Another Story of Lagging Broadband

We don’t really need any more proof that the FCC broadband data is massively out of touch with reality. However, it seems like I see another example of this almost weekly. The latest news comes from Georgia where the Atlanta Journal-Constitution published an article that compared actual broadband speeds measured by speed tests to the FCC data. The newspaper analyzed speed tests from June through December 2017 and compared those results to the FCC databases of supposed broadband speeds for the same time period. Like everywhere else that has done this same comparison, the newspaper found the FCC data speeds to be overstated – in this case, way overstated.

The newspaper relied on speed tests provided by Measurement Labs, an Internet research group that includes Google, the Code for Science & Society, New America’s Open Technology Institute, and Princeton University’s PlanetLab. These speed tests showed an average Internet speeds of only 6.3 Mbps for areas where the FCC data reported speeds of 25 Mbps are available.

Anybody that understands the FCC mapping methodology knows that you have to make such a comparison carefully. The FCC maps are supposed to show available speeds and not actual speeds, so to some degree the newspaper is comparing apples and oranges. For instance, when multiple speeds are available, some people still elect to buy slower speeds to save money. I would expect the average speed in an area where 25 Mbps is the fastest broadband to be something lower than that.

However, the ultralow average speed test results of 6.3 Mbps points out a big problem in rural Georgia – homes electing to buy lower speeds can’t possibly account for that much of a difference. One thing we now know that is an area shown by the FCC to have 25 Mbps broadband speeds is probably served by DSL and perhaps by fixed wireless. The vast majority of cable companies now have speeds much faster than 25 Mbps and areas shown on the maps that are served by cable companies will show available speeds of at least 100 Mbps, and in many cases now show 1 Gbps.

The only way to explain the speed test results is that the FCC maps are wrong and the speeds in these areas are not really at the 25 Mbps level. That highlights one of the big fallacies in the FCC database, which is populated by the ISPs. The telcos are reporting speeds of ‘up to 25 Mbps’ and that’s likely what they are also marketing to customers in these areas. But in reality, much of the DSL is not capable of speeds close to that level.

The newspaper also gathered some anecdotal evidence. One of the areas that showed a big difference between FCC potential speed and actual speed is the town of Social Circle, located about 45 miles east of Atlanta. The newspaper contacted residents there who report that Internet speeds are glacial and nowhere near to the 25 Mbps as reported on the FCC maps. Several residents told the newspaper that the speeds are too slow to work from home – one of the major reasons that homes need faster broadband.

Unfortunately, there are real-life ramifications from the erroneous FCC maps. There have been several grant programs that could have provided assistance for an ISP to bring faster broadband to places like Social Circle – but those grants have been limited to places that have speeds less than 25 Mbps – the FCC definition of broadband. Areas where the maps are wrong are doubly condemned – they are stuck with slow speeds but also locked out of grant programs that can help to upgrade the broadband. The only beneficiary of the bad maps are the telcos who continue to sell inadequate DSL in towns like Social Circle where people have no alternative.

The State of Georgia has undertaken an effort to produce their own broadband maps in an attempt to accurately identify the rural broadband situation. The University of Georgia analyzed the FCC data which shows there was 638,000 homes and businesses that couldn’t get Internet with speeds of at least 25 Mbps. The state mapping effort is going to tell a different story, and if the actual slow speeds indicated by the speed tests are still true today then there are going to by many more homes that actually don’t have broadband.

It seems like every examination of the FCC mapping data shows the same thing – widespread claimed broadband coverage that’s not really there. Every time the FCC tells the public that we’re making progress with rural broadband, they are basing their conclusions on maps they know are badly flawed. It’s likely that there are many millions of more homes that don’t have broadband than claimed by the FCC – something they don’t want to acknowledge.

Broadband and Education

I’ve always taken it as a given that broadband is important for education. I know as I travel around the country and meet with folks in rural counties that education is at the top of the list of reasons why rural areas want better broadband. I’ve heard countless stories of the major efforts rural families undertake to help their kids keep up with schoolwork.

