WiFi 7

The WiFi 6 standard was just approved in 2020 and is starting to find its way into home and business WiFi networks. If you’ve purchased a new WiFi router recently, there is a decent chance that it can support WiFi 6. However, the benefits of the new WiFi aren’t going to benefit a home until you’ve upgraded devices like TVs, computers, and various IoT devices to use the new standard. It’s likely to take years for WiFi 6 to get fully integrated into most homes.

But that hasn’t stopped vendors from already working on the next generation of WiFi technology, naturally being called WiFi 7. WiFi 7 promises faster speeds and lower latency and will be aimed at maximizing video performance. Qualcomm says it expects full WiFi 7 to become available after 2024. WiFi 7 will be using the new WiFi specification 802.11be.

The speed capabilities have climbed with each subsequent generation of WiFi. WiFi 5, which most of you are running in your home today has a maximum speed capability of 3.5 Gbps. WiFi 6 stepped maximum speeds up to 9.6 Gbps. The early specifications for WiFi 7 call for maximum data speeds of 30 Gbps. While most of us will never tax the capabilities of WiFi 5, faster speeds are important because it means a WiFi signal can burst huge amounts of data in a short period of time.

WiFi 7 isn’t going to require additional WiFi spectrum – but more spectrum helps. The federal Court of Appeaks for Washington DC just recently confirmed the FCC’s allocation of 6 GHz spectrum for WiFi use. The NCTA, representing the big cable companies, recently filed a request with the FCC asking the agency to consider opening additional new bands of free public spectrum for WiFi using 7 GHz spectrum and lower 3 GHz spectrum. The trade group argues that WiFi has created the largest public benefit of any spectrum band that FCC has ever authorized. The trade association argues that the world is finally becoming awash in Internet of Things devices, with Charter alone connecting to half a billion IoT devices.

There are two big changes that will differentiate WiFi 7 from WiFi 6. First is a major upgrade to the WiFi upload link. WiFi 7 will incorporate uplink multiuser multiple-input multiple-output (UL MU-MIMO) technology. The new technology creates multiple paths between a router and a WiFi-connected device. Connecting multiple paths to a device will significantly increase the amount of data that can be transmitted in a short period of time. WiFi 6 allows for a theoretical eight simultaneous paths – WiFi 7 increases that to sixteen paths.

WiFi 7 will also bring another improvement labeled as coordinated multiuser MMO (CMU-MIMO). CMU-MIMO will let a home device connect to more than one WiFi router at the same time. Picture your computer connected to several channels from different home routers. This coordination should result in faster connections, lower latency, and the ability to deliver high bandwidth to every corner of a home that is equipped with multiple WiFi access points. This is the most complicated challenge in the WiFi 7 specification.

WiFi 7 promises other improvements as well. The 802.11be specification allows for combining spectrum paths. Today’s WiFi routers use one channel of spectrum for a single device, and the planned upgrade would allow devices to combine signal paths from different WiFi frequencies at the same time. Another slated improvement is an upgrade to allow the use of 4096-QAM. The QAM technology will allow the combination of more than one frequency modulation in the same data path.

The 801.11be specification is pushing the limits of physics in a few places and may never fully achieve everything being promised. But it represents another huge upgrade for WiFi. There are a few vendors that will be previewing early versions of WiFi 7 technology at CES 2022. Maybe most of us will at least have made the transition to WiFi 6 before this latest and greatest WiFi is available.

FCC – Please Do the Right Thing with RDOF

The $42.5 federal BEAD broadband grants that are being funded from the Infrastructure Investment and Jobs Act should be a gamechanger for rural broadband. There will be many hundreds of millions of grants given to each state to fund the construction of broadband networks. This is likely once-in-a-generation funding, so there will only be one chance to do this right.

There is one pending issue that could really gum up the BEAD grants – there are pending RDOF awards that should not be funded. These pending RDOF grants fall into three categories.

First are RDOF auction winners that have probably bitten off more than they can chew. An example of this might be LTD Broadband. I don’t have any inside knowledge of the company, but I’ve seen estimates that the company would need to raise something north of $7 billion dollars to go along with the $1 billion RDOF award. There are likely other similar companies in the auction. The FCC has had almost a year to determine the financial ability of grant winners to fund the rest of the projects they won. If these companies don’t have the needed funding, it’s time for the FCC to cut them loose. This shouldn’t be a hard determination.

