly. Under the new FCC mapping rules. a wireless ISP is supposed to input a wireless propagation map like the one below. This map is typical of wireless coverage in that the wireless signal travels further in directions where it is unimpeded. But this example propagation map doesn’t tell the whole story because you might imply that the speeds are the same over the whole propagation area. My farmer example shows that wireless speeds can drop off rapidly with distance from a tower. A map of a 200 Mbps coverage area or even a 100 Mbps coverage area will be tiny for a wireless ISP. The map that should be input to the new FCC maps is just the areas that can get good broadband speeds. In the propagation map below, probably 80% of the green areas probably don’t even see one bar of broadband. It’s also worth noting that the propagation map is not fixed – the coverage area changes with temperature, precipitation, and more mundane factors like the amount of backhaul provided to a given tower.This raises the second issue. If the wireless carriers with fast licensed spectrum report properly in the new maps, there are going to be splotches of areas around every rural cell tower that will be off-limits for grants. In the same way that the swiss cheese RDOF awards goofed up anybody else from bringing a fiber broadband solution, these fixed wireless or cellular blotches will make it hard to build a coherent network in areas that have to avoid the wireless areas. In a real deployment, An ISP will likely build to everybody in an area – but because of the mapping rules, they won’t get grant funding everywhere. I can’t even begin to imagine how somebody building a fiber network is going to properly account for assets that are inside and outside of areas that are supposedly already served.

I wonder if the NTIA understands what it has done. The agency seems to have worked very hard to avoid the problems the FCC caused in the RDOF reverse auction. But this ruling brings in one of the most damaging aspects of RDOF – incoherent grant serving areas. I know there is a challenge process for the maps used for BEAD, but it’s going to be extremely difficult to dispute an ever-changing propagation map around every cell tower or fixed wireless radio. I fear this is going to be one of the newest nightmares to pop out of the revised FCC maps.

Reusing Existing Easements

Casey Lide and Thomas B. Magee of Keller & Heckman highlight an issue that anybody building fiber on utility poles should be aware of. A recent article on their website notes that in some cases, an easement obtained for using private land to bring electric service might not automatically allow an easement for bringing fiber.

There is a subtle difference between easements and rights-of-of way. An easement allows somebody to carry out an activity on private land. It was typical when electric companies built the power grid to seek an easement from each landowner to give permission to erect electric poles for bringing electric service. Rights-of-way are generally more specific and wider in scope. A city will often decree that it has a right-of-way in perpetuity to use the first few feet from the street of each property for civic purposes. The city can then use the right-of-way to allow for underground utilities or to place a fire hydrant.

The article warns that the original language of the easement might restrict usage for adding fiber. If the original easement language was narrow and only talked about bringing electric service, then somebody adding fiber would need to seek a new easement for every property underneath a pole line. If the original easement was more generic in nature, it might have allowed for electric and other services, in which case the electric company would have an easement to cover allowing others on its poles.

There are cases where a property owner has refused to allow fiber or other wires to be added to a pole line. In such cases, the new attacher has to get permission from the property owner and possibly pay for the easement when property owners insist there is a value for the easement.

The legislatures in twenty states have dealt with this issue in the last few years by passing legislation that says that the original easement given to the electric company covers other wires added to the poles. Within just the last three years, the following states have enacted this legislative fix as a way to make it easier to build broadband networks. Note that some of these laws are aimed only at electric cooperatives but not for commercial electric companies. The states are Alabama, Arizona, Colorado, Georgia, Hawaii, Maryland, Michigan, Minnesota, Mississippi, Missouri, Nebraska, North Carolina, Ohio, Oregon, Pennsylvania, South Carolina, Tennessee, Texas, Vermont, Virginia, and West Virginia.

If your state is not on that list, or if you are building fiber on the lines of a for-profit utility, then this is an issue that you should investigate as part of building fiber. The natural place to start is to ask the utility if it has clear easements for adding fiber. This is not always an easy thing for a utility to guarantee since some of the easements might have been negotiated more than a century ago. Examining the utility’s easement language should show if the easement is restrictive or open.

The chances are that you can build a network and never worry about this – many people have built fiber networks and never asked the question. But if an easement dispute is raised, you could be stopped in the construction process or even be stopped from using fiber that was built without an easement. Add this to the list of worries that come with building a new fiber network.

