The State of Broadband in North Carolina

Recently I was asked to compare broadband in my state of North Carolina to the rest of the country. It’s an interesting question that folks in many states have been asking.

Parts of North Carolina have the best broadband in the country. There are neighborhoods in the research triangle area where there is fiber from Google Fiber and AT&T and where the cable company offers an affordable gigabit product. That means the lucky homeowners in those neighborhoods are one of a handful of places that have a competitive choice between three gigabit ISPs – something that’s extremely rare.

Like in other states, the cities and larger towns in the state all have a cable provider that offers the basic speeds of more than 100 Mbps, in some cities now 200 Mbps. Since this was traditional AT&T territory, the company has built fiber in small neighborhoods around the state – so there are small pockets of fiber in many communities. However, for most urban residents the cable companies are the only option faster than 50 Mbps and are slowly moving towards becoming the monopoly broadband provider.

Like in most states, North Carolina has huge rural areas with little or no broadband. And like in most places you don’t have to go far outside of any city to find places with dreadful or non-existent broadband. The big telcos have ignored rural copper here like they have done almost everywhere in the country. There are many rural counties with virtually no broadband outside the county seat, and no county that has good broadband everywhere.

Also like most states, there are ISPs providing fiber in rural communities. The state has telephone cooperatives and independent telephone companies that have built or will soon finish the fiber in their traditional service areas. A few of these companies are building outside their traditional footprint, with Riverstreet Networks, owned by Wilkes Telephone Cooperative the most aggressive, and which is building in numerous counties around the state.

There is also a vibrant small WISP industry in the state of ISPs bringing wireless broadband. Like in most states the big issue for the WISPs is finding fiber backhaul. In the western half of the state the impediments to wireless broadband are the mountainous terrain and the thick forests.

The state just voted last year to allow electric cooperatives to enter the broadband business and there are a few of them already considering building fiber. However, unlike many states, there is a lot of rural areas in the state that are served by commercial power companies rather than cooperatives.

Like many other states, North Carolina has an effective ban on municipalities entering the broadband business. Back when fiber-to-the-home was a new technology, the communities of Wilson and Salisbury built fiber networks in their communities and the incumbent providers quickly pushed through legislation stopping municipalities from being ISPs. Municipalities can build and lease broadband facilities to ISPs, but there are enough strings in the law to make it hard to achieve, and difficult to financially justify.

The state has a new broadband grant program set at $15 million this year. While it would probably take more than a century to solve the broadband gaps in the state at $15 million per clip, the funding is still welcome and is bringing solutions to pocket of homes that have had no broadband.

The state takes pride in being first to tackle broadband and had the first statewide government broadband network and was the first state to get fast broadband to all of the schools.

Like most states the broadband gap is widening in some places. Like most states there have been rural hospitals closings, mostly in areas with poor broadband, meaning it’s difficult to provide telemedicine services. There are plenty of stories in the state of families sitting outside of WiFi hotspots so that kids can do homework each night. There are some big stretches of the state where there is little or no cellular service to go along with no broadband. And like everywhere in the country, broadband is priced out of reach of poorer households.

There are a few things unique about broadband in North Carolina, but overall, we look a lot like much of the rest of America. We have homes with great broadband and homes with no broadband. Broadband is creeping into the rural parts of the state but at a glacial pace. Like most states, we still have a long way to go to provide everybody with decent broadband.

A Decade of Statistics

Now that we’ve started a new decade, I thought it would be interesting to look back to see what progress has been made with broadband in the last ten years. My first realization in doing so was that I’ve been writing this blog about broadband for most of that decade, having started writing in early 2013, so I’ve tracked many of the changes in the industry.

I first looked at statistics on broadband subscribers and on the various ways that we use the Internet. The following statistics are for US adults:

  • 90% of Americans now say they use the Internet, up from 78% at the beginning of the last decade. Nearly 100% of Millennials say they use the Internet.
  • 85% of homes pay for a broadband connection at home. Surprising to me was that almost 80% of homes purchased Internet access in 2010. We now know there are two primary reasons why homes don’t buy broadband – price, and lack of broadband access in rural areas.
  • We are spending more time online. The average US adult now spends 3.7 hours per day online, up from 2.2 hours at the start of the decade.
  • 81% of Americans now use a smartphone, up from 35% at the start of the decade. 93% of Millennials own a smartphone. 96% of all adults own a cellphone.
  • 72% of Americans use social media, up from 43% at the start of the last decade. The number of people who say they get their news from social media (20%) now surpasses those that get news from print media (including online newspapers).
  • The use of tablets exploded in the past decade, growing from 3% of adults to 52% in 2019.
  • The use of desktops and laptops has declined slightly from 78% to 74%.

