Broadband and Water Systems

We always hear about smart grid technologies for electricity but rarely hear any mention of using smart technology to improve our water systems. Our water systems need help. The American Society of Civil Engineers has given the country’s water systems a grade of D- for the last decade. It’s been estimated that as much as 50% of water is lost to leaks in some systems, with even good systems losing as much as 20% of water. Major cities in the US like San Diego, Las Vegas, and San Antonio have had water scares in the recent past. In the telecom industry, we talk about outdated copper networks built in the 1970s but there are major water arteries in many communities that go back to the Civil War. My city of Asheville, NC recently had a major water project to replace wooden water pipes used in the original water routes from the local reservoir.

The good news is that there are tools that can help to pinpoint the biggest problems in water systems. Just like an electric grid, the first step in developing a smart water system requires placing numerous sensors throughout a city to gather information on water flow and pressure. At the simplest level, once engineers understand the normal water flow in a system, then any deviations and drops in water pressure are an immediate signal that there is a new leak in the system.

A second step is to upgrade to more accurate water meters. Engineers have estimated that as many as 40% of the meters used to serve high-volume commercial customers under-report the amount of water being used, and consequently underbill for water usage. Old and inaccurate meters can also disguise leaks.

Once more accurate water meters are installed, it becomes possible to start identifying long-standing water leak problems. It’s possible to build computer models for small sections of a water system to be able to compare the amount of water entering a neighborhood compared to what is reaching meters. This allows a city to rank and compare neighborhoods and identify the parts of a city with the highest amount of wasted water. After that comes the effort needed to identify the location of leaks. Sensors and computer modeling can be applied to smaller sections of a neighborhood to better pinpoint leaks.

There are also new techniques being developed. Daniel Tartakowsky, a professor of energy resources at Stanford recently published a paper suggesting new techniques to specifically identify the location of leaks. Even after computer modeling has identified a street with a major leak, the cost of pinpointing a leak located under city streets can be costly. Nobody wants to dig up whole city blocks looking for wet soil.

The proposed technique uses an older concept known as a water hammer. This has been used for years and is done by quickly turning off water and using sensors to gather data about how the shock wave and vibrations from turning off water propagate through pipes. Such vibrations tend to stop or be altered when hitting damaged pipes. The traditional water hammer technique involved time-consuming and costly calculations. The new technique proposed by Dr. Tartakowsky uses a computer model that can be handled with a laptop that can interpret the results from a water hammer test quickly to pinpoint the location of a leak, often within ten meters.

All of this new technology benefits from a city that has ubiquitous broadband capabilities to closely and accurately monitor the the numerous sensors needed to establish a smart water system. This is something that is sorely needed. Cities everywhere worry about having high water rates, which can be driven by processing and providing a lot of clean water that is then wasted in leaks.

 

Broadband and Bad Actors

I wrote a sentence in a blog the other day that stuck with me: “Fiber is not automatically a great technology – it can be a great technology when operated by a great ISP.” It’s becoming clearer to me over time that much of our broadband grief in this country comes from what I call bad actors. By this, I mean ISPs that put quarterly earnings above customers. Almost all of the troubles we see with rural broadband comes directly from the behavior of bad actors.

The original bad actors are the big telcos. These companies decided decades ago that they were going to stop maintaining rural networks – and they did so with a vengeance. They cut back drastically on the rural technician workforce. They closed businesses offices everywhere so that customers had to talk with people who had no idea where they live. Year after year, the telcos reduced the amount of maintenance capital that could be used to fix customer problems until the budgets are nearly zero.

Why do I call the big telcos bad actors? They purposefully let copper networks deteriorate. Each big telco made a decision in the boardroom to milk revenues out of remaining copper customers while spending the bare minimum amount of money needed to keep the lights on.

We know big telcos could have done much better. Many of the small telcos across the country took a different path. Many of them worked to keep copper in good operating condition and upgraded DSL technology several times to bring rural DSL download speeds between 10 Mbps and 30 Mbps. These companies also didn’t stop doing maintenance or cut back on customer service. We saw the same thing in places like Germany where the big telcos have gotten the most possible out of old copper and DSL.

What really made the big telcos into bad actors was when they took huge amounts of funding to make DSL better and largely pocketed the money instead of providing upgrades. I’ve written about the disaster of the CAF II program many times. The FCC should never have given this money to the telcos, but when they did, the big telcos purposefully misused the funds – that’s being a bad actor.

