Future-proofing Grants

There has been a lot of discussion in the last few months about how wonderful it was for Congress to have increased the speed requirements for broadband grant eligibility to 100/20 Mbps in the $42.5 billion BEAD grants. But is it really all that wonderful?

It’s obvious that the FCC’s definition of broadband of 25/3 Mbps is badly out of date. That definition was set in 2015, and it seemed like an adequate definition at the time. If we accept that 25 Mbps was a good definition for download speed in 2015 and that 100 Mbps is a good definition in 2022, then that is an acknowledgment that the demand for download broadband speed has grown at about 21% per year, which is shown in the table below.

Historic Download Speed Demand in Megabits / Second

2015 2016 2017 2018 2019 2020 2021 2022
25 30 37 44 54 65 79 95

We have outside evidence that the 21% growth rate makes sense. Several times over the last decade, both Cisco and Opensignal opined that the residential demand for download speed has been growing at that same 21% rate. Cisco said that it thought business demand was growing at about a 23% clip.

This raises an interesting question of how good it is for a grant program today to use a 100 Mbps definition for broadband? The main reason that this is a relevant question is that the BEAD grants aren’t going to be constructed for many years. My best guess is that the majority of BEAD grants will be awarded in 2024, and ISPs will have four more years to finish network construction – until 2028. The above table shows how much broadband demand for download speed grew from 2015 until 2022. What might this look like by the time the BEAD networks are fully implemented?

Future Projected Download Speed Demand in Megabits / Second

2022 2023 2024 2025 2026 2027 2028
100 121 146 177 214 259 314

If we accept that 100 Mbps download is adequate today as a definition of download broadband speed, then if broadband demand continues to grow at 21% annually, the definition of download broadband ought to be over 300 Mbps in 2028. I know many cynics will say that broadband demand cannot continue to grow at the historic rate, but those same people would have said the same thing in 2015 – and been proven wrong. In fact, there has been a steady growth curve for broadband speed demand back into the 1980s. There is no evidence I’ve heard that would indicate that the demand growth has slowed down.

We don’t really need to have this theoretical discussion of adequate broadband speeds because the market is ahead of the above speed growth curves. Since the early 2000s, cable companies have unilaterally raised the speed of basic broadband to keep ahead of the demand curve. The cable companies have raised minimum speeds every few years as an inexpensive way to keep customers happy with cable broadband.

The cable industry is in the process right now of increasing the speed of basic download speed to 200 Mbps – a number higher than predicted by the table above for 2022. There is a strong argument to be made that the cable companies have been resetting the definition of broadband while regulators were too timid to do so. I can remember when the cable companies collectively and unilaterally increased speeds to 6 Mbps. 12 Mbps, 30 Mbps, 60 Mbps, 100 Mbps, and now 200 Mbps.

This argument is further strengthened when considering that the big cable companies serve almost 70% of all broadband customers in the country today. When Congress gave the FCC responsibility for broadband in the 1996 Telecommunications Act, the requirement that the FCC has largely shoved under the rug was that rural broadband should be in parity with urban broadband. If 70% of new broadband subscribers in the U.S. are offered 200 Mbps broadband as the slowest basic product, it’s hard to argue that having a definition of anything under 200 Mbps today is not parity.

Congress wasn’t all that brave in setting the definition of grant-eligible at 100/20 Mbps. That is the lowest possible current definition of download speeds, and a number that is already starting to drift to be obsolete. Recall the gnashing of teeth in the industry last year while the legislation was being created – cable companies and WISPs both thought that 100/20 Mbps was too aggressive.

If we really wanted to future-proof the BEAD grants, then technology that won’t be built until 2028 should be required to deliver at least 300 Mbps download. Anything less than that means networks that the public will feel are inadequate as they are being deployed.

The 25/3 Mbps Myth

There is no such thing as a 25/3 Mbps broadband connection, or a 100/20 Mbps broadband connection, or even a symmetrical gigabit broadband connection on fiber. For a long list of reasons, the broadband speeds that make it to customers vary widely by the day, the hour, and the minute. And yet, we’ve developed an entire regulatory system built around the concept that broadband connections can be neatly categorized by speed.

I don’t need to offer any esoteric proof of this because every person reading this blog can easily prove this for themselves. Connect a computer directly into your incoming broadband connection and take a speed test multiple times throughout the day. Speed tests taken even minutes apart can vary by more than 10% and, depending upon the technology, can vary far more than that over a 24-hour period. What’s the speed being delivered to and from your home if the speeds you measure vary by 20%, 30%, or 40% over the course of a day? Assigning a single speed to describe your home’s broadband connection is a total fiction.

