Deregulating Text Messaging

“This is one of the oddest dockets I’ve ever seen”. That’s roughly quoting myself several times over the last year as I read some of the things that the current FCC is up to. I find myself saying that again as I read the FCC’s recent docket that proposes to classify SMS text messaging as a Title I information service. Their stated reason for the reclassification is that it will make it easier to fight text message spam, and that stated reason is where the FCC loses me.

Text message spam is a real thing and I’ve gotten some annoying text spam over the last year and I’d sure hate to see my texting inbox get polluted with crap like my email inbox. However, I doubt that you’ll find any technologist in the industry that will tell you that the way to fight spam of any kind is by waving a magic wand and changing the way that something is regulated. The way you fight spam is to put barriers in place to detect and block it – and that is something that only the carriers that control the flow inside of a communications path can do. It’s the solution that the FCC themselves just pushed recently to try to stop robocalling – by demanding that the telephone industry find a solution.

Yet here sits a docket that blindly declares that reclassifying texting as an information service will somehow dissuade bad actors from sending spam text messages. I’m pretty sure that those bad actors don’t really care about the differences between Title I and Title II regulation.

One of the interesting things about this filing is that past FCCs have never definitively said how texting is regulated. Over the years the industry has come to assume that it’s regulated under Title II just like a telephone call – because functionally that’s all a text message is, a telephone call made using texted words rather than a voice call.

To some extent this docket is the first time the FCC has every officially addressed the regulatory nature of text messaging. In the past they made rulings about texting that implies a regulatory scheme, but they never have officially put texting into the Title II category. Now they want to remove it from Title II authority – the first time we’ve ever been told definitively that text is already a Title II service. Here are some of the past FCC treatment of the regulatory nature of text messages:

  • In 1994 the FCC ruled that systems that store and forward telecommunications messages, like SMS texting are ‘interconnected’ services, which at that time were clearly regulated by Title II. But there was no specific statement at the time that texting was a Title II service.
  • In the Telecommunications Act of 1996 the FCC defined a telecommunications service for the first time – which was defined as a service that uses telephones and the PSTN to communicate. The 1996 Act didn’t mention texting, but it clearly fits that definition.
  • In 2003 the FCC declared that text messages were ‘calls’ when the agency implemented the Telephone Consumer Protection Act, which was the same treatment given to other Title II telephone services.
  • In 2007 the FCC included texting as one of the Title II services for which cellular carriers must allow roaming.
  • In 2011 USAC began enforcing the inclusion of text revenues as a Title II interstate revenues that used to assess monies owed to the Universal Service Fund.

All of these regulatory actions implied that texting is a Title II service, although that was never explicitly stated until now, when the FCC wants to reclassify it to be an information service. Reclassification doesn’t pass the ‘quack like a duck test’ because telephone calls and anything like them fit squarely as Title II services. Texting is clearly a type of telephone call and any person on the street will tell you that a text message from a cellphone is just like a phone call using text rather than voice.

Unfortunately, the only conclusion I can draw from this docket is that the FCC has an ulterior motive since their stated reasons for wanting to reclassify texting are pure bosh. There seem to be no obvious reasons for the reclassification. There are no parties in the industry, including the cellular carriers, that have been clamoring for this change. Further, the change will have the negative impact of further shrinking the Universal Service Fund – and expanding rural broadband is supposedly the number one goal of this FCC.

This is disturbing for somebody who has followed regulation for forty years. By definition, regulatory agencies are not supposed to push for changes without first opening an industry-wide discussion about the pros and cons of any suggested changes. Regulators are not supposed to hide the motives for their ideas behind false premises.

The only justification for the FCC’s proposed ruling that I can imagine is that the FCC wants to kill all Title II regulation. It seems they are on a mission to eliminate Title II as a regulatory category to make it hard for future FCC’s to reregulate broadband or to bring back network neutrality.

If that’s their real agenda, then we ought to have an open discussion and ask if we ought to eliminate Title II regulation – that’s how it’s supposed to work. The rules establishing the FCC call for a process where the agency floats new ideas to the world so that all interested parties can weigh in. The FCC is not ready to face the backlash from openly trying to kill Title II regulation, so instead of an open debate we are seeing a series of ridiculous attempts to chip quietly away at Title II regulation without overtly saying that’s their agenda.

In my opinion the time when we ought to stop regulating telephone services is getting closer as technology changes the way that we communicate. But that time is not here and there is still room for monopoly abuse of text messaging. There are a number of examples over the last decade where carriers have blocked text messages – sometimes when they disagreed with the content.

