Update on RDOF

The RDOF reverse auction was completed in December 2020, and since then, the FCC has been silent about the disposition of any of the winning bidders. Part of the quiet period has been due to the FCC processing the long-form applications where grant winners demonstrate that they have the technical, managerial, and financial capability of fulfilling the RDOF buildouts. The FCC’s silence came to an end recently with several actions taken by the agency.

The FCC first published a list of almost 11,000 Census blocks where RDOF grant winners have elected to reject funding totaling over $78.5 million. The defaults came for a variety of reasons. For example, there are some cases where investigation showed that an ISP was already offering fast broadband in a grant area. Other defaults come from the bidders deciding they couldn’t make an economic case for the Census block clusters won in the auction. The FCC has the ability to fine grant winners that default on winning grants, and the agency will likely consider the fines on a case-by-case basis.

Next, the FCC sent letters to dozens of RDOF winners asking them to voluntarily give up the RDOF funding for specific Census blocks. These are places that should never have been included in the auction. The list included such places as large metropolitan airports and big parking lots. Starlink alone was asked to give up funding to 6,500 Census blocks.

The FCC also sent a different letter to 197 RDOF grant winners asking them to reevaluate taking funding in specific blocks where the FCC now believes that one or more ISP already delivers speeds of 25/3 or faster. The FCC acknowledges that most of these areas were erroneously included in the action due to bad mapping data. These grant winners were warned that if they don’t relinquish these Census blocks that the FCC will look hard at blocking the funding for these areas – an action that could delay approval of overall funding for an ISP.

The FCC also announced that it was rejecting some of the claimed areas for LTD Broadband. The FCC killed funding for the company in California, Kansas, and Oklahoma due to the company not getting regulatory approval in those states to become an Eligible Telecommunications Carrier. This rejection killed $187.5 million in California to serve 76,856 locations, $81.1 million in Oklahoma to reach 39,889 locations, and $3.2 million in Kansas to reach 2,122 locations.

There has been some question of what happens to the Census blocks that are now back in play. Some have speculated that these areas would roll into the next RDOF auction. However, the FCC has no power to claim or reserve Census blocks, and any of the areas that fall out of RDOF becomes eligible for the many other grant programs now underway.

Finally, the FCC started making RDOF awards. It awarded $311 million to these companies that have made it successfully through the long-form review process. This will bring broadband to over 200,000 homes. This is only a small fraction of the $9 billion that was claimed in December. But for these companies and these Census blocks, the 10-year clock will soon be started to fulfill whatever technology was promised in the winning bid.

The FCC still has a long way to go. These actions clear up some of the messes caused by the FCC using bad mapping in setting grant areas. There are industry analysts that say that this effort is not complete and that additional areas are yet to be identified. But the FCC has disposed of less than $1 billion of the $9 billion in awards, so expect to hear periodic awards for more grant winners.

The FCC still has to wrestle with a few huge issues. There have been numerous complaints saying that grant winners like LTD Broadband should not have been allowed to participate in the auction in a big way. There are other grant winners that claimed the ability to deploy gigabit rural wireless – a technology that nobody I know thinks exists. There are likely ISPs that will not make it through the long-form review for some other reason, such as the inability to guarantee funding. The agency is likely a long way from resolving these many issues.

Satellite Broadband and Farming

An article in Via Satellite discussed John Deere’s interest in using low-orbit satellite broadband as the platform to expand smart farming. This makes perfect sense because there is no quicker way to bring broadband coverage to all of the farms in the world.

There are only a few other technologies that might be able to fill the farm broadband gap. The one we’ve been thinking about for the last decade is cellular, but there is a major reluctance of the big cellular companies to invest in the needed rural cellular towers and to constantly upgrade electronics for cell sites that have only a few customers. If you’ve ever traveled to the upper Midwest, you’ve stood on farm roads where agricultural fields stretch to the horizon in every direction. Standing in such a place makes you realize that cellular is not the answer. No carrier will invest in a cell tower where the potential customers are a few farms and the farm machinery. No farmer wants to pay a cellular bill large enough to support a single cell tower.

