Disappointment with the New FCC Mapping

The FCC took its latest shot at reforming the notoriously inaccurate broadband maps in January.  I put off writing a blog on this until now because I kept hoping that as I reread the new rules that I’d see something positive. But as I’ve reread the details of the proposed new mapping process, I see little improvement on the way. I’m not going to go through all of the details of the FCC order, just point out the proposed areas of the most impact.

The best change in reporting is to require ISPs to draw polygons around areas where customers either have service or where the ISP is willing to provide service within 10 days of a request. This will clean up two problems. It will draw lines around areas where cable company coverage stops in towns and create a clear border. Today, reporting by Census block often shows cable coverage extending far into the rural areas surrounding towns. Second, the consumer challenge process ought to eventually chop down over on rural WISPs and telcos that claim coverage where they can’t provide service.

The FCC totally blew the most important issue with poor mapping because it will continue to allow ISPs to report the fastest advertised broadband speed. This is the primary problem in rural areas today where the big telcos claim 25/3 Mbps advertised speeds and then deliver a 2 Mbps download speed. By not tackling the misrepresented speeds, the FCC really is wasting everybody’s time because this will produce a rural database that is no better than what we have today. Who cares what Frontier or CenturyLink advertise in rural America? We care about the poor speeds the telcos deliver.

The new rules include a two-tier challenge process, One form of challenge can come from governments or Tribes. The government challenge is complex in that anybody that wants to challenge must draw their own versions of the polygons in an area they are challenging. It will be difficult for governments to gather the huge volume of consumer data needed to make such a challenge. A government might gather a thousand speed tests in a rural county and still be unable to draw an accurate polygon of the coverage area. I foresee governments undertaking these challenges, but the process looks to be heavily slanted in favor of ISPs.

There is also a direct consumer challenge, but I think this public is going to be quickly disappointed by the process. A consumer can challenge that a broadband product is available at their home, and if they win, the carrier simply must redraw the polygon to exclude them – consumer challenges won’t bring anybody better broadband. Consumers are mostly going to want to challenge broadband speeds being delivered, but it’s highly unlikely that consumer challenges will succeed since ISPs are perfectly justified in reporting advertised speeds.

The FCC has a testing regimen that it says can be used to resolve major differences between the ISPs and the public – and they tout currently performing a few thousand speed tests per year. Does the FCC not realize that there are millions of homes that are misclassified in today’s mapping? The FCC would have to oversee millions of tests to respond to the flood of challenges that are going to be coming to the public under the new mapping system – and that’s not going to happen.

The proposed FCC mapping rules are not going to fix the problem that the public most cares about. By accepting advertised speeds today, the FCC has excluded huge areas with dreadfully poor broadband from being eligible for federal broadband grants. As long as the FCC defines grant areas by speed rather than by technology, and as long as the FCC keeps allowing ISPs to report advertised speeds, the FCC databases and maps will continue to ignore the reality of rural broadband and will continue to exclude areas from grant availability.

If the FCC moves forward with the recently adapted mapping rules it is headed for a disaster. The agency is foolish to establish a process to allow the public to challenge ISP reporting if it ends up ignoring the vast majority of those challenges. The agency is in for a public relations disaster of epic proportions. I seriously doubt that the FCC understands how irate the public is over poor treatment by ISPs in rural America – and a poorly managed challenge process is going to redirect that anger towards the FCC.

I can already imagine the response the public is going to get to an FCC challenge. “Dear Consumer: We’re sorry you are only getting 2 Mbps broadband service. Your ISP is properly reporting speeds in your area where it advertises a speed of ‘up to 25/3 Mbps’. We are not planning on funding any broadband grants in your area because we are happy with any ISP that advertises 25/3 Mbps broadband. Further, your ISP tells us that you did not properly perform the speed test, so we must reject your challenge. We hope this email is able to reach you. Have a nice day. Sincerely, the FCC”.

Why We Need Broadband Regulation

Anybody that reads this blog knows that I am in favor of broadband regulation. I’m sure ISPs read this and wonder why – because who doesn’t like being unregulated? My feelings on this go back to basic economics – monopolies must either be regulated or split up. By definition, monopolies always end up taking advantage of consumers – unregulated monopolies really can’t help this behavior, because employees and management of monopolies will inevitably take advantage of monopoly market power.

Of course, I’m also fine with breaking up monopolies. It’s actually surprising that stockholders of companies like Comcast aren’t clamoring for this. Comcast stock would be worth a lot more if the entertainment, sports, and cable businesses were separated into separate stocks. We know from seeing the split-up of AT&T that the stocks would be worth even more if the Comcast ISP properties were broken up into regions. Unfortunately, cable companies have gained such a dominant monopoly position in most markets that breaking Comcast into a half dozen smaller ISPs would just result in smaller monopolies.