The second category is unique. Starlink won nearly a billion dollars of RDOF funding. There are still a lot of unknowns about the company’s capabilities. I know some of the RDOF areas won by Starlink are heavily wooded, and from what I hear, that’s a big problem for the technology. There are also still questions about the ability of Starlink to serve every home in a grant area – which is what the RDOF requires. I have nothing against Starlink, and if I lived in a rural area, I would have been first in line for the beta test. But the company is still an unproven technology in terms of being able to serve everybody. The company is still a start-up with no guarantee of success or longevity. At the end of the day, Starlink doesn’t meet the basic requirement that federal funding should only go to companies that can guarantee to meet the requirements of the award.

Finally, are the RDOF auction winners that claim to be able to deliver gigabit wireless technology. Like Starlink, these are not field-proven technologies and likely will never deliver what is being promised. Over the last year, I haven’t talked to a single engineer who thinks it’s possible to deliver a wireless gigabit to every customer in rural Census blocks with gigabit wireless. I have no doubt that the new wireless technologies have the capability of being a lot faster than current fixed wireless technology. But these grants weren’t awarded to deliver a few hundred megabits per second. These grant winner should be tossed for overclaiming the technology, since doing so gave them an unfair advantage in the auction. If they had bid with the ability to deliver 200 Mbps the auction results would have been very different. These companies gamed the auction rules and that alone should have invalidated the awards. Unfortunately, the FCC might be ready to make these awards, having recently awarded funding to Resound Networks to provide gigabit wireless broadband.

It’s obvious that the FCC is already wrestling with all of these issues because it’s been eleven months since the RDOF winners filed their long-form information. But the FCC must know that the BEAD grants change everything. If it had known that BEAD grants were coming, the FCC probably would not have held the reverse auction. This new federal grant money changes the equation and brings a new paradigm that should make it easier for the FCC to make up its mind about questionable RDOF awards.

If the FCC gets this wrong, then the RDOF areas in question won’t be seeing the same broadband solutions that are coming everywhere else. The BEAD grants make it easy for the FCC to reject applicants that have not demonstrated the financial wherewithal to fund the promised RDOF solution. The BEAD grants should make it easy to reject Starlink – the company is still free to market broadband to all of rural America, and it already has a huge waiting list of people willing to buy service. The BEAD grants should make it easier for the FCC to admit it erred in letting bidders overclaim technology.

It’s not going to be easy for the FCC to publicly admit that it made some big mistakes in the RDOF auction. Most of these issues could have been avoided if the FCC had pre-screened applicants. Any technology that was not already proven to work in the real world should have been excluded from the auction. Applicants should have been given a dollar limit for participation in the auction based on their balance sheet. But the FCC has a chance to set this right by rejecting the questionable awards and letting the folks that live in these areas have a chance for a better and more permanent broadband solution through BEAD grants. FCC – please do the right thing.

Using ARPA Funding

I’m getting a lot of calls asking about ways that local ARPA (American Rescue Plan Act) funds can be used for broadband. Many of these questions are coming as the result of cities and counties being told they can’t use the funds to build broadband. In some cases, conservative local legal opinions are cautioning against using the money. We’ve heard of examples where big ISPs are telling communities they can’t use this money. In my state of North Carolina, the State Legislature has gone so far as to warn local governments that if they build infrastructure with ARPA that they won’t be eligible for state grant funding.

The reality is that the Department of Treasury has written the rules in such a way that communities have a huge amount of control over how they can use the ARPA funds. The only big overriding rule is that the funding must address some problem created by the pandemic – that’s an incredibly easy hurdle to cross with anything related to broadband. I’m not going to repeat the basic grant rules which are discussed in this earlier blog – but the blog is a good reminder that Treasury worked hard to make the funding easy to use.