There is also experimentation with the use of permanent blimps that can provide broadband coverage over a several-county area. I wrote a blog last year about a trial with blimps in Indiana. It’s an interesting idea, and it may be a good way to support self-driving equipment. But the big downside to blimps is the ability to handle millions of sensors and to process huge amounts of data in real-time, like the monstrously large data files created by surveying fields for a wide variety of soil conditions. I also have to wonder about the ability to replicate this technology outside of prosperous farming areas in the US.

Before John Deere or anybody decides that satellites are the answer to smart agriculture, we need to know more about the real-life capabilities of satellites constellations. Big data users like cell sites and farms could bog down a satellite network and lower the usefulness for retail ISP services.

I think we’re going to quickly find out if satellite technology has a limited capacity – something we learned with earthbound networks a long time ago. An individual satellite is the equivalent of a broadband node device like a DSLAM for DSL or an OLT used in FTTP. Local broadband devices are subject to being overwhelmed by a few heavy data users. There is a reason that we use separate networks today to support cell towers and home broadband – because both would suffer by being on the same node.

The article raised this question and quoted a John Deere engineer as saying that the ideal situation would be for John Deer to own a satellite constellation. Putting the cost issue aside, space is going to get to be far too busy if we allow individual corporations to put up fleets of satellites. It’s not hard to imagine a John Deere constellation, a Verizon cellular constellation, a FedEx constellation, etc. The sky could get incredibly crowded.

The alternative is for the handful of satellite companies to sell access to corporations like John Deere. And that means somehow satisfying hugely different broadband needs from a satellite constellation. It’s not hard to imagine Starlink preferring big farms and cell sites over residential subscribers. Farmers and cellular companies are likely willing to spend more than households, but will expect priority service for the higher fees.

I’m sure that the satellite companies are flooded with unique requests for ways to use the satellites. If I owned a satellite constellation, I would likely pursue the most lucrative, highest-margin customers, and it’s hard to think somebody like Starlink won’t do the same. If they do, there will either be a limit on the number of residential customers they can accept or a degraded level of broadband for customers not willing to pay a premium corporate rate.

CenturyLink Selling Copper Assets

I wrote a few weeks ago that Lumen (CenturyLink) was looking to sell a large portion of its copper networks to Apollo Global Management. That rumor became real when the company announced a sale of copper assets in twenty states (the orange areas in the map below). Selling a regulated telco property is never an easy process, and the sale is not expected to close until the second half of 2022.

The sale covers the retail operations in the twenty states, which mostly means DSL customers. The sales announcement says that Apollo is getting 7 million passings but didn’t say how many active customers that is. The areas being sold include 200,000 fiber passings and about 59,000 fiber customers. The sale will cover “CenturyLink-branded assets” which includes “consumer and small businesses, . . . fiber and copper networks, tower site connectivity and central offices”. Lumen will retain its competitive CLEC business, which consists of a national fiber network and selling to business customers mostly in cities. For example, the CLEC business holds the lucrative GSA contract that sells phones and broadband to the federal government.

The sale price is $7.5 billion, which is reported to be 5.5 times adjusted EBITDA. That price and multiple seem high for buying a mostly copper network, and several analysts estimated the value at around $5 billion in recent weeks. The purchase also brings along $1.4 billion in debt, which means cash changing hands ought to be around $6.1 billion.

The Apollo Global Management team is led by three veterans who helped to build Verizon’s FiOS business, including Bob Mudge, Chris Creager, and Tom McGuire. This purchase is another example of telecom businesses being snatched up by giant equity firms. Apollo is on a buying spree and a week earlier announced the $200 million purchase of FirstDigital Telecom, a fiber-based carrier from Lindon, Utah; FirstDigital just recently acquired Veracity Networks. In just the last few months Apollo also recently purchased the Media Assets of Verizon for $5 billion, bought a share of the University of Phoenix for $1 billion, purchased one of the top industrial staffing firms EmployeeBridge, purchased the majority stake in bioenergy producer AS Graanul, and purchased Foundation Home Loans.

It’s going to be interesting to watch the Apollo team works its way through the regulatory approval process because the main goal of the management team is likely to bring fiber to the county seats and towns that come with this purchase. One report of the sale said that 70% of the customers being acquired are in towns and 30% in rural areas. It’s hard to think that the team will want to make any investment in rural copper properties – unless it somehow capitalizes on upcoming infrastructure grants. To gain regulatory approval for the sale, Apollo is going to have to promise regulators that it won’t walk away from rural obligation – a promise that will be hard to keep because CenturyLink stopped maintaining rural properties decades ago in many of these places.