Most ISPs still care about telephone and cable TV service.

  • The total number of telephone line subscriptions was 150 million in 2010 and was down to 112 million in 2019. This number includes business telephone lines.
  • 39% of US homes still had a landline connection in 2019, down from 68% in 2010. A decade earlier this was at 96%.
  • The US had 104.6 million cable households in 2010 (59.8 million by cable, 6.9 million by telco and 33.9 million by satellite). By the end of the third quarter of 2019, paid CATV subscriptions dropped to 83.3 million (48 million by cable, 8.9 million by telcos, and 26.3 million by satellite). Cable subscribers at telcos surged at the start of the decade, but all categories are now dropping.
  • 50% of homes with Internet access now watch streaming video daily, up from 16% in 2010.

There are other statistics that should be of interest to ISPs:

  • The number of people that move has cut in half over the last 35 years. By 2019 only 1.5% of Americans moved to a different state. 5.9% of people moved but stayed in the same county. Many of my clients have reported lower churn over time due to households moving.
  • Rural populations continue to decline slowly. The last decade saw average declines in rural population of about 0.3% per year. That has slowed by the end of the decade, but overall, rural populations are still slightly declining.
  • Rural populations are aging. A report by the Census bureau in 2019 says that more than 22.9% of Americans over 65 live in rural America. There are 13 states where the percent of rural elderly exceeds 40% (VT, ME, MS, WV, AR, MT, SD, ND, AL, KY, NH, IA). This foretells significant declines in rural populations over the next several decades.
  • In 2019 Millennials surpassed Gen Xers as the largest generation in the workforce. In 2019 the workforce consisted of 57 million Millennials, 53 million Gen Xers, and 38 million baby boomers.
  • The last decade was the first decade in 160 years to see an increase in the size of the average household. The average household grew from 2.58 people in 2010 to 2.63 people in 2019. The number has been declining steadily since 1790 when a household averaged 5.79 people.

Nationwide statistics are always interesting, but few of my clients see the same numbers locally. One of the important pieces of the puzzle when looking for a broadband solution is understanding how your community fits into these national trends. As an example, one of the most disparate statistics we see when doing surveys is the penetration rate of traditional TV. We still find communities where it’s above 80% and others where it’s lower than the national average.

Killing 3G

I have bad news for anybody still clinging to their flip phones. All of the big cellular carriers have announced plans to end 3G cellular service, and each has a different timeline in mind:

  • Verizon previously said they would stop supporting 3G at the end of 2019, but now says it will end service at the end of 2020.
  • AT&T has announced the end of 3G to be coming in early 2022.
  • Sprint and T-Mobile have not expressed a specific date but are both expected to stop 3G service sometime in 2020 or 2021.

The amount of usage on 3G networks is still significant. GSMA reported that at the end of 2018 that as many as 17% of US cellular customers still made 3G connections, which accounted for as much as 19% of all cellular connections.

The primary reason cited for ending 3G is that the technology is far less efficient than 4G. A 3G connection to a cell site chews up the same amount of frequency resources as a 4G connection yet delivers far less data to customers. The carriers are also anxious to free up mid-range spectrum for upcoming 5G deployment.

Opensignal measures actual speed performance for millions of cellular connections and recently reported the following statistics for the average 3G and 4G download speeds as of July 2019:

4G 2019 3G 2019
AT&T 22.5 Mbps 3.3 Mbps
Sprint 19.2 Mbps 1.3 Mbps
T-Mobile 23.6 Mbps 4.2 Mbps
Verizon 22.9 Mbps 0.9 Mbps

The carriers have been hesitating on ending 3G because there are still significant numbers of rural cell sites that still don’t offer 4G. The cellular carriers were counting on funding from the FCC’s Mobility Fund Phase II to upgrade rural cell sites. However, that funding program got derailed and delayed when the FCC found there were massive errors in the data provided for distributing that fund. The big carriers were accused by many of rigging the data in a way to give more funding to themselves instead of to smaller rural cellular providers.

The FCC staff conducted significant testing of the reported speed and coverage data and released a report of their findings in December 2019. The testing showed that the carriers have significantly overreported 4G coverage and speeds across the country. This report is worth reading for anybody that needs to be convinced of the garbage data that has been used for the creation of FCC broadband maps. I wish the FCC Staff would put the same effort into investigating landline broadband data provided to the FCC. The FCC Staff recommended that the agency should release a formal Enforcement Advisory including ‘a detailing of the penalties associated with carrier filings that violate federal law’.