What do regulators mean when they set a speed definition of 25/3 Mbps? Does that represent the slowest speed that can be achieved, the fastest speed that can be achieved, or the average speed? There is no consensus on that. When a telco says it can deliver a speed of 25/3 Mbps the company is implying that it is capable of that speed, but doesn’t guarantee it. When a homeowner buys a 25/3 Mbps connection they view it as a speed they should be receiving and feel cheated if they get something slower. I’ll be honest – I have no idea what regulators think 25/3 Mbps means in the real world.

I would hope that every regulator understands that speeds are a convenient fiction that the FCC invented as a way to classify homes as having or not having broadband. A home connection that achieves 25/3 Mbps or something faster is considered to be broadband – anything slower is not considered to be broadband.

The big ISPs have always understood that choosing a speed to describe a broadband product is mostly symbolic in nature. Big ISPs regularly take advantage of the official definition of broadband to suit their goals. If a telco wants to create a regulatory block to keep away competitors it will overstate performance and declare its DSL to be 25/3 Mbps. But if having a slower speed means getting a subsidy, the same telco is likely to declare that speeds are less than 25/3 Mbps. Neither of those choices of naming the speed has anything to do with the actual broadband product being delivered – it’s just different manifestations of the speed fiction. Unfortunately, the pretense that ISPs can or cannot deliver certain target speeds has had real-life consequences. There are numerous communities that have been badly harmed by being denied broadband grant funding in the past because a big telco claimed the fictional broadband speeds of 25/3 Mbps.

It seems likely that the FCC will increase the definition of broadband to something like 100/20 Mbps in the upcoming year – and that is not going to stop speed from being an issue. Cable companies spent a lot of lobbying effort during the last year to make sure that the Congressional broadband grants can only be used in neighborhoods that don’t meet the speed requirement of 100/20 Mbps. The cable companies all swear they already meet that speed definition, and that means that the federal grants can’t be used to overbuild an existing cable company. It also means the cable companies can propose to use grant money to extend their coaxial technology outside current markets.

Our firm recently worked with two county seats that are served by big cable companies, and as part of those studies, we had residents take speed tests. With over 1,000 speed tests from cable customers, there were less than a dozen speed tests showing upload speeds faster than 20 Mbps upload, and over half had upload speeds of 10 Mbps or less. While many download speed tests were faster than 100 Mbps, about a fourth of download speed tests were under 50 Mbps. Do the cable companies in these towns provide 100/20 Mbps broadband? The speed tests would suggest that the cable companies aren’t meeting that speed definition for more than a tiny percentage of customers. These two towns (and most places that are served by a cable company) will fail a new FCC definition of broadband that requires 20 Mbps upload.

This all goes to show that a federal definition of broadband is a symbol only, a fiction. We already know that every cable company is going to swear that it meets the 100/20 Mbps definition of broadband – even when actual speed tests show this to not be true. They are going to say that their technology is capable of delivering upload speeds of 20 Mbps and that it doesn’t matter that they are underperforming. The cable companies worked hard to make sure that grants defined upload speeds as 20 Mbps rather than the 100 Mbps that was in the first draft of the Senate infrastructure bill. Just as the telcos manipulated the 25/3 Mbps definition of broadband to meet their purposes, the cable companies are going to do the same with 100/20 Mbps. It’s going to be shocking if any of the $42.5 billion in grants is used to overbuild a cable company – even if a cable company is badly underperforming.

The big ISPs have become masterful at using the federal speed definition to meet their purposes. The big federal grants include the worst of both worlds. They still have a test of defining unserved locations at 25/3 Mbps, allowing telcos to challenge any grant application. And the grants can be used to fund places with speeds up to 100/20 Mbps, allowing the cable companies to argue that the funds can’t be used to compete against them. It’s obvious that the big ISPs had a huge hand in drafting the federal grant language.

For years I have cringed every time I see a federal document that references 25/3 Mbps – because I know that the way that number is being used is a far cry from the broadband actually being delivered to homes. The definition of speed ought to be based on technology and not on the fiction of meeting achieving an imaginary speed goal. If the FCC wants to allow federal grants to overbuild DSL, they should say so. If they want to protect cable companies from competition, they should say so. But a policy that favors or disfavors certain technologies will never fly in a country where lobbyists influence policy. Instead, we’re going to keep seeing definitions of speeds that give the big ISPs the ammunition they need to fight against competition.

FCC’s 2020 Look at Broadband Speeds

The FCC recently released a Notice of Inquiry asking about the state of broadband in preparation for the upcoming 2021 report to Congress. The FCC is required to annually examine the state of broadband and this is the sixteenth NOI that is the first step towards creating the annual report.