I’m starting to hear some interesting stories from cities that want to use the money for broadband. Following are a few of the ideas that I know are being considered:

  • I know cities that are considering using ARPA money to bring broadband to public housing and to low-cost neighborhoods. These cities want to provide free or low-cost broadband to citizens who have not been able to afford broadband. This goes far past using the $30 discount from the Affordable Connectivity Program – $30 off cable company broadband connection is still out of reach for many homes.
  • There are cities using the money to create a wireless system to reach all students at home so that every student is guaranteed a connection for doing homework.
  • There are cities connecting to anchor institutions with fiber to reduce the ongoing cost of paying to connect city buildings.
  • I know cities that are looking to build fiber to business districts that have been devastated during the pandemic. Smaller communities aren’t going to fully recover from the pandemic until local merchants and local jobs are up and running again.
  • If you know of other ideas for using ARPA in cities, I’d love for you to describe them in the comments section of this blog.

Rural counties and small towns are mostly focused on bringing broadband to rural areas that have poor or no broadband. Rural communities are mostly partnering with local ISPs to bring better broadband.

  • I know several counties that are using ARPA money as matching funds for state and local grants. Communities are recognizing that the most powerful use for this money is to use it to attract larger grant funding from elsewhere. Many states are encouraging this. I saw a presentation recently from the Virginia grant office that encourages localities to layer local, state, and federal grants together to bring broadband to high-cost places.
  • I know a few communities that are taking the idea of collaboration to the next level past state and federal grants and are also attracting funding from schools and libraries, rural health care facilities, electric cooperatives to create the funding plan to bring broadband to every stakeholder.
  • I know of counties that plan to use the funding to directly build broadband to places they fear nobody else will serve.
  • I’ve also heard of a few cases of counties that are using the money to build middle-mile fiber with a partnership in place for an ISP to bring the funding to build the last-mile networks.

In all of the above cases, the ARPA money can be used for the engineering and feasibility study work needed to quantify the costs of a project.

My bottom-line advice is to ignore those who are telling you that this funding can’t be used for broadband. I think Treasury made it abundantly clear that communities get to call the shots about how they want to use the funding. Once this funding hits your coffers, it’s your money – as long as you follow a few simple guidelines.

U.S. Broadband Prices – High or Low?

Over the years, I’ve seen a number of studies that ask how U.S. broadband prices stack up against the rest of the world. Interestingly, in 2021 I saw reports at both ends of the spectrum. One report says that U.S. broadband prices are among the most expensive in the world. At the other extreme is a report that claims that U.S. broadband prices are low and that prices are falling.

Let’s start with the high price claim. The most recent look comes from CompareTheMarket that claims that the average U.S. residential price for broadband is $66.13 and is the ninth most expensive in the world. The study compares a broadband product in each country that offers unlimited bandwidth and that delivers speeds of at least 60 Mbps download. According to this report, the only places with higher prices than the U.S. are Ethiopia, UAE, Qatar, Zimbabwe, Oman, Honduras, Saudi Arabia, and Iceland.

The calculated $66.13 price seems realistic to me and is similar to numbers I’ve been gathering all year through surveys. The CompareTheMarket price is only for broadband and doesn’t include a WiFi modem. I’ve been seeing average prices that include the WiFi modem generally range between $70 and $75 per month. It’s worth noting that the big ISPs have been quietly burying the cost of broadband in the modem fee, with one of the highest fees being the $14 monthly fee from Comcast.

There is another report that claims that U.S. Broadband prices are not only affordable but are falling from year to year. This comes from the 2021 Broadband Pricing Index Report published by USTelecom, the lobbying arm of the biggest ISPs in the country. That report makes some outrageous claims. For example, it claims that the price of the most popular tier of broadband declined by 7.5% between 2020 and 2021 – something that’s impossible to believe when Comcast and Charter, which together are half of the broadband industry, each had a significant rate increase during that period.

It’s impossible to understand what USTelecom is comparing since there are zero statistics cited to back up its numbers. It seems to be relying on the fact that the price per megabit has been decreasing – which I don’t think anybody disputes.  It’s clear that consumer broadband speeds have risen at a faster pace than prices. But that’s not what the report is implying – a casual reader would have to assume the report means that out-of-pocket prices to customers are dropping.

USTelecom puts out this report every year, and I always find it rankling. There is no consumer in the U.S. who thinks their ISP is cutting broadband prices. Some ISPs still negotiate with customers that ask for lower rates, but overall, broadband prices from the big cable companies that control most of the market keep rising year after year.

