Beavers Kill Fiber Route

An article from CBC earlier this year reported that beavers had chewed through an underground fiber and had knocked 900 customers in Tumbler Ridge, British Columbia off broadband for 36 hours. The beavers had chewed through a 4.5-inch conduit that was buried three feet underground. This was an unusual fiber cut because it was due to beavers – but animals damaging fiber is a common occurrence.

Squirrels are the number one source of animal damage to fiber. It’s believed that rodents love to chew on fiber as a way to sharpen their teeth, which grow continuously throughout their life. For example, squirrel teeth grow as much as eight inches per year, and the animals are forced to gnaw to keep teeth under control and sharp. For some reason, squirrels seem to prefer fiber cables over other kinds of wires hanging on poles.

I remember reading a few years ago that Level 3 reported that 17% of their aerial fiber outages were caused by squirrels. A Google search turns up numerous network outages caused by squirrels. I have a client with a new fiber network, and the only outage over the last year came from a squirrel chewing through the middle-mile fiber route that carried broadband to and from the community.

ISPs use a wide variety of techniques to try to prevent squirrel damage – but anybody that has ever put out a bird feeder knows how persistent squirrels can be. One deterrent is to use hardened cables that are a challenge for squirrels to chew through. However, there have been cases reported where squirrels still partially chew through such cables and cause enough damage to allow in water and cause future damage.

A more common solution is to use sort of physical barriers to keep squirrels away from the cable. There are barrier devices that can be mounted on the pole to block squirrels from moving higher – but these can also be an impediment for technicians. Another kind of barrier is mounted where the fiber connects to a pole to keep the squirrels away from the fiber. There are more exotic solutions like deploying ultrasonic blasters to drive squirrels away from fiber. In other countries, ISPs sometimes deploy poison or obnoxious chemicals to keep squirrels away from the fiber, but such techniques are frowned upon or illegal in the US.

What was most interesting about the beaver fiber cut was that the cut was far underground – supposedly out of any danger. In parts of the country there are similar threats to buried fiber from pocket gophers. There are thirteen species of pocket gophers in the US that range from 5 to 13 inches in length. The two regions of the country with pocket gophers are the Midwest plains and the Southwest. Gophers live on plants and either eat roots or pull plants down through the soil.

Pocket gophers can cause considerable damage to buried fiber. These rodents will chew through almost anything and there have been reported outages from gophers chewing through gas, water, and buried electric lines. Gophers typically live between 6 and 12 inches below the surface and are a particular threat to buried drops.

There are several ways to protect against gophers. The best protection is to bury fiber deep enough to be out of gopher range, but that can add a lot of cost to buried drops. I have a few clients that bore drops to keep them away from gophers. Another protection is to enclose the fiber in a sheath that is over 3 inches in diameter. Anything that large and tubular is generally too big for a gopher to bite. Another solution is to surround the buried fiber with 6 – 8 inches of gravel of at least 1-inch size – anything smaller gets pushed to the side by the gophers. Unfortunately, all of these solutions add a lot of cost to fiber drops.

An unexpected risk for aerial fiber is from birds. Large birds with sharp talons can create small cuts in the sheath and introduce water. Flocks of birds sitting on a fiber can cause stretch and cause sag. That may sound like a small risk, but when I lived in Florida is was common to see hundreds of birds sitting shoulder to shoulder on the wires between two poles. While most people would find that many birds to be an interesting sight, being a broadband guy, my first reaction was always to see which wire they were sitting on.

Satellites and Cellular Backhaul

Elon Musk recently announced that he was going to be providing cellular backhaul from the Starlink constellation of satellites. This makes a lot of sense from a financial perspective in that it avoids the costly wired fiber networks needed to reach rural cell sites.

This is clearly a shot across the bow for companies that currently bring fiber connectivity to rural cell sites. There are numerous rural middle-mile networks that mostly survive by providing backhaul to cell sites. While there has been downward pressure from the cellular carriers on transport rates – it’s likely that Starlink or other satellite providers could drop the bottom out of the market pricing for transport.

Since we hear so much about how the US is losing the 5G war, people may not realize how far the cellular networks around the world are behind those in the US and other developed countries. According to statistics from GSMA, in 2020 there were 7.9 billion cellular users in the work, 48% who were still using 2G or 3G cellular technology. The percentage of users on older technologies is expected to drop to about 23% by 2025, with a big transition to 4G.