The carriers are also hesitant to end 3G since a lot of customers still use the technology. Opensignal says there are several reasons for the continued use of 3G. First, 12.7% of users of 3G live in rural areas where 3G is the only cellular technology available. Opensignal says that 4.1% of 3G users still own old flip phones that are not capable of receiving 4G. The biggest category of 3G users are customers that own a 4G capable phone but still subscribe to a 3G data plan. AT&T is the largest provider of such plans and has not forced customers to upgrade to 4G plans.

The carriers need to upgrade rural cell sites to 4G before they can be allowed to cut 3G dead. In doing so they need to migrate customers to 4G data plans and also notify customers who still use 3G-only flip phones that it’s finally time to upgrade.

One aspect of the 3G issue that nobody is talking about is that AT&T says it is using fixed wireless connections to meet its CAF II buildout requirements. Since the CAF II areas include some of the most remote landline customers, it stands to reason that these are the same areas that are likely to still be served with 3G cell towers. AT&T can’t deliver 10/1 Mbps or faster speeds using 3G technology. This makes me wonder what AT&T has been telling the FCC in terms of meeting their CAF II build-out requirements.

The Greed of the Programmers

If you use social media you may have noticed a flurry of activity at the end of December warning that small cable TV providers across the country could lose the Fox channels on January 1. That includes Fox News, Fox Business, FX, National Geographic, FS1, FS2, and the Big Ten Network. The dispute was with NCTC, a cooperative that negotiates rates for most of the smaller cable companies in the country.

Fox was asking for what has been described as a 20% rate hike on programming. Fox was seeking a big rate increase to recognize that they have the number one network on cable TV with 1.5 million daily viewers. NCTC finally struck a deal with Fox on December 31 and the channels didn’t go dark – but the cost of buying the Fox networks went up substantially. Back in September, the Fox channels went dark for ten days on Dish Networks when the satellite company refused to accept the same big rate increase.

This is not the first big rate increase from Fox. ALLO Communications, a sizable fiber overbuilder, says that Fox has raised rates 800% since 2004, To put that into perspective, the cost of living in the US has increased by 36% since 2004.

The Fox rate increase is the perfect metaphor for the woes of the cable industry. Fox is not unique, and during the 2000s most cable programmers raised rates much faster than inflation. Cable companies have had little choice but to pass the rate increases along to customers. The programming cost increases have led to a steady annual rate increase for consumers. The soaring price of cable has led to the cord cutting trend and customers are bailing from traditional cable TV by the millions and at an increasing pace.

As a whole, traditional cable TV has probably now entered what economists call a death spiral. Most programming contracts are for 3 – 5 years and the cable TV companies already know of the big programming cost increases coming for the next few years. As cable companies keep raising rates they will lose more customers. The programmers will likely try to compensate by raising their rates even higher, and within a short number of years, cable TV will cost more than what most homes are willing to pay.

A company like Fox can weather the storm of disappearing cable subscribers since they know that all of the online alternative networks like Sling TV, YouTube TV, and others will carry their major networks like Fox News, Fox Business, and the sports networks. The chances are that the primary Fox channels will be solid and steady earners for the company far into the future. However, the same can’t be said for many cable networks.

The online cable products have far smaller channel lineups than traditional cable. There are more than 100 traditional cable channels that are losing subscribers from cable companies and not replacing them with online programming. It’s only a matter of time until many of these networks go dark, as programming revenues won’t cover the cost of operating the network.

It’s easy for people to hate cable companies since that’s who people pay every month. Cable providers like Comcast and AT&T share in the blame since they are both the two largest cable providers and also owners of content. All cable companies share some blame for not yelling bloody murder to the American public for the last decade – and for not fighting back. The cable companies instead started sliding the programming rate increases into hidden fees. However, the fault ultimately lies with the greed of the programmers. These are mostly big publicly traded companies raise rates every year to please stockholders.

It’s no longer good enough for corporations to make money, they are expected to increase bottom line quarter after quarter, year after year. We’ve only been talking about cord cutting for a few years, but the industry has been declining for over a decade. In 2010 there were nearly 105 million subscribers of traditional cable TV, and that number dropped to just over 83 million by the third quarter of 2019. It’s easy to think of cord cutting as a recent phenomenon, but the industry has been quietly bleeding customers for years. Sadly, the programmers are still denying the reality that they exist in a dying industry and are likely to continue to raise rates like Fox just did.