In the NOI, the FCC provides a preview of what they are planning to tell Congress in the upcoming report. The FCC continues to pat itself on the back for closing the digital divide. Consider the following facts cited by the FCC in their opening paragraphs of the NOI:

The number of Americans lacking access to fixed terrestrial broadband service of at least 25/3 Mbps continues to decline, falling more than 14% in 2018 and more than 30% between 2016 and 2018. In addition, the number of Americans without access to 4G Long Term Evolution (LTE) mobile broadband service with a median speed of at least 10/3 Mbps fell approximately 54% between 2017 and 2018. The vast majority of Americans, surpassing 85% of the population in 2018, now have access to fixed terrestrial broadband service at 250/25 Mbps, representing a 47% increase in the number of Americans with access to this speed since 2017. Over the same period, the number of Americans living in rural areas with access to such service increased by 85%. 

These statistics all sound great, but unfortunately, we can’t believe any of these claims. The FCC continues to draw conclusions based upon the badly flawed Form 477 data reported to the agency by ISPs. In every rural county I have examined, there are overstatements by ISPs of broadband speeds and availability – and those overstated coverages are included by the FCC as places that have good broadband. I’ve written blogs about entire counties that the FCC thinks haves good broadband, but where the ISP-reported broadband doesn’t exist. If the FCC’s NOI was being truthful, the above list of statistics would open with this sentence: “This report summarizes the broadband speeds and coverage that ISPs report to us. We have no way to know if any of these claims are true”.

Anybody who digs into the FCC data knows it’s terrible, but it’s impossible to know how bad it is. We get clues every time somebody takes a stab at developing a more accurate broadband map. The State of Georgia undertook a mapping effort and in July identified 507,000 homes in the state that don’t have access to 25/3 broadband. That number was 255,000 homes higher than what was shown by the FCC. If that same ratio holds everywhere in the country, then there are twice as many homes without broadband than what the FCC cites in the NOI. I think in many western states that the FCC data is even worse than what Georgia found.

What I find most troublesome about the NOI is that the FCC is planning to stick to the definition of broadband as 25/3 Mbps. It’s easy to understand why the agency wants to keep this speed as the definition of broadband. If the agency increases the definition of broadband, then overnight a whole lot more homes would be declared to not have good broadband. That would completely kill the FCC’s narrative that they are doing great work and closing the digital divide.

The FCC’s cited statistics argue against 25/3 Mbps as the right definition of broadband. Consider the statement above which says that 85% of homes have access to 250/25 Mbps broadband. If that is true, then almost by definition, the FCC’s should define broadband at least at 250/25 Mbps. After all, the FCC’s mandate from Congress is to measure and close the gap between urban and rural broadband. If urban broadband can deliver 250/25 Mbps to everybody, then by the Congressional mandate the speeds available urban America should be the target for rural America. To keep the definition at 25/3 Mbps is ignoring market reality – that most of the people in the country now have speeds far faster than the FCC’s obsolete definition of broadband. And perhaps worse of all, the FCC is drawing this conclusion based upon 2018 data. We know that homes are using roughly 50% more broadband today today than what they used in 2018.

Western Governors Take a Stance on Broadband

The Western Governor’s Association (WGA) represents all of the states west of the line starting with Texas north to North Dakota, includes Alaska, Hawaii, and the western American territories. The association has been jointly exploring issues of joint interest for the region in many years. In July, the WGA issued a policy position paper that lays forth goals for broadband for 2020 through 2028. This is one of the more concise descriptions I’ve seen of the problems due to poor broadband as well as a concise of a list of needed broadband solutions.

The policy paper begins with the simple statement that broadband is critical infrastructure. I don’t know that I’ve ever seen the term ‘critical’ used at the FCC, which doesn’t share the same sense of urgency as the western governors.

The WGA states that the 25/3 Mbps definition of broadband is obsolete and that western economies and communities need faster broadband to prosper. The FCC recently proposed to stick with the 25/3 Mbps definition of broadband for yet another year and will still fund grants that would build new broadband networks that provide that speed. The governors support a faster definition of broadband that is scalable and that will increase as needed in the future.

The West has a lot of characteristics that make it difficult to find broadband solutions. Communities are often far apart and there are often few opportunities to monetize middle-mile fiber needed to connect communities. The West also has significantly large tracts of federal land that presents a challenge for building broadband infrastructure. Federal agencies like the US Forest Service, Bureau of Land Management, and Bureau of Indian Affairs play a crucial role in allowing (or hindering) the siting of broadband infrastructure. The governors ask for a more coordinated effort from these agencies to remove roadblocks for broadband deployment.

The WGA position paper tackles the inadequacy of the FCC’s 477 data gathering. They note that errors in this mapping are particularly egregious in sparsely populated rural areas where the FCC gathers the maximum advertised speeds instead of actual broadband speeds, which greatly overstates the availability of broadband throughout the West. The WGA supports Congressional funding to produce better data collection.

The WGA complains that there is a maze of broadband grants and financial assistance available from numerous federal agencies but that local communities are rarely able to sort through the opportunities and grants often go unclaimed. The governors support better coordination between federal agencies and states to identify grant opportunities.

The governors strongly support the use of more spectrum for rural broadband.