Comcast just announced an overall 3% price increase across the board for January 2022, but I haven’t yet seen this expressed in specific product prices. This comes on top of the basic broadband at Comcast that I calculate to cost $90. That’s $76 for the basic standalone broadband package (100 Mbps or 200 Mbps in most markets), plus $14 for the WiFi modem. The rate increase would put the new price at around $93.

I have to think that the USTelecom report is aimed at providing cover for politicians that support the big ISPs. There are no consumers who feel like broadband prices are dropping – unless perhaps they are in a market where a new competitor showed up during the last year. But USTelecom and the big ISPs want politicians to think the ISPs are looking out for the public during the pandemic.

I know I shouldn’t get worked up over these kinds of shenanigans from the big ISPs. But it’s aggravating to see them peddle such blather since the purpose behind these untruths is to lobby policymakers. This is a story the ISPs want legislators to hear to tell at a time when the big ISPs know that the FCC is likely to reintroduce broadband regulation. The message from the big ISPs is clear, “Why regulate us? Look how well we’re taking care of the public without regulation”. Tell that to the families paying $90 per month for Comcast broadband – assuming they don’t exceed Comcast’s data cap and pay even more.

The Future of the Universal Service Fund

The FCC adopted a Notice of Inquiry on December 15 that asks for comments about the future of the Universal Service Fund. There is not a lot of time to respond with the holidays in the middle since comments are due on January 18. But the NOI is asking the right questions.

High-Cost Programs. On the topic of the High-cost programs, it asks how the giant BEAD grants will impact the future of the FCC broadband awards. It asks if there should be an additional round of RDOF. It asks if some of the highest-cost areas constructed with the BEAD grants will need ongoing high-cost support. It asks if the FCC should adopt a standard of 100/20 Mbps as a requirement for future high-cost support. It asks about the use of future reverse auctions.

Lifeline. The NOI asks about the future of the existing Lifeline fund in light of the funding given to the EBB program and now to the ACP program that provides a larger monthly broadband subsidy.

E-Rate. The NOI asks if the E-Rate program for schools and libraries should be changed due to anything that came out of the Infrastructure Act. It asks about ways to protect against waste, fraud, and abuse.

Rural Health Care. The NOI asks if the program changes due to telehealth funding in the Infrastructure Act.

Funding. The NOI asks if the method of funding the USF should be changed.

I’ve written about all of these questions before. Here are a few quick thoughts I have on these questions – each question deserves a much longer response:

The FCC’s high-cost funding has outlived its usefulness. While this funding did a lot of good and helped telcos build rural fiber, it also made some telco owners rich through overpayments. The overpayments became obscene when the FCC gave $11 billion in CAF II funding to the big telcos and then ignored the reports that upgrades weren’t being done. The RDOF reverse auction is a giant mess and will turn into a disaster if the FCC doesn’t soon kill off unworthy awards in favor of BEAD grants. It’s time to kill this program completely, get the FCC out of the broadband funding business, and downsize the USF accordingly. The need for broadband funding can always be revisited in a decade if some rural places still need ongoing support. But even revisiting the idea is suspect because the FCC is always going to rely on poor mapping and inadequate cost models to determine who gets funded.

The $9.95 Lifeline fund still has some use to support cellphone for homeless and other forgotten communities. But the monthly subsidy is too small to make home broadband more affordable. The FCC should either re-purpose the Lifeline fund to strictly support low-income cellphones or kill the program.

The E-Rate program provides noticeable benefits to schools and has brought gigabit broadband to some of the poorest parts of the country. I’ve never heard anything but good about the Rural Health Care funding.

As far as funding – if the High-cost fund and Lifeline programs are curtailed or eliminated then the amount of needed funding drops drastically. But I think a more fundamental question needs to be asked. Why is the FCC still being allowed to operate a giant slush fund? A huge percentage of the funding over the years has gone to the big ISPs. The USF has been riddled with stories of abuse and fraud. The primary problem with the USF is that regulators are trying to run national one-size-fits-all programs without the needed facts or staffing to do it right. I think it’s time to have a conversation about ending the Universal Service Fund. The E-Rate and Rural Health Care programs are successful, but they are something that should be funded by Congress. Let’s get regulators out of the funding business and aim the agency back towards their primary goal of regulating the broadband industry – instead of funding the companies the FCC is supposed to be overseeing.