One of the interesting sidenotes of the purchase for industry veterans is that the purchase includes Louisiana, meaning CenturyLink is divesting its original telco property. That will really cut the ties between Lumen and CenturyLink. The purchase likely is also divesting CenturyLink’s one foray into last-mile partnering through selling CenturyLink’s participation on the municipally-owned network in Springfield, MO.

It will be interesting to see if Apollo can do better than other past forays with buying copper networks. I can’t think of one of these mega-deals where buying copper networks has gone well. I think back on the purchases by Frontier, Fairpoint, Iowa Telephone, Windstream, Citizens, and others that never panned out – and those deals were for copper that was ‘t as ancient as is coming in this sale. Some of the rural customers in this sale have seen the name of the incumbent telco change several times – but they haven’t seen improvements in copper for decades.

Ireland’s Solution to the Rural Divide

The pandemic has given the whole world a pause to consider if we should return to business as usual when the pandemic is behind us. Ireland has a unique reaction and is something that could make sense here.

Ireland plans to provide incentives to lure people from cities back to smaller rural towns. Like much of the world, Ireland has seen decades of young people moving to cities to find work, leaving behind shrinking and aging rural towns. The government has announced a plan called “Our Rural Future” that will hopefully lure residents back to smaller towns.

An obvious key piece of this plan is making sure that rural towns have fiber broadband – something the country has been tackling for several years. The new plan is to fund the renovation of rural city centers and to create 400 rural working hubs. The government will give tax breaks to people and corporations that shift to working in the rural hub towns. The government also plans to relocate at least 20% of the 300,000 federal civil servants to the newly established hub towns.

The hope is to rebalance the economy throughout the country, so that rural areas share the same growth and prosperity as cities. The Irish government tried something similar in 2000 when it moved some government jobs out of Dublin.

This is an idea that we should consider here. Two-thirds of US counties have lost population since 2010, representing a huge shift of the population from rural America to cities and suburbs. Further, the population in a lot of rural counties is aging, since much of the lost population are younger residents looking for better-paying jobs.

The US has already started down a path to bring a lot of fiber to rural areas – something that is a key factor for making rural America a place to work. We’ve had recent grants like RDOF along with the new state and federal grants that should give a big boost to rural broadband. Even bigger would be an infrastructure plan to build tens of billions of dollars of fiber. We have one significant difference compared to Ireland’s plan. The US government is funding better broadband for the most rural places in the country, but not funding broadband upgrades for county seats. It is those towns across America that could thrive and grow with the right incentives. Ireland is creating the work hubs in small towns that are the equivalent to small county seats here.

There are enormous incentives for the US to consider something similar. If rural communities continue to lose population while continuing to age, we’re going to find rural economies dragging down the economy as a whole. Luring people out of cities can also help to cool off the torrid urban housing market that is making it nearly impossible for young families to afford homes. Pushing new housing construction to smaller communities here would spread our prosperity, much as Ireland is hoping for.

To do this in a big way would require the full support and funding from the federal government. However, individual communities can undertake a programs to lure urban residents. I wrote a blog some years back about how Independence, Oregon had a program to lure Portland residents to its lower cost of living and its fiber network.

As a nation, we only get a reset button once or twice per century, and this could be one of those times. Newspapers and the web are full of stories of people who used the pandemic year to reexamine their priorities, and there are seemingly millions of people willing to step off the urban treadmill if we make it easier for them to do so.

It seems kind of a shame to spend money on better rural broadband networks if we don’t also make a push to get people to use them. Perhaps some of this shift will happen naturally from people who have found a way to permanently work from home – something that is made easy with new fiber networks.

I’d love to hear from any communities that are actively using fiber to lure new residents.

California Tackles Middle-Mile Fiber

The California legislature unanimously passed legislation in both the Assembly and Senate to fund $3.2 billion for middle-mile fiber and another $2 billion for last-mile networks. It’s an interesting use of broadband money and recognizes something that we don’t talk about enough. There are currently huge federal grants aimed at bringing good last-mile broadband to rural areas, but many of the rural places in America still have inadequate backhaul to reach connectivity to the Internet.