U.S. Technology Competitiveness

There is a bipartisan bill moving through Congress that has the goal of assessing U.S. leadership in key technologies relative to competitors like China. The bill is called The American Technology Leadership Act. The bill is sponsored by U.S. Senators Michael Bennet (D-Colo.), Ben Sasse (R-Neb.), and Mark Warner (D-Va.).

The Act would create an Office of Global Competition Analysis to assess how the United States fares in key emerging technologies relative to other countries to inform policy and strengthen U.S. competitiveness. This new office would be staffed by experts from the Departments of Commerce, Treasury, and Defense, along with the Intelligence Community, and other relevant agencies. The new Office could also draw on experts from the private sector and academia on a project basis. The new Office would support both economic and national security policymakers. The effort would be used to assess U.S. competitiveness in areas like semiconductors and artificial intelligence.

When I read that, my first reaction was that this sounds totally sensible. In a world that has shifted to a global economy, it sounds smart to take steps to make sure that the U.S. has access to the best technologies. We learned during the aftermath of the pandemic how fragile we are to the vagaries of the supply chain or other economic disruptions. It makes sense to have something like a Department of the Future that is tasked with thinking about how new technologies will change our economy and security.

But then what? Is there anything the government can do to change the way that new technology affects the world and the U.S.? A new technology like artificial intelligence is not something that can be curated or directed. The big breakthroughs are likely to come from four smart people in a university lab from somewhere on the planet who strike upon the right solution. The idea of any government somehow controlling the development of any new technology is ludicrous. I would venture to say that the smartest people in the artificial intelligence field have no idea where or when the big breakthroughs will happen. New technologies invariably take a different path than anybody ever anticipated.

The U.S. doesn’t have the best track record of trying to direct new technologies. Just in recent decades, I can recall when Bill Clinton was going to establish the U.S. as the world leader in microtechnology. I remember a big federal push to make the U.S. the world leader in solar power. And folks in our industry all remember the boondoggle that was the government’s big push for winning the 5G war with China.

The 5G story is a cautionary tale about why governments should not meddle with or back new technologies. Seemingly the whole federal government, from the White House, the Congress, and the FCC became convinced that 5G was going to revolutionize the world and that the U.S must have a major role in the development of the technology. It went so far as having real discussions about the U.S. government buying Nokia or Ericsson.

It turns out that the whole 5G fiasco was mostly the runaway result of hard lobbying by the big cellular carriers to get more spectrum. Of course, the carriers were also hopeful of tax breaks and handouts to help them towards the 5G future.

And that highlights the real danger of the government trying to meddle with technology. Studying trends and assessing the impacts of technologies sounds sensible. Making sure the U.S. has a source in the supply chain for new technologies sounds like a great idea after a new technology reaches the market. But it never turns out well when any government goes further. The government should not be in the business of picking winners and losers. Doing so ends invariably leads to huge government handouts for the corporations involved. But such funding is likely to never produce the intended results – because the worldwide economy and industries are the ultimate ones that can turn new technologies into something useful – and government interference in that process is much more likely to hinder than help new technologies.

Should Grant Networks Allow High Prices?

I wrote a blog yesterday about a grant application filed in Nebraska by AMG Technology Investment Group (Nextlink Internet). This is one of the companies that won the RDOF reverse auction at the FCC but is still waiting to hear if it will be awarded the FCC subsidy funding.

One of the things that caught my eye on the grant request was the proposed broadband rate. Nextlink is proposing a rate of $109.95 for a 2-year contract for 100/100 Mbps. I have to assume that the rate without a 2-year contract is even higher – or maybe a customer can’t buy broadband for less than a 2-year commitment.

Today’s blog asks the question – should higher-than-market rates be allowed on a network that is being subsidized with public funding? This is not the first time I’ve seen a rate that high, and I can recall at least two other RDOF winners planning on basic rates of at least $100. One example is Starlink, which also has not yet been approved by the FCC for RDOF and which has a $110 rate.

I don’t think there is any question that a $110 rate is higher than the market. Should an agency that awards grants or other broadband subsidies somehow insist that broadband rates are somehow tied to market rates? That’s a lot harder question to answer than you might think because the question implies that these agencies have the power to regulate or cap broadband prices in grant areas.

The Ajit Pai FCC voluntarily gave away the right for the FCC to regulate broadband rates when it gave up Title II authority. It’s not clear if that decision has any bearing on other federal agencies that award grants like NTIA, EDA, and USDA. Can these federal agencies insist on affordable rates for ISPs that take federal funding? If not, can the agencies at least consider rates when deciding who gets grant funding – can these agencies assign fewer qualifying grant points to somebody with a $100 basic rate compared to somebody with a $50 rate?