The governors support an expansion of the eligibility of telephone and electric cooperatives to build new broadband since these are entities that are tackling a lot of western broadband gaps.

The governors ask for better coordination of efforts to help find broadband efforts for tribal lands, which still are far behind the rest of the West in broadband availability and adoption.

The governors ask the federal government to provide more aid in the form of block grants. They say that states know better on how to solve local broadband problems than do federal agencies.

It’s an interesting document in that it is factual and completely non-partisan. As I’ve been contending for many years, broadband is not and should never be a partisan issue. The document reflects the ability of western governors from both parties able to reach an agreement on what’s needed for the region.

Time to Stop Talking about Unserved and Underserved

I work with communities all of the time that want to know if they are unserved or underserved by broadband. I’ve started to tell them to toss away those two terms, which are not a good way to think about broadband today.

The first time I remember the use of these two terms was as part of the 2009 grant program created by the American Recovery & Reinvestment Act of 2009. The language that created those grants included language from Congress that defined the two terms. In that grant program, unserved meant any home or business that has a broadband speed of less than 10/1 Mbps. Underserved was defined as homes having speeds above 10/1 Mbps but slower than 25/3 Mbps.

As far as I can tell, these terms have never been defined outside of broadband grant programs. However, the terms began to be widely used when talking about broadband availability. A decade ago, communities all wanted to know if they were unserved or underserved.

The terms began to show up in other grant programs after 2009. For example, the FCC’s CAF II grant program in 2015 gave money to the largest telephone companies in the country and funded ‘unserved’ locations that had speeds less than 10/1 Mbps.

The same definition was used in the ReConnect grants created by Congress in 2018 and 2019. Those grants made money available to bring better broadband to areas that had to be at least 90% unserved, using the 10/1 Mbps definition.

The biggest FCC grant program of 2020 has scrapped the old definition of these terms. This $20.4 billion Rural Digital Opportunity Fund (RDOF) grant program is being made eligible to Census blocks that are “entirely unserved by voice and with broadband speeds of at least 25/3 Mbps”. That seemingly has redefined unserved to now mean 25/3 Mbps or slower broadband – at least for purposes of this federal grant program.

There are also states that have defined the two terms differently. For example, following is the official definition of broadband in Minnesota that is used when awarding broadband grants in the state:

An unserved area is an area of Minnesota in which households or businesses lack access to wire-line broadband service at speeds that meet the FCC threshold of 25 megabits per second download and 3 megabits per second upload. An underserved area is an area of Minnesota in which households or businesses do receive service at or above the FCC threshold but lack access to wire-line broadband service at speeds 100 megabits per second download and 20 megabits per second upload.

It must also be noted that there are states that define slower speeds as unserved. I’m aware of a few state broadband programs that still use 4/1 Mbps or 6/1 Mbps as the definition of unserved.

The main reason to scrap these terms is that they convey the idea that 25/3 Mbps broadband ought to be an acceptable target speeds for building new broadband. Urban America has moved far beyond the kinds of broadband speeds that are being discussed as acceptable for rural broadband. Cable companies now have minimum speeds that vary between 100 Mbps and 200 Mbps. Almost 18% of homes in the US now buy broadband provided over fiber. Cisco says the average achieved broadband speed in 2020 is in the range of 93 Mbps.

The time has come when we all need to refuse to talk about subsidizing broadband infrastructure that is obsolete before it’s constructed. We saw during the recent pandemic that homes need faster upload speeds in order to work or do schoolwork from home. We must refuse to accept new broadband construction that provides a 3 Mbps upload connection when something ten times faster than that would barely be acceptable.

Words have power, and the FCC still frames the national broadband discussions in terms of the ability to provide speeds of 25/3 Mbps. The FCC concentrated on 25/3 Mbps as the primary point of focus in its two recent FCC broadband reports to Congress. By sticking with discussions of 25/3 Mbps, the FCC is able to declare that a lot of the US has acceptable broadband. If the FCC used a more realistic definition of broadband, like the one used in Minnesota, then the many millions of homes that can’t buy 100/20 Mbps broadband would be properly defined as being underserved.

In the last few months, the FCC decided to allow slow technologies into the $16.4 billion RDOF grant program. For example, they’ve opened the door to telcos to bid to provide rural DSL that will supposedly offer 25/3 Mbps speeds. This is after the complete failure in the CAF II program where the big telcos largely failed to bring rural DSL speeds up to a paltry 10/1 Mbps.

It’s time to kill the terms unserved and underserved, and it’s time to stop defining connections of 10/1 Mbps or 25/3 Mbps as broadband. When urban residents can buy broadband with speeds of 100 Mbps or faster, a connection of 25/3 should not be referred to as broadband.

