Free the Fiber Now

A few blogs ago I mentioned that the FCC had taken away restrictions to allow broadband supplied by E-Rate funding to be used to provide free WiFi for the public. That’s a good idea that will provide some relief for areas with little or no other broadband. But the announcement raises a more fundamental question – why was such a restriction in place to begin with?

I see such restrictions all of the time where broadband infrastructure that is built with public dollars cannot be used for commercial purposes, or in the case of school bandwidth, can’t even be used to distribute broadband to the public for free.

The first time I ran across this was over twenty years ago when I was working with a city in Virginia that wanted to build a backbone fiber to connect city buildings, but also to connect to a few business districts that had lousy broadband. The city had a fairly robust fiber network that was used to control streetlights and there was enough spare fiber in this network to provide a significant portion of the needed solution. Upon investigation, it turns out that about one-fourth of that fiber had been funding through a grant from the state highway department that came with a clear prohibition from using the fiber for any other purpose other than traffic control. The city attorney read that grant prohibition to even mean the city couldn’t use the fiber to connect city buildings, let alone run the fiber to a business district. And this was after the city had paid for most of the fiber out of local tax dollars. The city would have been far better off financially had it never taken the highway grant.

This happens all of the time. I’ve seen similar restrictions on fiber networks built to reach schools. There are often similar restrictions on fiber built to connect public buildings. Some states have laws that prohibit fiber built by a municipal electric or water utility to be used for any other purposes.

There are other fibers funded 100% by taxpayer dollars that are also off-limits for other purposes. For example, there was a lot of middle-mile fiber built as part of the $11 billion CAF II program that was given to the large telcos. The fiber was built as middle-mile fiber to reach DSL huts and cellular towers. None of that fiber was made available to anybody else, although the fiber was funded by federal money and most of the fiber sits unused today.

There are a few reasons such restrictions exist. In the case of the Virginia city, after a lot of investigation, we figured out that Comcast and Verizon had lobbied to restrict the use of state-funded fiber. The restriction wasn’t from a specific law in this case but had been written into state grant awards. In some cases such restrictions are written in state law, which likely is also due to lobbying by the big telcos and cable companies. We’ve found a few restrictions against using government-funded fiber that seem to come from bureaucrats who simply invented the rules without understanding the long-term ramifications.

The COVID-19 pandemic has shown us that all of these restrictions must go. Government-funded fiber ought to be made available to ISPs, cities or others that want to use it to solve the digital divide. It’s ridiculous for the country to be sitting on huge amounts of empty fiber due to stupid political restrictions or boneheaded bureaucratic decisions at a time when people don’t have broadband in their homes.

The only way to fix this is in Congress. They could write and a pass a short simple bill that would remove all restrictions against using fiber funding by the government. The federal law should override contracts, state laws, and any restrictions created by state or federal agencies. The FCC sadly can’t consider this kind of ruling since they have written themselves almost completely out of the broadband regulation business. Since the FCC killed its own regulatory powers, a federal law should give the power to state regulatory commissions to work out any details.

I run into people all of the time who are upset because they live close to fiber but have no broadband. They get doubly mad when they find out that the fiber was funded by their tax dollars to provide broadband to highway signs or to serve a nearby school. A new law won’t automatically bring relief to everybody who lives near fiber because you shouldn’t cut into a long-haul fiber anywhere except existing access points. However, there is a huge amount of government-funded fiber in the world and this one simple change would unleash ISPs to find many more last-mile solutions.

T-Mobile Needs to Step Up

The T-Mobile Sprint merger became official on April 1. Since we are in the middle of the Covid-19 pandemic, the country needs T-Mobile to keep a few of the promises it made that were contingent upon the merger.

First, T-Mobile promised to offer wireless home broadband immediately after the merger for 50% of the people in the US, including many rural subscribers. T-Mobile envisions packaging excess cellular capacity as home broadband, at a reasonable price. The company does not envision putting fixed wireless antennas on homes like the products of AT&T and Verizon. The T-Mobile home product just requires a billing change where people pay less for cellular data usage inside their home. T-Mobile could effectuate this product almost immediately. This product could immediately help millions of homes that are struggling without affordable broadband right now.