The California legislation recognizes several things. First, there is a lot of federal money currently aimed at providing last-mile networks, but barely any grant funding currently for middle-mile fiber. Second, I imagine legislators in California have all heard stories about how rural communities today lose all Internet access for hours or days at a time when the single fiber reaching the community gets cut or has an electronics failure.

The best fiber last-mile network in the world can’t function if the fiber that routes traffic to and from the Internet goes out of service. The middle-mile fiber networks in rural America are often on the oldest fiber still operating in the country. Much of these routes were built years ago by the big incumbent telephone companies to provide a fiber path to support long-distance traffic. Most of these networks are configured like a wagon wheel where straight-line fiber paths are built from rural communities to a hub larger city in a region.

Like the rest of rural networks maintained by the big telcos, many of these fiber routes have been poorly maintained, and still likely are using electronics that are past the useful life. I wrote a blog last year about how the communities in northwest Colorado banded together to build an alternative for the inadequate middle-mile network still operated by CenturyLink. The existing fiber would maddingly go out of service, sometimes for days, and would leave communities and vital institutions like hospitals and public safety with no Internet access. The communities built a new middle-mile network they labeled as Project THOR, and almost immediately after activation, the new network saved communities from another big regional middle-mile outage.

https://potsandpansbyccg.com/2020/05/06/funding-middle-mile-fiber/

Rural communities not only need reliable middle-mile networks to deliver traffic to and from the Internet, but these networks must be redundant so that a single fiber cut doesn’t kill broadband for an entire community. That means building fiber rings. Too much of our daily lives now rely on broadband, and it is poisonous to a local economy when broadband access dies for an hour or a day.

The California middle-mile plan anticipates open-access where affordable transport can be provided to any ISP that wants to use the network. The legislation has a dual stated purpose – to first provide reliable broadband access to the rural parts of the state, but secondarily to make it easier for ISPs to serve in rural parts of the state. Buying connectivity on the traditional rural middle-mile networks is often unreasonably expensive and has been a barrier for serving pockets of rural customers.

The new networks will focus on reaching parts of the state where businesses and residents don’t have access to broadband faster than 25/3 Mbps. Almost invariably, in most states, these are the region that don’t have adequate middle-mile networks.

It’s always interesting to see any legislators pass something unanimously – it only happens when a topic is indisputably important. Once built, the new middle-mile fiber routes will serve rural California for many decades to come. There won’t be any headlines when this network is functioning and meeting its purpose – instead, there will no longer be news stories of small towns that lost broadband access for a few days.

The Battle Over Grant Rules

There has been a huge battle going on behind the scenes in Washington as Congress wrestles with including broadband grants in the infrastructure bill. Every lobbyist in Washington has been working overtime to try to influence the process. We’ve now seen the Senate’s vision of legislation, but there will still be a big fight when it’s time to reconcile the Senate and House broadband grant rules. Here are some of the key issues being contested in creating final infrastructure legislation:

What is Grant Eligible? This is the biggest area of contention. The big cable companies and telcos only want to see grants being awarded to places that don’t have 25/3 Mbps broadband today. More importantly, they want to see the eligible areas defined by the FCC’s lousy mapping. The big ISPs don’t want to make it easy for communities to make claims that actual broadband speeds are far slower than what has been reported to the FCC.

What the big ISPs definitely don’t want to see is the definition of unserved and underserved to be updated to something closer to reality. They do not want to see grant funding available to areas that don’t have 100/20 Mbps speeds today.

The worst possible scenario for the big ISPs is that local communities get to decide what areas need better broadband like is happening with ARPA funding that’s been given to cities, counties, and states. They know that cities intend to build fiber to poor neighborhoods, or even to whole cities – and the ISPs want to maintain the monopoly in these areas.

Who Decides the Grant Rules? There is also a lot of arm wrestling about who gets to decide the rules for grants. The big ISPs are not happy that Treasury got to set the rules for ARPA grants because that was a new group of decision-makers who have never been lobbied before. Giving the rulemaking ability to Treasury also meant that the White House could provide input by making its wishes known.

There is no perfect answer to this question from the perspective of the big ISPs. They don’t want Treasury to set the rules again. There are several alternatives. One is to let the FCC award the funding through another reverse auction, the option with the highest chance of following the FCC mapping. The rules can be set by the NTIA – a group that lobbyists know well – but which is likely unpredictable if handed tens of billions of dollars. Grant money could be given to the USDA to administer through the ReConnect grant program and the arcane rules at the RUS. Or funding could be given to states to decide – but only of the rules are first restricted to limit states from using the money freely.