But even then, cellular data speeds are likely to remain slow in many countries due to the lack of fiber backhaul and to the fact that in many countries the vast majority of people get almost all of their broadband from cellphones.

It’s been predicted for many years that satellites would play a big role in supporting cell sites. The worldwide consulting firm NSR predicted last year that there would be 800,000 cell sites worldwide connected via satellite by 2029. Over that same time period, NSR predicts the US market for satellite backhaul at $39 billion.

But it’s still a bit of a surprise to hear Starlink talking about providing cellular backhaul. A rural cell site is a large data user and requires far more bandwidth than the average residential or business customer. It would be a big challenge to Starlink or any satellite network to carry both cellular backhaul and residential broadband – because the cellular backhaul would suck away a lot of the capacity of the network out of any one satellite. One would think that cell sites would get priority routing, which means other broadband users would suffer.

It’s been less than five years since the new generation of satellite companies said they would be launching big constellations in the overhead sky. My first thought when I first heard of the new satellite technology is that they would be far better off financially by supporting a handful of cellular companies rather than million of residential customers. What I never expected is that somebody would try to handle both on the same network.

And perhaps that’s not Starlink’s plan. The company has been talking about launching 30,000 satellites over time (currently at 1,500). It would be possible to have different satellites for different customers with a constellation that large. But Elon Musk’s disclosure made it sound like discussions about cellular backhaul are already in the works.

I think we’re many years away from fully understanding how satellite companies will operate. It’s possible that cellular companies and big corporate users will make it worthwhile for the satellite companies to give them priority over residential broadband customers. It’s not hard envisioning satellites providing connectivity to large fleets like FedEx, UPS, or the US Postal Service. Satellite broadband could become the connectivity of choice for the large trucking companies. It’s going to be hard for a constellation owner to say no to those kinds of opportunities – but saying yes to big commercial opportunities will means diluting the broadband available for residential customers.

Standalone Broadband

Parks Associates recently announced the release of its Home Services Dashboard, a for-pay service that tracks consumer adoption of telecom services like Internet, pay-TV, and cellphones. As part of the announcement, the company released a blog that shows that at the end of the first quarter of 2021 that 41% of US homes are buying standalone broadband – meaning broadband that’s not bundled with cable TV or a home telephone.

This is further evidence of cord-cutting since in 2018 only 33% of homes had standalone broadband. This shows that in eight years that 8% of all US homes have ditched all services from their ISP other than broadband. One doesn’t have to trend this too many years into the future until over half of all homes will be buying only broadband.

ISPs are working hard to keep some kind of bundle because they understand the power of the bundle to control churn. It’s much easier for a customer who is only buying broadband to switch to another ISP. As the bundle with cable TV is losing appeal, the biggest cable companies, Comcast and Charter, have been busy bundling customers with cellular service. Comcast has also been successful in bundling millions of homes with smart home packages. For a short time, Comcast even tested the idea of bundling with solar power.

My consulting firm does broadband surveys and we’ve seen a wide range of success of bundling in different markets across the country. Just in the last two years, we’ve seen communities where the level of bundling is as low as 45% or as high as 80%. We’ve noticed that cities with older populations seem to have the highest percentage of homes still buying a bundle. Bundling is also still fairly common in rural America, although the rural bundle is most typically a DSL connection and a telephone landline. A few telcos like CenturyLink still bundle with satellite TV.

The one statistic from Park Associates that I have to challenge is the average price for unbundled broadband at $64. I have to wonder what is included in that figure. Consider Comcast as an example. The Comcast price for its most popular broadband product, Performance, is $76. There is currently a web special where a new customer can buy the product for as little as $34.99. But that price is only good for 12-months and reverts to the higher price. But more importantly, Comcast charges $14 for the modem. That means the price of standalone broadband without a promotional price is $90. Even the introductory product is at $49 when including the modem. The same is true for Charter and other major cable companies – the standalone price without special discount with every big cable company is more than $64 – sometimes a lot more.

Over the last year, I’ve done rate studies in over a dozen communities, and I’ve never seen the average price for standalone broadband below the $75 range. I can accept the Park Associates price if it doesn’t include the extra modem fee. Park Associates are obviously looking at a larger database of numbers than I am, but I’ve seen the $70+ average price in urban, suburban, and rural markets.

I agree with Parks Associates that broadband prices have steadily been climbing, and they observed that standalone broadband prices have increased in price by 64% since 2011. I have no way to judge the percentage increase, but I agree there has been substantial rate increases.