The only other alternative is to regulate monopolies. Such regulation needs to take the form of protecting the public from monopoly abuse. We know that regulation of broadband companies works. Back when telephone companies were regulated, the public had a favorable opinion of Ma Bell because regulation forced decent customer service and prices. AT&T was far from perfect, but everybody who worked at the company was aware that the company had to answer to regulators – and that’s what stopped the kind of poor treatment that cable companies heap upon the public. There are no repercussions for Comcast or other big ISPs to treat customers poorly today.

Recently we got a glimpse of why regulation works. Charter had asked the the Ajit Pai FCC to implement data caps two years early. The company was prohibited from using data caps until 2023 as part of its agreement to buy Time Warner Cable. When the administration flipped and Chairman Ajit Pai left the FCC, Charter quietly withdrew the request because they knew that the new FCC would reject the request. Just the mere hint of a regulator saying no was enough to stop Charter from asking to implement data caps two years early – which means a savings of millions for customers over the next two years. It’s not hard to imagine big ISP being better citizens if FCC regulation had any teeth.

There are stories in the press every week showing why we need regulation. The latest example I read is that Frontier raised its Internet Infrastructure Charge from $3.99 to $6.99 for every broadband customer. This fee is a great example of an ISP hidden fee. There is no basis for this fee – Frontier instead uses this fee to bill more for broadband so that the company can continue to advertise that it has inexpensive broadband. Hidden fees are dishonest because ISPs can advertise low base fees and then hit customers with the hidden fees on the first bill.

I’m hoping the new FCC implements truth in billing rules and does away with hidden fees. Frontier has every right to increase its broadband prices – but it should do honestly and tell customers the real cost of broadband. The big ISPs have hidden fees on all of the triple play services and get away with this because no regulator tells them to knock off the nonsense.

I opened up this blog saying that small ISPs probably wonder why I’m always asking for more regulation. There are two reasons. My primary reason is that the vast majority of the public has no choice but to buy broadband from one of the big ISPs.

But another important reason is that the vast majority of small ISPs have nothing to fear from basic regulation. They already treat their customers well and don’t engage in the shady practices of the big ISPs. Small ISPs will be better off if their big competitors must be truthful. How much easier would it be to compete against Comcast if the company had to honestly tell customers that standalone broadband costs nearly $90?

This is not to say that there are not bad actors among small ISPs. There are, and we’d all be better off if these companies are also brought to task. The basic premise of regulation is simple – regulators are supposed to protect the public against abuses by regulated companies. This is not to say that regulators can’t go too far in being too pro-public – because regulators’ second role is to foster the industry they are regulating. If regulators go too far, you’ll see me writing blogs about the regulators. But as long as regulators tackle the role of watching out for the public, paint me as pro-regulation.

Another Idea for Federal Broadband Funding

It’s obvious that we need better broadband in the country, and much of that broadband is in rural places that are going to require financial assistance to build. The new White House and Congress are finally talking about the need for an infrastructure package that will create jobs and that will build rural broadband along with fixing roads and bridges. However, deficit hawks worry that too much spending will increase the deficit to an unsupportable level.

There is an idea from our past that can build better broadband while not increasing the permanent deficit. As a nation, we solved a similar problem when we figured out a way to bring electricity to everybody in the country. The challenge of bringing broadband to everybody is amazingly similar to what happened with electrification.

Franklin D. Roosevelt campaigned on the issue during his 1932 presidential campaign, and after he won, he worked with Congress to create the Rural Electrification Administration (REA). Rather than the government directly funding electric infrastructure, the REA offered 30-year loans to electric cooperatives to electrify rural America. Citizens from all over the country came together and formed cooperatives, borrowed the federal money, and electric grids sprang to life all over rural America.

There is no reason this same idea can’t work for rural broadband. The challenge is nearly identical. The best long-term infrastructure solution for broadband is fiber. Fiber provides enough broadband capacity to meet the needs of homes today and will meet broadband needs decades from now. No other technology can scale to the needed bandwidth demands over the next century.

The basic funding method used for electrification still makes sense, as does the idea of doing this through cooperatives. Cooperatives owned by the customers are willing to take on the long-term debt needed to make this work. Cooperatives are largely non-profits since any profits generated by the business must be rolled back into the business. It makes far less sense for the government to subsidize the giant for-profits ISPs like AT&T, CenturyLink, or Frontier – those big companies care about the bottom line and are not willing to operate a business with slim margins. We’ve seen these companies in the past improve rural profitability by cutting back on staff and maintenance.  That’s not the kind of stewards we want operating rural broadband networks for the next hundred years.