The other T-Mobile promise addressed the digital divide and the company promised to serve 10 million homes that don’t have broadband today. This offer came with a promise to provide free devices to homes to receive the broadband. This is a digital divide product and could bring relief to poor households struggling with students trying to work from home. The product had a catch, in that annual usage was limited to 100 GB for free – but that’s enough usage to get students through the rest of this school year. As cellular plans in general go that’s not bad, meaning a monthly data allowance of over 8 GB per month in data allowance.

If T-Mobile is brave enough to launch these products immediately, they will reap mountains of marketing goodwill, which is exactly what the newly merged company needs. They will have created millions of fans who likely would become loyal to the company for helping them during this pandemic.

If T-Mobile doesn’t step up, ideally the FCC would turn the screws hard to make the company meet these promises now, rather than years from now. However, these plans involve broadband data and the feckless FCC has written themselves out of the broadband business. The FCC can huff and puff, but they no longer have the power to blow anybody’s house down.

Unfortunately, the history of the telecom industry is full of broken promises made as part of mergers. One of the biggest wireless mergers in the past was the 2005 merger of Sprint with Nextel. The companies had promised that the merger would allow them to bring Nextel’s popular ‘push to talk’ technology everywhere. The companies also promised they would blanket the country with cellular data, including rural America, using the 2.5 GHz spectrum. None of those promises ever came to pass – which was perhaps the first of many broken promises made for rural broadband. Like with most mergers, this merger also promised a lot of new jobs, but instead cut jobs.

There are plenty of other failed mergers. Consider the 2011 merger of Comcast with NBC Universal. Comcast promised it would offer affordably-priced standalone Internet everywhere – a product that was created but never marketed. Comcast promised to not discriminate against other programmers, but immediately disadvantaged Bloomberg by moving it to an obscure part of the channel lineup since it competed against the newly acquired MSNBC and CNBC. Comcast also promised to not discriminate against rival streaming services, but soon after the merger implemented its data caps, which applied to everybody’s video except Comcast’s.

One of the most blatant examples of carriers that tossed away pre-merger promises came after the 2006 merger of AT&T and BellSouth. Almost none of the promises made were kept. For example, AT&T promised to bring affordable broadband to all rural customers in the 22 states served by the two companies. Ask the folks in Mississippi and Alabama if this promise was fulfilled. AT&T has promised to build wireline networks in at least 30 cities outside its footprint and compete for voice and data – but this never happened. The companies promised to spend $16.5 billion to upgrade broadband in California and instead shut down expansion soon after the merger. The company claimed it would spend $1 billion wiring schools and libraries – another promise never met.

T-Mobile has an opportunity right not to become a legend in the industry by aggressively bringing affordable broadband to the students and workers who were sent home without broadband. This would distinguish them for the next decade as the carrier that met its promises and would likely propel them into the number one position in the industry. Let’s all hope they step up and do what they promised and do it quickly. Unfortunately, history has shown us that pre-merger promises are often forgotten before the ink is dry. But it would be so refreshing to see a company do what it promised, so we can hope.

The Government Needs to Address the Homework Gap

I’ve been at a bit of a loss over the last few days on what to write about, because suddenly newspapers, blogs, and social media are full of stories of how impossible it is for some students to work at home during the Covid-19 shutdowns. I’ve been writing this topic for years and there doesn’t seem to be a lot I can add right now – because the endless testimonials from students and families struggling with the issue speak louder than anything I can say.

There have been some tiny reactions of the federal government to help solve the issue. For example, the FCC removed the E-Rate exemption that said that government-powered broadband couldn’t be used for the general public. This allowed schools and libraries to aim their broadband outside for the general public and for students trying to keep up with homework. This was always a stupid restriction and I hope whatever DC bureaucrat originally dreamed this up is forced to use satellite broadband for the next year.

