Ending Bans on Broadband Deployment

The big telcos have been successful over the years in squashing competition. When there’s been an opportunity, they’ve marshalled through legislation to block local governments and cooperatives from entering the broadband business. There is no better way to protect legacy revenues than by legally barring those entities that might decide to compete by building better broadband.

A number of states have laws that ban electric cooperatives from offering broadband. It amazes me how such laws came into place. Some legislator wrote and got enough votes to enact a law that tells customer-owned companies that they can’t put fiber on the poles and the rights-of-ways that they already own. I find it hard to believe that politicians would directly oppose the rural citizens who own cooperatives. The only explanation for such laws is the lobbying and donations made to politicians by the big telcos.

If you’ve never looked at the locations of electric cooperatives, most are extremely rural – they were created to build bring electricity to the places where no commercial electric company would make the investment in infrastructure. It’s not a coincidence that these are the same rural areas where the big telcos stopped making investments decades ago, and these are the many of the same rural places with poor or nonexistent broadband.

The tide is turning, and a number of states are reversing these laws to enable electric cooperatives to get into the broadband business. Last June the state of Indiana passed the Facilitating Internet Broadband Rural Expansion (FIBRE) Act that enables electric cooperatives to build and operate fiber networks. Since that act, several Indiana Cooperatives such as Jackson County Rural Electric Membership Corporation, South Central Indiana REMC, and Orange County REMC have decided to deploy fiber networks to reach rural customers. A number of other cooperatives are considering broadband deployment.

In January of this year the legislature in Mississippi unanimously approved the Mississippi Broadband Enabling Act that allows the 25 electric cooperatives in the state to build broadband networks.

In Texas, Senator Robert Nichols introduced SB 14, legislation modeled after Indiana’s FIBRE Act to enable the electric cooperatives in the state to provide broadband.

It’s clear to me why the tide has turned in favor of electric cooperatives and municipalities building fiber networks. In the numerous rural counties I have visited in the last year the local politicians have been telling me that lack of broadband is the number one issue in their jurisdiction. Homeowners without broadband are demanding that local politicians find a broadband solution. Members of rural electric cooperatives are begging their Boards to build fiber.

I think it’s starting to dawn on many rural communities that nobody has plans to bring them broadband. I’ve talked to numerous rural households and farmers in the last year who describe the agony of raising school kids in a home with no broadband or in operating a farm that’s at an automatic disadvantage to farms that have broadband. Rural communities are starting to realize that they must find their own broadband solution.

It’s easy to draw a parallel between what’s happening today and what happened a century ago when these same rural areas figured out a way to bring electricity to their communities. They looked then in envy at the towns with electricity in the same way that rural residents today can see broadband just out of their grasp.

We recently conducted a survey for a rural electric cooperative where every respondent to the survey was in favor of bringing fiber – even those households who didn’t own a computer or want broadband in their own homes. I’ve never before seen a survey where everybody supported fiber broadband.

These laws are passing because rural residents are fed up with the inaction of the big telcos. It’s just as extraordinary to see the Mississippi law passed unanimously to oppose the big telcos as it is to see every resident of a community support broadband. The tide has definitely turned.

Why I Am Thankful – 2018

It’s Thanksgiving again and I take a pause every year to look at the positive events and trends for the small ISP industry. This year was challenging in some ways because we have a current FCC that clearly favors the giant ISPs over the rest of the industry. But there are still a lot of things to be grateful for here at the end of 2018.

Local Governments Opening the Purse Strings. Local governments are listening to their constituents who are demanding broadband, and a surprising number of local communities are finding ways to help pay for broadband networks. In Minnesota alone there are a dozen counties that have agreed to make million dollar plus contributions to help fund local broadband efforts. These are de facto public-private partnerships with small telcos and rural cooperatives using that public funding to help bring broadband to rural areas.

Electric Cooperatives Have Awoken. All over the country we see electric cooperatives planning to bring broadband to their members. These cooperatives own electric grids in many of the same rural places that don’t have broadband. With existing pole lines and rights-of-way these cooperatives have a natural advantage for stringing fiber, particularly if they put the cabling into the electric space on poles and avoid costly make-ready. The coops also enjoy the natural advantage of being customer-owned and customer friendly, meaning that they are likely to see far higher penetration rates than an outside commercial operator building a broadband network.

We Finally Have the Next Big Product. I know numerous small ISPs who have seen instant success selling managed WiFi. I have clients that have achieved penetration rates north of 50% in just one year for the new product (and a few considerably higher than that). Bigger bandwidth requires an efficient and effective WiFi network and customers seem to be glad to have their ISP make this work for them.

Politicians Outside of Washington DC Get It. State legislatures all over the country are listening to constituents and are creating state broadband grant programs. Many of them are doing it the smart way and are mimicking successful grant programs like the one in Minnesota. The grant programs are coming from both red and blue states, demonstrating that broadband is not a partisan issue – almost all of rural America needs better broadband and state legislators are listening to their voters. Federal politics continue to be mired in partisan infighting and we probably won’t see anything out of them for the next few years.

FCC Holds out Possibility of New Spectrum. For the most part the FCC has been giving spectrum to the 5G industry and has not been creative in finding ways to also use spectrum to help solve the rural broadband gap. However, the FCC is looking at spectrum that would significantly benefit rural broadband. Of massive importance is the 6 GHz band being considered as the next swath of WiFi. This would double the amount of mid-range spectrum available for WiFi. The FCC is also considering other frequencies such as C-Band spectrum between 3.7GHz to 4.2 GHz. There are proposals in front of the agency to allow for 5G use in urban areas while allowing use for broadband in rural areas. The FCC may yet give this all to 5G carriers, but there are reasonable ways to share most bands of frequency to benefit both urban 5G and rural broadband.

Urban Broadband Speeds Improving. The big cable companies have unilaterally improved broadband speeds in urban areas, increasing the speed for their base products to between 100 Mbps and 200 Mbps. You might ask how this benefits rural ISPs. The increases in speed are in response to demands from customers, and the cable companies are redefining acceptable broadband – something the FCC is never going to be realistic about. These new urban speeds were easily predictable by anybody that understand that customer demand for broadband speed and total downloads has continued to double ever three years. Fast urban broadband resets the expectation for acceptable rural broadband.

The Big Telcos are Walking Away from Rural America. This has actually been quietly happening for decades as the big telcos have refused to invest in their rural networks. CenturyLink made it clear in 2018 that they are no longer interested in ‘infrastructure returns’ like what is earned on last-mile networks. They now join Verizon, which has been furiously selling rural properties and AT&T that keeps pestering the FCC to tear down rural copper. The door is open even wider for those ISPs that want to fill the broadband gaps.