What might surprise a lot of people is how many households still cling to their bundles. After accounting for homes that don’t buy broadband, there are still slightly more homes that buy broadband through a bundle than households that buy standalone broadband. However, at the rate that homes are cutting the cord, it seems likely that within a year or so that there will be more homes without a bundle. In 2020, the traditional cable industry lost almost 6 million customers or almost 7.4% of the base of cable customers – and most of those customers broke a bundle when they ditched cable.

The Dumb Pipe Question

Every few years I read something that resurrects the old question of whether ISPs should be dumb pipe providers or something more. Some ISPs have fought against the idea of being dumb pipe providers and want to believe they are far more than that. The latest event that raises this question anew is AT&T’s debacle with ditching DirecTV and WarnerMedia. AT&T was clearly not content with being considered as only a dumb pipe provider. The company was lured by the perceived higher earnings of both cable companies and media companies, and AT&T went on a buying spree and purchased both DirecTV and WarnerMedia.

At the time of the DirecTV purchase, when AT&T paid $67 billion for the satellite company, there were already rumblings in the industry about cord-cutting. There hadn’t been any evidence of large numbers of customers dropping traditional cable TV, but the industry was already in a holding pattern of zero net growth, with new customers roughly equaling customers who were ditching traditional TV. Since the DirecTV purchase, cord-cutting materialized with a fury as the traditional cable industry lost over 13 million cable subscribers.

The lure for an ISP to become a media company has hovered over the industry for over twenty years. Those of us that were in the industry in 2000 still remember being flabbergasted by the merger of AOL and Time Warner. The merger was blessed by Wall Street and by the consensus of analysts that the Internet was going to subsume media and that the merger was a defensive move by Time Warner. But it was hard to picture a path where the combined companies could grow to justify the astronomical $350 billion valuation that was awarded by the stock market at merger. And sure enough, the wheels came quickly off in what was possibly the worst merger of all time.

AT&T was also lured by the continued growth in the valuation of media companies. The stocks of media companies like Disney climbed in value year after year while AT&T’s value stagnated. AT&T was convinced that the merger with Time Warner would put the company’s stock on an upward trajectory like other media companies.

Underlying AT&T’s decision in both purchases to branch out was a dissatisfaction of being viewed by Wall Street as a dumb pipe provider. AT&T is the ultimate dumb pipe provider with a huge base of cellular and broadband customers – all who buy basic connectivity from the company.

AT&T was obviously jealous after watching companies like Apple and Google profit by putting apps on AT&T’s phones. AT&T was equally unhappy to see companies like Disney prosper from sending video signals over AT&T copper and fiber. I believe the entire AT&T debacle boils down to a company that did not want to be perceived as only providing dumb pipes. I think it’s that simple.

But something happened in the industry in recent years while AT&T lost over $90 billion from the two acquisitions in just five years. In recent years, the valuation of fiber-based dumb pipe providers is up significantly. In the last year the industry has seen transactions for fiber-based ISPs getting huge valuations. I honestly can’t fathom some of these high valuations any more than I could understand the AOL / Time Warner valuation. But the current high valuation for fiber networks is real since there are investors willing to pay big prices to get fiber companies.

All of the big ISPs have grasped this fundamental market shift. Most of the big ISPs have announced strategies to build significant amounts of fiber this year and next year. AT&T is building fiber past 3 million more homes this year. Verizon is on a tear and says it will build fiber-to-the-curb past 25 million homes by 2025. We see big fiber expansion plans from Charter, CenturyLink, Altice, Frontier, Windstream, and a long list of others.  All of a sudden, everybody wants to be a bigger dumb pipe provider.

It’s going to be interesting to see if this trend continues. For now, investors are betting that fiber companies will beat the cable companies in the broadband market – there is no other way to explain the higher valuations. The cable companies have thrived during a decade of lopsided competition against telephone DSL. Are the cable companies faced with being on the opposite side of the competitive battle and seeing fiber become the consumer choice? As always, this industry continues to provide interesting trends to watch.

OpenRoaming WiFi

AT&T recently conducted a test of WBA OpenRoaming WiFi in the historic 6th Street district of Austin, Texas. This is  technology that allows a WiFi user to roam between public hotspots without having to log-in to each new hotspot.