The big telcos aren’t the only bad actors. The big cable companies are slipping into bad actor mode. The cable companies had to compete against DSL for the first decade or so after introducing broadband, but they’ve won that battle now and are becoming monopolies – in many markets where AT&T walked away from DSL recently, the cable company is now a monopoly.

There are a number of reasons why I now consider big cable companies to be bad actors. Their billing practices are deceptive and a significant portion of every bill is now buried in hidden fees. The cable companies use data caps that punish homes for using the bandwidth they’ve purchased. The cable companies have notoriously dreadful customer service, the worst of any other corporations in the US – the public likes the IRS and funeral homes more than they like Comcast.

The big cable companies are also headed down the path of neglecting networks. In every city I’ve studied, there are some neighborhoods that have sluggish broadband – and the cable companies don’t bother spending the money to fix problems. The cable companies elected to not implement the upgrade for upload speeds that were part of DOCSIS 3.1 and are quietly ignoring the upload crisis right now. If the cable companies cared about customers more than the bottom line, they would profusely apologize about the upload performance that has crippled millions of homes during the pandemic and would be doing everything in their power to boost upload speeds – instead, I hear only crickets.

This all matters because the federal government continues to give money to the bad actors. The FCC is flowing an additional $1.5 billion to the big telcos this year from the CAF II program. Big telcos and cable companies have won billions in the recent RDOF auction. There is some chance that those companies won’t build everything they should or will cut corners and build the absolute minimum needed to fulfill the grant requirements. But even if they build what they’ve promised, they are likely going to continue taking advantage of customers. Is there any reason to think that a big telco is going to take any better long-term care of a rural fiber network than it has done with copper? It’s not hard to predict that bad actors still won’t fund sufficient technicians or enough maintenance capital. Unfortunately, but bad actors are unlikely to get better. If I had a magic wand the bad actors would never see another penny of federal subsidy – they’ve shown repeatedly that they don’t deserve it.

Quantifying the Benefits of Fiber

Dr. Bento J. Lobo, an economist at the University of Tennessee at Chattanooga undertook a study to quantify the benefits of the municipally-owned fiber network in Chattanooga. Any citywide fiber network brings economic development to a community, but a municipally-owned system brings additional benefits because of the way that the business is more deeply integrated into the community.

The study estimates that the network has generated nearly $2.7 billion in benefits since the network was constructed a decade ago. I’ve always felt that you have to take the claims from economic benefit studies with a grain of salt. Many of the benefits are easily measurable, but other benefits rely on assumptions that are hard to prove or disprove. But the big story is that even a conservative economic analysis (and this analysis might already be conservative) would still demonstrate a huge benefit to the city from fiber.

Chattanooga is a bit of a unique case because it was one of the first municipally owned citywide fiber systems and is also the largest. Being first to market with fiber brought some benefits to Chattanooga that might not come in the same magnitude to other cities building fiber today. For example, EPB – the municipal utility, offered affordable gigabit broadband when the cable company still had speeds of 30 Mbps download.  With that said, here are some of the benefits that the fiber business brought to Chattanooga.