The supply and demand side of any sane industry would have gotten together years ago and figured out a way for the industry to be sustainable. However, the combined greed of the programmers and the big cable companies has resulted in the runaway rate increases that will doom traditional cable. It’s hard to know where the tipping point will be, but we’ll be there when cable networks start going dark – it’s just a matter of time.

Is Your Home Listening to You?

When I was a teenager, science fiction books envisioned a future where people talked to their home to take care of mundane tasks. For somebody willing to spend the money on new appliances and devices that future is here today.

Just consider the Amazon Alexa voice assistant, which is installed in the largest number of devices. GE has built Alexa into its new stoves, refrigerators, wall ovens, dishwashers, washers and dryers, and air conditioners. Samsung has built Alexa into refrigerators, washers, dryers, air conditioners, and vacuums. Alexa is built into smart light bulbs, smart wall plugs, televisions, thermostats, smart door locks, security cameras, speakers, and numerous other devices. The chips and/or software to add Alexa to devices are getting cheap and it shouldn’t be long until the app is built into most electronics you might buy.

The convenience of talking to home devices is not without a cost, and companies like Amazon, Apple, and Google are listening to you through the devices. Like other voice assistants, Alexa listens all of the time waiting for a ‘wake word’ that activates the app. There are major privacy and security concerns related to the constant listening. We have to trust the company controlling the device not to listen to us all of the time because there is nothing stopping them from doing so.

Amazon swears they don’t listen or record except for a short period of time after the wake word is spoken. They also swear that they only preserve those recordings in an effort to improve Alexa’s responses to questions. If you are going to use Alexa in your home, you are trusting that Amazon is telling the truth. Back in 2017 Samsung got a huge black eye when they were unable to make that promise concerning their smart TVs.

The other big concern is hacking. There is zero chance that all of the companies making devices that include a voice assistant have iron-clad security. While Amazon really might not be listening to you, a hacker will surely be willing to do so.

To make matters even more uncomfortable, a lot of lawyers and privacy experts believe that if a person knowingly installs a device that listens and transmits information to a third party, that person has waived their Fourth Amendment privacy rights and any rights granted by the Electronic Communications Privacy Act. The concept has not yet been challenged in a court, but if it’s true, then people have no recourse against Amazon or anybody else using the information gathered from a voice assistant device.

My house has four Amazon Echos that we bought when the devices first hit the market. They are convenient and I use them to listen to music, check the weather or news, check the hours at stores or restaurants, and to make the occasional reminder in the middle of the night. My family has gotten uncomfortable with being listened to all of the time and we now unplug the devices when we aren’t using them. This kills all of the spontaneous uses of the devices, but for now, that feels safer than being listened to.

I’m going to be leery about buying any new household appliance that can listen to me. If I can’t disable the listening function, I’m not going to buy the device. It’s impossible to feel secure with these devices right now. It’s impossible to take the word of big company that such devices are safe. You only have to look at the current experiences with the hacking of Ring cameras to know that smart home devices are currently anything but safe.

Small ISPs have never worried much about the devices that people hang off their networks. ISPs provide the bandwidth pipe, and how people use data has not been a concern for the ISP. However, that is slowly changing. I have a lot of clients that are now offering smart thermostats, smart security systems, and other smart devices as a way to boost revenue. ISPs need to be careful of any claims they make to customers. Somebody advertising safety for a smart security system might have liability if that system is hacked and the customer exploited.

Maybe I’m being overly cautious, but the idea of somebody I don’t know being able to listen to everything said in my house makes me uncomfortable. As an industry person who has been following the history of IoT devices, I’m even more uncomfortable since it’s now obvious that most smart home devices have lousy security. If you don’t think Amazon is listening to you, I challenge you to activate Alexa and say something vile about Jeff Bezos, then see how much longer it takes to get your next Amazon shipment. Go ahead, I dare you!

US Has Poor Cellular Video

Opensignal recently published a report that looks around the world at the quality of cellular video. Video has become a key part of the cellular experience as people are using cellphones for entertainment, and since social media and advertising have migrated to video.

The use of cellular video is exploding. Netflix reports that 25% of its total streaming worldwide is sent to mobile devices. The new Disney+ app that was just launched got over 3 million downloads of their cellular app in just the first 24 hours. The Internet Advertising Bureau says that 62% of video advertisements are being seen on cellphones. Social media sites that are video-heavy like Instagram and Tik-Tok are growing rapidly.