I’m disappointed to have an FCC that is using regulatory trickery to achieve their agenda rather than having a bold FCC that is willing to have the public debate that such a decision deserves. Telephone and related services like text messaging were regulated for many reasons and we ought to examine all of the pros and cons before deregulating them.

I’m guessing that this FCC wants to kill Title II regulation without ever having to tell the public that’s their agenda. I think they want to deregulate text messaging and then point to that deregulation as the precedent to justify deregulating all Title II services without having to suffer to criticism that is sure to come when the public realizes this closes the door on net neutrality.

A Roadmap to Better Broadband Grants

I’ve been thinking about the effectiveness of federal broadband grant programs. We’ve had three recent major sets of federal grant awards – the stimulus grants of 2007, the first CAF II grants in 2015 and the recently awarded CAF II reverse auctions. We also have an upcoming e-Connectivity grant program for $600 million. I think there are lessons to be learned from studying the difference in the results between these grants. These lessons apply to State grant programs as well as any new federal programs.

Don’t Reward Slow Broadband Speeds. Probably the most bone-headed decision made by the FCC in my memory was handing out billions in CAF II to upgrade rural copper to 10/1 Mbps. This wasn’t considered decent broadband at the time of this decision and yet these upgrades continue to be funded today. The FCC could still take back the remaining CAF II money and redirect these funds to a reverse auction, which we just saw produced much faster speeds in areas with far less density than the CAF II footprint.

Keep Politics Out of It. The CAF II decision to give all of the funding to the big telcos was purely political and resulted in a huge waste of money that could have created many real broadband solutions. The FCC is supposed to be an independent agency, and it’s shameful that lobbyists were able to kill the reverse auction originally planned for CAF II. We are seeing politics back on the table with the e-Connectivity grants where Congress created a feel-good grant program, but then saddled it with a restriction that no more than 10% of homes in a study area can have existing 10/1 Mbps speeds. The reason for this provision was not even hidden, with the big telcos saying they didn’t want federal grant money to be used to compete against them.

Don’t Fund Inadequate Technologies. AT&T is using LTE cellular broadband to satisfy CAF II. This technology will never provide adequate broadband. In the recent reverse auction we saw money going to high-altitude satellite companies. Regardless of speeds that can be delivered with these satellites, the latency is so poor that it limits the ability to use the broadband for important activities like working at home or taking on-line classes.

Don’t Stress Anchor Institutions over People. The stimulus grants required middle mile providers to pop off of highways to build expensive last mile fiber to a handful of anchor institutions – schools, libraries, etc. While these anchor institutions need good broadband, so do the neighborhoods around them. This requirement added a lot of cost to the middle-mile projects as well as made it harder for anybody else to build a last mile network since the biggest bandwidth users in a community already have fiber.

Build to Industry Practices. The stimulus grants required that fiber builders conduct expensive environmental studies and historic preservation studies. That was the first time I ever saw those requirements in my forty years in the industry. Since telecom infrastructure is built almost entirely in existing public right-of-way these restrictions added a lot of cost but zero value to the projects.

Penalize Companies that Cheat. There needs to be repercussions for companies that cheat on grant applications to win the funding. The biggest area of cheating is claiming speeds that the technology can’t deliver. The FCC follows up grants with a decent speed-test program, but the worst repercussion in failing these tests is to not get funding going forward. A carrier that badly fails the speed tests should have to return the original grant funding. I’m also hearing rumors that the many rural households covered by CAF II will not get the promised upgrades – and if so, the big telcos should be forced to return a proportionate amount of that funding for homes that don’t get the promised upgrades.

AT&T Phasing out Lifeline?

A lot of homes still rely on the FCC’s Lifeline program to get a discount on their telecom bills. The program is funded through the Universal Service Fund and administered through USAC. The lifeline program provides a $9.25 discount per household that can be applied to landline telephone, cellular telephone or landline data – assuming customers use a provider that participates in the Lifeline program.

AT&T still touts that they participate in the Lifeline program, but numerous customers around the country received notifications this year notifying them that they were no longer eligible for the Lifeline program. This particular notification was from a customer in Houston, Texas. If you visit the USAC website and look for Lifeline providers in Houston, AT&T is the only company that is listed for landline service. There are numerous cellular providers listed in Houston, but AT&T is not among them.

People might wonder why landline Lifeline is still important. Landline penetration rates are reported each year by the Center for Disease Control. (CDC). They track landline and cellular penetration rates through a huge annual survey that studies the topic to understand how the medical community can communicate best with the public during a medical emergency. They reported last year that the nationwide landline penetration rate was at 45% of households – a number far greater than many people would guess.