There They Go Again

The FCC issued the 2020 Broadband Deployment Report on April 20. It’s a self-congratulatory document that says that the state of broadband in the country is improving rapidly and that the FCC is doing a great job. I had a hard time making it past the second paragraph of the report which summarized the state of broadband in the country. Consider the following:

The number of Americans lacking access to fixed terrestrial broadband service at 25/3 Mbps continues to decline, going down by more than 14% in 2018 and more than 30% between 2016 and 2018. 

The FCC has no factual basis for this statement because they don’t know the number of households in the US that don’t have access to 25/3 Mbps broadband. The numbers cited are based upon the Form 477 data collected from ISP that everybody in the country, including the FCC, has acknowledged is full of errors. The FCC has proposed moving to a new method of data collection that will produce maps based upon drawing polygons that they hope will fix the rural broadband reporting problem. 

I’ve been working all over the country with rural counties and I have yet to encounter a rural county where the Form 477 coverage of 25/3 broadband is not overstated. In county after county, we find places where the big telcos and/or WISPs exaggerate the broadband speeds that are available and the coverage area available for faster speeds of broadband. The reporting problem is getting worse rather than improving as witnessed by a recent filing by Frontier to the FCC that claims they have improved speeds in 16,000 rural Census blocks to 25/3 Mbps broadband since June 30, 2019. This claim is made by a company that just went into bankruptcy and which the whole rural industry knows is not spending a dime on rural infrastructure. There were similar claims made by the other big telcos in a proceeding that was to determine the areas available for FCC grant funding.

The number of Americans without access to 4G Long Term Evolution (LTE) mobile broadband with a median speed of 10/3 Mbps fell approximately 54% between 2017 and 2018. 

There has been a lot of rural cell sites upgraded from 3G to 4G as the big cellular carriers want to mothball 3G technology. However, any quantification of the improvement of cellular broadband coverage is suspect due to blatantly erroneous reporting by the big cellular carriers. In 2019 when the FCC went to award grant funding to upgrade rural cellular coverage the discovered that Verizon, T-Mobile, Sprint, and US Cellular had significantly overstated rural cellular coverage in an attempt to shuttle grant funds away from smaller cellular carriers. The FCC reacted by yanking that grant program and delaying it, in what is now called the 5G Fund. It’s hard to believe that the FCC would try to quantify the improvement in 4G coverage between 2017 and 2018 without acknowledging that this was the coverage that was badly overstated by the cellular carriers.  

AT&T, Sprint, T-Mobile, and Verizon are also rapidly expanding their 5G capability, with 5G networks in aggregate now covering the majority of the country’s population, especially in urban areas, and more live launches planned for 2020.

The FCC clearly buys the 5G hype from the cellular companies which are claiming widespread 5G coverage. The cellular companies have introduced new spectrum into their 4G LTE environment, and the cellular marketers have labeled this as 5G. Much of the first wave of new spectrum being used is in lower frequency bands such as 600 MHz for T-Mobile and 850 MHz for AT&T. These lower frequency bands don’t carry as much data as higher frequencies and won’t be delivering faster broadband. However, new spectrum bands improve the chances of grabbing a channel to get the data speeds that 4G was already supposed to be delivering.

5G will not arrive until the carriers begin implemented the new features described in the 5G specifications. For now, none of the important new 5G features have yet made it to the market. So, contrary to the FCC telling the public that 5G is nearly everywhere, the truth is that it is not yet anywhere in the country. I’ll be curious in a few years to see how the annual FCC reports on broadband describe the actual introduction of 5G features. It’s likely they’ll parrot whatever language the cellular marketers spin by then.

This opening pat on the back is followed by page after page of broadband statistics that are based upon the lousy Form 477 reporting from ISPs. There is almost no statistic in this report that is entirely trustworthy.

This report is unfortunate in many ways. The FCC feels compelled to exaggerate broadband coverage so that they can’t be forced to try to fix broadband gaps. The sad aspect of this report is that this is the statistics cited in this report are used to determines which parts of rural America are eligible for broadband grants – and this report is largely a fairy tale. It would have been nice if the summary of the report had acknowledged that the FCC knows that their data is faulty – something they have openly recognized in other dockets. Instead, the FCC chose to spin this fanciful tale of rapidly improving broadband that does little more than provide cover for the FCC to not have to fix rural broadband. 

Are You Covered by the RDOF Grant?

The FCC has published a detailed map of the upcoming RDOF grant program that is overlaid on Google Maps. This let’s everybody in rural America see if they might be getting covered by the $16 billion grants that will be awarded in October of this year. This is the largest broadband grant to ever be awarded and will serve only rural areas. You can zoom in on this map to see if your home or business will be covered by this giant grant program.

