Another FCC Disaster?

Anybody thinking of filing an RDOF grant needs to pay a lot of attention to the challenges being made to the $16.4 billion RDOF grant footprint. The FCC invited ISPs to notify them if there are any Census blocks where the ISP has added broadband of at least 25/3 since June 30, 2019. Even though the RDOF is covering the most remote households that supposedly don’t have even 10/1 Mbps broadband, you’d expect that some ISPs have built into the RDOF footprint over the last 9 months. However, that’s not the response that the FCC got. While there were a number of ISPs that claimed to have built into a few Census blocks, the large incumbent telcos are claiming to have built into a huge numbers of blocks since last June. Frankly, the responses of the of large telcos are not credible and the FCC needs to take a pause and challenge these results.

Here’ what the big telcos claimed:

  • AT&T claims about 1,500 Census blocks that have been upgraded to at least 25/3 since June 30, 20198.
  • Frontier claims over 16,000 Census blocks have been upgraded.
  • CenturyLink claims over 5,400 Census blocks have been upgraded.
  • Windstream claims 1,713 upgraded Census blocks.
  • Consolidated claims over 7,300 Census blocks.

To put these numbers into perspective, the Census Bureau says that the average Census block contains 40 – 45 people. Rural Census blocks often have fewer residents than urban blocks, and even if the average for these blocks is 40 people, the big telcos are asking to remove about 1/3 of the people out of consideration for RDOF grants. That number is mind-boggling. If the big telcos had been making this kind of progress in expanding 25/3 Mbps rural broadband before June 30, 2019, then we wouldn’t have a rural digital divide.

Consider the individual claims:

  • Frontier lost 235,000 broadband customers in 2019, representing 6.3% of their customer base. The company has been cash-strapped and has not been making rural capital investments. It’s fairly well understood in the industry that the company didn’t even spend much of its CAF II funding to upgrade rural customers to 10/1 Mbps. It’s inconceivable that the company that just entered bankruptcy upgraded over 16,000 Census blocks in the last 9 months.
  • Consolidated Communications is next on the list claiming upgrades in 7,300 Census blocks. The company purchased Fairpoint in July 2017 and has been actively making upgrades since then. But even for a company actively making upgrades, a claim of improvements in this many Census blocks seems hard to believe over a 9-month period that includes the winter months.
  • CenturyLink claims upgrades in 5,400 Census blocks. The company has loudly proclaimed a number of times that it is not making investments that earn ‘infrastructure returns’. It’s frankly hard to believe that they would have spent the money in rural America needed to make these upgrades.
  • Windstream is claiming over 1,700 Census blocks. The company has been flirting with bankruptcy during the last nine months and it’s reasonable to ask if they were really this active in making upgrades in the last 9 months.
  • AT&T claims over 1,500 Census blocks have been upgraded. This is the company that wants badly to get out of the rural wireline business. These upgraded Census blocks need to have come from the AT&T Fixed wireless technology. I’m not aware of AT&T having launched any mass marketing effort aimed at rural census blocks. Consider AT&T’s broadband subscriber numbers for 2019. AT&T lost a little over 300,000 broadband customers during the year. To offset that loss, AT&T claims to have added over 1 million customers on fiber. One would think it would be obvious if AT&T was also out heavily promoting the rural fixed-wireless product.

It’s easy to understand why an incumbent telephone company would make these claims. Any Census blocks that remain in the RDOF grant process are going to be overbuilt by faster technology than the rural DSL offered by these telcos. The incumbents can only remain as the monopoly provider by removing Census blocks from the RDOF footprint.

The FCC needs to investigate these claims. This is reminiscent of the overstated wireless coverage claimed last year by Verizon, T-Mobile, and Sprint that prompted the FCC to delay the rural cellular grants, now labeled as 5G Grants, for a year. It was obvious to the FCC that those wireless carriers were making the erroneous coverage claims to keep out competition. There has to be a whole lot of that going on here as well.