I hadn’t looked at residential phone rates in a while and just looked at AT&T’s residential rates. In case you haven’t looked at landline rates, they are not cheap. AT&T has three packages: Complete Choice comes with Caller ID and 9 other features (not including Voice Mail) for $40 per month. Complete Choice Basic is a basic line plus Caller ID and Call Waiting for $36. A basic phone line with no features is $28 per month. None of these prices include taxes and fees that add at least another $10 per month. None of these packages includes long distance. AT&T offers lower rates for those that bundle telephone with Internet or cable TV (although they are actively knocking people off their TV product).

In Texas, AT&T mitigated the Lifeline discontinuation notices somewhat by offering discounts of between $8 and $12 per month for qualifying customers who will sign a term contract, and who know to ask for the discount. But since this wasn’t widely advertised there is a good chance that few people asked for the discount. Discount plans like this also come and go and there is no guarantee of this discount surviving into the future.

I can’t see that there are any penalties for AT&T no longer offering Lifeline. There was a time when the big telcos had to participate in the program, but as state Commissions have deregulated telephone service any such requirement probably no longer applies.

What’s shameful about this is that I am sure that any AT&T executive will say that the company supports the Lifeline program. It certainly says so on their website. Both the AT&T and the USAC website imply that customers in Texas can still enroll in Lifeline, but numerous reports on complaint sites show this not to be the case. Perhaps a really persistent customer can still fight through the customer service gauntlet to get the Lifeline discount, but many customers report they’ve lost the discount.

What’s also disturbing about this is that AT&T doesn’t even have to go through the process of qualifying customers for Lifeline eligibility. In Texas customers must certify eligibility by going through the Public Utility Commission. The big telcos complained in the past that certifying customers was expensive and exposed them to liability if they granted eligibility to unqualified households. But Texas and a number of other states took over the certification process, meaning the telcos have little cost or liability for participating in the program, since USAC reimburses them for discount granted to customers. Why would a big telco stop giving the discounts when it costs them so little?

Another Spectrum Battle

Back in July the FCC issued a Notice of Proposed Rulemaking seeking comments for opening up spectrum from 3.7 GHz to 4.2 GHz, known as the C-Band. As is happening with every block of usable spectrum, there is a growing tug-of-war between using this spectrum for 5G or using it for rural broadband.

This C-Band spectrum has traditionally been used to transit signals from satellites back to earth stations. Today it’s in use by every cable company that receives cable TV signals at a ‘big-dish’ satellite farm. The spectrum had much wider use in the past when it was used to deliver signal directly to customers using the giant 7 – 10 foot dishes you used to see in rural backyards.

This spectrum is valuable for either cellular data or for point-to-multipoint rural radio broadband systems. The spectrum sits in the middle between the 2.4 GHz and the 5.8 GHz used today for delivering most rural broadband. The spectrum is particularly attractive because of the size of the block, at 500 megahertz.

When the FCC released the NPRM, the four big satellite companies – Intelsat, SES, Eutelsat and Telesat – created the C-Band Alliance. They’ve suggested that some of their current use of this spectrum could be moved elsewhere. But where it’s not easy to move the spectrum, the group volunteered to be the clearing house to coordinate the use of C-Band for other purposes so that it won’t interfere with satellite use. The Alliance suggests that this might require curtailing full use of the spectrum near some satellite farms, but largely they think the spectrum can be freed for full use in most places. Their offer is seen as a way to convince the FCC to not force satellite companies completely out of the spectrum block.

I note that we are nearing a day when the need for the big satellite earth stations to receive TV might become obsolete. For example, we see AT&T delivering TV signal nationwide on fiber using only two headends and satellite farms. If all TV stations and all satellite farm locations were connected by fiber these signals could be delivered terrestrially. I also note this is not the spectrum used by DirecTV and Dish networks to connect to subscribers – they use the K-band at 12-18 GHz.

A group calling itself the Broadband Access Coalition (BAC) is asking the FCC to set aside the upper 300 megahertz from the band for use for rural broadband. This group is comprised of advocates for rural wireless broadband, including Baicells Technologies, Cambium Networks, Rise Broadband, Public Knowledge, the Open Technology Institute at New America, and others. The BAC proposal asks for frequency sharing that would allow for the spectrum to be used for both 5G and also for rural broadband using smart radios and databases to coordinate use.

Both the satellite providers and the 5G companies oppose the BAC idea. The satellite providers argue that it’s too complicated to share bandwidth and they fear interference with satellite farms. The 5G companies want the whole band of spectrum and tout the advantages this will bring to 5G. They’d also like to see the spectrum go to auction and dangle the prospect for the FCC to collect $20 billion or more from an auction.