I think we got a hint that considering rates is probably allowed since Congress made it clear with the BEAD legislation that the NTIA has no authority to regulate rates – this implies that without that specific Congressional mandate that the NTIA might have had that authority. But even the specific BEAD edict might not mean that rates can’t be considered in BEAD grants.

It’s an even fuzzier question if a State has the right to set rates. There have always been two schools of thought about the scope of State versus Federal authority in terms of regulating broadband. I’ve heard it argued that a State’s right to regulate broadband rolls downhill from the federal ability to regulate. If you believe in this philosophy, then a State’s right to regulate broadband rates was severely weakened when the FCC gave up its rights. But I’ve also heard just the opposite argued – that a State has the right to step into any regulatory void left by federal regulators. We recently saw this concept in action when courts recently upheld California’s right to implement net neutrality rules after the FCC washed its hands of such authority. If you accept this view of regulation, a State can tackle rate regulation if the FCC refuses to do so.

To be fair to Nextlink, the company also offers less expensive broadband rates. Its fixed wireless products, rates start at $69.95 for a 15 Mbps download connection. Fiber prices start at $49.99 for a 25 Mbps download speed. But these lower rates for slower speeds raise more questions for me. Many of the current broadband grants require building networks that can deliver at least 100/100 Mbps broadband. Should an ISP be able to use a grant-funded network to offer anything slower? The whole point of these grant programs is to bring faster broadband across America. Should a network that is funded with public money be allowed to set slower speeds for the most affordable options? If so, it’s hard to argue that the ISP is delivering 100/100 Mbps broadband everywhere. If the agencies awarding grants can’t demand affordable rates, perhaps they can demand that 100/100 Mbps is the slowest product that can be offered on a grant-subsidized network. Nobody is forcing ISPs to accept grant funding and other subsidies, but when they elect to take public money, it seems like there can be strings attached.

I also wonder if ISPs benefitting from a grant-subsidized network ought to have the ability to force customers into long-term contracts? It’s not hard to make the case that the public money paying for the network should justify public-friendly products and practices.

As a final note, this topic highlights another glaring shortfall of awarding subsidies through a reverse auction rather than through grants. With RDOF, the reverse auction determined the winner of the subsidy first, and then the FCC proceeded to find out the plans of the subsidy winners. There were no pre-determined rules for issues like rates that an RDOF winner was forced to accept as part of accepting the public money. Let’s not do that again.

Please Make Grant Applications Public

Most broadband grant programs do not publish open grant applications for the public to see. But we are in a time when an ISP that is awarded funding for bringing a new broadband network is likely to become the near-monopoly ISP in a rural area for a decade or two to come. The public ought to get to see who is proposing to bring them broadband so that these decisions are not made behind closed doors.

One of the interesting things about writing this blog is that people send me things that I likely would never see on my own. It turns out that the Nebraska Public Service Commission posts grant applications online. I think that every agency awarding last-mile grant funding should be doing the same.

The particular grant application that hit my inbox is from AMG Technology Investment Group (Nextlink Internet). This grant seems to be asking for state funding in the same or nearby areas where Nextlink won the RDOF auction. The FCC hasn’t yet made that RDOF award to Nextlink almost 20 months later.

The person who sent me the grant application wanted to point out inconsistencies and that the application didn’t seem to be complete. I’m not sure that’s unusual. One state grant office told me recently that they outright reject about half of all grant applications for being incomplete. The email to me included a number of complaints. For example, they thought there is an inconsistency since this grant asks to fund a 100/100 Mbps network when the speed promised for RDOF was symmetrical gigabit. They were dismayed that the grant application didn’t include a specific network design.

The point of this blog is not to concentrate on this particular grant application but to point out that letting the public see grants can raise the kind of questions that ended up in my inbox. I have no knowledge of the Nebraska PSC grant program or its processes. The PSC might routinely ask a grant applicant to fill in any missing gaps, and for all I know, they may have already asked questions of Nextlink. The point of today’s blog is that allowing the public to see grant requests can prompt interesting observations and questions like the ones sent to me. Certainly, not all public input will be valid, but there can be issues raised by the public that a grant office might not otherwise hear.