The pressure on cellular networks to deliver high-quality video is growing. Ericcson recently estimated that video will grow to be almost 75% of all cellular traffic by 2024, up from 60% today. Look back five years, and video was a relatively small component of cellular traffic. To some extent, US carriers have contributed to the issue. T-Mobile includes Netflix in some of its plans; Sprint includes Hulu or Amazon Prime; Verizon just started bundling Disney+ with cellular plans; and AT&T offers premium movie services like HBO or Starz with premium plans.

The quality of US video was ranked 68 out of 100 countries, the equivalent of an F grade. That places our wireless video experience far behind other industrialized countries and puts the US in the same category as a lot of countries from Africa, and South and Central America. One of the most interesting statistics about US video watching is that 38% of users watch video at home using a cellular connection rather than their WiFi connection. This also says a lot about the poor quality of broadband connections in many US homes.

Interestingly, the ranking of video quality is not directly correlated with cellular data speeds. For example, South Korea has the fastest cellular networks but ranked 21st in video quality. Canada has the third-fastest cellular speeds and was ranked 22nd in video quality. The video quality rankings are instead based upon measurable metrics like picture quality, video loading times, and stall rates. These factors together define the quality of the video experience.

One of the reasons that US video quality was rated so low is that the US cellular carriers transmit video at the lowest compression possible to save on network bandwidth. The Opensignal report speculates that the primary culprit for poor US video quality is the lack of cellular spectrum. US cellular carriers are now starting to implement new spectrum bands into phones and there are more auctions for mid-range spectrum coming next year. But it takes 3-4 years to fully integrate new spectrum since it takes time for the cellular carriers to upgrade cell sites and even longer for handsets using a new spectrum to widely penetrate the market.

Only six countries got an excellent rating for video quality – Norway, Czech Republic, Austria, Denmark, Hungary, and the Netherlands. Meanwhile, the US is bracketed on the list between Kyrgyzstan and Kazakhstan.

Interestingly, the early versions of 5G won’t necessarily improve video quality. The best example of this is South Korea that already has millions of customers using what is touted as 5G phones. The country is still ranked 21st in terms of video quality. Cellular carriers treat cellular traffic differently than other data, and it’s often the video delivery platform that is contributing to video problems.

The major fixes to the US cellular networks are at least a few years away for most of the country. The introduction of more small cells, the implementation of more spectrum, and the eventual introduction of the 5G features from the 5G specifications will contribute to a better US cellular video experience. However, with the volume of US cellular broadband volumes doubling every two years, the chances are that the US video rating will drop more before improving significantly. The network engineers at the US cellular companies face an almost unsolvable problem of maintaining network quality while dealing with unprecedented growth.

Seattle Tackles MDU Broadband

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Our industry takes it as general wisdom that urban areas have better broadband than rural areas, and as a general premise it’s true. But within urban areas, the segment of the community with the widest range of broadband coverage are apartment buildings. I think you can go to every big city and find some apartments with gigabit speeds while other apartment buildings have little or no broadband.

There are several reasons for the wide variance in broadband coverage. First, landlords have always had a say about what carriers they will allow in their buildings. I’ve seen numerous cases of landlords that include slow broadband into the rent and don’t let faster ISPs into their building. Some buildings don’t have broadband due to what can only be described as redlining where ISPs avoided poor or troubled neighborhoods. Finally, some older apartment buildings are expensive to rewire due to the way they were originally constructed.

The City of Seattle is tackling the issue in an interesting way. Over half of the living units in the city are in MDU’s (multi-dwelling units), meaning apartments, condominiums, and townhouses. In 2019 almost 81% of new units built in the city are in MDUs. The city views the ability of MDU tenants to have the same broadband quality and options as single family homes as a digital equity issue.

The city has been gathering facts about MDU broadband for several years and came to understand the wide variance of broadband in different buildings. They found that MDUs routinely don’t have the same broadband options as nearby single-family homes. The city conducted a survey in 2017 that found that 95% of MDU tenants have access to broadband of at least 25/3 Mbps. However, the survey found that few tenants in the city have a competitive choice between multiple ISPs at speeds of 100 Mbps or faster. The tenants who have the choice of multiple fast ISPs were the most satisfied with their broadband. The city concluded from the survey that choice was just as important to MDU tenants as broadband speeds.