WBA stands for the Wireless Broadband Alliance, and the vision is that this technology will work for any ISPs or carriers that join the WBA federation. If the technology works as promised, and if multiple large carriers join the WBA federation, a user might seamlessly bounce between WiFi routers supported by different carriers.

One of the key aspects of the test is the use of Passpoint technology that was developed fifteen years ago by the Wi-Fi Alliance. This is software that provides and approves credentials for a WiFi user across different networks. Quick authentication is vital to the idea of roaming between hotspots operated by different ISPs and carriers. This allows WBA OpenRoaming to verify users quickly without having to rely on the MAC address of the user’s device.

The carriers are touting this as a great feature for WiFi users. A cellphone user could walk around a downtown district and not lose WiFi connectivity while moving between hotspots operated by different ISPs or wireless carriers. The WBA is promoting the WiFi connections as safe since every member of the federation agrees to use end-to-end encryption of the WiFi communication path – which would eliminate the biggest threat from using public WiFi.

What is not being discussed is the bigger motivation of the cellular carriers for implementing the technology. This would offload huge volumes of cellular data traffic to the landline broadband connections of the stores, shops, and restaurants that offer WiFi routers to the public. In a crowded environment like 6th Street in Austin, this would remove a huge amount of traffic from the cellular network in busy times.

This is something that cellular companies have wanted to do for many years. There was an earlier attempt to make this concept work in 2013 and 2014. At that time, the technology was labeled as Hotspot 2.0. The trials of that technology introduced Passpoint validation and had the ultimate goal of reliving data pressure on the cellular networks. Many of you may have sat in presentations at industry conventions that promised big revenues for landline ISPs for WiFi offloading – the idea was that the cellular companies would pay to get traffic off the cellular network. That idea never went much further than trials, and here we are in 2021 trying the idea again under a new name.

I also wonder if cellular companies see this as a revenue opportunity. It’s not hard to envision them selling the WiFi roaming feature to cellular customers for a few dollars per month – effectively getting WiFi users to pay to offload traffic to landline broadband connections.

Regardless of the motivation of the cellular carriers, it’s an idea that is long overdue. Users benefit by being able to stay under data caps on cellular data plans. The carriers benefit in crowded environments by shielding cellular networks from becoming overloaded. I just hope that the merchants supplying the underlying broadband will have unlimited data plans – or they are the ones who will pick up the tab for this.

Cellular Data Speeds Much Improved

I’m curious about how many people realize that cellular broadband download speeds have increased dramatically over the last year. I’m not a heavy cellular data user, particularly during the pandemic year when I barely used cellular data outside of the home. But I’ve always run cellular speed tests a few times per year and have definitely noticed faster download speeds.

Following is a comparison of cellular download speeds in the recent first quarter of this year compared to the first quarter of 2019. In both cases, the speeds are national averages reported by Ookla that are based upon millions of cellular speed tests.

2019 2021
AT&T 34.7 Mbps 76.6 Mbps
T-Mobile 34.1 Mbps 82.4 Mbps
Verizon 33.1 Mbps 67.2 Mbps

There are several reasons for the increase in speeds. First, many cell sites were not fully 4G compliant in the first quarter of 2019. The first fully 4G compliant cell site was completed in the winter of 2018. Since then, the carriers have implemented 4G everywhere.

The carriers have also implemented new spectrum bands. They’ve labeled the new spectrum as 5G, but the new spectrum bands are all still using 4G technology. The new spectrum allows cellular customers to spread out into multiple channels. This means that older spectrum bands and the networks are not getting bogged down and overbusy during the heaviest usage times of the day such as during the daily commute.

I also suspect that the pandemic has some role in the difference. During the pandemic the daytime demand for cellular data has been suppressed by far fewer people commuting and spending the day outside the home. A less busy cellular network should translate into faster speeds.

As part of writing this blog I took a speed test on my cellphone in downtown Asheville on AT&T. I got a download speed of 60.5 Mbps, and an upload speed of only 1.8 Mbps.

It’s worth looking at the Ookla article because it shows median broadband speeds by state. Note that median is different than average and median means half the speed tests were slower and half were faster. The medium speeds are significantly lower than the national average, which indicates that there are more fast speed tests than slow ones to drive the average higher.

It also seems likely that urban speeds are much faster than rural speeds for a variety of reasons. That conjecture is somewhat verified by the District of Columbia having the fastest median speeds. The top eight fastest speeds are all on the east coast. The ten slowest states are all at half of the median speeds in D.C. – with the slowest speeds being in Mississippi, Wyoming, West Virginia, Iowa, Vermont, and surprisingly Texas.