The FCC has it within their power to accommodate rural broadband as they deal with this block of spectrum. However, recent history with other spectrum bands shows the FCC to have a major bias towards the promise of 5G and towards raising money through auctions – which allocates frequency to a handful of the biggest names in the industry.

The BAC proposal is to set aside part of the spectrum for rural broadband while leaving the whole spectrum available to 5G on a shared and coordinated basis. We know that in real life the big majority of all ‘5G spectrum’ is not going to be deployed in rural America. The 5G providers legitimately need a huge amount of spectrum in urban areas if they are to accomplish everything they’ve touted for 5G. But in rural areas most bands of spectrum will sit idle because the spectrum owners won’t have an economic use for deploying in areas of low density.

The BAC proposal is an interesting mechanism that would free up C-Band in areas where there is no other use of the spectrum while still fully accommodating 5G where it’s deployed. That’s the kind of creating thinking we need to see implemented.

The FCC keeps publicly saying that one of its primary goals is to improve rural broadband – as I wrote in a blog last week, that’s part of their primary stated goals for the next five years. This spectrum could be of huge value for point-to-multipoint rural radio systems and would be another way to boost rural broadband speeds. The FCC has it within their power to use the C-Band spectrum for both 5G and for rural broadband – both uses can be accommodated. My bet, sadly, is that this will be another giveaway to the big cellular companies.

The New e-Connectivity Pilot Grants

In March Congress passed a new $600 million grant/loan program to build rural broadband. The project has been labeled as the e-Connectivity Pilot and it’s expected that the specific rules for seeking the funding will be released early on 2019. The USDA sought public comments on the program in September and is now working out the details of how the awards will be made.

Anybody interested in these grants should get serious about it now, since it’s likely that the grant application window might not be any longer than 60 to 90 days. Getting ready means having a detailed and solid business plan as well as already having a source of funding for any parts of a project not covered by these grants. The grants are also likely to include provisions like getting a professional engineer to approve the network design – so designs need to be specific and not generic. It’s likely that the USDA will stick with their existing grant application process – and those forms have always been a bear to complete.

There is one huge hurdle to overcome for this program since an application can’t cover an area that has more than 10% of households with access to broadband speeds of at least 10/1 Mbps. Considering that the CAF II awards and more recent CAF II reverse auctions awards already will supposedly provide this kind of speed to huge swaths of the country, there are not a lot of areas left that will meet this requirement.

Claiming that an area meets the 90% unserved threshold will be also be difficult because grant applications can be challenged by carriers that serves the grant area today. I have to assume that CAF II reverse auction winners will also be able to challenge. The big rub is that the original CAF II award winners still have until 2020 to complete their build-out and they will certainly challenge awards for any CAF II area that has not yet been updated. The CAF II reverse auction winners have ten more years to complete their buildout. The USDA will likely be obligated to reject an application that encroaches on any of the CAF II footprint – even if those areas don’t have broadband today.

This gets even more complicated since the CAF II reverse auction awarded funding to fixed wireless and satellite providers. They were funded to serve specific little pockets of unserved homes, but it won’t be hard for them to claim that the CAF II award dollars will allow them to serve much larger areas than the tiny boundaries they bid on.

The process of proving a study area isn’t served will be further complicated by the USDA’s reliance on the FCC’s broadband maps, which we all know to be highly inaccurate in rural America. This all adds up to mean that an applicant needs to prove the area doesn’t have broadband today and will not be getting it over the next decade from one of the CAF winners. They will also need to overcome any errors in the FCC maps. This is going to be hard to prove. I expect the challenge process to be brutal.

From the instant I saw the 90% unserved test, I’ve assumed that the most likely candidates for these grants will be somebody that is already planning on building broadband across a large footprint. If such an applicant is careful to only identify the scattered homes that meet these grant rules, then this funding can help to pay for a project they were going to build anyway. The other natural set of applicants might be those companies that already took CAF II funding – they could use these grants to fill in unserved homes around those build-out areas. The industry is going to be in an uproar if a lot of this funding goes to the big incumbent telcos (who won’t challenge their own applications).

Another issue to consider is that the USDA can award funding as a combination of grants and loans. These awards will surely require matching funding from an applicant. Anybody that is already planning on funding that matching with bank or other financing might find it impossible to accept USDA loans for a portion of a project. USDA loan covenants are draconian – for example, USDA loans usually require first priority for a default, which will conflict with commercial lenders. It’s always been nearly impossible to marry USDA debt with other debt.

rant applicants should also be aware that the USDA is going to be highly leery of awarding money to start-ups or somebody that is not already an ISP. The agency got burned on such grants awarded with the stimulus grants and has indicated that they are looking for grant award winners to have a strong balance sheet and a track record of being an ISP. This will make it nearly impossible for local governments to go after the money on their own. Chances of winning will be greatly enhanced by public/private partnerships with an existing ISP.