Probably the most important finding of Seattle’s research is that there is a wide variance among landlords in terms of understanding their broadband options. They found landlords who know very little about broadband up to landlords that have sophisticated tech plans. The city found that many landlords have relied on the advice from ISPs – which clearly can be self-serving and not in the benefit of landlords and tenants.

The city concluded that one way that they could help improve MDU broadband was by helping to educate landlords. The Seattle Office of Cable Communications launched an initiative they call B4B – Build for Broadband. Their goal is to create awareness of the importance of broadband for landlords and to provide educational content for the many landlords that can’t afford telecom planners and consultants.

The city has undertaken an initiative to provide information about broadband to landlords. They’ve started a series of webinars covering topics of interest to landlords. I should disclose that I helped the city with a webinar that compared wired and wireless technologies. The city is also gathering other information for landlords on their website.

This initiative makes a lot of sense in Seattle since it has one of the highest percentages of MDU residents in the country. However, any city that has MDUs could consider something similar. I’ve done broadband feasibility studies for cities that have between 20 to 50 MDU complexes, and inevitably they are as widely disparate as the ones in Seattle. There usually are a few that have little or no broadband and a few that have been wired with fiber and that offer gigabit broadband.

Cities are often surprised by the wide variance in broadband availability and speeds at different MDUs. Cities are also often surprised to hear that even if they find a broadband solution for improving broadband for single-family homes and businesses, that the solution will not necessarily apply to MDUs. I know of many fiber overbuilders that skip past MDUs due to the cost of rewiring the buildings, the reluctance of landlords to let them in, or the marketing challenge of keeping up with tenant churn.

It’s not hard for smaller cities to take an inventory of the state of broadband in their MDU community. It’s normally as simple as to visit each apartment complex to find out what’s available to tenants. While smaller cities are not going to undertake an educational process with the scope of Seattle’s, cities can assist MDUs with poor broadband to find a better solution. Sometimes it’s as easy as helping to match competitive ISPs and landlords. It might mean getting landlords talking to each other. One thing is for sure – no solutions can be found until the problems are identified.

Maximizing the Benefits of Fiber

I recently talked to Deb Socia who is now the CEO of the Enterprise Center in Chattanooga, Tennessee. Anybody who knows Deb knows that she’s worked for decades to find solutions for digital inclusion and was also the founder of Next Century Cities. It’s not a surprise to see her now as the head of the Enterprise Center, which is a non-profit that is working to leverage the city’s fiber network to benefit a number of sectors of the community.

The organization has three primary areas of focus. First, the Enterprise Center helped to establish and now is at the forefront of promoting Chattanooga’s Innovation District. This is a section of town that is focused on promoting new business start-ups and to create collaboration between creative thinkers, entrepreneurs, the local University community, and technology gurus. This effort involves numerous initiatives such as a high-tech business incubator program, co-working space for new businesses, and a host of services to help new businesses succeed.

The second area of emphasis is the Smart City Collaborative. This currently involves a 1.5-mile section of the city that is fully-sensored with a wide range of smart devices. The area is a testbed for smart city applications and has attracted institutions like the Oak Ridge National Laboratory, the National Science Foundation, U.S. Ignite, and the University of Southern California, along with numerous vendors and entrepreneurs. The collaboration has a number of goals. One is to test new smart city ideas in a field environment that is wired with gigabit fiber. The collaboration also concentrates on smart city applications that don’t violate citizen privacy. The long-term goal of the Enterprise Center is to spread the best of the smart city applications to the rest of Chattanooga.

Finally, Deb returned to her roots and is promoting digital equity through various programs such as Tech Goes Home – something she worked on in her past. Chattanooga is known for having fiber available everywhere, but like most cities still has many households that can’t afford broadband. The digital equity effort works to provide the three necessary components of digital inclusion – connectivity, computer hardware, and the training needed to use broadband. Deb reports that the demand for computer training is far exceeding predictions.

All of this is made possible to some degree by the fact that Chattanooga has a municipal broadband network. Deb says that City-owned ISP is key for her success. That can be seen in other communities like Wilson, North Carolina where the city has leveraged broadband to make big strides in revitalizing downtown, attracting businesses, invigorating the arts, and helping to solve the digital divide. Eugene, Oregon has leveraged gigabit fiber to create an economic boom by enabling a sizable community of software developers.