  • One of the most immediate benefits is a sizable saving to consumers. EPB charges $57.99 for a symmetrical 300 Mbps connection and $67.99 for a symmetrical gigabit. EPB charges $9.99 for a whole-house WiFi network. These prices are far lower than Comcast’s basic product in most markets that is $76 for up to 200/25 Mbps connection plus $14.95 for the WiFi modem. EPB also offers low-income broadband for qualifying homes at $26.99 per month. The study quantifies the benefit to consumers of over $144 million.
  • Chattanooga was one of the first places in the nation that touted the ability to bring an affordable gigabit to anybody. This resulted in attracting entrepreneurs to the city that were enticed by cheap and fast broadband. The study estimates that the fiber network has gained or saved over 9,500 jobs. The city has gained a reputation as a good incubator for start-ups and now has an innovative business community – where nothing like it existed before the network was built. Cities building fiber today are not going to duplicate this results, at least not to the extent seen in Chattanooga.
  • The study also credits the fiber network with attracting nearly $1 billion in new investments by businesses in the city – from start-up or existing corporations that moved to the city or expanded existing businesses.
  • There are a few direct benefits that come from operating a new municipal business. For example, the fiber business has paid around $60 million into the city coffers for in-lieu-of-tax payments (payments that mimic taxes). The fiber business has also absorbed $338 million in overhead costs that would have otherwise been charged to the electric utility – a saving that translates into lower electric rates.
  • The study assigns a $750 million benefit to an electric smart grid. Fiber allowed a number of beneficial changes to the operations of the electric business. This includes automated meter reading that significantly lowered labor and vehicle costs. The fiber network has been credited with reducing the duration of electrical outages. The use of automated electrical switching devices has shaved the peak load (the biggest cost of power is to satisfy the peak during heavy usage times). Smart metering has saved the city over $50 million in electricity theft.
  • The study calculated $74 million in benefits to businesses for having faster and lower latency broadband due to automation and increased efficiency. This is the kind of benefit that is clearly real, but difficult to quantify.
  • The study also took a stab at quantifying more esoteric, but real benefits. For example, it’s incredibly hard to quantify the impact of having good broadband on education both before and during the pandemic. The city has done more than most cities in getting broadband to low-income and student households. There are also significant societal benefits from telecommuting, which was booming in Chattanooga even before the pandemic. Chattanooga was also pioneering telemedicine before the pandemic.
  • Finally, the study even assigns a value to the publicity generated by the fiber network. The city went from obscurity to appear on nationwide lists of the best places to live and retire, all credited to the fiber network.

Again, Chattanooga is somewhat unique by being an early adapter to fiber. But the city has also done a lot more than just offering affordable broadband. New businesses didn’t just magically appear in the city and are the result of the hard effort of economic development folks – but such efforts would have gone nowhere without the fiber network. Chattanooga is ahead of most cities in adopting the benefits of smart grid – but again, because it decided to take maximum of advantage of the fiber network.

My guess is that this study is a little conservative. For example, what’s the benefit from higher property tax revenues due to having Chattanooga listed as one of the best places in the country to live? I can’t even begin to imagine quantifying the true long-term benefits that come from using fiber to reduce the number of students that drop out of school or fall through the cracks. What’s the value to society from a student who goes to college, but without home broadband wouldn’t have?

No other city is likely to see some of Chattanooga’s early adopter advantages, but most of the advantages realized by the city can be duplicated. There is also a big lesson to be learned from Chattanooga – building fiber is only part of the story and a community has to take the extra steps to make sure that all of the constituencies of a city see the advantages of fiber. Too often, cities analyze the feasibility of a fiber network by looking only at the financial performance of the fiber business. Chattanooga’s example shows that the biggest advantages to the community don’t appear on the books of the fiber business, but in the pocketbooks of the citizens and businesses in the community.

Why Do We Assume Cable Broadband is Always Good?

One of the oddest aspects of FCC monitoring of broadband is that the agency has accepted the premise that any broadband product faster than 25/3 Mbps is adequate broadband. This means that the FCC has completely accepted that broadband provided by cable companies is adequate and is something the agency doesn’t have to be concerned with. The FCC makes the automatic assumption that broadband from cable companies is good broadband and that anybody that has cable broadband is ‘served’ with broadband. The realities of the marketplace tell a different story, and cable broadband is often not adequate for homes and businesses that often have no other broadband option.

This became crystal clear during the pandemic when many homes found out that their cable broadband connection would not support the family for working and schooling from home. Families that were paying more than $70 per month for a broadband connection found that no more than one or two family members could work from home at the same time. This is all due to the decision of most cable companies to not upgrade the upload link when they implemented the upgrade to DOCSIS 3.1. Instead, cable companies stayed with the older DOCSIS 3.0 upload technology, and most homes get between 10 and 20 Mbps upload speeds, with some unlucky homes getting slower speeds. What no cable company ever talks about is the fact that upload bandwidth is jammed into the noisiest and part of the cable TV system that suffers from various kinds of interference that can further degrade performance.

We shouldn’t let the cable companies off the hook by blaming upload problems on the pandemic. Many cable company networks had big problems long before the pandemic. We recently did speed tests in a city where 75% of households in the city were seeing download speeds that were lower than the published target 100 Mbps target speed. 40% of the customers in that city were seeing speeds under 50 Mbps, with 15% seeing speeds under 25 Mbps. These kinds of speed test results demonstrate a network with problems. What are some of the problems that can lead to poor performance in a cable network?