I know my take on the grants sound highly pessimistic. Congress saddled these grants with the 90% unserved test at the coaxing of the big telcos who wanted to make sure these funds weren’t used to compete against them. Past USDA grants had the opposite requirement and could consider awards to areas that didn’t have more than 10% of houses with broadband. However, if you are able to identify a service area that can survive the challenge process, and if you have the matching funded lined up, these grants can provide some nice funding. I’m not taking any bets, though, on the USDA’s ability to award all of the money – there might not be enough grant applications that can make it through the gauntlet.

Fighting Spoofing

One of the biggest problems with the telephone network today is spoofing – where robocalls are generated using stolen numbers to mask the identity of the caller. Spoofing and robocalls are the biggest source of complaints to the FCC and NANC (the North American Numbering Council) reports that in 2016 there were 2.4 billion robocalls per month – a number that has surely grown. As recently as a year ago I rarely got robocalls on my cellphone but now get half a dozen per day.

The FCC called upon NANC to find a solution to the problem. NANC used the Call Authentication Trust Anchor Working Group to find a solution to the problem. In May of this year the FCC accepted the recommendations of this group to implement a ‘taken’ system to authenticate that calling numbers are authentic.  Last week Chairman Ajit Pai asked the industry to speed up implementation of the solution, warning that the FCC would issue an order to do so if the industry didn’t solve the problem quickly.

The proposed solution involves a new process used to authenticate the originating telephone number for calls. The concept is to issue ‘tokens’ to carriers that allow them to authenticate, in real-time, that the originating number of a telephone call is really from the party that owns the number. This will mean a whole new overlay on the PSTN to make this validation quickly before a call is terminated.

In addition to developing the specifications for how the process will work, the NANC working group recommended the following industry process for making this work:

  • The industry needs to select a governance authority to take ownership of the process so that it’s implemented uniformly across the industry;
  • The working group also recommended that a policy administrator be chosen that will administer the day-to-day implementation of the new process;
  • The working group also recommended specific roles and responsibilities for the governance authority and policy administrator;
  • Set the goal to have those two entities in place within a year. I think the FCC Chairman’s frustration is due to the fact that this was recommended in May 2018 and I don’t think that the governance authority or policy administrator have been chosen.

Of course, this means a new industry protocol and process and comes with a slew of new acronyms. Primary among this is SHAKEN which represents new SIP protocols used specifically for purpose of creating the all authentication tokens. Also used is STIR (secure telephone identity revisited) which is the IETF group that created the specific protocols for telephony. This leads to the cute acronym SHAKEN/STIR which is being used to describe the whole process (and which would definitely not be approved by James Bond).

The working specifications recognize that what is being prepared is just the first step in the process. They understand that as soon as they implement any solution that spammers will instantly begin looking for workarounds. The initial concept is to first begin be implementing this with the largest carriers and that will still leave a lot of holes with numbers assigned to smaller carriers, numbers deep inside PBX trunk groups, numbers used for Internet calling like Skype. However, the goal is to eventually cover the whole industry.

The concept is that this is going to have to be a dynamic process. I envision it much like the software companies that build spam filters. The group making this work will have to constantly create patches to fix vulnerabilities used by spammers. I have my doubts that anything like this will ever fully stop spoofing and that spammers will always be one step ahead of the spoofing police.

This is a concern for small carriers because it sounds like something new that a voice provider is going to have to pay for. It’s likely that there will be vendors that can do this for small carriers, but that sounds like another check to write to be able to provide voice service.

The FCC’s Strategic Plan

In one of those quiet things that the FCC does behind the scenes, the FCC has created a strategic plan for the four years from October 2018 to October 2022. This strategic plan represents their official goals that they report to Congress. This plan also supposedly is how they judge their performance internally. The Strategic Plan has four primary goals:

Strategic Goal 1: Closing the Digital Divide. Develop a regulatory environment to encourage the private sector to build, maintain, and upgrade next- generation networks so that the benefits of advanced communications services are available to all Americans. Where the business case for infrastructure investment doesn’t exist, employ effective and efficient means to facilitate deployment and access to affordable broadband in all areas of the country.

 Strategic Goal 2: Promoting Innovation. Foster a competitive, dynamic, and innovative market for communications services through policies that promote the introduction of new technologies and services. Ensure that the FCC’s actions and regulations reflect the realities of the current marketplace, promote entrepreneurship, expand economic opportunity, and remove barriers to entry and investment.