I’d like to praise the Nebraska PSC for putting the grant application online. In most state grant programs, the broadband grant requests are never shown to the public – even after they are awarded. At most, grant offices might publish a paragraph or two from the executive summary of a grant request.

I talked to several grant offices about this issue, and they told me that they are not comfortable disclosing financial information about a grant applicant. That’s a valid concern, but a grant application can easily be structured so that financial information is in a separate attachment that could be kept confidential if requested by the applicant. I would note that some grant applicants I work with like electric cooperatives would welcome disclosing everything as a way to compare them with other applicants.

I don’t think there is any question that the public wants to see grant requests from the companies that are vying to become the new dominant ISP in the community. Communities ought to have a chance to weigh in against an ISP they don’t want, against a technology they don’t want, or to weigh-in in favor of a particular ISP if there are multiple ISPs asking for funds for the same geographic footprint.

Letting the public see grant requests is also a way to fact-check ISPs. Most states will tell you that the folks reviewing broadband grants often don’t have a lot of experience with the inner workings of ISPs. This means that it is easy for an ISP to snow a grant reviewer with misleading statements that an experienced reviewer would catch immediately. ISPs will be less likely to make misleading claims if they think the public will call them out and threaten the chances of winning the grant.

I know that publishing grant requests can open a whole new can of worms and extra work for a grant office. But I think the extra public scrutiny is healthy. I would think a grant office would want to know if false or misleading claims are made in a grant request. On the flip side, a grant office will benefit by knowing if the public strongly supports a grant request. Shining light on the grant process should be overall a positive thing. It’s a good check against awarding grants that aren’t deserved. But it’s also a way to make sure that grant offices are being fair when picking winners.

Small ISPs and the ACP

I’ve recently talked to several small ISPs who are having trouble navigating the FCC’s Affordable Care Program (ACP). These ISPs are wondering if they should drop their participation. This is the program that gives a $30 monthly discount to customers who enroll in the plan through their ISP. The program is administered by USAC which also administers the various Universal Service Fund programs.

The stories I’ve heard from these ISPs show that the program is challenging to use and slow to reimburse ISPs. There is no one major specific complaint about the administration of the program but a string of problems. Consider some of the following (and the list of complaints is much longer):

  • The rules are overly complex. As an example, an ISP must have different staff assigned to four functions – an Administrator, Operations, Analyst, and Agent. It turns out that various tasks can only be performed by one of these positions – something not explained in the rules.
  • There doesn’t seem to be any training available to ISPs joining the program. Instead, ISPs have to wade through the 166-page FCC rulemaking that created the ACP program. The FCC says there have been over 700 training sessions for people on how to enroll new end-user customers, but the ISPs I talked to couldn’t find any online resources for explaining the program from the ISP perspective – no videos or no frequently asked questions helping ISPs figuring out how to get reimbursed from the program. .
  • The ACP system returns unhelpful error messages when something doesn’t work. A common error message is “Your user name doesn’t seem to exist” which is returned for a variety of online problems encountered by people who are logged into the system and clearly have valid user IDs. Error messages for any online system ought to be worded to tell a user what they did wrong. For example, an error message that says, “This function can only be done by an Analyst” would help an ISP figure out the problem.
  • There is a hotline for ISPs, but unfortunately, the folks manning the hotline can’t answer even basic questions about the online system and refer a caller to the written rules. It’s obvious that the people answering the calls have never navigated through the system.
  • One ISP had been in the system for a while and found out it wouldn’t be paid for the discounts given to customers since the ISP hadn’t submitted a customer’s last four digits of a social security number. This doesn’t make sense since the FCC had ruled that the SSN is not needed to enroll a customer – the ACP rules allow for numerous other forms of identification. Customers didn’t need to input an SSN number to join the ACP, and the ISP never asked for them. They are now wondering if they will ever get reimbursed for these claims.
  • There is a disconnect between customer approval and the ISP portal. Customers are told through the customer portal that they are successfully enrolled in the ACP program, but when an ISP asks for reimbursement, it is often told that it must provide more identification to get reimbursed. In this situation, the customer is already getting the discount while the ISP is not yet eligible for reimbursement and will end up eating the customer discount.

Overall, these ISPs told me that navigating the system and the rules is a major disincentive for them to participate in the ACP.