If it turns out your neighborhood is covered by this grant, here are a few things you should know:

  • The money is being awarded by reverse auction with different ISPs competing for the money. The ISP willing to take the least amount of federal grants will win the award for your area. There is one twist on the auction in that any ISP offering gigabit speeds wins the grant after a few rounds of bidding.
  • ISPs can use any technology that delivers at least 25/3 Mbps broadband to participate in the grant auction. The auction is weighted to try to give the money to faster technologies. However, the winner in your area could be proposing to use DSL, fixed wireless, satellite broadband, or fiber. The technology you will be served with is going to depend on the ISP that wins your area. You should be able to find out the technology that is coming to your neighborhood when the auction is finished sometime near the end of this year.
  • You might not see a solution quickly. Winners will have 6 years to complete construction, meaning that some homes in the winning areas won’t get broadband until 2026. Since people are being asked to work and school from home, that’s a really long time to wait.
  • If nobody wins the grant money in your area it would go back into the pot for a smaller $4 billion grant to be awarded in 2021.

What if you aren’t covered by these grants and don’t have good broadband? What are your chances of seeing a broadband solution?

It’s possible that your area would have been covered by the $1.5 billion reverse auction grants awarded last year. However, if your area was awarded one of these grants then hopefully you’ve already heard about it.

If you live really close to one of these RDOF areas, there is a chance that the winner of these grants might build to your home. However, that’s something that you aren’t likely to know for a long time, and the chances are not good that you’ll be covered.

There will be a second FCC auction in 2021 for $4 billion that will cover additional areas that are not on this map. $4 billion will cover a much smaller area than this map – but some folks will get a second chance. That auction is likely to have the same rules, meaning that you might not see a broadband solution until 2027. It’s likely that the FCC will issue a second map similar to this one for the areas covered by those grants.

There are other federal grant programs such as the ReConnect grants that are awarding smaller dollars. The ReConnect grant for this year is $300 million for the whole country and was boosted by $100 million in the COVID-19 stimulus package. There is no guarantee that this grant program will carry into the future – it’s been funded now for the last few years as part of the annual agriculture bill.

There are also state grant programs that might cover you. Most of the state grant programs are relatively small, but they are helping to spread broadband. However, there is a significant chance that a lot of state grant money will be used as matching funds for the RDOF grants.

If you have poor broadband options and you aren’t covered by this grant there is a good chance that you just got screwed. There are many millions of homes and business that don’t have good broadband that are not covered by this grant. That blame can be laid squarely on the FCC. The FCC is using information supplied by ISPs to define areas that are eligible for this grant. There are huge parts of rural America where the ISPs are falsely claiming to offer 25/3 speeds, and such areas are not included in this grant.

The FCC knows they are using faulty data and they decided to move forward with these grants anyway. The areas covered by the RDOF grants don’t have good broadband, but there is an even larger geographic area of the country that should be eligible for federal grants that have been shut out due to the FCC never insisting on good mapping data from ISPs.

If your neighborhood has poor broadband and isn’t covered by these grants, then you need to yell bloody murder to anybody and everybody. Complain to local, state and federal politicians. The fact is that if your neighborhood isn’t on these maps, or isn’t covered by a few other existing grant programs, then you are not likely to be getting broadband with federal grant assistance any time soon. You aren’t going to be alone and there are millions of other rural residents in this same situation – so join forces and shout until there is a solution.

The FCC is Redlining Rural America

The recent statistics of broadband usage in the US provide evidence that, unwittingly, the FCC is redlining rural America. OpenVault recently released its Broadband Industry Report for 4Q 2019 that tracks the way that the US consumes data. OpenVault has been collecting broadband usage for more than ten years, and the last two reports have been eye-opening.

The most important finding is that the average data consumed by households grow by 27% from 2018 to 2019 – in the fourth quarter of 2019 the average US home used 344 gigabytes of data, up from 275 gigabytes a year earlier.

The report also looks at power users – homes that consume a lot of broadband. They report that nearly 1% of homes now use 2 terabytes per month and 7.7% use over 1 terabyte per month. A terabyte is 1,000 gigabytes. The percentage of homes using over 1 terabyte almost doubled from 4% a year earlier. This statistic is important because it shows the number of homes that are hitting the 1 terabyte data caps of companies like Comcast, AT&T, Cox, and Mediacom is quickly growing.

Homes are starting to buy gigabit broadband when it’s available and affordable. 2.8% of homes in the country now subscribe to gigabit speeds, up 86% from the 1.5% of homes that bought gigabit in 2018.

54% of homes now purchase broadband plans with speeds of 100 Mbps or faster. Another 23.6% of homes are subscribing to broadband between 50-75 Mbps. This means that nearly 78% of homes are subscribing to data plans of greater than 50 Mbps. The average subscribed speed grew significantly in 2019, up from 103 Mbps to 128 Mbps.

What’s the point of all of these statistics? They show that broadband usage and speeds in urban America is growing by leaps and bounds while broadband in rural America sits still. Urban broadband speeds have increased so rapidly that the average home in the US in 2019 got speeds that were 25 Mbps faster than what they had in 2018. The average speed of broadband in 2019 was more than 100 Mbps faster than the FCC definition of broadband. I contend that FCC actions and inaction have now culminated in the redlining of rural broadband households. It may sound drastic to call the FCC inaction redlining, but I think the word fits the situation.