Broadband Mapping Woes Continue

The FCC’s plan to fix broadband mapping is progressing slowly. I think by now that everybody in the industry understands how lousy the FCC maps have been. Through a combination of dumb mapping rules and ISPs overreporting broadband speeds, the current maps sometimes completely miss the mark.

Congress got involved and passed legislation to require the FCC to fix the maps. In March 2020, Congress passed S.1822, the Broadband Deployment Accuracy and Technology Availability (DATA) Act. That bill requires the FCC to gather granular service data for wired, fixed wireless, and satellite broadband providers. It requires the FCC to consider using state broadband mapping data where states have tried to create a better picture of broadband. It also requires a crowdsourcing process to allow the public to participate in data collection. The Act provides for penalties against ISPs that knowingly or recklessly submit inaccurate mapping data. Finally, the Act requires the FCC to use better maps when making awards for broadband funding.

But as often happens in the government, this bill didn’t provide any funding to make the needed changes. The FCC started the process of formulating new rules after the passage of the Act, but didn’t take any action to fix the maps due to lack of funding.

Congress finally provided $98 million in funding from the American Rescue Plan Act (ARPA) in December 2020 that included $65 million to create better maps. During that same month, the FCC completed the $7 billion RDOF reverse auction that was still based upon the lousy mapping – seemingly in violation of the Act.

In February of this year, the FCC under acting chair Jessica Rosenworcel established the Broadband Data Task Force with the aim of implementing the goals of the DATA Act and fixing the mapping. The FCC kicked off the new Broadband Data Collection (BDC) program in March 2021 to change the way that mapping data is collected from ISPs. The federal procurement process is slow, and the FCC finally released the RFP to hire a vendor to fix the mapping and eventually awarded a $45 million contract to CostQuest Associates.

In November, LightBox challenged that RFP award. According to federal procurement rules, it will take at least one hundred days for the FCC to deal with that challenge.

Meanwhile, it is raining federal broadband grant monies. There was a huge amount of potential grant funding in the ARPA legislation that gave some grant monies to federal agencies like the NTIA and the RUS. But that legislation gave far more money directly to cities, counties, and states – much of it directed at broadband. In November, Congress added another $42.5 billion in grants to the pile of federal money that is on the way.

All of these grants include some sort of speed test threshold to define what is eligible for grant funding. That’s going to require relying on the FCC maps. People all over the country are already making plans for applying for the BEAD grants, and they will be hindered all next year while waiting on the maps.

The FCC was recently asked by Congress for a status of the mapping update and the FCC has no estimated timeline for the introduction of revised mapping. I’ve talked to several knowledgeable folks who are estimating that it will be at least early 2023 before we get a gander at revised mapping. I think everybody expects the first version of the new maps to be a mess as ISPs try to interpret how to report in the new mapping system. In fact, that was one of the purposes for having a challenge process. It’s hard to think that it won’t be well into 2023 before the maps are scrubbed to the point of making sense.

And after all of that, I still hold out little hope for the new maps. ISPs are still going to be reporting theoretical marketing speeds instead of actual speeds. Further, as I wrote in a recent blog, there is no way to map actual speeds – it’s a futile quest. I personally don’t think it’s possible to create an accurate broadband map when two neighbors can experience different broadband speeds from the same ISP. But hopefully, we can at least improve the mapping to the point where the maps don’t stop neighborhoods from getting broadband upgrades.

 

 

Idle Fiber

Just in the last few months, I have talked to several rural residents and businesses who are furious that they can’t get fiber broadband even though there is fiber close to their home or business. They can’t understand why the uncaring company that owns the fiber can’t make the tiny investment needed to connect them to fiber that’s already tantalizingly close to them. I’m pretty sure that none of these folks are satisfied with my explanations of why they aren’t likely to get connected. It’s likely that these folks won’t get fiber for the reasons discussed below.

The most common reason is that the fiber that runs close to the home and business is likely middle-mile fiber. This is fiber that runs between two distant points. At the extreme, the middle-mile fiber might be part of a long-haul fiber route connecting two distant states. It’s economically infeasible to break into the middle-mile fiber. I recently had a conversation with a long-haul fiber provider that quoted a price of $2 million for a long-term contract to snag a single fiber on a fiber route that runs between the East Coast and the Midwest. Obviously, these middle-mile routes are too valuable to serve last-mile customers.