Interestingly, I’ve heard credible rumors over the last few months that each of these options has been considered during various permutations of writing the legislation. The key goal for the big ISPs is to be able to influence grant rules, regardless of who will dispense the money. If the rules are set tight enough, much of the grant money could be unusable – and nothing would please the big ISPs more. For example, if money is divvied up evenly by state, then there are many states that can’t spend a pro rata share of the billions. If the rules can strictly only be used in places that can’t get 25/3 Mbps, then it’s probably impossible to spend much of the infrastructure money.

Broadband Speeds for New Infrastructure. A fight over speeds is the same thing as a fight over the technologies that can be built with grant funds. It seems the Senate has accepted the goal for new infrastructure at 100/20 Mbps. This speed enables grant funding to go to cable companies, WISPs, and satellite broadband. If grants can only be used to fund 100 Mbps symmetrical speeds, those two technologies are largely eliminated. You may have noted a spate of opinion pieces lately throughout the industry claiming that we don’t need symmetrical speeds. This is what that argument is all about.

Summary. You can quickly see who is winning the lobbying war by skimming through proposed legislation for these critical elements. On one side of the battle are broadband and community advocates who think we should largely use grant money to build fiber. This side argues for symmetrical speeds. They want communities to decide the areas that need better broadband rather than stick with erroneous FCC maps.

On the other side are big ISPs that don’t want to see fiber everywhere. They are pushing for a strict definition of areas that are eligible for grants, and they want technologies that barely meet 100/20 Mbps to be grant eligible. They want the ability to influence the writing of the grant rules.

We are now deep into the sausage-making part of legislation, and all of these issues are still open for debate. The Senate legislation clearly favors the big ISP position. There is still work to be done to get a bill that reconciles the House and Senate plans – and much more infighting to come. But at this point, the big ISPs and their lobbyists are winning the fight – which likely means in ten years, we’ll still be wondering why many parts of the country didn’t get adequate broadband.

A New Fiber Technician Training Program

Back in February I wrote a blog that talked about the need for fiber technicians in the country. Eleven different industry trade associations wrote a letter to the White House and Congress outlining an upcoming crisis due to a shortage of technicians. The group estimated that the industry would need to find 850,000 new technician man-years by 2025. That’s a huge number. Anybody who has been trying to hire technicians lately knows that there is a shortage. I also have heard from many clients who have seen technicians lured away for higher wages.

The Fiber Broadband Association (FBA) has developed a new technician training program being labeled as the Optical Telecom Installation Certification (OpTIC) program. It’s hoping to get vocational schools, community colleges, and veteran training programs to adopt the program. The first launch of the program will be at the Wilson Community College in Wilson, NC.

The training course consists of 144 hours of class and lab courses that will be followed by a 2,000-hour apprenticeship. The key to making this work will be fiber companies of all types to step up to accept and work with the apprentices. That could be fiber construction companies, ISPs, and anybody else that operates fiber networks. Apprentice programs are great for participants because they get paid during the apprenticeship work, with the pay increasing as they progress through the training program.

The OpTIC program has been recognized by the U.S. Department of Labor, which means that the program is eligible for state and federal grants. That’s really important right now because communities could use ARPA funding to help establish local training programs. I think every community understands that technical training programs are one of the best paybacks that any community can invest in since this creates higher-paying jobs. The eleven trade groups said in February that the average technician salary is $77,500.

Details of the new training program are on this website. Anybody who completes the program will be certified as an FBA accredited OpTIC technician.

For now, this program is being launched at just the one community college. Hopefully, other institutions around the country will jump on the bandwagon. That’s likely going to take ISPs to step up and partner with local schools to get this started. FBA announced the initiative at its recent Fiber Connect annual meeting in Nashville. Hopefully, a lot of attendees at that meeting carried the idea home for further discussion.

There is no doubt that this is needed. We are already in a superheated industry in terms of the amount of fiber construction that is underway this year. ISPs of all sizes are expanding fiber coverage this year. There is even more fiber construction on the way as the current round of grants kick in, including RDOF, NTIA grants, ReConnect grants, EDA grants, and ARPA grants. The top will really be blown off the industry if Congress adds an infrastructure program to build massive amounts of fiber.