Redlining historically has been used to describe how big corporations discriminate against poor neighborhoods. Redlining is more often due to neglect than to conscious decisions – grocery stores don’t consider poor neighborhoods as places to build; cable companies and telcos make upgrades in neighborhoods where they have the most customers or the highest revenue per customer. The consequence of redlining is that some neighborhoods get left behind.

The FCC has taken a series of actions that is dooming large parts of rural America to poor broadband for decades to come. One of the most egregious actions by the FCC is refusing to consider a faster definition of broadband, although every statistic shows that urban America is leaping far ahead of rural America and the broadband gap is now growing rapidly each year.

The decision to stick with the outdated 25/3 definition of broadband then boxes the FCC into having to allow federal grant dollars go to build technologies that meet the 25/3 definition of broadband. Considering how fast broadband speeds and consumption are growing, this is an amazingly shortsighted decision when considering that that grant recipients for programs like RDOF have six years to construct the new networks. There will be ISPs still constructing 25/3 broadband networks using federal money in 2026.

Next, the FCC has made it clear that any rural area that gets any federal or state subsidy – even if it’s to support 25/3 Mbps, or to support satellite broadband is not going to be eligible for future federal assistance. Once the FCC sticks you with poor broadband, they’re done with you.

Finally, the FCC continues to hide behind ludicrously dreadful maps that show good broadband available for millions of homes that have no broadband option. The rules for the 477 data collection are lousy, but that’s only half the problem, and I can’t recall ever hearing any discussion at the FCC about penalizing ISPs that file fraudulent speeds. There should be huge financial penalties for a telco that claims 25/3 speeds when nobody gets speeds even close to that or for WISPs that claim 100 Mbps speeds and deliver 15 Mbps. These ISPs are stopping whole counties from being eligible for broadband grants.

All of these FCC actions and inaction have doomed huge swaths of rural America from even participating in federal grant programs to get better broadband. If that’s not redlining, I don’t know what else to call it.

How FCC Policies Hurt Communities

I was recently looking at one of the counties where the winner of the CAF II reverse auction was Viasat, a satellite broadband provider. There are many other rural counties with an identical outcome. As I thought about these counties, I came to realize that a series of FCC policies and decisions have hurt these counties in their search for better broadband. There is no single FCC action that hurt them, but a cascading series of individual decisions have made it harder for them to find a broadband solution.

The first FCC decision that created the current situation is when the current FCC declined to consider an increase in the definition of broadband from 25/3 Mbps. That definition was set in 2015 and there is ample record on file in FCC proceedings that 25/3 is already an obsolete definition of broadband.

The most recent evidence comes from OpenVault. The company just released its Broadband Industry Report for 4Q 2019 that shows the average subscribed speed in the US grew from 103 Mbps in 2018 to 128 Mbps in 2019. That result is largely being driven by the cable companies and the fiber providers that serve more than 2/3 of all of the broadband customers in the country. The FCC is stubbornly sticking to the 25/3 Mbps definition of broadband even as a large majority of households in the country are being given speeds greater than 100 Mbps.

The decision to stick to the outdated 25/3 Mbps then created a second problem for rural America when the outdated FCC speed definition is used to award federal grants. The FCC decided in the CAF II reverse auction grants that any technology that met the 25/3 Mbps speed was acceptable. The FCC boxed themselves in since they couldn’t set a higher speed threshold for grants without admitting that the 25/3 Mbps threshold is inadequate. That auction awarded funding for technologies that can’t deliver much more than 25 Mbps. What’s worse is that the winners don’t have to finish building new networks until 2025. When the FCC blessed the use of the 25/3 threshold in the reverse auction they also blessed that 25/3 Mbps broadband will still be adequate in 2025.

The next FCC decision that is hurting these specific counties is when the FCC decided to allow satellite broadband companies to bid for scarce federal broadband grant monies. The FCC probably thought they had no choice since the satellite providers can meet the 25/3 Mbps speed threshold. This was a dreadful decision. Satellite broadband is already available everywhere in the US, and a grant given to satellite broadband brings no new broadband option to a rural area and only pads the bottom line of the satellite companies – it doesn’t push rural broadband coverage forward by a millimeter.

Finally, the FCC recently rubbed salt in the wound by saying that areas that got a previous state or federal broadband grants won’t be eligible for the additional federal grants out of the upcoming $20.4 billion RDOF grant program. This means that a county where a broadband grant was given to satellite provider is ineligible for grant money to find a real broadband solution.