I recently saw a study that looks at the impact of lack of broadband on education. The study comes from the ICUF (Independent Colleges and Universities of Florida) – a group of 30 universities in the state. This study correlates lack of broadband with lower high school graduation rates, lower percentages of college degrees and lower per capita income.

The study says that 700,000 Floridians don’t have enough broadband to take part in distance learning. Distance learning is used for numerous college degree programs and the ICUF institutions have over 600 distance learning degree programs.

But distance learning is now also a big part of K-12 education and students are expected to be able to use distance learning tools for homework or to make up for work missed during absences. High schools also use distance learning to offer a wider variety of classes to students on subjects where it would otherwise be hard to justify hiring a teacher. My daughter finished high school in Florida last year and she took a distance learning math class when she was unable to otherwise fit it into her schedule.

The study concludes that students need broadband speeds at something similar to the FCC definition of broadband of 25 Mbps down and 2 Mbps up in order to successfully use distance learning. I would also add that distance learning requires low latency in order to maintain a live connection – this is not something that can be done, for example, with a satellite broadband connection.

The study identified 13 counties in the state that have inadequate broadband, ranging from Madison County where 41% of residents can’t get broadband to Dixie County where 99% of households don’t have broadband access. These counties have significantly fewer citizens with college degrees than the 19 counties that are at the top of the list in terms of broadband access.

But the 13 county statistic is misleading because every county has pockets of students without good broadband. As soon as you get outside city limits almost anywhere the availability of broadband quickly diminishes. A few years ago I looked at my own county, Charlotte County, and I found several pockets of homes without broadband even inside suburban neighborhoods.

The state of Florida has a goal to have 55% of its population with a college degree or advanced education certificate by 2025. They think this is needed to keep the state competitive in the global economy. The areas without broadband are far below that target with college graduation rates between 12% and 27%. A few of the urban counties in the state already have as many as 54% of residents with a college degree or certificate.

This study doesn’t reach any conclusions on how to close the rural broadband gap (something a whole lot of us are struggling with). But they see this study as a cry to develop policies and funding to close the gap. The conclusion of the study is that areas without broadband will fall further behind than they are today unless we can find broadband solutions.

Is 25 Mbps Still Broadband?

FCC_New_LogoYesterday’s blog noted that the CRTC in Canada (their version of the FCC) adopted a new definition of broadband at 50 Mbps download and 10 Mbps upload. They also said that broadband is now a ‘basic telecommunications service’, meaning that everybody in Canada ought to have access to broadband.

It’s not unusual for a government to define broadband. Two years ago at the end of January 2015 the FCC defined US broadband to be connections that are at least 25 Mbps down and 3 Mbps up. That was a huge increase over the older US standard of 4 Mbps down and 1 Mbps up. The Canadian action raises several questions for me. First, what does it mean when a government defines broadband? Second, once broadband has been defined, how often should the definition be reexamined to see if it’s still adequate?

There is no easy answer to the second question. There is almost nothing in our lives that is growing as rapidly as the demand for broadband. Since the early 80s the demand for speeds and total downloads has doubled approximately every three years. According to Cisco that growth curve might be slowing a tad and perhaps will now double every four years. But this means that any definition of broadband is going to become quickly obsolete. I am not surprised to see somebody talking about twice the speed of the US broadband definition even though it’s only been two years since it was set. And this means that if a government is going to define broadband at a specific speed, then they are almost committed to reexamining that speed on a regular basis.

The policy question of why a government should define broadband is a harder question. Certainly there was a wide range of positions on the topic among the five FCC Commissioners at the time the new definition was set. Commissioner Jessica Rosenworcel thought the definition ought to be 100 Mbps download. Her reasoning was that what the FCC was setting was a goal and that striving high might prompt providers to meet the higher standard. At the other end of the spectrum, Commissioner Michael O’Rielly hated the 25/3 Mbps speed. He said that most cable companies already offered faster speeds and he saw no social benefit from defining broadband to be faster than what people without access to cable networks can get.

