The Industry

An Odd Appeal to Rural America

USTelecom recently sent a letter to practically every politician who might have a hand in deciding how broadband grants are awarded – the White House and key Cabinet officials, the NTIA, the FCC, members of Congress, Governors, Mayors, other local officials, tribal leaders, and state broadband offices. That’s some mailing list!

The main thrust of the letter is that communities should only rely on experienced broadband partners to build and operate networks – obviously meaning the big ISPs. The letter reminds officials that building a network is only a part of the solution and that communities need partners that know how to operate the business over the long run. The letter specifically calls out municipalities and non-profits as not being good partners because of their “propensity to fail at building and maintaining complex networks over time.”

The letter asks Congress to modify the current grant rules to remove any preferences for municipalities, non-profits, and electric cooperatives. USTelecom wants the grant rules to be changed to favor ISPs with experience and financial wherewithal. The big ISPs also think that communities should only be able to spend grant money by giving it to an ISP partner.

USTelecom also uses the letter to ask for changes that will make it easier to build broadband networks. They ask the various governments to:

  • Eliminate permitting delays and fees.
  • Streamline rights-of-way acquisition.
  • Streamline easements for railroad and other complex situations.
  • Eliminate Title II regulation (which, by the way, was eliminated by the last FCC – they actually fear it coming back).
  • Change the contributions to the Universal Service Fund so that all players pay a fair share.
  • Use only the FCC’s new maps to determine grant eligibility.

This letter is perhaps the most succinct statement of the broadband wish list of the big ISPs that I’ve seen in many years. They have been lobbying for everything on this list, but I can’t recall them asking for everything at the same time.

From a strategic position, this letter is mostly aimed at local officials. It’s unlikely that Congress or the White House is going to change the trajectory of the current grants at this late date. To do so would start the grant clock all over and push grant funding a few more years into the future.

It’s an interesting appeal to make to local governments since city and county officials will have a big hand in determining who gets grant funding when they choose a grant partner. This wish list basically tells local officials that they should have no option other than to fork grant money over to the biggest ISPs. And while asking local officials to change local rules to make it easier to build broadband, the big ISPs don’t want local governments to be able to challenge the FCC maps that the ISPs create. My guess is that most local officials are going to be offended by this document, so I don’t think this is going to get the reaction that USTelecom is hoping for.

The other odd aspect of this appeal is that most current grant money is going to rural America. The letter asks to keep electric cooperatives out of the broadband business – but many rural people still remember how the electric cooperatives bailed them out when nobody else would bring electricity. It’s interesting to stress experience when electric cooperatives have been around a lot longer than ISPs like the cable companies.

The big telephone companies have been around the longest – but they have a very poor name in rural America. A century ago, the large Bell companies refused to build in rural America, just like the big electric companies. Thousands of small local telcos were formed to fill the void but most eventually got gobbled up by companies that morphed into CenturyLink, Frontier, and Windstream. The big telcos have largely abandoned rural America over the last few decades – and it is that neglect that is the primary reason why rural broadband is in such bad shape. I’m sure there are some communities that will partner with the big ISPs – but a lot of communities that I work with would hope to partner with almost anybody else. This letter is not going to change many minds.

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