I’ve still never figured out why faster cellular data speeds would be important to the average cellular customer. The most data-intensive most people do on cellphones is to watch video, and that only requires a few Mbps of speed. There would be a benefit when updating cellphone software, but I have to imagine that most people do this while on WiFi. I would love for somebody to provide real-life examples of how faster cellular data speeds are making a daily difference.

Figuring Out AT&T

Like has happened many times during my career, AT&T is changing the trajectory of its business. Over just a few months, the company has shed major parts of the business and has taken huge losses in doing so.

At the end of February, the company spun off its cable TV business that includes DirecTV, AT&T TV, and U-Verse. The business went to a newly formed company that will be owned 70% by AT&T and 30% by TPG Capital. AT&T received $7.8 billion in cash which values the new business at $16.25 billion. This represents a huge loss for AT&T which originally paid $67 billion to acquire DirecTV in 2015. That’s over a $50 billion loss after six years.

AT&T recently announced an even bigger deal and sold off WarnerMedia to Discovery Inc. The sale net’s $43 billion in cash to AT&T to pay down debt. The newly formed company will become the second-largest Media company and will combine HBO, Warner Bros. studios, TNT, TBS, and CNN with Discovery, Oprah Winfrey’s OWN, HGTV, The Food Network, Animal Planet and others. The new company will have a huge sports presence between TNT and TBS and Discovery’s worldwide sports coverage.

The sale represents another big loss for AT&T. The company paid $85 billion for Time Warner and will lose $42 billion in only five years. The two sales will allow AT&T to pay down about $51 billion of its $169 billion in debt. But a lot of the remaining debt is still due to the original two purchases.

I find these transactions to be ironic because AT&T lobbyists have been harping for years against municipal broadband saying that it generates huge losses. The vast majority of municipal broadband ventures are cash self-sufficient, and AT&T’s claim is aimed at convincing legislators to ban municipal competition. But it’s ironic to see that the same company that rails against municipal broadband is absorbing over $90 billion in losses. If AT&T had instead put this money into fiber it would now own the US market and we’d have solved much of the lack of broadband in the country. As we saw from the recent blast at municipal broadband from USTelecom, the irony isn’t stopping AT&T from continuing to make the same false claim against muni broadband.

The company also shifted directions in the broadband market when it decided last October to stop selling DSL to new customers. One has to think that this is the precursor for AT&T pulling down rural copper. In urban areas, this decision will push remaining customers to the cable companies. In rural areas, some of the DSL customers might be able to convert to cellular broadband from AT&T, but for many households, the AT&T decision just means less choice for broadband.

This largely means that AT&T will be focusing on the cellular business and fiber broadband business. The company is still primarily a cellular company and for years the telecom business has been relegated to back pages and footnotes in the company’s annual reports. But AT&T has quietly been investing in fiber. The company has passed over 14 million homes and businesses with fiber in the last few years and is building to pass 3 million more this year. This appears to be a profitable venture for AT&T since the network builds are efficient as AT&T is mostly overlashing fiber onto existing copper wires.

AT&T is still the largest cellular company in the country, but the competition has gotten a lot stiffer over the last five years. The T-Mobile merger with Sprint put them in close second and on AT&T’s tail. We’re now seeing the big cable companies picking off significant numbers of cellular customers. Within a few years, we’ll see the market entrance of Dish Networks which already is saying it’s going to gain market share with low prices.

Back when AT&T moved heavily into media and cable TV, many analysts wondered why the company didn’t stay focused on its core competency. I guess those skeptics were prescient since the new ventures barely made it past half of a decade before AT&T abandoned the new direction.

Altice Slashes Upload Speeds

In a change that makes no sense, Altice announced it is slashing upload broadband speeds for customers served on its cable systems. The speed changes are drastic – on the most popular 100 Mbps download product, upload speeds are getting cut from 35 Mbps to 5 Mbps. On the 200 Mbps service upload is being cut from 35 Mbps to 10 Mbps. The full list of cuts is listed on the company’s website.

The company says it didn’t have any problems delivering the faster speeds throughout the pandemic. Instead, the company says that the changes are being made to bring the company’s speeds in line with what other cable companies are offering.