Let’s Not Forget the Lobbyists

Common Cause recently released a report, Broadband Gatekeepers, that describes the influence that lobbyists have on broadband policies. The numbers are staggering – the ISP industry spent $234 million lobbying the 116th Congress (2019 and 2020). That number is likely understated since the rules on reporting lobbying are lax, and enforcement is almost nonexistent. That number doesn’t include the huge amounts of lobbying efforts at State legislatures.

The evidence of lobbying is all around us in the industry, yet we don’t talk about it very much. Consider the massive push for 5G a few years ago by the federal government. Industry lobbyists convinced both Congress and the White House that the country was facing a 5G crisis. The lobbyists injected a sense of urgency through the guess of arguing that we are losing the 5G race to China and that our economy will never recover. It’s hard to fully fault the FCC for passing pro-5G rules when they were being pushed to do so by Congress and the White House, all which were prodded by lobbyists.

The cellular carriers had some legitimate concerns, and that’s usually the case for most issues that are heavily lobbied. The FCC was dragging its feet in approving new cellular spectrum. Cities were taking a long time to approve the location of small cell sites.

The intense lobbying on 5G paid off. The FCC gave the carriers carte blanche authority to place small cells anywhere and at a low licensing cost. The FCC sped up and pushed through a ton of new spectrum for the industry. But the 5G effort went too far, and there was serious talk about the US Government buying Nokia or Ericsson so that the US could control its 5G future. All of the government reactions to the supposed 5G crisis were crazy when you consider that we still don’t have any phones served with 5G – and the world has not come tumbling down around us.

5G wasn’t the only issue on lobbyists’ plates during the last decade. Intense lobbying got the last FCC to eliminate broadband regulation by killing its Title II authority. State regulatory Commissions have largely deregulated the big ISPs over the last decade. The big telcos pocketed most of the $10 billion CAF II grants with no repercussions. Numerous states legislatures have passed prohibitions against municipalities and even electric cooperatives from offering broadband. AT&T decided last year to unilaterally stop selling DSL, with no regulatory pushback that I can see. The big ISPs have regularly redlined poor urban neighborhoods. The big telcos stopped maintaining rural copper networks. The two biggest cable companies are on a trajectory for having a basic $100 broadband product. This list could go on for a few pages. It’s pretty obvious that lobbying has paid off big time for big ISPs and cellular carriers. .

The Common Cause report looks at the political spending and lobbying spending of the big ISPs. The report demonstrates how specific lobbying efforts have derailed attempts at broadband regulation. The report specifically focuses on ISP spending during the 116th Congress as an example of how political spending impacts legislation.

Everything detailed in this report is dwarfed by the current lobbying efforts of the big ISPs, which are trying to stave off real competition through the billions in broadband grants that are raining down on the industry. The big ISPs are genetically opposed to competition in any form, even in the rural markets they wrote off decades ago. There is intense lobbying at every level of government to not use grants to build fiber except in rural areas.

The report discusses some commonsense legislation that could put some brakes on lobbying by requiring more openness and disclosures. While this blog looks only at the broadband industry, it’s scary to think that there are many similar lobbying efforts by large corporations throughout the economy.

Federal Broadband Coordination

The White House is now requiring that the three agencies that are involved with broadband funding – the National Telecommunications and Information Administration (NTIA), the Federal Communications Commission (FCC) and the U.S. Department of Agriculture (USDA) – to share information about broadband funding.

The agencies have agreed to share the following information about any location that is receiving or is under consideration for federal broadband funding:

  • Every ISP serving in the area
  • Description of broadband technology and speeds being delivered for each ISP
  • Maps showing the geographic coverage of ISPs
  • Identity and details of any ISP that has received or will receive broadband funds from any of the three agencies.

This kind of coordination seems vital in the current environment and where all three agencies are awarding sizable grants. It’s not hard to imagine having different ISPs seeking grants from different federal grant programs to serve the same geographic areas.

But then what happens? Will two agencies collaborate to decide which grant program will make the award? That would add another layer of complexity to grants if a grant application filed with one agency is suddenly conflicting with a grant request at another agency. Will ISPs be informed if discussions are happening behind the scenes between agencies concerning a grant request?