  • Some cable companies still have network nodes that are too large, meaning too many households are sharing a fiber connection back to the node. It’s easy to spot such networks because they still bog down at prime time in the evenings when most households are using bandwidth. To give credit, most cable networks have licked this problem, but not all.
  • A common problem is poorly functioning cascading. Cable companies routinely have to amplify the signal between homes and the network core, and cascading problems occur when multiple amplifiers in a row serving a given neighborhood are not properly in sync, resulting in loss or distortion of data.
  • Everybody in the country talks about the poor condition of the telephone copper networks because of age. But the copper coaxial networks of the cable companies are also old and near the end of economic life. The majority of cable copper was built in the 1970s with some neighborhoods even earlier. Age is a problem with cable networks because a coaxial copper network acts like a giant antenna and picks up interference from numerous sources in the environment. New coaxial networks are ‘tight’, meaning that cable splice points don’t let in much interference. But over time, as cables are cut and repaired and as connections naturally loosen over time, the networks get noisier and noisier, meaning degradation of signal quality.
  • One of the most susceptible parts of the cable network are drops. They get whipped by the wind and degraded by weather.
  • There can also be tons of small network issues that never get fixed. There might be bad power taps or amplifiers that should be replaced. These devices might not have been properly installed and have been causing local problems for a few customers for decades.
  • There are documented examples of cable companies who have upgraded the network but didn’t upgrade modems. The most notorious such case was Charter in upstate New York where the company went for years with outdated modems, even after promising regulators the problem would be fixed. The company nearly lost its statewide franchise due to sticking with outdated customer technology.

A big part of my practice these days is working with cities that are fed up with inferior cable broadband. In some cities the strength of the broadband signal varies widely throughout the day. Some cities complain of nagging small outages that occur daily, with broadband dropping out of service for a few minutes or an hour or two at a time. As evidenced by the speed tests I’ve mentioned, some cities have broadband speeds that are far slower than what the cable company advertises. I’ve done several surveys this year where a third of homes say that cable broadband is not adequate for working or schooling.

Unfortunately, we have an FCC that assumes that everything faster than 25/3 Mbps is adequate broadband and there has been virtually no discussion at the FCC about cable companies that deliver lousy broadband. As household demand continues to grow, there is a growing number of customers who are unhappy with the broadband they are receiving from cable companies. City governments hear numerous complaints from the public about poor broadband but feel powerless in eliciting changes from cable company monopolies that could improve performance but refuse to do so. In most cases, the cable companies know exactly what their problems are in a given market but have elected to not spend the money to fix issues.

The State of the Internet

The Mozilla Internet Health Report is packed with interesting statistics about the state of the Internet. Reports like this one remind us that broadband is a worldwide issue that is much larger than the US broadband industry I write about every day.

The report contains a lot of interesting facts:

  • A little more than half of the planet is still not connected to the Internet. As a planet, we still have a long way to go. While the largest percentage of a region still not online is in Africa, by sheer numbers, most of those still not connected are in Asia.
  • Worldwide, men are 21% more likely to be online than women.
  • Much of the world connects to broadband through cellphones, and the cost of broadband is a huge issue in many parts of the world. In Middle Africa, a gigabit of cellular broadband costs almost 12% of the average monthly income. In Western Africa, it’s over 8% and in Eastern Africa, it’s over 7.4%. Closer to home in Central America it’s 4%.
  • Much of the world can’t afford smartphones. For example, in Sierra Leone it takes six months of an average salary to buy a smartphone. In India it takes 63 days of the average salary.
  • Seven of the top ten largest companies in the world, by market capitalization, are Internet companies – Apple, Microsoft, Amazon, Alphabet (Google), Facebook, Tencent, and Alibaba.
  • Five of those companies – Amazon, Microsoft, Alibaba, Google, and Tencent – control 80% of all of the cloud traffic in the world, meaning that most other web applications run through these companies.
  • Four of the top six social media platforms, in terms of users are owned by Facebook – Facebook, WhatsApp, Facebook Messenger, and Instagram.