It’s hard to think of a business reason why the company would poke its customers in the eye for no good reason. Many households with people still working and schooling from home are going to find the slower speeds unusable. I’ve seen this throughout the pandemic as we’ve helped communities with surveys and found consistently that about a third of people trying to work from home said their upload broadband was inadequate.

If the company had no problems offering faster speeds during the pandemic, and if making this change is going to harm customers, then there must be some strong motive for doing something this negative.

The timing of this change is suspicious, and I have to wonder if this is being done to create a unified face for the cable industry. The whole industry is under fire as the Treasury Department is suggesting in the rules for ARPA money that the right definition of minimum broadband ought to be symmetrical 100 Mbps. My guess is that the cable industry is going take a strong position that 5 – 20 Mbps is adequate upload broadband and that homes don’t need more.

Further, Altice is not changing the speeds for existing customers – only new customers or those that change packages. That makes this sound even more like a regulatory stunt than any real change.

It’s too bad that we don’t have an FCC with any power. A broadband regulatory agency would likely be dragging Altice in this week to explain the change and might even ask to see any correspondence between Altice and the other big cable companies. But the FCC under Ajit Pai pulled the FCC’s regulatory teeth, and the agency is largely powerless to challenge ISPs on broadband issues.

What is most interesting about this change is that Altice is lowering its speeds in solidarity with other cable companies rather than the other cable companies trying to increase speeds to emulate Altice. The cable companies profited greatly from the upload crisis – it’s been reported that millions of customers upgraded to faster download speed in an attempt to get faster upload speeds. During the last year we saw cable companies crowing about how they weathered the pandemic, when in reality millions of their customers were unable to use the upload bandwidth to function well at home.

The biggest problem faces by the cable companies is that they are on the wrong side of this issue. The big cable companies have been increasing broadband rates annually but are unwilling to make the investments needed to offer the upload speeds that people need and want. Altice has shown that cable networks can be configured to reach 35 Mbps upload speeds, but most of the companies other than Altice have failed to do so. This might require cable companies to upgrade the upload portion of the network to DOCSIS 3.1 – something that should have been done when the download performance was upgraded.

The funny thing is that we’ve seen this before. If you go back a decade when most cable companies offered download speeds of 30 Mbps, the CEOs of the cable companies were all saying that was all of the speed households needed. The cable companies were dead wrong about that and finally decided to provide the broadband that people want – and that change has won them most of the broadband customers in the industry. It’s curious to watch the industry again telling the public what it needs and doesn’t need. In the long run, this isn’t going to go well for the cable companies.

USTelecom Blasts Municipal Broadband

In a typical knee-jerk reaction, USTelecom released an Issues Brief that claims that government-owned broadband networks aren’t built for the long haul. This was clearly prompted by federal grants that are giving money directly to towns, cities, counties, and states that can be used to build infrastructure, including broadband.

The Issues Brief trots out the same old lame arguments that the big ISPs have made for years against municipal broadband – that there have been some municipal broadband efforts that have failed. This is a true, but my math shows that the municipal failures are something less than 5% of municipal ventures. We never hear the comparative figures about how many new commercial ISP startups fail. That’s because there are no newspaper headlines when a small fiber overbuilder over-borrows and quietly folds shop. And somehow the big ISP industry totally overlooks their own big dramatic failures. Frontier just went through bankruptcy and walked away from $10 billion in debt – any industry expert can tell you that Frontier’s problems were all self-made and not due to unforeseeable market forces. AT&T recently walked away from a disastrous foray into cable TV and content and lost over $50 billion in just five years. This is not an industry that should talk too loudly about failures.

The real truth behind this Issues Brief is that the big companies don’t want any competition. The Issues Brief trots out the ridiculous FCC statistic that says that there is “fierce competition among providers—over 92% of American homes have at least two fixed broadband providers competing for their business”. That statistic is due to an FCC that hasn’t wanted to admit that urban areas are largely a monopoly for cable companies. Urban homes can either buy decent broadband from a cable company or slow broadband from ancient and out-of-date DSL from a telco. And that’s where you can still buy DSL – because that FCC statistic hasn’t been updated to reflect that AT&T completely walked away from selling new DSL. There is no fierce broadband competition in most markets. My consulting firms conducts surveys, and we generally see over half the public everywhere claiming they don’t have any choice of broadband providers.