This also raises the issue of different agencies having significantly different grant requirements. We’re already seeing differences among grants in terms of identifying areas that are eligible for grant awards, different definitions of qualifying broadband speeds, different lists of technologies that will or won’t be funded, etc. How can the agencies collaborate if grants trying to serve the same area are following different grant rules? For example, what does collaboration mean when grants at one agency allow for wireless technologies when grants at another agency don’t?

One of the most troublesome aspects of this arrangement is that the agencies are going to share information on existing broadband speeds and coverage. The whole industry understands that the FCC’s database for this data is often badly flawed. Some grant programs today are open to examining facts that prove the errors in the FCC mapping data – but will the FCC be open to having its data challenged by a grant request filed with a different agency?  For collaboration to be effective, all three agencies have to be working with the same set of facts.

One of the oddest aspects of this collaborative effort is that it’s only required to last two years and any of the three agencies is free after that to end the collaboration. That makes it sound like somebody doesn’t think this is going to work.

The collaboration sounds like a worthwhile effort if the agencies can work together effectively. But it’s not hard to imagine the collaborative effort adding complexity and possibly even paralysis when considering multiple grants for the same location. How will the three agencies resolve differences between grant programs? My biggest fear is that this effort will add paperwork and time to the grant process without improving the process.

Starry Coming to Columbus, Ohio

I’ve been predicting for several years that wireless broadband is coming to metropolitan areas. There are several factors aligning to support this trend. Most importantly, there have been big advances in millimeter-wave radios that can bring decent broadband. Second, DSL is clearly on the way out – in fact, AT&T will no longer install DSL or even copper voice customers. Finally, the big cable companies feel that they’ve won the broadband battle and are flexing their monopoly power by aggressively raising rates – both Comcast and Charter are on a path to have $100 broadband in just a few years. These factors leave a void for an ISP with low prices and decent broadband.

Perhaps the splashiest wireless company to tackle the market niche is Starry. The company is owned by Chet Kanojia, who you may remember as the founder of Aereo, which was trying to offer a cheap alternative to local programming.

Starry has been operating for several years by beaming gigabit broadband to high-rise apartment buildings in Boston, New York City, Washington D.C., Denver, and Los Angeles. In those markets, Starry has been offering broadband using the 37 GHz spectrum band through a market test license from the FCC.

Starry offers an interesting broadband product. The company always posts its speeds on its website, and as I wrote this article, the average speed for Starry customers is 204 Mbps download and 201 Mbps upload – an attractive product in today’s market. The company offers low prices – in current markets, the price is $50 per month with no contracts, no connect fee, and no gimmicks. The company also provides 24/7 live customer service.

Starry is ready to roll out the next generation of millimeter-wave technology and has chosen Columbus, Ohio as the first market. Rather than offer broadband only to high-rise apartments, the wireless technology will be available to everybody from high-rises to single-family homes and will cover downtown and stretch into nearby suburbs.

Starry is taking advantage of radios that can bounce signals from one customer to the next. This creates a neighborhood mesh network around each base transmitter. Starry also is deploying Time Division Duplex (TDD), which handles upload and download bandwidth differently than other ISPs. With TDD, there are both download and upload timeslots built automatically into the transmission path. This allows a single frequency and channel to handle both upload and download functions simultaneously. One user in a household can be downloading while somebody else uploads at the same time using a single frequency channel. The Starry technology will further vary the number of upload or download time slots depending upon demand.

Because of the TDD technology, the Starry home receiver is a sophisticated piece of electronics and not a simple receiver. When Starry first launched, the cost of the receiver was nearly $500 but is now approaching $200.

Starry will be launching in Columbus with a $25 introductory price for early adopters but will likely get back soon to a standard $50 rate. Starry has big plans to eventually pass up to 40 million urban households. Starry also won $268.9 million in the RDOF grants to bring broadband to over 100,000 rural homes, with a network that will be a hybrid of both fiber and fixed wireless.

Starry will  be the first splashy wireless company to hit urban markets, but it won’t be the last. There is a solid market in every city for decently priced broadband with decent speeds. There are folks in every market who want an alternative to the big cable companies, and wireless technology is poised to fill the niche being vacated by DSL. Expect to hear a lot more from Starry and from others that start popping up in urban markets.