But carriers are also usually reluctant to break into shorter transport fiber routes, like fiber between two neighboring communities. What will drive people nuts is that a fiber owner could use these types of middle-mile fiber routes to serve customers if there are spare fibers. But there are two reasons to not use middle-mile routes for last-mile service. The first is technical. Every fiber splice point added to an existing fiber will slightly degrade a fiber’s performance. If a middle-mile route wasn’t designed to have multiple splice points, the owner is not going to put the middle-mile investment at risk.

But the main reason carriers don’t break into existing middle-mile fiber routes is economic. There is often no reasonable business case for serving just a few customers off an existing fiber. It’s expensive to add a few customers onto an existing transport fiber route. An ISP would have to build an FTTP hub in the area. That might mean land, a hut, core electronics, and an ongoing utility bill to keep electricity at the new hut. The ISP also must consider the cost of the fiber drops – which get expensive after a few hundred feet. The ISP also now haw to make sure there is a technician within easy range of the new customers. Unless there is an opportunity for adding a lot of customers from a new splice point, it probably makes no financial sense. You can’t just drop off a fiber to serve just a few people – the math for doing so is likely not pretty.

There is one situation that I think rightfully infuriates folks. State legislators have typically made sure that fiber built with state funding can’t be used for commercial purposes. This is obviously done at the prodding of big ISP lobbyists. This means that fibers built to connect to city halls or to connect schools together can’t be used for anything else if these fibers include a whiff of state funding.

State-funded fibers don’t just come close to rural households – the fibers often run through towns and cities, often deep into residential neighborhoods to reach schools, firehouses, and other government buildings. In these kinds of cases, it would be economically feasible to use such fiber as the launch point for last-mile fiber.

People can’t blame the school systems or the counties that build such fiber – the fault comes from restriction at the state level. I was flabbergasted a few decades ago the first time I encountered this, but I’ve come to learn that this is a common practice. Even many states that allow municipal competition usually draw a line for using state-funded fiber for any commercial purposes. Such fiber might sit idle and unused forever because of the way they were originally funded.

The final category of fiber that drives people crazy comes from commercial entities that elect to use the fiber only for themselves. A perfect example of this is Duke Power, the electric utility in my part of the world. The company used to have a thriving wholesale fiber business that leased fibers to ISPs. But a few years ago, the company decided to completely get out of the fiber leasing business, and the company now doesn’t let any other entities share its fiber. The utility probably owns the most extensive fiber network in my part of the world, including fiber that reaches deep into neighborhoods. The utility cited security as the reason to stop sharing fiber, but there are easy ways to share fiber with responsible carriers that add zero security risks.

Not Giving Up on CAF II

Brandon Presley, a Commissioner on the Public Service Commission of Mississippi, recently sent a letter to FCC Chairwoman Jessica Rosenworcel asking the FCC to investigate AT&T’s performance under the CAF II program. This FCC program gave AT&T $280 million to improve rural broadband speeds in the state to at least 10/1 Mbps.

Presley’s letter follows a request a year earlier from all three Mississippi Commissioners asking the FCC to conduct a full compliance audit on AT&T. The letter said that the PSC had documented specific examples of where AT&T had not done any upgrades, including listing homes as having improved service that have no broadband service.

This is an issue that I’ve written about many times. My consulting firm helps rural counties across the country undertake large volumes of speed tests – and in some counties, we can’t find any rural DSL customers who are receiving 10/1 Mbps DSL. These counties weren’t just served by AT&T, and we’ve seen the same thing happening in counties served by Frontier, CenturyLink, and Windstream.

To be fair to the telcos, the problem is not universal. We have done speed tests in counties where most rural DSL speeds exceed 10/1 Mbps. But it looks to us like there are a lot of places where the telcos didn’t do much, if anything, with the CAF II funding. In many of our studies, we also do field engineering inspections, and we’ve often found no new fiber construction and rural DSL cabinets still running old DSL technology. We’ve seen in many counties where the DSL speeds in the county seats has improved, and we speculate that the telcos upgraded the town DSL using the CAF II but didn’t spend the money as promised in the rural areas.