It’s clear that after the FCC set the 25/3 definition of broadband that even they weren’t quite sure what it meant. Soon after they approved the 25/3 standard they went on to approve the CAF II plan that is handing out $19 billion dollars to large telcos to improve rural broadband to speeds of at least 10/1 Mbps. The FCC did not feel that their own definition of broadband constrained them from funding something slower.

The main way that the FCC uses their definition of broadband is to count the number of homes that are above or below the broadband threshold. To the FCC this is the litmus test by which they measure the state of broadband in the country. Interestingly, there isn’t a lot of difference for this accounting if the speed is set at 25 Mbps or 50 Mbps. Generally the technologies that can offer 25 Mbps can offer even faster speeds. If the official broadband speed is only for this litmus test then there wouldn’t be much difference between using 25 Mbps and 50 Mbps for that test.

The US has not undertaken any material efforts in the last few years to achieve faster broadband speeds. In fact, in can easily be argued that the CAF II program is doing the opposite and makes it harder for somebody to justify building fiber in rural areas. So, at least in the US, the broadband speed definition is not much more than a number. It certainly presents a target to shoot at for those parts of the country that don’t have broadband, but the government has done almost nothing with that definition to promote faster broadband.

Governments of all sizes have programs to build fiber. Portugal is doing this with tax incentives. The State of Minnesota is doing this with matching grants. And numerous cities have put bond money behind local fiber networks. We’ll have to watch to see if the Canadian government puts any more teeth into their attempt to define broadband. The fact that they also deemed broadband to be a basic service that should be available to all might mean that the government will take steps to build more broadband networks. But setting a broadband definition is a far cry from building fiber infrastructure and it will be interesting to see if setting the 50/10 Mbps goal equates to government involvement in building fiber.

How Many Homes Can’t Get Broadband?

cheetah-993774The FCC periodically puts out some very high-level statistics that talk about the state of broadband in the US. They issued their annual broadband report in January and made the following high-level announcements:

  • 39% of rural households don’t have access to broadband that meets the FCC definition of 25 Mbps download and 3 Mbps upload.
  • 4% of urban households don’t have access to those speeds.
  • 41% of schools still do not have 100 Mbps download speeds.
  • Only 9% of schools have 1 Gbps broadband.

I looked deeper into how the FCC counts these various numbers to try to make some sense of them, and the following is what I discovered.

First, they followed the Census definition of urban and rural areas. The Census defines urban areas in one of two ways. One definition of an urban area is a defined geography with more than 50,000 people. It can also be a cluster of smaller towns in a fairly adjacent geographical area that has more than 2,500 people but less than 50,000. In the Census estimate for 2015 the urban areas include about 260 million people. Anything that is not urban is rural, which in 2015 is about 61.5 million people.

If a rural county has a county seat with more than 50,000 people, the county seat would counted as urban and the rest of the county would be rural. Otherwise the whole county is normally counted as rural. But in big urban areas, like the northeast corridor, many areas that you would consider as rural are included in the urban areas. So there is a significant amount of crossover at the edges of these two types of areas. For instance, for broadband purposes we know that somebody that lives 50 feet past where the cable company stops at a county seat might not be able to get broadband, but they might often still be counted as urban.

The raw data that backs up these statistics is still self-reported to the FCC by the ISPs annually on Form 477. On this form telcos and cable companies must report the speeds that they deliver to census blocks, which are census-defined areas of 500 to 900 homes. I looked through this mass of data and there are a huge number of census blocks that are reported at broadband speeds like 3 Mbps or 6 Mbps download. In most cases this is DSL, and our experience is that a whole lot of people in rural DSL areas can’t really get those speeds. That is the ‘advertised’ speed or the theoretical speed. This has always been an issue and I’ve always contended that there are far more homes that can’t get broadband than are reported by Form 477.

Using these FCC numbers means that there are about 24 million people (or 10 million homes) in the rural areas that can’t get the FCC’s defined broadband speeds. While the 4% of urban areas that can’t get fast broadband sounds small, it still equates to 10.4 million people or 4.3 million homes. So what the FCC numbers are really saying is that there are 34 million people and 14.7 million homes in the country that can’t get an FCC-define broadband connection.