Remember that these claims are being made under the existing rules for the FCC’s 477 process. In the current process an ISP only has to have one customer in a Census block getting the declared speed. The easiest way for the FCC to check these numbers is to require each telco to provide the addresses of customers in each Census block that supposedly now has 25/3 Mbps broadband. The FCC could call and talk to those homes and ask them to take a speed test to see if the telco claims are even remotely plausible. I expect the lists would quickly revised and shrink if the carriers are required to get that specific.

The FCC also needs to allow Census blocks that have only a few 25/3 customers to remain in the RDOF grant. It would be a huge disservice to the other customers in these Census blocks to doom them to remain as monopoly customers for another decade.

These filings are so blatantly suspicious that the FCC has to pause, even if that means delaying the RDOF grants. Considering the hardships being experienced by everybody in these areas during the current COVID-19 crisis, the FCC cannot accept these crazy claims without challenging them. It would have been possible credible if each of these big telcos claimed a few hundred Census block upgrades – but in aggregate this filing looks like a monopoly land grab more than anything else. If these claims prove to be false the FCC needs to fine these telcos into the stone age – such fines deserve to be in the billions.

FCC Reports on Poor Rural 4G Coverage

The FCC released a report in January that shows that the cellular networks of the major carriers underperform in rural America. This is no news to anybody who lives and works in a rural county. The tests allowed the FCC to conclude that the national coverage maps for 4G LTE are largely fiction in rural America.

The FCC conducted 25,000 tests in twelve states to verify the coverage maps of Verizon, T-Mobile, and US Cellular. The majority of tests were done in Arizona, New Mexico, Oklahoma, Vermont, Alabama and Montana. Speeds were tested from both stationary locations and in a moving vehicle. AT&T and Sprint weren’t tested because the maps they provided to the FCC showed only the combined upload and download speeds – something that is meaningless to test. The other three carriers reported what they claimed were actual upload and download speeds, shown separately.

The FCC undertook the testing in response to numerous complaints filed in the FCC’s docket for the Mobility Fund Phase II grants. The intention of this fund was to improve 4G coverage in rural areas with little or no cellular coverage. Smaller cellular carriers and the public complained to the FCC that the cellular data coverage claimed by the large cellular carriers was overstated. Small cellular carriers worried that the overstatements would stop them from asking for funding for areas that need upgrading. Local governments were worried that the overstated coverage meant that their areas wouldn’t see upgrades and they’d be doomed for another decade with poor cellular coverage.

The tests were conducted in areas where the carrier maps showed cellular data coverage. The results of the testing were rather bleak. 16% of all calls tried on Verizon were unable to make a data connection. The failures to connect were 23% on T-Mobile and 38% on US Cellular.

Overall, the three carriers met the FCC’s minimum requirement of 5 Mbps download for 4G only 62% of the time. That was 64% on Verizon, 63% on T-Mobile and only 45% for US Cellular. However, even within those reported results, the testers said that they experienced intermittent dropped calls on all three networks.

The FCC responded to these tests by revamping the reporting of cellular data speeds in the future, asking for far more granular speed data by location. The FCC also convened a group of experts to recommend to the FCC how to better test cellular speeds. Finally, the FCC issued an Enforcement Advisory on the accuracy of the cellular data on form 477. That’s a step short of issuing fines and likely will have little impact on the carriers. It doesn’t appear that any of them have pared back their national coverage maps that still claim coverage across most of rural America.

There are significant real-life implications of overstated cellular coverage maps. Just like with the RDOF grant program that will rely on faulty maps of landline broadband, poor maps of cellular coverage mean that many areas with overstated cellular coverage won’t be eligible for federal grants to help fix the problem.

The big downside is that many rural households have no 4G LTE coverage, or at best have slow and intermittent 4G data available. These are often the same areas where landline broadband is slow or non-existent. As hard as it is to live without good cellular coverage or good landline broadband, homes without both are cut off from the rest of the world. To make matters worse, there is still 3G coverage in a lot of rural America and all of the carrirs have plans to cut that dead over the next few years.