Another great quote from the Issues Brief is that “The private sector has the best track-record of success for broadband deployment”. Really? I work with dozens of communities every year that are only looking for a better broadband solution because the big incumbent ISPs have not invested in their communities. The big telcos walked away from maintaining or upgrading copper networks several decades ago. When cable companies decided to upgrade to DOCSIS 3.1 a few years ago, most of them decided to leave the upload bandwidth at the older DOCSIS 3.0 technology – which hurt millions of homes that struggled with working and schooling at home during the pandemic. The big companies only spend capital when they feel like they don’t have an alternative. This is another topic the big ISPs ought not to be touting too loudly because it’s demonstrably not true.

The Issues Brief finishes by touting public/private partnerships as the answer – the big ISPs want cities to hand them all of the current grant funding to get them to invest in the networks they should have been investing in all along. The truth here is that the vast majority of communities do not want to be an ISP and are looking for partnerships. But in most cases, communities first look for smaller ISP partners that have a track record of providing good customer service before considering the incumbents. There is a clear reason why the big ISPs are always at the bottom of every measure of customer satisfaction – they treat customers like dirt.

I can summarize this Issues Brief a lot more succinctly than did USTelecom: “We know cities are getting a lot of grant money right now. Don’t try to use this money to become a municipal ISP because cities are too stupid to make it work. Give the grant money to us instead and we’ll take care of your future broadband needs, just like we have over the last twenty years. Wink wink.”

AT&T’s Plan for Ditching Copper

Jeff Baumgartner of Light Reading recently reported on a wide-ranging discussion by AT&T CEO John Stankey. One of the most interesting parts of the discussion was about AT&T’s plan to use cellular wireless in rural markets to replace DSL.

I’m not going to repeat everything in the article, but the gist is that AT&T hopes to be able to start walking away from rural copper. Stankey was quoted as saying that there is already a voice alternative in rural markets – meaning cellphones. Unfortunately, that ignores the many rural homes with poor cellular coverage. The FCC was going to plow something like $4 billion into a grant program to expand rural cellular coverage, but the misreporting of existing cellular coverage areas by the big cellular carriers put that plan on hold.

Stankey believes that cellular broadband will be the alternative to rural DSL. Verizon has the same strategy but doesn’t serve as many rural markets after having unloaded most of them to Frontier over recent years.

What might a rural cellular data network look like? In most rural counties there are generally only a few existing cell towers – it’s not unusual for this to be a half dozen or less. The traditional older cell towers often don’t reach a lot of rural homes since the towers were built for the old cellular model of making sure that cars could get cell signal along numbered highways. But over time, many counties have added a few more towers for public safety purposes that reach a lot more homes for voice service.

Most people don’t realize that cellular broadband has a lot of the same characteristics as other rural wireless broadband. The signal from the cell towers quickly dies with distance. Depending upon the spectrum being used, cellular broadband can hit speeds of 50-100 Mbps for the first mile from a rural cell site, but the speeds drop off pretty rapidly from that point. Cellular broadband does not travel nearly as far as cellular voice, and rural people are used to the idea of being to make a call but not being able to grab the web. Cellular data also gets slowed and stopped by hills and other impediments. Any county without a flat topology will have lots of cellular dead spots.

What this means is that cellular broadband is not a pure replacement for landline service. For the typical rural county with a limited number of cellular towers, there are going to be plenty of homes that can’t get a cell signal. There will be a lot more homes that can’t get enough broadband speed to be meaningful.

What Stankey failed to mention in the interview is that AT&T has already walked away from the DSL market. As of last October, the company won’t sign new DSL customers anywhere in the country – in towns or rural areas. That means everybody buying or building a rural home in an AT&T area doesn’t have DSL as a broadband option. I’m sure AT&T will continue to milk existing DSL revenues for the next few years. But is the company going to care a whit if some rural households can’t get the cellular data?

The various rural grant programs are filling in some of the rural broadband gaps – but not close to all. As large as the RDOF grants were, the FCC says those grants will reach 5 million rural homes if the grants are all awarded. There are still 10 to 15 million more homes in rural America that don’t have adequate broadband – maybe more. Unfortunately, some recent federal grants went to providers like Viasat or to ISPs that might not be able or willing to fulfill the RDOF requirements.

Don’t get me wrong. I’m happy for the rural home that can finally get a decent cellular data plan. I just don’t want regulators or politicians to think that companies like AT&T are taking care of rural America with this new strategy. I would characterize AT&T’s strategy as providing cover for the company to pull down rural copper. The copper is old and at end of life and has to come down – but it’s disingenuous to not tell the public that cellular broadband means the end of copper.