There are a few differences between now and the 1930s that we have to recognize. There has been a lot of years of inflation since 1932 and it doesn’t look feasible in many cases to build broadband networks and repay the money with 30-year loans, even at low interest rates. A new program would need to consider longer loans like 40 years, and maybe even 50 years. There is no reason a coop wouldn’t accept longer loans if it means getting fiber broadband. It’s also likely that in the highest-cost places that there would have to be some grant funding to accompany the loans.

These loans could go almost immediately to existing telephone and electric cooperatives. In areas where there are no cooperatives, or where the existing cooperatives don’t want to tackle broadband, the government could help with the formation of new cooperatives, just like they did in the 1930s. I’ve been working in rural areas all over the country and I can’t think of a community that would not be excited about this idea.

One of the best features of this plan is that most of the money spent by the government is in the form of loans that will get repaid. That means that the expansion of broadband doesn’t have to be a big burden on the taxpayer.

There are some obstacles to overcome to make this work – but mostly it just requires the will of the White House and Congress to solve the rural digital divide. There will be lobbyists from all of the big ISPs moaning about how this unfairly competes with the private sector. That argument falls apart quickly when you visit a rural county and can’t find even one rural home that has broadband speeds of 10/1 Mbps. The big companies have completely failed rural America and their lobbyists must be ignored.

There will also be a lot of silly discussions about which rural places should be eligible for this money – and those discussions will be couched in terms of talking about the number of homes that have access to broadband speeds of 25/3 Mbps. These speed discussions are a red herring because urban residents have access to far faster broadband. In the 2020 broadband report to Congress, the FCC said that 82% of homes already have access to broadband speeds of 250/25 Mbps. Hopefully, policymakers will agree that rural broadband ought to be as good as urban broadband and that we can stop using speed thresholds – everybody in America deserve good broadband.

Funding cooperatives should not be the only government solution because the solution won’t work everywhere for everybody that needs better broadband. But I can’t think of any reason why the this shouldn’t be part of the solution.

More Delays on CAF II

In the continuing saga of the FCC’s CAF II program, Frontier and CenturyLink recently notified the FCC that the companies did not fully meet upgrade obligations. The CAF II program flowed $11.2 billion to the big telcos over six years between 2015 and 2020. Frontier, CenturyLink, and AT&T were the three biggest recipients of the funding – but some also went to other big telcos like Fairpoint, Consolidated, Verizon, and Windstream. For agreeing to accept the funding, the telcos agreed to increase rural broadband speeds to 10/1 Mbps – which even in 2015 was slower than the FCC’s definition of broadband at 25/3 Mbps.

CenturyLink was the largest recipient of CAF II funding, accepting over $3 billion to improve broadband speeds to more than 1.1 million rural homes. CenturyLink just told the FCC that it met or exceeded its requirements in 10 states but failed to meet obligations in 23 states. Frontier accepted $1.7 billion to upgrade broadband to over 659,000 homes. Frontier just told the FCC that it met its obligations in only 8 states but didn’t meet the obligations in 17 other states. As a reminder, the companies had six years to make the needed upgrades.

I think that the real story on the street is far different than what these companies are telling the FCC. We have been working with rural counties all over the country, and part of that effort includes conducting speed tests. We have never yet found a rural DSL customer of CenturyLink, Frontier, or Windstream that had a speed of 10/1 Mbps or faster. The more typical download speed of rural DSL is just a few Mbps, with some homes seeing speeds under 1 Mbps. This is not to say there these telcos didn’t upgrade any DSL households – but we’ve never seen one. Our findings are bolstered by customers that have taken speed tests collected by M-Lab which show that a rural DSL customer achieving 10/1 Mbps is a rarity.

I can’t just point out Frontier and CenturyLink. We’ve worked in counties where the telco is Windstream and couldn’t find 10/1 Mbps rural DSL. AT&T claims that it has met its rural obligations through the use of rural cellular broadband. Customers have been telling us that it’s exceedingly hard to buy this product, and in many cases, it doesn’t meet the FCC’s speed requirements. That’s not hard to believe since many of the CAF II areas also have poor cellular coverage.