 Strategic Goal 3: Protecting Consumers & Public Safety. Develop policies that promote the public interest by providing consumers with freedom from unwanted and intrusive communications, improving the quality of communications services available to those with disabilities, and protecting public safety.

 Strategic Goal 4: Reforming the FCC’s Processes. Modernize and streamline the FCC’s operations and programs to increase transparency, improve decision-making, build consensus, reduce regulatory burdens, and simplify the public’s interactions with the agency.

Within each goal there are more specific targeted objectives. For example, the goal for Closing the Digital Divide includes more specific goals like: adopt pro-competitive rules that will expand facility-based competition; ensure that broadband is built everywhere; use reverse auctions to efficiently award USF grants; remove regulatory barriers to next generation technology; develop industry best practices; foster participation in the market by non-traditional participants; free up spectrum to help eliminate the digital divide; continue to free up spectrum in the 600 MHz band; and, conduct timely spectrum licensing.

The period covered by these goals is already barely underway, and yet it’s already interesting to see how the FCC is performing against some of these goals. For example, the first Digital Divide goal is to provide a regulatory environment to promote broadband. This FCC has already tried to walk completely away from regulating broadband, and I have to suppose that they believe the best way to meet this goal is to have no regulations. However, it’s sophistry to claim that lack of regulation is the same thing as a ‘regulatory environment’.

I can think of a number of regulations that would help to foster competition. For example, regulations that curtail monopoly abuses by big ISPs help smaller carriers. Allowing small ISPs to continue to use unbundled copper loops fosters competition (something the FCC wants to end). Making Lifeline funds available to all ISPs fosters competition. Allowing rural carriers to use idle spectrum would foster competition. Many of the actions taken or being considered by this FCC seem to favor large ISPs rather than foster competition. I’m guessing that the giveaways to the big ISPs are covered in the ‘promoting innovation’ goal.

You can make similar observations about many of their goals. For instance, this FCC seems to be antagonistic towards municipal broadband, which makes it hard to meet their goal of fostering participation by non-traditional participants.

I have no doubt that the FCC will claim that they are meeting every goal in the Strategic Plan. The goals are high-level and they are likely to be able to self-grade themselves as successfully meeting each goal. I coach clients on setting goals and I tell them they can’t have soft goals like “bring broadband to more customers in the coming year’. For a goal to have any meaning it has to be far more specific, such as “add 2,000 new broadband customers in the next calendar year”. The FCC’s goals are so nebulous that they can almost do the opposite of the goals and still claim to meet many of them.

Are Millimeter Wave Radios Safe?

Deep inside the filing of the recent docket at the FCC that resulted in eased access to poles for 5G providers were comments that warned about the unknown health impacts of millimeter wave radiation. A group of 225 scientists from 41 countries filed comments in Dockets No. 15-79 asking that the FCC be cautious in implementing millimeter wave radiation without further scientific research into the impacts of prolonged exposure of the radiation to humans. These scientists have all published peer-reviewed papers on the topic.

As scientists are wont to do, their wording sounds cautious, but in scientific language is a stern warning: “There is scientific evidence to cause concern among independent scientists, that this new infrastructure, on top of existing electrical and wireless infrastructures, will cause more harm to mankind and nature . . . The FCC needs to critically consider the potential impact of the 5th generation wireless infrastructure on the health and safety of the U.S. population before proceeding to deploy this infrastructure.”

I looked around the web to find some of the research that’s been done in this area in the past. A quick web search showed:

·         The biggest impact of millimeter wave radiation is on the skin and 90% of the transmitted power is absorbed by the dermis and epidermis layers of the skin – meaning concerns about skin cancer.

·          A 1994 study showed that low levels of millimeter radiation created lens opacity in rats, which is linked to cataracts.

·         A 1992 Russian study found that frequencies between 53-78 GHz caused overall stress in rats that manifested by an increase in arrhythmia and other changes to heart rates.

·         A 2002 Russian study found that exposure to low level 42 GHz radiation had a profound impact on the overall immune systems in rats.

·         A 2016 Armenian study observed that millimeter wave radiation created changes in the cells of bacteria. They postulated that the radiation could do the same to humans. This study concluded that changes to bacteria could change result in increasing drug resistant.

·         Another Armenian study showed that the impact to plants might be even greater than to animals.

·         Dr. Joel Moskowitz of UC Berkeley says that the impacts of all of these other studies might be understated since 5G uses pulsed frequencies. The studies were all done using constant frequency and Dr. Moskowitz has shown that pulsed frequencies magnify the impact of radiation on organisms.