We no longer have to rely on our small sample of county speed tests because the recent NTIA maps and the DSL maps created by some states show the same thing. Those maps are often created by huge numbers of speed tests. We know that speed tests are not perfect, but when large-scale speed tests show that nobody is meeting the CAF II 10/1 Mbps target that it’s pretty certain that no upgrades were made.

As you might expect, AT&T denies the allegations in Mississippi. They claim to “have invested billions of dollars, building out our wired and wireless networks across Mississippi, and we are proud of the work we have done as a company to keep communities connected and help fuel Mississippi’s economy. . . We are also proud of the work we have done through federal and state programs that help expand critical connectivity in underserved and unserved areas, including the FCC’s Connect America Fund Phase II program. We have worked closely with the FCC and USAC on this program and any suggestion that we filed false data is patently incorrect.”

The AT&T situation is more complicated than the other big telcos because AT&T largely says it is meeting the CAF II requirements using fixed cellular service. It’s probably true that customers today who are in the range of AT&T towers that have received the new bands of frequency being labeled as 5G can receive faster broadband. But those new cellular networks don’t reach everybody in rural areas, and there are still a lot of cellular dead spots. More importantly, AT&T only started to upgrade the rural cellular networks after the end of the CAF II program.

Hopefully, this issue soon becomes history if the new round of federal grants brings faster broadband to these rural areas. But Commissioner Presley is worried that AT&T and the other big telcos will chase the new funding and will repeat history by underperforming on promises made to regulators.

This also raises the question about whether there should be large penalties against the telcos who didn’t make the upgrades. It would not be hard for the FCC to make a list of counties where upgrades weren’t made. They have access to large amounts of speed tests, and they could also activate local governments to investigate and provide feedback.

I personally think the right remedy is that the telcos must return the full amount of funding in areas where they didn’t make upgrades and that money ought to supplement the BEAD grants and be given to whoever is going to bring better broadband to the affected counties.

Ideally, the FCC or other federal agencies would prohibit any telco that is caught cheating in this manner from getting any further rural subsidies. The big telcos are lining up to pursue the $42.5 billion in BEAD grants that will probably be awarded a year or so from now. AT&T recently announced that these big grants have enticed it to add a goal of 5 million new fiber passings in rural areas. Since those grants are administered by the states, AT&T might have a challenge getting any of the BEAD grants if State officials like Commissioner Presley have any input on the grant winners.

Big Telcos and Federal Grants

Several large telcos have announced big plans to expand fiber coverage, and I assume that also means heavily participating in the upcoming $42.5 billion BEAD grants that are aimed primarily at bringing better broadband to rural areas.

When Frontier came out of bankruptcy, the company announced plans to pass 6 million homes with fiber by 2025. As part of its Build Gigabit America plan, the company raised that goal to 10 million homes. Frontier already has undertaken the first step in that plan. It set a goal of 495,000 new fiber passings for 2021 but recently announced that it expects to hit 600,000 passings for the year.

AT&T also has big plans. The company has been steadily building a fiber customer base and announced at the end of the third quarter that it now has 5.7 million fiber customers, representing a 37% market share of its 15.4 million fiber passings. A year ago, AT&T announced a goal to pass 25 million homes and businesses by 2025 – another 10 million passings. CEO John Stankey announced recently that the federal infrastructure bill will entice AT&T to increase that goal to 30 million passings, adding 5 million rural passings.

Windstream didn’t express expansion plans in terms of passings but announced this past summer that it is embarking on a $2 billion fiber expansion plan. It seems likely that the federal grants will entice the company to tackle even more growth.

Consolidated Communications is passing 300,000 new potential customers with fiber this year and has plans to continue fast growth into the future. I couldn’t find any specific plan related to federal grants, but I speculate that the company is likely going to chase grants close to existing properties.

The big mystery is CenturyLink. The company is passing 400,000 locations with fiber this year. But the company also announced the sale of its copper networks in twenty states.

It’s likely that all of these telcos want to benefit from the huge upcoming federal grants. The easiest ways for telcos to take advantage of the federal grant is to plan to overlash fiber onto existing telco copper where the companies are already the incumbent. But if the grants are lucrative enough, they might seek grants in other areas as well.

It would be interesting to be a fly on the walls of the corporate board rooms of these big telcos to see how they feel having the huge federal funding flowing through the states. The big companies have always done well with subsidies coming directly from the federal government, such as the $11 billion CAF II subsidies.