To add insult to injury, the FCC is flowing a seventh year of CAF II funding this year, with no specific obligations for the telcos to use the money to improve anybody’s broadband. That’s an additional $1.5 billion to the telcos in 2021, including $505 million to CenturyLink and $283 million to Frontier. I’m sure that rural residents are thrilled to hear that AT&T is getting an additional $49.8 million this year in Mississippi, CenturyLink is getting an additional $74.9 million in Missouri, and Frontier is getting an additional $38.1 million in West Virginia.

As if this story could get any worse, the FCC’s plans to police this program is largely a joke. The FCC will be conducting speed tests on CAF II areas to see if customers are achieving the desired speeds. Unbelievably, the telcos get a say on who gets tested. – and will choose the handful of customers that might meet the CAF II requirements. I call the tests a joke because a telco is going to pass the CAF II speed requirements if 70% of customers achieve 70% of the required speeds. That test means that the FCC was never serious about the telcos needing to upgrade to 10/1 Mbps. Even if the tests were given to all CAF II homes, a telco would still pass the test if it had made no upgrades to 30% of the CAF II households and then achieved download speeds of 7 Mbps for the rest. I’m positive that the telcos can’t come close to meeting even this watered-down test.

Rather than flowing extra money to the carriers in 2021, the FCC should be asking for a return of much of the original funding. The FCC doesn’t need to go through the fiction of conducting speed tests on a tiny fraction of the CAF II household. I’m positive that rural county administrators would love to tell their broadband story to the FCC. If the agency asked local officials to do speed tests in the CAF II areas, the agency could quickly get the real picture of the CAF II upgrades, instead of the fictions being told by the telcos.

The FCC is contemplating something along these lines. The agency is finally pursuing revamping the FCC broadband mapping, and one aspect of that revised program is to ask for citizen feedback on actual broadband speeds. If the FCC does that properly, then it will quickly see that much of what the telcos have reported as CAF II upgrades has been a sham. Until then, the FCC really needs to put 2021 CAF II payments on hold. And the agency needs to give serious thought to reclaiming the original funding that padded telco bottom lines rather than being used to upgrade rural broadband.

FCC Expands Siting Rules for Wireless Broadband

On January 8, the FCC expanded the over-the-air reception device rules (OTARD) to allow for the placement of wireless hubs and relays for the delivery of broadband or voice service. This ruling will make it easier for fixed wireless companies and 5G providers to distribute signals within a neighborhood.

This ruling amends and extends the original OTARD rules. Those rules allow apartment tenants to install antennas in any space they control like a patio or balcony. They allow somebody renting a house to install an antenna anywhere on the home or property they rent, without having to notify the property owner. These rules were first passed many years ago to define tenant rights that are separate from landlord rights. Tenants can use areas that are included in the rental space to receive a wireless signal. Landlords still have jurisdiction over common spaces like rooftops and common real estate. Landlords can allow the use of common spaces but are not required to do so.

The rules also stop others like homeowner associations or local governments from placing unreasonable restrictions on the placement of antennas. For example, a homeowner association might suggest that antennas must be placed on the backside of a home away from the street. But if there is no place in the rear that can receive the wireless signal, the OTARD rules allow placement in the front of the building.

In the past, these rules applied to tenants and renters being allowed to place antennas or small dishes so that they can receive service. The most recent ruling gives new rights to WISPs and wireless companies. Providers can now site a relay point along with a customer antenna. For example, a WISP may have a customer in one apartment and can use that receiver to further beam the signal to a second customer.

This kind of use vastly increases the reach of a WISP. Today, there is no broadband option for a premise that doesn’t have line-of-sight to the WISP transmitting antenna. The new ruling gives the wireless provider the ability to use an existing customer location as a relay point to reach other customers.

This has some interesting applications due to newer technologies. For example, there are now receivers that can be placed inside windows that could be reached from a nearby transmitter. Such devices can’t receive the signal directly from the distant tower but can connect to a nearby neighbor.

This is also a useful ruling for fiber-to-the-curb providers like Verizon which can use a receiver on a customer’s home to retransmit broadband to a second customer that is not within line-of-sight from the pole-mounted transmitter.

It’s likely that the new ruling will quickly get tested in court. For example, a tenant might have broadband service directly from a WISP with a legally located antenna. But when that tenant leaves, the landlord or the next tenant might want to remove the antenna. In the past, that’s been allowed if there is no longer service being provided to the original customer.

But this gets complicated if the unit in question is also a relay unit being used to serve additional renters. The new rules imply that the receiver could not be removed because that would disconnect working customers, even though they are not located at the property with the antenna. This seems to grant property rights to wireless companies in that they’ll be able to force property owners to keep a relay antenna that is not providing any direct benefit to the unit with the antenna. It’s not hard to anticipate property owners not liking these rules. It’s also not hard to envision property owners taking down an antenna without knowing it is being used to serve other customers.