The report also contains many stories about some of the negative aspects of the web. A few include:

  • The states of Rakhine and Chin in Myanmar have been blacked out from Internet access for over a year. Governments routinely block Internet access as a way to punish or control people. In addition to these two places, there was at least one other place in the world with blocked access every day in 2020.
  • 2020 might go down as the year when Internet disinformation was weaponized with governments all over the world using social media to spread propaganda.
  • The pandemic magnified the extent of the digital divide across the world. In many parts of the world, the education systems have effectively shut down for rural and poor urban students.
  • Government data has been hacked. A good example is a hack in Chile where over 19 gigabytes of citizen data including passwords and personal identifying data was stolen.
  • There are practically no binding guidelines anywhere in the world that set limits or define ethics for the newly developing artificial intelligence technology.

Of course, there are also positive things happening with the Internet:

  • In the US and Europe, there is a major push to tackle antitrust abuses by the largest web companies.
  • Europe is leading the world, but others are catching up in creating rules to enforce consumer privacy.

It’s easy to forget that the web only became a real thing in the mid-1990s. While there are clear problems associated with the web, it’s also amazing that in a little over 25 years we’ve connected half of the people on the planet.

The Need for Training Telecom Technicians

Eleven different industry trade associations have written a joint letter to Congress and the new administration asking that any new infrastructure funding include training for telecom technicians. I can’t recall a time when so many associations aligned like this on any issue.

The letter included support from the Competitive Carriers Association (CCA), the Fiber Broadband Association (FBA), INCOMPAS, NATE: The Communications Infrastructure Contractors Association, NTCA – The Rural Broadband Association, Power & Communication Contractors Association (PCCA), the Telecommunications Industry Association, USTelecom – The Broadband Association, the Wireless Infrastructure Association (WIA), the Wireless Internet Service Providers Association (WISPA), and the CTIA.

The letter says that the industry expects to create 850,000 new technician jobs by 2025 to support wireline and wireless deployments. To put that number into perspective, the industry currently employees 672,000 technicians with an average salary of $77,500. The industries also collectively expect to add another 2.1 million jobs to support the new industries like 5G and new fiber ISPs.

The associations are asking for the federal government to expand existing apprenticeship programs and create new ones that combine class learning along with field experience. There are some such programs in the country, but nearly enough to handle the upcoming needs of the telecom industry. To letter asks that in order to promote diversity that training programs be established at Historically Black Colleges and Universities and Tribal Colleges and Universities along with community colleges, public universities, and other institutions.

The industries suggest that training institutions form public/private partnerships with the industry to help develop the programs in a timely manner and to make sure that training is covering state-of-the-art technologies and techniques.

We are not currently prepared to double the number of fiber technicians – but we’re going to have to find a way to do it. There are some formal training programs for fiber technicians, mostly being done by trade schools or technical colleges that sponsor apprenticeship like the CFOT or CPCT certification process sponsored by the Fiber Optic Association. But the majority of fiber technicians today are trained on the job with new employees starting as hands-on journeymen.

I’ve written about this issue before. We’re facing a shortage of technicians for several reasons. First, the large telcos have been downsizing technician workforces for the last two decades, meaning they did not train a lot of new technicians. These big ISPs have historically been the primary drivers for training new technicians. Unfortunately, this also means that a lot of the technician workforce are baby boomers who are now retiring, causing additional shortages.

We must find a way to make this happen or the wireless and broadband industries will be forced to cut back on expansion plans. We’ve been building fiber and new small cell sites at a furious pace for the last few years and are likely to continue to do so as long as we have the technicians needed to construct the new networks and to maintain them after they are built. Fiber and wireless technicians are the kinds of solid middle-class jobs our economy needs and hopefully, we can kick training programs into high gear in a hurry.

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.

States Get Serious About Broadband Funding

One of the consequences of the pandemic is that states are getting a lot more serious about funding broadband solutions, as evidenced by recently announced proposals to increase state funding for broadband in 2021. I’ve seen proposals from states of more than $2 billion in new funding. These are newly proposed funding amounts that don’t include money already allocated for existing state broadband grant programs.

Few of these proposals are a done deal – most have been suggested by governors or legislators and still must go through the legislative process. But even at the proposal level, this is a far greater amount of state broadband funding than anything we’ve seen in the past and reflects the serious nature of the rural broadband divide. Politicians at all levels are being assailed by people who have struggled through the pandemic due to a lack of broadband. Every governor recognizes the huge economic downside from a failed education system or from businesses crippled when employees can’t work from home. I see these state proposals as a cry for help to solve broadband gaps.