But will the telcos do as well with funding being decided at the state level? State regulators and state governments across the country have been unhappy with the way that the big telcos abandoned rural telephone networks. Most states have been able to make an easy comparison between smaller telcos and cooperatives that have invested in rural fiber and the big telcos that have done as little as possible to keep rural networks operating.

I’m curious about the degree to which the big telcos might have burned their bridges with past behavior. I know a lot of state regulators and state broadband offices who will not want to see money going to the companies that were largely responsible for creating the rural broadband gap. Are states going to be willing to give another chance to these big telcos?

I am sure that the state politics involving these grants is going to get intense. Most of the broadband offices that will be awarding these grants will be understaffed and under a lot of pressure to spend the grant money on schedule. Legislators are bound to get involved in some states to try to steer the grant process, although the federal money must meet federal grant rules set by the NTIA. Governors will also weigh in on the issue, and in some states, the grant offices are part of the executive branch. State regulators who have tussled with the big telcos will weigh in. And the public is likely to make itself heard as communities are coalescing around grant applications.

It’s going to be nearly impossible to follow grant policies and trends everywhere when all fifty states will be embarking on a giant grant program at the same time. One thing is for sure – the next few years are going to be interesting.

Build It, and They Will Fill It.

I assume that most people know the famous line from Field of Dreams where the disembodied voice promises, “Build it, and he will come.” For twenty years, I’ve been advising broadband clients against taking that advice. It doesn’t make any sense to invest a lot of money into building a broadband network without first having done enough market research to know that people will buy your services.

Today I want to talk about a similar-sounding idea – build it, and they will fill it. This is a shorthand way to describe the unbelievable growth in broadband demand. I’m now warning clients to build new networks that are robust enough to handle the future demand that will inevitably be coming from customers.

We have a lot of evidence of the fast growth of broadband usage. Center stage is statistics from OpenVault that has reported on the average nationwide broadband usage by homes as follows:

1st Quarter 2018          215 Gigabytes

1st Quarter 2019          274 Gigabytes

1st Quarter 2020          403 Gigabytes

1st Quarter 2021          462 Gigabytes

It’s easy to think that the usage spike created by the pandemic is an anomaly, but recent broadband growth has been only slightly higher than the long-term growth trend. The amount of bandwidth used by the average home has been doubling about every three years for several decades.

Another statistic from OpenVault tells a similar story. OpenVault has labeled households that use more than a terabyte of data per month as power users. The percentage of power users has grown from 4% of all homes at the end of 2018 to almost 11% by the middle of 2021.

There are two reasons that average household broadband usage has been growing. Over time, homes are finding new ways to use broadband while also using more broadband for the things we’ve always done.

I think most of us see how familiar tasks are using more broadband. A few years ago, I used Microsoft Word and Excel locally on my computer and the only time I used bandwidth was when I sent a document to somebody else. Today, my files are automatically stored in the cloud as I type, and I also keep another backup copy of everything in a different cloud. I also participate in collaboration software that stores some of the same documents again. For somebody that creates as many spreadsheets and word documents as me, this is a major increase in home broadband usage.

But it’s the new uses of broadband that really add up. New uses of broadband are coming along every day. Just a few years ago, I talked almost exclusively on my cellphone. Today I probably average three hours per day on video calls. As a sports fan, it’s not unusual for me to be streaming two or three 4K games at the same time. I’m not a gamer, but the major game platforms were all in the process of migrating to the cloud just as the pandemic hit. Our Subaru dumps a big file into the cloud every time we pull into our driveway. YouTube has started accepting 8K video that requires a 50 Mbps download stream. There are already early experimental HD virtual reality streams online.

I’m regularly asked why fiber is superior to technologies like wireless or satellite networks – and the answer is easy. Anybody who builds a new broadband network must be prepared for that network to carry ten times more broadband traffic in a decade and one hundred times more traffic in twenty years. Fixed wireless networks are not going to be able to do that. Satellite networks won’t even come close. Until the cable companies make major upgrades, they are already fallen badly behind the demand curve for upload bandwidth.

If you build a fiber network, your customers will fill it. When it gets too busy you can upgrade electronics and start the growth cycle all over again.