Smart WISPs will talk to property owners when they establish these kinds of connections because nobody wants to get embroiled in this kind of dispute. But ultimately, the OTARD rules provide the ability of renters to get wireless broadband – and now seemingly gives that right to secondary locations that are reached by a locally relayed signal.

Mediacom Threatens ‘Excessive Uploaders’

Far too often in this industry I read something that makes me roll my eyes. The latest comes from a warning by Mediacom to subscribers about excessive upload usage. The company is calling and writing to customers who use upload bandwidth and warning them that they will be throttled or disconnected if they use too much bandwidth.

This is outrageous during the pandemic. The vast majority of upload traffic is coming from those who work from home or have students working from home. The heaviest users are households with two or more people trying to work simultaneously – something that millions of households are trying to do. Upload bandwidth means connecting to school and work servers and getting on Zoom calls – something that is hard for anybody working from home to cut back on. The next biggest use of upload bandwidth is backing up data on local hard drives into the cloud – something that is universally recommended to anybody working from home.

Mediacom already uses data caps as a way to throttle heavy usage. The data caps on a 60 Mbps broadband connection is one of the stingiest in the industry, with monthly data caps starting as low as 200 gigabytes of data per month. However, the data caps on speeds greater than 100 Mbps are larger – the cap for 300/30 Mbps is 2 gigabytes and for a gigabit download product can be as high as 6 gigabytes. These data cap plans put a cap on total download and upload traffic – but it appears there is also a secret unpublished cap placed on upload data usage.

Like all cable companies, Mediacom has slow upload speeds which are proving to be inadequate during the pandemic. The advertised upload speed for 100 Mbps download broadband is only 5 Mbps. That’s likely the most popular product being sold by Mediacom, and a 5 Mbps upload path is not adequate to support multiple family members working and schooling at the same time.

During the pandemic, it’s been reported that millions of households nationwide have upgraded to more expensive broadband products in order to get an upload data path that will work. In the case of Mediacom, subscribing to a gigabit broadband product comes with a 50 Mbps upload speed – a speed that ought to be sufficient to support people working from home. But now the company is punishing customers that pay more for the extra speed and then try to use what they’ve purchased.

This is the kind of ISP behavior that cries out for broadband regulation. If the FCC regulated broadband, it could step in and tell Mediacom to stop this anti-customer behavior. This is a company that undoubtedly accepted a lot of upgrade orders from customers wanting faster broadband during the pandemic and then turned around and told those same customers they couldn’t use what the extra fees had purchased.

Mediacom could offer faster upload speeds but has decided not to. I have no doubt that Mediacom is still using the upload technology that came with DOCSIS 3.0 from 2006. That technology deploys upload bandwidth in the band of frequency inside the cable transmission between 5 MHz and 42 MHz. This is a relatively small band of frequency and doesn’t support much bandwidth. It’s also the noisiest frequency inside of a cable network and is subject to a lot of ambient interference.

Since Mediacom is offering gigabit broadband it means it upgraded the download path to DOCSIS 3.1. But the company clearly elected to not upgrade the upload bandwidth speeds. DOCSIS 3.1 allows for using what is labeled as a mid-split option to enable frequency as high as 204 MHz to be used for better upload speeds.

I’m sure the company elected to not undertake the upload upgrade to save money. Like most of the cable industry, Mediacom didn’t think customers needed more upload speed. But now, during the pandemic, the public clearly needs faster upload speeds and is even willing to pay more to get it. Mediacom could have spent 2020 making the upgrade to the mid-split to meet increased customer demand. Instead, they are threatening and throttling customers who actually use what they have purchased. For those that are keeping tabs – this is what monopoly abuse looks like. I hope the new FCC finds a way to stop this nonsense.

Misconceptions of Title II Regulation

It seems likely that a newly formed FCC will tackle the reinstitution of regulation. We can only speculate how they’ll do it, but the easiest path would be to declare broadband to be a “telecommunications service’ under Title II regulations. A cleaner path would for Congress to finally pass an updated telecom act that would address broadband regulation, but nobody is holding their breath waiting for Congress to do the right thing.

This is a topic that clients and peers have recently wanted to talk about. I can already see that the big ISPs have turned up the PR machine to lobby against the reregulation of broadband and we can expect the press to be full of warnings about how regulation will destroy the Internet. I thought it would be useful to discuss just what Title II regulation of the Internet means and doesn’t mean. It’s something we don’t have to speculate about since Title II regulation of broadband was in place before Chairman Pai’s FCC got rid of it.