I am positive that this number is conservatively low. Census blocks are not assigned by nice political boundaries and there are huge numbers of census blocks that cover both towns and country areas. There has to be many homes that are in census blocks where some of the people can get the speeds shown on Form 477 while others can’t. My guess is that there must be additional millions of people that supposedly can get broadband but that really can’t. Even in towns anybody that lives right past where the cable TV network stops is not going to get much broadband.

The FCC says that they are solving part of the rural broadband problem with CAF II funding which is supposed to bring faster connections to 3.6 million of these homes. But those funds only require upgrades to technology that will achieve 10 Mbps download and 1 Mbps upload. That program is not going to remove any homes from the list of those that can’t get broadband.

I really hate to see public announcements that talk in nationwide percentages instead of numbers. This always makes it feel like they are trying to pull something over on us. I had to dig really hard to go one level behind the one-page press release – and that doesn’t really help the public to understand the situation. Much more useful would have been detailed tables by geographic areas that let people see the state of broadband in their area. I suspect they don’t do that because then many of the problems with carrier self-reporting would be more obvious.

Taking Federal Broadband Funding

USDAThe USDA recently announced a new round of loan financing for the Rural Broadband Loan and Loan Guarantee Program as authorized by the 2014 Farm Bill. The loans are administered by the Rural Utility Service (RUS), a part of USDA.

The loans are available to bring or improve broadband in areas where at least 15% of the households do not have broadband today. The loans can be used to build technologies that are as slow as the old FCC definition of broadband – 4 Mbps download and 1 Mbps upload, although the RUS will strongly encourage building technology capable of meeting the new broadband definition of 25 Mbps down and 3 Mbps up. The projects can range between $100,000 and $20 million.

Over the years I have helped numerous clients acquire these loans, but I have seen more and more reluctance to use them in recent years for a variety of reasons. Following are some of the issues my various clients have with this loan program:

Slow Response Time. I don’t know what the current backlog is, but there have been times over the last five years when a loan application might wait 18 months or more for a decision from the RUS. Those kinds of wait times might have been acceptable back in the days of all-regulated telephony, when companies worked slowly on five and ten year capital plans. But the world has gotten more competitive for everybody and nobody is willing to wait that long for a yes or no answer on a major capital program.

Paperwork. The loans take a lot of paperwork. The application itself is like writing a book and my firm has historically charged up to $20k for writing one of these applications – it’s that much work. And the paperwork doesn’t stop with the application. Once you’ve taken the loan there is major annual compliance paperwork that can overwhelm the staff of smaller borrowers.

Engineering. The loan applications for larger projects must be signed by a professional engineer, and this means that projects must be nearly fully engineered just to apply for funding. That differs from the rest of the industry where projects typically are done with ‘pre-engineering,’ which means that an engineer has made a very good estimate of the cost of the project, and in my experience those pre-engineered estimates are usually pretty reliable.

Extra Costs. Sometimes the loans require extra steps that are not required for other financing. For example, I’ve seen federally-funded loans require an expensive environmental study. Nobody else ever does this because fiber is almost always built into existing public rights-of-way, which by definition have already been cleared for these purposes. Depending on the size of the loan there can also be some kind of customer survey required.

Mostly Still for Regulated LECs. Most of the loans still go to regulated telephone companies for a variety of reasons. For instance, the projects usually require 10% to 20% equity from the borrower and also first lien against the assets built with the loan. These requirements have largely stopped government entities from using these loans. Another issue that these loans entail is that they have loan covenants that can be burdensome. As an example, there might be limits on dividends that can be paid to company owners while one of these loans is outstanding.

Rates are Not that Attractive. There have been times in the past when the RUS interest rates were significantly lower than commercial bank rates and thus were very attractive. But with today’s low interest rates there is currently not a lot of difference between the government rates and commercial rates. By the time you factor in all of the extra costs of applying for and complying with these loans, the RUS loans might be more expensive.