Why are these kinds of issues problematic for smaller ISPs? Bigger ISPs can assign a team to a program like this and give them enough time to figure out the nuances. Small ISPs have tiny staffs, particularly in the backoffice. Small ISPs can’t devote the many hours and days needed to solve the ACP puzzle. The small ISPs I’ve heard from are wondering why they are even bothering with ACP. The program is not bringing new customers but mostly is giving discounts to existing customers. There is no reimbursement for the hours the ISPs spend learning the system or navigating it each month. After all of the hassle, the ISPs are not receiving full reimbursement in every case, and even when they do, the payments are slow. ISPs have also heard through the grapevine that they will eventually be audited to make sure there is no fraud – anybody who has been through this kind of audit shudders at the idea.

Everything I read says that most of the discounts for ACP are being claimed by cellular resellers and not facility-based ISPs. I don’t know if that is finally changing, but if this isn’t made easier for ISPs, it’s likely that many ISPs will drop out or stop accepting additional ACP customers. The final issue ISPs worry about is that the program is only funded for perhaps two more years. They worry about the impact on their business if the program ends abruptly.

To be fair, any new online system has bugs. But ACP was launched in January and replaced the similar EBB program. We are now far past the initial launch window, and nobody seems to be working to make the system usable. The FCC wants to brag about how well ACP is doing, but they need to put some effort into making this worth the effort for ISPs.

The FCC Tackles Pole Replacements

In March, the FCC issued a Second Further Notice of Proposed Rulemaking FCC 22-20 that asks if the rules should change for allocating the costs of a pole replacement that occurs when a new carrier asks to add a new wire or device onto an existing pole. The timing of this docket is in anticipation of a huge amount of rural fiber construction that will be coming as a result of the tsunami of state and federal broadband grants.

The current rules push the full cost of replacing a pole onto the entity that is asking to get onto the pole. This can be expensive, and is one of the factors that make it a challenge for a fiber overbuilder or a small cell site carrier to get into poles.

There are several reasons why a pole might need to be replaced to accommodate a new attacher:

  • The pole might be completely full, and there is no room for the new attacher. There are national safety standards that must be met for the distance between each attacher on a pole – these rules are intended to make it safe for technicians to work on or repair cables. There is also a standard for the minimum clearance that the lowest attacher must be above the ground – a safety factor for the public.
  • The new attacher might be adding additional weight or wind resistance to a pole – there is a limit on how much weight a pole should carry to be safe. Wind resistance is an important factor since there is a lot of stress put onto poles when heavy winds push against the wires.

This docket was prompted in 2020 when the NCTA – the Internet and Television Association filed a petition asking that pole owners pay a share of pole replacement costs. The petition also asked for an expedited review process of pole attachment complaints between carriers.

NCTA makes some valid points. Many existing poles are in bad shape, and the new attacher is doing a huge favor for the pole owner if it pays for poles that should have been replaced as part of regular maintenance. Anybody who works in multiple markets knows of places where almost all of the existing poles are in bad shape and should be replaced by the pole owner. The FCC labels such poles as already being out of compliance with safety and utility construction standards and asks if it’s fair for a new attacher to pay the full cost of replacement. The FCC is asking if some of the costs of a replacement should be allocated to the pole owner and existing attachers in addition to the new attacher.

Not surprisingly, both AT&T and Verizon have responded to this docket by saying the current cost allocation processes are fine and shouldn’t be changed. This is not an unexpected response for two reasons. First, these two companies probably have more miles of cable on existing poles than anybody else, and they do not want to be slapped with paying a share of the cost of replacing poles from new attachers. More importantly, the big telcos have always favored rules that slow down construction for competitors – pole attachment problems can bring a fiber construction project to a screeching halt.

In contrast, INCOMPAS filed comments on behalf of fiber builders. INCOMPAS said that pole attachment issues might be the single most important factor that will stop the federal government from meeting its goals of connecting everybody to broadband. INCOMPAS says that the extra costs for pole replacement in rural areas can sink a fiber project.

As usual with a regulatory question, the right answer is somewhere in the middle of the extremes. It is unfair to force a new attacher to pay the full cost to replace a pole that is already in bad shape. Pole owners should have an obligation to do regular maintenance to replace the worst poles in the network each year – and many have not done so. It’s also fair, in some circumstances, for the existing attachers to pay a share of the pole replacement when existing attachments are in violation of safety rules. And, if we are going to build billions of dollars of new broadband networks as a result of grants, it makes sense for regulators to gear up for an expedited process of resolving disputes between carriers concerning poles.