Most importantly, declaring broadband a regulated service doesn’t regulate the ‘Internet”. It means broadband would be regulated, not Internet content. This means that the FCC would again have to power to regulate ISPs or companies that transmit data on long-haul fiber networks. The FCC is not seeking to regulate Facebook, which would make many people nervous – they want to regulate Comcast, which I imagine a lot of people think is a good idea.

We have a good idea of what the FCC would put back in place once broadband is regulated because we know what disappeared when broadband was deregulated:

  • The FCC will begin again taking complaints from customers about abuses by ISPs. The FCC complaint process provided a mechanism for customers to get redress for bad instances of overbilling or other bad ISP behavior. The fact that a complaint process existed made the big ISPs at least try to not abuse customers.
  • The FCC will also be able to again mediate disputes between carriers. You may remember that there was a bunch of complaints at the FCC when broadband was regulated looking at issues like the big ISPs that were strong-arming companies like Netflix to pay more by throttling their signals as a negotiating tactic. We stopped hearing about such issues when the FCC stopped being the referee in such complaints. It’s not likely that bad carrier behavior ceased, just that we stopped hearing about it.
  • The FCC is almost certainly going to reinstate net neutrality, which basically says that ISPs can’t discriminate between different kinds of web traffic. ISPs don’t really hate this and the CEO of every major ISP went on the record at some point in the past saying they could live with net neutrality.
  • With regulation, the FCC could have told ISPs how to react to the pandemic. Numerous other federal agencies were able to impose emergency rules to protect the public and the economy, but the FCC was powerless to do anything.

There are some other things the FCC could do with reinstated Title II regulation:

  • The FCC could regulate broadband prices but is extremely unlikely to do so. Doing this would finally awaken Congress via industry lobbyists. However, the FCC could use the threat of rate regulation to get ISPs to pare back on the worst practices like hidden fees or exorbitant fees for going over data caps. I am positive that all of the ISP anguish about regulation is a worry that there will be constraints on rates. The big cable companies clearly envision $150 monthly broadband rates in a decade, and they don’t want anybody telling them they can’t do this – at a time when the cable companies are wiping out the vestiges of urban DSL and become real monopolies.
  • I find it likely that the FCC would use regulation to push the consumer privacy issues harder.

The list above is all that we are likely to see from a reintroduction of Title II regulation. But the ISP arguments against regulation aren’t likely to mention any of the above issues – all of which are popular with the public. Instead, the ISP arguments against regulation will make the following spurious claims.

  • ISPs will threaten that increased regulation will mean less investment in infrastructure. This is the funniest thing the big ISPs have ever argued because there has never been a big ISP board meeting where somebody suggested cutting back on investments due to regulation – this never ever happened in any boardroom.
  • ISPs will warn that the FCC will ‘break the Internet’ by imposing heavy regulations. The above list of regulations doesn’t come close to being heavy regulation when you realize that broadband is one of the key industries in the country, operated largely by monopolies. Nobody blinks an eye over regulators keeping an eye on automobiles or airlines.

The big ISPs have been extremely clever and call the current regulatory regime ‘light-touch’ regulation, when in fact it is no-touch regulation – broadband is as close as possible to being fully unregulated. The real issue in play is that ISPs have powerful enough lobbyists to get what they want. But as a country, it’s crazy to not regulate perhaps our most important industry that is controlled by monopolies. The public deserves better than that.

Fixing the RDOF

A bipartisan group of legislators recently sent a letter to the FCC asking for transparency during the due diligence review of the long forms for the RDOF grants. The group was led by Representatives James E. Clyburn (D-SC) and Tim Walberg (R-MI) and Senators John Thune (R-SD) and Amy Klobuchar (D-MN) and signed by 160 members of the House and Senate. Here is the key paragraph of the letter:

As responsible stewards of USF funds, we ask that the FCC redouble its efforts to review the long-form applications that will now be submitted.  We urge the FCC to validate that each provider in fact has the technical, financial, managerial, operational skills, capabilities, and resources to deliver the services that they have pledged for every American they plan to serve regardless of the technology they use. We also strongly encourage the FCC to make as public as possible the status of its review and consider opportunities for public input on the applications. Such transparency and accountability will be essential to ensure the success of this program and to minimize any opportunities for fraud or abuse.