At times in recent years the RUS has built up billions of uncommitted funds because not enough borrowers have been interested in the money. Over the last decade I have helped more clients refinance RUS loans with other lenders than I have helped people get new RUS loans. I’ve read other articles that say that the RUS is too conservative. That may or may not be true, because for the carriers I know it’s generally one or more of the above factors that have turned them off government money.

I don’t want to sound like I am trashing the program, because RUS loans have helped to fund many worthwhile projects. But a lender needs to weigh all of their options and consider all of the costs of borrowing money from different sources. Borrowing money is about a whole lot more than just the interest rate and you need to take all of the other aspects of any loan into consideration.

If You Think You Have Broadband, You Might be Wrong

Speed_Street_SignThe FCC has published the following map that shows which parts of the country they think have 25 Mbps broadband available. That is the new download speed that the FCC recently set as the definition of broadband. On the map, the orange and yellow places have access to the new broadband speed and the blue areas do not. What strikes you immediately is that the vast majority of the country looks blue on the map.

The first thing I did, which is probably the same thing you will do, is to look at my own county. I live in Charlotte County, Florida. The map shows that my town of Punta Gorda has broadband, and we do. I have options up to 110 Mbps with Comcast and I think up to 45 Mbps from CenturyLink (not sure of the exact speed they can actually deliver). I bought a 50 Mbps cable modem from Comcast, and they deliver the speed I purchased.

Like a lot of Florida, most of the people in my County live close to the water. And for the most parts the populated areas have access to 25 Mbps. But there are three urban areas in the County that don’t, which are parts of Charlotte Beach, parts of Harbor View and an area called Burnt Store.

I find the map of interest because when I moved here a little over a year ago I considered buying in Burnt Store. The area has many nice houses on large lots up to five acres. I never got enough interest in any particular house there to consider buying, but if I had, I would not have bought once I found there was no fast broadband. I don’t think I am unusual in having fast Internet as one of the requirements I want at a new home. One has to think that in today’s world that housing prices will become depressed in areas without adequate Internet, particularly if they are close to an area that has it.

The other thing that is obvious on the map of my county is that the rural areas here do not have adequate broadband, much like most rural areas in the country. By eyeball estimate it looks like perhaps 70% of my county, by area, does not have broadband as defined by the FCC. Some of that area is farms, but there are also a lot of large homes and horse ranches in those areas. The map tells me that in a county with 161,000 people that over 10,000 people don’t have broadband. Our percentage of broadband coverage puts us far ahead of most of the rest of the country, although the people without broadband here probably don’t feel too lucky.

I contrast the coasts of Florida by looking at the Midwest. In places like Nebraska it looks like nobody outside of decent sized towns has broadband. There are numerous entire counties in Nebraska where nobody has access to 25 Mbps broadband. And that is true throughout huge swaths of the Midwest and West.

There are pockets of broadband that stick out on the map. For example, there is a large yellow area in rural Washington State. This is due to numerous Public Utility Districts, which are county-wide municipal electric systems, which have built fiber networks. What is extraordinary about their story is that by Washington law they are not allowed to offer retail services, and instead offer wholesale access to their networks to retail ISPs. It’s a hard business plan to make work, and still a significant amount of fiber has been built in the area.

And even though much of the map is blue, one thing to keep in mind that the map is overly optimistic and overstates the availability of 25 Mbps broadband. That’s because the database supporting this map comes from the National Broadband Map, and the data in the map is pretty unreliable. The speeds shown in the map are self-reported by the carriers who sell broadband, and they frequently overstate where they have coverage of various speeds.

Let’s use the example of rural DSL since the delivered speed of that technology drops rapidly with distance. If a telco offers 25 Mbps DSL in a small rural town, by the time that DSL travels even a mile out of town it is going to be at speeds significantly lower than 25 Mbps. And by 2–3 miles out of town it will crawl at a few Mbps at best or not even work at all. I have helped people map DSL coverage areas by knocking on doors and the actual coverage of DSL speeds around towns looks very different than what is shown on this map.