Here is the list I’ve assembled. I’m sure there are other states I’ve missed or states that have not yet announced plans for new 2021 broadband funding. If anybody knows of other proposals, please leave in the comments to this blog.

  • Iowa – $450 million over 3 years
  • Ohio – $250 million
  • Tennessee – $200 million
  • Wisconsin – $200 million
  • West Virginia – $150 million
  • Oregon – $118 million
  • Indiana – $100 million
  • South Dakota – $100 million over 5 years
  • Kentucky – $50 million
  • Minnesota – $50 million
  • Utah – $50 million
  • Washington – $45 million
  • Arizona – $43.1 million
  • Nebraska – $40 million
  • Idaho – $35 million
  • Arkansas – $30 million
  • North Carolina – $30 million
  • South Carolina – $30 million
  • Georgia – $20 million
  • Vermont – $20 million
  • Virginia – 15 million
  • New Mexico – $10 million
  • Missouri – $5 million
  • Maine – $1.8 million

One of the best things about this list is that money is being allocated to broadband in both red and blue states. Broadband should not be a partisan issue, although there are only a few state legislatures where it is. In most states, practically every rural politician is desperate to solve the rural digital divide, and broadband funding bills get bipartisan support.

This funding augments any federal grants. That includes the $9.2 billion that was recently announced at the end of the RDOF grants, $1 billion recently allocated for Tribal areas, and $300 million provided by the NTIA for grants.

While $2 billion might sound like a huge amount of money, it is just a start to permanently solve the rural broadband gap. This article from the Alabama Daily News describes a statewide study done by CTC Technology and Energy that estimates that it will cost between $4 billion and $6 billion to build fiber to all underserved areas of Alabama. I’ve also seen estimates nationwide that vary between $60 billion and $100 billion.

States are clearly saying that they are not going to sit around and wait for federal funding to help solve broadband gaps. Hopefully, most of these proposals make it through the legislative process – and perhaps when states see where they fall on the list above, some of them will step up the amount of funding even more.

Broadband Usage Explodes in Fourth Quarter of 2020

OpenVault just released its Broadband Insights Report for the 4th quarter of 2020. The report shows continued staggeringly fast growth of broadband usage in the country. The growth has been so fast that OpenVault applies the word ‘exploded’ to describe the giant increase in customer usage.

The monthly average household usage leaped to 482.6 gigabytes – which is a combination of both the upload and download usage in the average home across the whole country. It’s impossible to put that number into perspective without comparing it to the average household usage in recent quarters, as follows:

1st quarter 2018           215 Gigabytes

1st quarter 2019           274 Gigabytes

4th quarter 2019           344 Gigabytes

1st quarter 2020           403 Gigabytes

2nd quarter 2020          380 Gigabytes

3rd quarter 2020           384 Gigabytes

4th quarter 2020           483 Gigabytes

The fourth-quarter number is up 26% from the third quarter this year and up 40% from the fourth quarter of last year – the last time that usage wasn’t impacted by the pandemic. These are growth rates that network engineers can’t really grasp – how does one design a network to be ready for a 40% growth in traffic volume in a single year?

OpenVault also saw that there wasn’t a big difference between homes with data caps at 472.3 gigabytes per month and homes with unlimited usage at 496.6 gigabytes per month. You might expect homes with data caps to try to curtail usage, and the numbers show they only do so moderately.

Median usage has also grown significantly over the last year – this is the level at which 50% of homes use less broadband and 50% use more. Median broadband usage per home was 190.7 gigabytes at the end of 2019 and grew to 289 gigabytes by the end of 2020. The median usage in the US is going to remain a lot lower than the average usage due to homes with exceedingly slow rural broadband that are incapable of using a lot of data.

The number of households that are heavy users of broadband continues to explode upward. At the end of the fourth quarter, 14.1% of homes consumed more than 1 terabyte of data per month (1,000 gigabytes), up from 7.3% of homes just a year earlier. OpenVault has started also counting what they call extreme users or homes using more than 2 terabytes per month – 2.2% of all homes were extreme users at the end of 2020, up from 1% only a year earlier. There is no mystery about why Charter wants to start billing for data caps – there is a lot of money to be made from homes that use a lot of data. Looking back four and five years, and the cable companies claimed that homes that used a terabyte of data were anomalies and should pay extra. That argument loses steam when 1 out of 7 homes is routinely using more than a terabyte of data.