I’ve always been mystified why more cities don’t follow the lead of cities like Chattanooga, Wilson, and Eugene. There are now a few hundred communities that have built municipal fiber networks and many of them have not taken the next step past using the network to provide faster broadband. Faster and better broadband is important and can alone bring big benefits to a City such as increased incomes from citizens working from home, or from citizens levering broadband to start new businesses. The Enterprise Center has made the bold statement that broadband alone is not nearly enough, and a City has to expend effort to get the full benefits out of a broadband network.

Even more puzzling is that it’s rare to see this same effort in cities that have broadband networks provided by commercial ISPs. There are now many cities served by Google Fiber or other fiber overbuilders. I can’t think of anything that stops such cities from duplicating the efforts undertaken by the Enterprise Center and its many partners in the City.

I think cities that don’t tackle these issues are missing a huge opportunity. My guess is that twenty years from now the City of Chattanooga will be able to point to major employers that got their start through the business incubator effort. The city is likely to have benefitted hugely by keeping some of its brightest entrepreneurs at home rather than have them move to the handful of big tech centers around the country. It’s almost impossible to calculate the gigantic community benefit that can come from helping low-income households join the digital world. In a decade Chattanooga will start seeing young professionals and entrepreneurs that were aided by the efforts made today to solve the digital divide.

My Telecom Predictions for 2020

Technical Resource Shortage. There is already a growing shortage of fiber resources that includes engineers, construction companies, and fiber consultants. The upcoming $16.4 billion RDOF program will create a resource shortage in 2020 for those who can help companies seek grant funding. Once the grants are awarded, the size of the program will add stress to the resources needed to build networks. Companies that don’t line up their experts early might find themselves without help.

Broadband Price Increases Are Now Routine. The biggest ISPs including Comcast, AT&T, Charter, Verizon, and others have now made it clear that they will be raising broadband rates annually – at least in the majority of their markets where they don’t face real competition. Anybody building a business plan for a new market has to decide how to predict future rate increases.

5G Cellphones Will Prove to be a Joke. At least for 2020, almost everybody who spends extra for a 5G handset is going to be disappointed. The companies deploying millimeter wave spectrum are doing it in limited downtown areas of major cities – and the speeds are only faster outdoors. Carriers implementing low frequencies like 600 MHz and 850 MHz admit that service won’t be any faster than 4G LTE.

FCC Will Eliminate the Last Vestiges of Regulation. The FCC has been actively tearing down regulations affecting the biggest ISPs. The agency has completely deregulated broadband and killed net neutrality. They’re in the process of gutting the use of unbundled network elements They’ve preempted local authority on the placement of wireless infrastructure. Since there is a chance that the administration will change at the end of the year, the FCC will kill as many regulations as they can during 2020.

T-Mobile / Sprint Merger Will be Approved. While there is a lot of opposition to the merger, the reality is that Sprint is not particularly viable as a cellular carrier. The biggest cable companies are entering the cellular markets and will push down urban cellular prices. Dish Networks seems to have a viable plan to become a major carrier if the T-Mobile/Sprint merger is approved.

Courts Will Chip Away at the 5G Pole Attachment Rules. The authority of the FCC to override local policy for the placement of cellular infrastructure boils down to a state versus federal jurisdiction battle. The courts have already said that cellular companies must heed some historic preservation and aesthetics rules. Ultimately the courts will weaken, but not kill the FCC rules, giving cellular carriers more rights than they historically had, but not full carte blanche authority to place devices anywhere.

State Net Neutrality Will Be Almost as Powerful as Federal Policy. It will be hard for the big ISPs to comply with net neutrality rules in California and Washington without complying everywhere. It’s also likely that more states will pass similar net neutrality rules

The RDOF Grants Will Fund Poor Broadband Solutions. Unfortunately, the $16.4 billion RDOF grants will award some grant money to technologies that are not future-proofed. Since the grants can be awarded for technologies that deliver broadband speeds of as little as 25/3 Mbps, we’ll see money go to technology solutions that might be obsolete before the end of the RDOF implementation period.

Cellular Networks Will Continue to Degrade. The nationwide use of cellular data is currently doubling every two years, which is greatly stressing cellular network quality. The cellular carriers need to implement massive numbers of small cells, add new spectrum, and fully implement 5G to keep up with the growing demand. Since those solutions will take 3 – 7 years to implement, cellular network quality is going to get a lot worse before the problems are solved.

Household Bandwidth Usage Will Continue to Grow. OpenVault says the average home now uses 275 gigabytes of data per month, with cord cutting households using 520 GB per month. Opensignal and Cisco both report that household broadband usage continues to grow rapidly, at about 21% annually, or a doubling every 4 years. There is nothing to suggest this growth will be slowing.