One of the handful of current uses of millimeter wave radiation is in airport scanners, which use frequencies between 24 – 30 GHz. Numerous studies have shown that the likely exposure from these scanners is safe, but made the conclusion based upon the relative short burst of exposure. The issue that has scientists concerned about 5G is continuous transmission from poles in front of homes, and perhaps eventually building some of this frequency into cellphones.

Obviously, no study has yet shown a direct health impact from pole-mounted 5G transmitters since they are just now starting to see their first deployments. The scientific evidence of the dangers of the prolonged low-level radiation has a lot of people concerned. I’ve been contacted by several groups that are starting to alert their local officials of this danger (the inbox of a blogger can be really interesting). Nationwide several local politicians have jumped on the issue.

The question these local groups are asking is if there is any way to use the health concerns to try to block 5G deployment in their neighborhoods. It looks to me like the recent FCC order for allowing small cell sites on poles doesn’t contain much ambiguity – pole owners have a federal mandate to connect the 5G devices. However, that order is being challenged in court by numerous states and cities and I imagine that the health concerns are going to be one of the issues raised in those appeals – with the primary legal tactic challenging if the FCC has the jurisdiction to override cities on pole issues.

Interestingly, Verizon has announced a timeline that seems to be going full bore on installation of 5G transmitters. The industry is usually cautious about relying on any FCC order until it’s been vetted by the courts, but perhaps Verizon is only concentrating on 5G deployment in cities that have invited them to deploy, like Sacramento. It won’t be surprising to see cities ask for an injunction against deployment until the courts decide on the issues.

Disasters and Regulation

Both Ajit Pai, the Chairman of the FCC and Governor Rick Scott of Florida have expressed frustration over the speed of recovery of communication in the Florida Panhandle following hurricane Michael. I don’t think anybody expects communications to be restored quickly in the neighborhood by the shore where even the houses are gone, and the frustration is more with lack of communications in areas that were damaged, but not totally devastated.

There are a number of issues to be considered when looking at the slow recovery – regulation, technology and the profitability of the telecom carriers.

The regulatory issues are pretty clear. Back when AT&T or some smaller independent telephone company would have served this area we would have seen the same sort of response from the telephone companies as we see today from the power companies. AT&T and other telcos from around the country would have mobilized swarms of technicians to replace fallen wires. The electronics vendors would have gone to extraordinary lengths to shuffle and direct all of their resources to the disaster areas.

We had plenty of hurricanes during the time when we had telephone monopolies and the telephone linemen were out working as furiously as the power companies to restore service. I remember from the time when I worked at Southwestern Bell that the company had disaster plans in place and routinely reviewed the plans with employees who might be activated during emergencies – the company made disaster a recovery an everyday part of operating the monopoly business.

But the days of monopoly are long past. The phone company is now far from a monopoly and probably only serves a small percentage of the customers in any given area. The big telcos have had huge layoffs over the years and don’t have the staffs that can swarm the area. I wouldn’t be surprised if they don’t even have disaster plans.

Cable companies are the closest thing we have to monopolies and I expect them to put wires back in a reasonable time after a bad storm – but there are many parts of the hurricane-struck area that aren’t served by a cable company. A cable company is still not likely to get the same swarm of technicians like we saw in the regulated telco days.

As we saw with hurricane Sandy, the telcos no longer rushes to fix the damage. After that storm Verizon decided that they weren’t going to fix the copper and used the storm as an opportunity to switch customers to all-wireless cellular broadband. That’s not a change that can be implemented quickly and we saw some of the areas after Sandy without telecom for months. I expect AT&T is going through the same thought process for much of the area from hurricane Michael and is not going to put back copper wires.

There are also technical issues to consider. I’m willing to bet that the primary cause of frustration is the slow recovery of the cellular towers. Unlike the telephone network there is little redundancy built into the cellular networks. When the towers, antennae and equipment huts around a tower are damaged there is no quick fix, and replacements need to be shipped in. Unlike the major coordinated disaster plans of the old Ma Bell, I doubt that the cellular carriers have react-immediately disaster recovery plans. That kind of planning costs money. The companies would need to hold dozens of cell sites in place as spares that were ready to be shipped out on a moment’s notice. That’s not profitable and there is no regulatory agency insisting that the cellular companies have such plans in place.

As the technology at the edge increases, the time needed for recover from a disaster increases. I remember that this was a concern for telcos when they first placed DSL cabinets in neighborhoods – they knew it would take a lot longer to recover from destroyed electronics compared to the days when the outside network was most just copper wires. The cellular networks are the same, and we are about to enter a time when 5G and other new technologies will place electronics deep into neighborhoods. As slow as the recovery might be for hurricane Michael, it’s going to be worse when we are relying on dispersed 5G electronics deep in the field – it takes longer to fix the electronics and the backhaul networks than it is to put wires back on poles.