Such counties are possibly doomed to be stuck without a broadband solution due to this chain of decisions by the FCC. I’m sure that the FCC didn’t set out to hurt these rural counties – but their accumulated actions are doing just that. Each of the FCC decisions I described was made at different times, in reaction to different issues facing the FCC. Each new decision built on prior FCC decisions, but that culminated in counties with a real dilemma. Through no fault of their own, these counties are now saddled with satellite broadband and a prohibition against getting additional grant monies to fund an actual broadband solution.

A lot of this is due to the FCC not having a coherent rural broadband policy. Decisions are made ad hoc without enough deliberation to understand the consequences of decisions. At the heart of the problem is regulatory cowardice where the FCC is refusing to acknowledge that the country has moved far past the 25/3 Mbps broadband threshold. When 2/3 of the country can buy speeds in excess of 100 Mbps it’s inexcusable to award new grant monies for technologies that deliver speeds slower than that.

It’s obvious why the FCC won’t recognize a faster definition of broadband, say 100 Mbps. Such a decision would instantly classify millions of homes as not having adequate broadband. There is virtually no chance that current FCC will do the right thing – and so counties that fell through the regulatory cracks will have to find a broadband solution that doesn’t rely on the FCC.

The RDOF Grants – The Good and Bad News

The FCC recently approved a Notice of Proposed Rulemaking that proposes how they will administer the $16 billion in RDOF grants that are going to awarded later this year. As you might imagine, there is both good news and bad news coming from the grant program.

It’s good news that this grant program ought to go a long way towards finally killing off large chunks of big telco rural copper. Almost every area covered by these grants is poorly served today by inadequate rural DSL.

The related bad news is that this grant award points out the huge failure of the FCC’s original CAF II program where the big telcos were given $11 billion to upgrade DSL to at least 10/1 speeds. The FCC is still funding this final year of construction of CAF II upgrades. The new grant money will cover much of the same geographic areas as the original CAF II deployment, meaning the FCC will spend over $27 billion to bring broadband to these rural areas. Even after the RDOF grants are built, many of these areas won’t have adequate broadband. Had the FCC administered both grant programs smartly, most of these areas could be getting fiber.

Perhaps the best good news is that a lot of rural households will get faster broadband. Ironically, since the grants cover rural areas, there will be cases where the RDOF grant brings faster broadband to farms than will be available in the county seat, where no grant money is available.

There is bad news on broadband speeds since the new grant program is only requiring download speeds of 25/3 Mbps. This means the FCC is repeating the same huge mistake they made with CAF II by allowing federal money to spend on broadband that will be obsolete before it’s even built. This grant program will be paid out of ten years and require deployment over six years – anybody paying attention to broadband understands that by six years from now a 25/3 Mbps broadband connection will feel glacial. There is grant weighting to promote faster data speeds, but due to the vagaries of a reverse auction, there will be plenty of funding given to networks that will have speeds close to 25/3 Mbps in performance.

There is further bad news since the FCC is basing the grants upon faulty broadband maps. Funding will only be made available to areas that don’t show 25/3 Mbps capability on the FCC maps. Everybody in the industry, including individual FCC Commissioners, agrees that the current maps based upon 477 data provided by ISPs are dreadful. In the last few months, I’ve worked with half a dozen counties where the FCC maps falsely show large swaths of 25/3 broadband coverage that isn’t there. It’s definitely bad news that the grant money won’t be made available in those areas where the maps overstate broadband coverage – folks in such areas will pay the penalty for inadequate broadband maps.

There is a glimmer of good news with mapping since the FCC will require the big ISPs to report broadband mapping data using polygons later this year. Theoretically, polygons will solve some of the mapping errors around the edges of towns served by cable TV companies. But there will only be time for one trial run of the new maps before the grants, and the big telcos have every incentive to exaggerate speeds in this first round of polygon mapping if it will keep this big pot of money from overbuilding their copper. I don’t expect the big telco mapping to be any better with the polygons.

Another area of good news is that there will be a lot of good done with these grants. There will be rural electric cooperatives, rural telcos, and fiber overbuilders that will use these grants as a down-payment to build rural fiber. These grants are not nearly large enough to pay for the full cost of rural fiber deployment, but these companies will borrow the rest with the faith that they can create a sustainable broadband business using fiber.

The bad news is that there will be plenty of grant money that will be used unwisely. Any money given to the traditional satellite providers might as well just be burned. Anybody living in an area where a satellite provider wins the grant funding won’t be getting better broadband or a new option. There is nothing to stop the big telcos from joining the auction and promising to upgrade to 25/3 Mbps on DSL – something they’ll promise but won’t deliver. There are likely to be a few grant recipients who will use the money to slap together a barely adequate network that won’t be fast and won’t be sustainable – there is a lot of lure in $16 billion of free federal money.

It’s dismaying that there should be so many potential downsides. A grant of this magnitude could be a huge boost to rural broadband. Many areas will be helped and there will be big success stories – but there is likely to be a lot of bad news about grant money spend unwisely.