The RDOF grants were awarded near the end of last year in a reverse auction where bidders who were willing to take the least amount of grant subsidy won grant funding to build broadband to some of the least populated parts of the country. This letter was prompted by major concerns about some of the winners of the grant being able to execute on what they had promised in the winning bid. Just a few of the concerns that prompted the letter include:

  • Sketchy Technologies. Some bidders claimed to be able to deploy gigabit fixed wireless technology in rural America – a technology that nobody I know thinks exists.
  • Huge Financial Commitment. Since the grants are paid over 10 years but must be built faster, grant winners not only have to raise the money not provided by the grant but must borrow against future grant payments. There are some big awards made to small companies that look impossible to finance. This issue is magnified by cases where the winning bidders took only a small fraction of the grant funds that were on the table.
  • Build Commitment. The grants require quick construction, with 40% of the build to be completed by end of the third year. It doesn’t seem reasonably feasible for small companies that won big awards to build that quickly. Can satellite companies launch enough satellites to get the needed coverage in 3 years?

The letter asks for a few important things. First, it asks that the review process be made transparent. The process of approving grant recipients is referred to as the long-form process, and they are asking that these forms be made available for public review and comment. In the past, long-form reviews were done behind the scenes, with no public scrutiny of the promises made by grant winners.

The legislators also asks the FCC to conduct due diligence to made sure that grant winners demonstrate the technical, financial, managerial, and operational capacity to do what they’ve promised. This is going to be hard for the FCC since this is a regulatory agency and is not stocked with the experts that can make such complicated and nuanced determinations. I’ve always recommended that big federal grants be made as block grants to the states for this exact reason – the FCC doesn’t really belong in the business of picking commercial winners and losers.

The biggest question that my clients are asking is what happens if the FCC disqualifies a grant winner. Would the grant funding revert to the second-highest bidder? That could be a problem because there are quite a few examples where multiple questionable bidders were going after the same Census blocks. If a grant award is canceled would the funds and the Census blocks get pushed into the second round of RDOF? That seems unfair to the people that live in these areas because it seems likely there is going to be a significant delay until the next round of RDOF. It also seems unfair to bidders who were willing to build rural fiber but got outbid by questionable winners.

The FCC has tied itself a Gordian knot and it’s going to take a long time to sort out this first round of the grant. This grant is such a mess that the agency ought to strongly consider something different for the second round of RDOF – because the reverse auction brought too many problems that could have been avoided.

FCC’s 2021 Broadband Deployment Report – Part 2

As mentioned in yesterday’s blog, the FCC is required to annually report on the state of broadband to Congress. The prior FCC chaired by Ajit Pai issued the 2021 report on January 19, the last day of Pai’s leadership. Following is the primary finding of the report:

Since the Commission’s last Broadband Deployment Report, the number of Americans living in areas without access to at least 25/3 Mbps (the Commission’s current benchmark) has dropped from more than 18.1 million Americans at the end of 2018 to fewer than 14.5 million Americans at the end of 2019, a decrease of more than 20%. Moreover, more than three-quarters of those in newly served areas, nearly 3.7 million, are located in rural areas, bringing the number of rural Americans in areas served by at least 25/3 Mbps to nearly 83%. Since 2016, the number of Americans living in rural areas lacking access to 25/3 Mbps service has fallen more than 46%. As a result, the rural–urban divide is rapidly closing; the gap between the percentage of urban Americans and the percentage of rural Americans with access to 25/3 Mbps fixed broadband has been nearly halved, falling from 30 points at the end of 2016 to just 16 points at the end of 2019.

This includes the extraordinary statement that 83% of rural Americans have broadband speeds of at least 25/3 Mbps. If that was even close to being true, then Chairman Pai would deserve to make this the crowning achievement of his tenure at the FCC. Unfortunately, it’s not even remotely close to being true.

If the real number is less than 83%, then what is the right number? Unfortunately, nobody knows, because the FCC statistics are based upon the big lie that’s embedded in the poor FCC mapping and data collection. It’s extraordinary that the FCC would issue a report to Congress without a huge bold print caveat at the top of the first page saying, “The statistics in this report are all as reported to use by various ISPs. We have a large amount of anecdotal evidence that these numbers are overstated, and so the Congress should not base any policy decisions based upon these numbers.”

There is a huge amount of anecdotal evidence. For example, the State of Georgia created its own broadband map and estimated that the number of homes in Georgia that didn’t meet the 25/3 Mbps threshold was twice the number claimed in the FCC data. My firm works with rural counties all across the country and helps them perform speed tests, and we have never once seen a speed test from a rural DSL customer of CenturyLink or Frontier that was receiving 25/3 Mbps service. In fact, in most counties we’ve studied we don’t even find any DSL customers getting speeds of 10/1 Mbps. Yet the FCC mapping data shows a lot of coverage of these two speeds in rural areas.