Many of the telcos claim the advertised speed of their DSL for the whole area where it reaches. They probably can deliver the advertised speeds at the center of the network near to the DSL hub (even though sometimes this also seems to be an exaggeration). But the data supplied to the National Broadband Map might show the same full-speed DSL miles away from the hub, when in fact the people at the end of the DSL service area might be getting DSL speeds that are barely above dial-up.

So if this map was accurate, it would show a greater number of people who don’t have 25 Mbps broadband available. These people live within a few miles of a town, but that means they are usually outside the cable TV network area and a few miles or more away from a DSL hub. There must be many millions of people that can’t get this speed, in contradiction to the map.

But the map has some things right, like when it shows numerous counties in the country where not even one household can get 25 Mbps. That is something I can readily believe.

Telemedicine Needs Big Bandwidth

Medical_Software_Logo,_by_Harry_GouvasThe Federal Government is a big believer in telemedicine and there are several branches of the government that have been vigorously pursuing it as a way to better treat patients. Some of these initiatives include:

  • The Department of Veterans Affairs kicked off their telehealth program in 2011 named Special Care Access Network – Extension for Community Healthcare Outcomes (SCAN-ECHO). This program is aimed at providing care to veterans without requiring them to travel to a VA hospital. In some parts of the country VA hospitals are widely scattered and the VA knows that a lot of doctor visits are routine and can be handed adequately through telemedicine links.
  • The Department of Defense started working on a telemedicine program almost two decades ago for use on the battlefield. Their telemedicine links allow specialists to weigh in on battlefield injuries along with field medics, and they had great results in Iraq and Afghanistan. The DoD has named their system ECHO and has recently licensed it to Kaiser Permanente. The hospital chain sees use of the technology to field triage accident victims and to use for their patients who can’t make it to a hospital.
  • The Air Force has been working on a focused telemedicine program for the last four years. Instead of working on remotely treating patients, which is being pioneered by others, they have been focused on four specific areas within teleimaging: teleradiology, telecardiology, tele-endoscopy and telepathology. In a nutshell they are working with field devices that can create the diagnostic images that telemedicine doctors need to better treat field injuries. This would provide more detailed diagnostics for accident victims and remote patients who can’t easily get to a hospital.

Telemedicine is a priority for the Veterans Administration which reports that they are today treating 380,000 vets who live in rural areas. They have nearly 11,000 veteran patients now using the VA’s tele-audiology system, but they would like to greatly expand their telemedicine capabilities.

What all of these programs have come to realize is that the broadband in rural America is not adequate for what they are trying to do. One thing every one of the above efforts needs is big broadband capacity to connect to patients through video links or to transmit gigantic imaging files.

The military is used to having big broadband on the battlefield. We tend to think of satellite data links as small bandwidth and slow connections, but satellites can download significant bandwidth pipes with the right receivers and at the right price. I would assume (but don’t know) that the military has their own data satellites in orbit to provide bandwidth on the battlefield.

So these agencies are adding their voice to the cry for better rural broadband, which is the primary place where intensive telemedicine technologies are most needed. As these agencies are moving battlefield-tested technology into the civilian world they are bumping up against the same rural bandwidth limits that others have been seeing for years.

Just last week the FCC boldly increased the definition or broadband in the country to 25 Mbps download and 4 Mbps upload. According to the FCC’s numbers this means that 55 million Americans, or 17 percent of the population do not have access to broadband.

If you have followed my blog you know that I think the number is even higher than that since the FCC’s estimate is based upon a very flawed National Broadband Map, which is populated by the carriers. But one can be pretty certain that the vast majority of the people who can’t get the FCC’s newly defined broadband live in rural areas.

I have worked for years with rural communities and the lack of broadband has some real life repercussions for the people living there. There are numerous rural communities without hospitals, without doctors and without universities, and the people who live in these remote places have to undertake long drives to do things the rest of us consider as routine like see a doctor or take a class.

Telemedicine has a huge potential for diagnosing and treating rural patients. It is already being used worldwide to bring modern healthcare into remote communities. But I find it sad that many places in our own country can’t have this great technology due to the lack of broadband infrastructure.