The Government’s Role in 5G

It’s been really interesting to watch how much the federal government talks about 5G technology. I’ve not seen anything else like this in my adult lifetime, although there may have been times in the past, such as the advent of railroads or electricity that the federal government took such an active interest in new technology.

The government gets involved to some extent in many new technologies, but with 5G there has been a steady and persistent dialog about how 5G is vital to our economic future, and pronouncements of why we must implement 5G as quickly as possible to stay ahead of the rest of the world. As I’ve watched the way the government talks about 5G, it makes me wonder why we never heard the same urgency for breakthroughs like personal computers, the world wide web, or understanding the human genome.

A good example of what I’m talking about came in November when a bipartisan group of senators sent a letter to Robert O’Brien, the current national security advisor asking for a better government strategy for 5G. They claimed they are concerned that China is winning the 5G war, which they believe creates a security threat for the US.

I’ve been hearing about the 5G war for a few years now and I still don’t know what it means. 5G is ultimately a broadband technology. I can’t figure out how the US is harmed if China gets better broadband. If there is now a 5G war, then why hasn’t there been a fiber-to-the-home war? I saw recently where China passed us in the number of last-mile fiber connections, and there wasn’t a peep about it out of Congress.

The market reality of 5G looks a lot different than the rhetoric from the politicians. Cellular carriers worldwide are crowing about 5G deployment, yet those deployments contain none of the key technology that defines 5G performance. There is no frequency slicing. There is no bonding together of multiple frequencies to create larger data pipes. There is no massive expansion of the number of connections that can be made at a website. Cellphones can’t yet connect to multiple cell sites. What we have instead, for now, are new frequencies layered on top of 4G LTE.

New frequency does not equal 5G. The millimeter wave spectrum is faster in the handful of neighborhoods where people can go outside in the winter to use it. The carriers admit that the 600 MHz and the850 MHz spectrum being deployed won’t result in faster speeds than 4G LTE.

AT&T recently announced a significant cut in its capital budget for 2020 – something that is hard to imagine if there is an urgent need to deploy 5G faster than the Chinese. The reality is that the big cellular companies are struggling to find a business case for 5G. They are starting to realize that a lot of people aren’t willing to pay more for faster cellular data. Some of their other big uses for 5G such as using it for self-driving cars, or for supplanting WiFi as the technology to handle IoT devices are still years into the future and may never come to fruition.

The other Washington DC talking point is that 5G networks will be 100 times faster than today’s cellular data. That may be true in the tiny downtown urban areas that get saturated with outdoor millimeter wave broadband. I have a hard time thinking this is anything more than a gimmick that will never become widespread. A dense fiber network is needed to support the millimeter wave transmitters, and it’s hard to think that the revenues from millimeter wave broadband will ever justify building the needed network.

It’s starting to look like the real reason for the talk about a 5G war is to drum up sympathy for the big cellular carriers as a justification for big government giveaways. The FCC has been generous to the cellular carriers in the last few years. They killed broadband regulation and net neutrality. They gave the cellphone carriers the right to place cellular equipment anywhere in the public right-of-way. Just recently the FCC created a 5G Fund to give $9 billion to the cellular carriers to expand their networks in rural areas. The FCC has been freeing up every imaginable band of spectrum for 5G.

That sounds like that ought to be enough, but since these giveaways are behind us, I wonder why I’m still hearing the rhetoric, such as the recent letter from Senators. Are we going to be seeing other big giveaways? Is the government perhaps going to give billions of dollars to build urban and suburban 5G networks so that we don’t lose the 5G war? I’m at a loss to think of anything else that the government could do to push 5G beyond what they’ve already done.

There doesn’t seem to be anything that the US government can do in terms of developing 5G technology faster. Corporations all over the world are furiously working to implement the many new aspects of the 5G specifications. Many of the corporations doing the key research are not even American, and labs at Nokia and several Chinese companies are among the leaders in developing the core equipment used to transmit 5G. It’s hard to think there is anything the US government could do to help us win the 5G war from a technical perspective.

I must admit that I’m starting to cringe when I hear federal officials talk about the 5G war. It makes me believe that there more big handouts coming to the cellular carriers. I hate the idea of the federal government handing billions to these big carriers while we continue to have lousy rural broadband – which is largely the fault of these same big carriers. My response to these Senators is that we shouldn’t be trying to win the 5G war if that means losing the landline broadband war.