The issue that nobody wants to talk about is that all of the big companies in the telecom market are now publicly traded companies that exist to maximize quarterly earnings. Having disaster plans in place costs money – and the big companies these days don’t spend anything extra that’s not mandatory. Call it lack of regulation or call it an emphasis on the profit motive, but the big ISPs and cellular companies have no motivation or incentive to make extraordinary efforts after a disaster. I doubt that the existing regulatory powers even give the FCC any authority to impose such rules – particular with broadband, since the FCC says they are no longer regulating it.

Will South Dakota Get 5G?

The Senate Commerce Committee held a recent hearing in Sioux Falls, South Dakota talking about the benefits that 5G will bring to the state. The hearing was chaired by Senator John Thune, who’s one of the primary telecom-related members of Congress.

A local paper quoted Thune as claiming that 5G is going to transform the economy of the country and of the state. He cited the same 5G talking points used by the FCC in their recent order that mandated cheap and fast connections to poles for 5G transmitters. Thune also said we’re in a race with China, Japan and South Korea and that we can’t afford to lose the 5G race.  FCC Commissioner Brad Carr was at the hearing and said that 5G could bring hundreds of millions of dollars of economic benefit to the state. He also estimated that realizing the benefits of 5G would require hundreds of thousands of small cells mounted on poles and light poles in the state.

The numbers cited in this hearing stun me. What would it mean to have hundreds of thousands of 5G transmitters on poles in South Dakota and could such a network create hundreds of millions of benefits for the state? I decided to try to put those numbers into context.

I still don’t know what a 5G transmitter on a pole will cost. I’ve heard that a full-blown small cell site currently costs more than $15,000 – but I have to assume that in order to make this even reasonably profitable that most of the devices in a 5G network will have to cost far less (and likely have far less functionality than a full-blown small cell site). Assuming thst that manufacturers will somehow get the installed price down to $2,500 each, then deploying on 200,000 poles (derived from “hundreds of thousands of poles”) equates to a cost in the state for just for the pole electronics of $500 million. This doesn’t include the cost of the fiber and other backhaul costs needed to support the 5G gigabit network.

I look at that $500 million number, knowing that it’s only a portion of the cost of deploying 5G and I wonder who is going to make that kind of investment in South Dakota. It’s not going to be the two primary incumbents, CenturyLink or Midco, the primary cable TV incumbent. It’s unlikely that Verizon owns any significant amounts of fiber in the state and they are not likely to do much there. I look around the industry and I can’t see any major player who would make a $500 million investment in a state with so few people.

Consider the demographics. South Dakota is one of the least populated states and the Census estimates the population to be around 870,000 with almost 400,000 housing units. The biggest city is Sioux Falls with a population of 176,000, Rapid City has 70,000 and cities are much smaller after that. When you get outside the cities it’s one of the least densely populated states.

Even if somebody made that kind of investment in South Dakota, how do they make their money back? Very few large public companies today are willing to earn infrastructure returns on investments, which is one of the primary drivers of our infrastructure crisis. Almost nobody other than governments are willing to invest in projects that have 10 and 20-year paybacks. This is the primary reason why no big ISPs are building residential fiber-to-the-home. It’s hard to envision the paybacks for 5G being much faster than fiber.

If I do the math on a $500 million investment, it would require a new revenue stream of $35 per month for every one of the 400,000 households in North Dakota to repay that investment in 3 years. Even at 6 years that’s still $17.50 per month for every household in the state. When you consider that only a much smaller percentage of people would somehow pay for some sort of theoretical 5G product, the cost per potential customer becomes gigantic – if 25% of the people in the state somehow bought a 5G product that would require a new expenditure of $70 per home per month to pay this investment off in the six years that Wall Street might find acceptable.

Of course, the investment is not just $500 million because there are a lot of other costs to bringing a widespread 5G network. To build the kind of network envisioned at the Congressional hearing has to cost far north of a billion dollars, any possibly several billions if a lot of fiber has to be built. That makes me wonder what the 5G hype is all about. It’s hard to envision anybody making this kind of investment in South Dakota. I’m not busting on South Dakota because this same cost to benefit applies to any place outside of large NFL cities with a high density of households.

I don’t have a crystal ball and I can’t say that somebody won’t invest in 5G in states like South Dakota. But I understand business plans and paybacks and I can’t foresee any of the current big ISPs in the industry making the needed investments where housing density is low. Smaller ISPs can’t raise the huge amount of needed money. It’s certainly possible that some of the neighborhoods a few cities in the state might see some 5G, but that’s probably not going to be on anybody’s radar for a while. I’m skeptical because I just can’t see a way to make the math work.