Why Change the Definition of Broadband?

slow-downThe FCC is going to vote at its January 29th meeting to possibly increase the definition of broadband from 4 Mbps download and 1 Mbps upload to as much as 25 Mbps download and 3 Mbps upload. The higher speeds are what Chairman Tom Wheeler favors and was contained in the first draft of the Annual Broadband Progress report that goes to Congress each year.

This proposal has me scratching my head because the same FCC just announced a few weeks ago that the large price-cap telcos are going to qualify for the $9 billion in new funding from the Connect America Fund by deploying technology capable of providing speeds of 10 Mbps download and 1 Mbps upload.

I am having trouble getting my head around that disconnect. The FCC is willing to spend a huge amount of money, spread over as many as seven years on the giant telcos that are promising to deliver 10/1 Mbps service to rural areas. If at the same time the FCC changes the definition of broadband, then those upgraded connections are not even going to be considered as broadband.

To make this worse, it’s almost certain that sometime during the next seven years the definition of broadband will be increased again, making any technology that delivers only 10 Mbps seem really slow and outdated by the end of seven years.

I understand the FCC’s dilemma a little. The big telcos are the ones that serve huge portions of rural America and so the FCC is thinking that luring them into serving at least 10/1 broadband is better than nothing. Unfortunately, that’s all it – just better than nothing.

It seems to me before we hand the large telcos that money that we ought to first see if somebody else is willing to take the same money to build fiber to those same rural areas. $9 billion is a lot of money and it would go a long way towards seeding a lot of rural fiber projects. But the current Connect America Fund rules say that if the big telcos accept the CAF money that nobody else has a shot at it.

It’s not like there aren’t companies willing to build faster facilities in rural America. There are plenty of independent telephone companies, municipalities and electric cooperatives that would think about building rural fiber if they got help with the funding. It’s my understanding that there were hundreds of applicants for the FCC’s recent experimental grants who offered to build rural fiber networks. Wouldn’t it make a lot more sense to give these companies a chance to compete with the big telcos for the $9 billion?

Let’s face it. If the big telcos upgrade rural America to 10 Mbps, this is their last hurrah. They won’t ever being doing additional upgrades in those areas. And so the FCC is dooming these areas to those speeds for decades to come.

The FCC’s own numbers say that the average household today already needs at least 10 Mbps. And we know that bandwidth utilization in households is doubling every three years. So if a household needs 10 Mbps today, by the end of the seven years of CAF II funding it is going to need nearly 50 Mbps.

Meanwhile, seven years from now there will be a lot of urban and suburban households that can buy 1 Gbps. And the ones who can’t get that will probably be able to buy 100 Mbps or more.

These rural areas are already way behind the cities. Some of the areas that will be built by CAF have either no broadband or else slow connections at maybe 1 or 2 Mbps. So upgrading them to 10 Mbps is going to feel like a big improvement to those households. But almost by the time the ink dries on those projects those areas are going to be further behind the urban areas than they are today.

I don’t know why we are having a federal program that is supporting rural DSL. DSL isn’t inherently bad and it’s reported that there are places in urban areas where AT&T is now goosing several hundred Mbps from DSL. But that is not what is going to happen over the older wires and the longer distances in rural America. The FCC wants to pay the big telcos to upgrade the electronics on wires that are at least fifty years old and that degrade a little more every year.

I’m actually not against using CAF funding to upgrade the DSL in areas where nobody else is willing to do something faster. But I can’t understand why we aren’t first having an auctions for serving these areas with speed as the determining factor on who gets the federal funding. Under that kind of auction most of the money would probably still go to the telcos, but the money might also bring fiber to a million or more rural households – and that would be real progress. Rural America is doomed to remain behind unless they get fiber. And $9 billion would be a great start towards building that fiber.

I guess the main question this raises for me is why the FCC is changing the definition of broadband. If 25 Mbps is to mean anything then I would think that the FCC would not fund anything that isn’t considered broadband. Otherwise, it’s just a goal that has little meaning. It’s something the big telcos can wink at while they get paid for deploying something that is not even broadband.