Of all of the statistics gathered by OpenVault, the fastest-growing category is the number of homes subscribed to a gigabit-speed service. At the end of the fourth quarter that has grown to 8.5% of all households, triple the 2.8% of homes that were buying gigabit products at the end of 2019.

Finally, the statistic that best defines broadband during the pandemic is the growth of average household upload usage each month. At the end of 2019, the average US homes uploaded 19 gigabytes of data per month. By the end of 2020 that had grown to 31 gigabytes. It’s likely that the demand for upload has grown even more than this, but huge numbers of homes report being restricted on the upload path. There are stories everywhere of homes still unable to connect to school or work servers, or home broadband connections that won’t support multiple people using the upload path at the same time.

Broadband is seasonal it’s likely that usage will drop some by the end of the second quarter in 2020 when school is out for most students. It’s going to be really interesting to see how usage changes by the end of 2021 as we hopefully leave the pandemic behind us.

Solving the Urban Digital Divide

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We suddenly have a new way to tackle the urban digital divide. The Consolidated Appropriations Act of 2021 allocated $3.2 billion to bring broadband to homes that need it during the pandemic. Further, a recent editorial in the Washington Post suggests that we expand this program and make it permanent. I have conflicted feelings about the plan.

It’s wonderful for the federal government to finally recognize that there is a huge digital divide in urban America. The FCC has rightfully concentrated its effort on rural homes that have no broadband option, but this means there is barely any official acknowledgement that an urban digital divide even exists. Finally recognizing the issue is a great step towards starting the process of finding permanent solutions to the problem.

This feels like the absolute right solution for 2021 while we are still under the pandemic. The proposed solution would pay $50 for a home broadband connection for homes that need it. There are still millions of homes with students struggling with schooling from home and millions more were sent home to work. Broadband is also essential for the millions who have lost jobs during the pandemic. $3.2 billion will pay for broadband to 10 million homes for six months or 20 million homes for three months. I wonder if anybody even knows how many homes need broadband right now – I’m guessing it’s far more than 10 million.

But I can’t help feeling like this is a big giveaway to the biggest ISPs which are likely to claim most of this money. It’s impossible for Washington DC outsiders to understand where ideas like this came from. I’d feel better about this idea if it came from digital divide advocates than if this idea was hatched by big ISP lobbyists who see a way to snag billion in federal money.

That’s a legitimate concern because this plan largely ignores the other two issues faced by homes without broadband. Many such homes don’t have a computer and many people don’t know how to use computers. Urban digital divide proponents will tell you that we need to solve all three issues before a home can meaningfully take advantage of getting broadband.

I also hope that any money used this way goes towards real broadband. It will be maddening if Comcast can charge the federal $50 monthly for what it already provides with its $9.95 Internet Essentials program. Comcast has crowed loudly about the good done by this program, but Comcast recently announced it is upgrading the program for 25/3 to 50/5 Mbps – a speed that is still inadequate for multiple people to use at the same time. I thought that was a decent program before the pandemic, but it no longer delivers what a home needs to stay connected during the pandemic.

I also hope that none of this money goes to AT&T DSL since the company stopped offering DSL to the public in October. None of this money should go to DSL in general since most DSL connections have upload speeds even slower than the Comcast Essentials.

I have reservations against making this a permanent solution. I might be wrong about this and perhaps I can be convinced that this is the best solution for the urban digital divide. I can’t help but wonder about what happens the day this subsidy ends and millions of homes lose their broadband connection. Perhaps the big ISPs already envision that day and know the temptation will be for the government to continue funding the program endlessly. My other big concern is that if this is made permanent that it will always be an annual target for politicians to eliminate.

My gut tells me that billions could be better spent by building a permanent broadband solution for poor urban neighborhoods. Before we make $50 payments into a permanent solution, as has been proposed by the Washington Post, I’d like to at least explore using federal funds to create urban broadband cooperatives or non-profit ISPs that could bring permanent broadband to neighborhoods that most need it. We already have a great historical example of how this can work. Rural America basically got electricity because the federal government loaned money to cooperatives to build electric networks. My guess is that we’d see the same thing happen in urban America if the government offered the oans. It makes a lot more sense to loan the money needed to let neighborhoods help themselves than to create a permanent subsidy.