The FCC has revamped the Mobility Fund II grant program by doubling the amount of funding to $9 billion and renaming it as the 5G Fund. That’s a silly name because the goal of the program is to bring at least minimal 4G coverage to rural areas, not 5G. Remember that the grant program was originally aimed only at areas that showed no coverage by the carriers. Ideally the FCC would also  direct funding to the many areas where the carriers were lying about their coverage – but It’s doubtful that they have any meaningful maps of real 4G coverage.

The FCC’s 15th Annual Broadband Deployment Report

The FCC just released its most recent annual report on the state of US broadband. This report is mandated by Section 706 of the Telecommunications Act of 1996 which requires the FCC to “determine whether advanced telecommunications capability is being deployed to all Americans in a reasonable and timely fashion”. The FCC concludes in this latest report that broadband deployment is reasonable and that actions taken by this Commission are helping to close the broadband gap.

I take exception to several findings in this latest report. First, everybody in the country now understands that the FCC’s conclusions are based upon dreadfully inaccurate 477 data reported by ISPs. There have been numerous studies undertaken at the state and local levels that show that the FCC maps undercount households without broadband. Even USTelecom, the group mostly representing the largest telcos showed that the FCC maps in Missouri and Virginia classified 38% of rural homes as being served when in fact they were unserved. Microsoft has been gathering credible data showing that well over 150 million homes aren’t connecting at the FCC’s defined broadband speed of 25/3 Mbps.

For the FCC to draw any conclusions based upon inaccurate 477 data is ridiculous. A few years ago the FCC could have claimed to not understand the extent to which their data is flawed, but they’ve been shown extensive evidence that the 477 data is incredibly bad, and yet they still plowed forward in this report pretending that statistics based upon 477 data have any meaning. There is not one number in this report that has even the slightest amount of credibility and the FCC knows this.

With the knowledge that the FCC now has about the inaccuracy of their data, this FCC should have humbly admitted that they don’t know the number of households that don’t have broadband. The report could have discussed ways that the Commission is trying to fix the bad data and described steps they have taken to improve rural broadband. But for this report to lead off with a claim that the number of homes without broadband fell by 18% in 2018 is a joke – there is zero chance that’s an accurate statistic. This report should have stated that external analysis has shown that the state of broadband is a lot worse than what they’ve reported in prior annual reports.

I also take exception to the opening statement of the report where the FCC claims that its top goal is “closing the digital divide and bringing the educational, healthcare, social, and civic benefits of connectivity to all Americans seeking broadband access.” This FCC’s top goal is clearly to eliminate regulatory rules that create any obligations for the largest carriers. This FCC already completely deregulated broadband – something an agency would never do if their goal was to improve broadband access. Most of the major dockets that have been approved by this FCC have made it easier for the big carriers to deploy 5G or to otherwise avoid any regulatory burdens.

It’s insulting to the American people for the agency to state that their top goal is improving broadband when their actions show that their priorities are elsewhere. Regulatory agencies are not supposed to engage in propaganda, and this document reeks of self-promotion.

Finally, this report trots out the oft-repeated message that broadband is improving because of this FCC’s effort to remove barriers to broadband investment. I don’t think Chairman Pai makes a speech or writes an opinion that doesn’t bring up this disproved argument. We know by now that those without broadband fall into two categories – rural homes that don’t have access to a broadband connection and urban households that can’t afford broadband. The big telcos aren’t spending any of their cash to solve these two problems.

There has been a lot of fiber built in recent years. AT&T built fiber to pass 12 million homes as a condition for its merger with DirecTV – an effort the company announced was done this past summer. Verizon has been building fiber to bolster their cellular network, including an expansion of small cell sites – largely as a way to reduce their reliance on paying transport to others. These fiber efforts have nothing to do with the repeal of net neutrality and the ending of broadband regulation. Chairman Pai probably ought to cut back on making this claim, because his real legacy is that he’s emboldened the big cable companies to begin regularly increasing broadband rates since there’s no threat of regulatory oversight. Chairman Pai and his light-touch regulation will get the credit for why broadband costs $100 per month a few years from now.