To make matters worse, we don’t see many urban DSL customers with speeds of 25/3 Mbps or greater. DSL can only achieve such speeds by upgrading to newer versions of DSL and by bonding two pairs of copper into one DSL circuit. In towns that haven’t upgraded to these faster technologies – and there are a lot of them – nobody has speeds of 25/3 Mbps.

The FCC statement claims that 37% of rural homes got upgrades between 2016 and 2019 that pushed broadband speeds over 25/3 Mbps. There were some such upgrades, notably in areas where smaller telcos upgraded speeds by installing fiber. But those upgrades don’t come close to accounting for 37% of all rural homes. I am positive there were very few, if any rural homes in those years seeing this upgrade from CenturyLink, Frontier, AT&T, Verizon, or Windstream.

This means that the only way that the rural statistics could have gotten better was from ISPs claiming to bring fast speeds to rural areas. We’ve seen evidence of that. I know of rural counties where WISPs claim speeds of 100 Mbps download or faster where they have virtually no customers, and the few customers have speeds of only a few Mbps. It’s also likely that the big telcos claimed better coverage during this time period as they claimed upgrades due to CAF II (which largely are imaginary). Recall that just before the RDOF grant process that Frontier tried to claim that over 16,000 census blocks suddenly had broadband speeds that would have exempted those areas from getting grants.

Don’t bother printing this FCC report because it would be a waste of paper. The report is full of statistics from beginning to end – and practically none of the statistics are believable, and many are outright lies.

FCC’s 2021 Broadband Deployment Report – Part 1

On the last day of Ajit Pai’s term as FCC Chairman, the agency issued the 2021 Broadband Deployment Report. This is a report that is mandated to be delivered to Congress each year. One of the most extraordinary things said in the report is the following:

We find that the current speed benchmark of 25/3 Mbps remains an appropriate measure by which to assess whether a fixed service is providing advanced telecommunications capability. We conclude that fixed services with speeds of 25/3 Mbps continue to meet the statutory definition of advanced telecommunications capability; that is, such services “enable[] users to originate and receive high-quality voice, data, graphics, and video telecommunications.” 

This statement displays a willful disdain for the public and completely ignores the pandemic that the country has been suffering through since March 2020.  Nobody in the industry, other than this FCC, thinks that a 3 Mbps upload path is sufficient for families to work and tackle schoolwork from home. Any home that has a 3 Mbps upload path is not able to originate advanced telecommunications and there is no rational way that a 3 Mbps upload stream can still be considered as broadband.

It’s clear why the Pai FCC wants to stick with 25/3 Mbps as the definition of broadband. If the upload definition is increased to something even a little faster, such as 25 Mbps upload, then probably 80% to 90% of the country would no longer be considered to have broadband. Chairman Pai does not want to get the black eye for admitting that our national broadband was not up to the challenges of the pandemic. Rather than face a simple truth to which any homeowner can attest, the Pai FCC has decided to stick with the definition of broadband that was developed in 2015.

The 2020 deployment report wasn’t issued until June of 2020, so this latest 2021 report is extraordinarily early by FCC standards. The timing is not accidental, and the report was issued on Chairman Pai’s last day in office. He rushed this report out the door so that his own FCC could pronounce that the state of broadband is good and getting better – instead of recognizing the reality that millions of homes who thought they had good broadband suddenly found out during the pandemic that they don’t.

Chairman Pai had an opportunity with this report to be bold and do the right thing. A recognition by Chairman Pai that upload speeds are inadequate would have set off a furious debate after he left. Cable companies won’t be prodded into improving upload speeds unless pushed to do so by the FCC. The entire purpose of the report to Congress is to let legislators know the state of US broadband. Every member of Congress has already heard loudly from their constituents that broadband is not good enough. It’s insulting to Congress to publish this whitewashed report, and it’s a huge disservice to homes still suffering through the pandemic to be told that the state of broadband is great.

It’s clear that the cable companies are quietly hoping that the upload issue blows away after the end of the pandemic. However, it’s looking more and more like millions of people will continue to work from home even after the pandemic ends – and the FCC’s definition of broadband needs to recognize the real world.

I don’t know if an incoming FCC can issue a revised report – but they should strongly consider doing so. As a country, we can’t properly tackle broadband issues if we’re not even willing to admit where problems exist. We now know that upload speeds on most technologies, including cable company networks, has been inadequate for a lot of home over this last year.

Of course, the upload speed issue is not the only problem with this latest report – stay tuned for part 2 tomorrow.