I’ve also seen notices from small ISPs that are distributing WiFi hotspots to students that need them. That is a great idea and I totally support. What I haven’t seen is anybody talking about who is going to pay the cellular data bills on those hotspots when they come due. Verizon has halped a little by temporarily adding 15 GB of usage to its data plans, but it doesn’t take long to rack up a big cellular data bill working on a hotspot.

These fixes are temporary bandaids. I’m sure any students benefiting by these recent changes are grateful. But it’s still second-class broadband that makes families park in cars while kids do homework. And as much as cellular hotspots are a great solution that brings broadband to the home – it’s also a curse if this brings monthly broadband bills of hundreds of dollars per month just to do homework.

I’m sure that most school systems will somehow slog through the rest of this school year. However, I’ve talked to several rural school administrators in the last week who worry that half of the children working at home are learning little or nothing while at home. I’ve seen school systems already asking if they should push all students to the next grade this year, whether they are ready or not.

The big challenge is going to come if this crisis carries forward into the next school year starting this fall. I doubt that there are many school systems with rural students that are ready to face this for a whole school year. Let’s hope that doesn’t happen, but if it does then our lack of broadband for students becomes a national shame.

I don’t have many suggested quick solutions that will help the homework gap by the fall. It’s hard to even predict how much fiber construction will be done this summer due to social distancing – likely less than was planned.

One might hope that communities will install many more outdoor-facing hotspots. It would be nice to see these at every government building and at socially-minded businesses everywhere. This is a fix that is within the reach of every community. Any business that has broadband ought to consider sharing it during the times of the day or night when the business isn’t using it. Let’s turn all parking lots for towns of all sizes into WiFi zones.

It would also be nice if the FCC could somehow turn up the pressure on the wireless carriers to provide fixed cellular broadband. This is the technology used by AT&T that beams data using cellular frequencies from cell sites to small dishes at homes. This provides a better indoor signal than regular cellular service, and the cellular companies price this more like a broadband service than cellular service. AT&T has halfheartedly rolled out the product as a way to implement their CAF II obligations – but the word from rural areas is that it’s not marketed and nearly impossible for customers to buy. T-Mobile promised to roll this product out in every rural market as part of the agreement to merge with Sprint and the government needs to hold their feet to the fire to make this happen quickly this year.

Unfortunately, the FCC sabotaged their ability to push for better broadband solutions when they killed Title II authority and stopped regulating broadband. The solution we really need this year is for Congress to resolve the Title II issue once and for all and to make the FCC responsible for finding broadband solutions. Right now everything the FCC says on the topic is rhetoric because they have no power to compel ISPs to do anything. This is no time for politics and rhetoric, but a time for action.

We Need Penalties for Bad FCC Mapping Data

The FCC has been in the process of implementing revised mapping that will fix a lot of the problems with the current 477 broadband reporting process. The needed changes should be further boosted by the Broadband DATA Act that was signed into law on Monday. The new mapping will use polygons, and ISPs are supposed to show precise coverage areas for where they offer or don’t offer broadband.

If ISPs do this correctly – and that’s a big if – then this will fix at least one big problem that I call the town boundary problem. The current FCC data gathering asks ISPs to report the fastest speed they can deliver in a census block. Unfortunately, census blocks don’t stop at town boundaries, and so the FCC databases regularly assumes that all of the people outside of town can receive the same speeds as people inside the towns. If cable companies and fiber providers draw honest polygons that stop where their network stops, this boundary issue should disappear.

Unfortunately, the benefits of the new mapping are not so clear cut in rural areas. DSL providers and fixed wireless providers are also supposed to draw polygons. The rural polygons are supposed to only cover existing customers as well as places that can be connected within ten business days of a customer request for activation.

I’ve been spending a lot of time lately looking through the claimed coverage on Form 477 by telco DSL and WISPs. Some of the things I see in the FCC database are massively erroneous and I’m not convinced that rural ISPs will clean up their act even if they are forced to use the polygons. Consider a few examples:

  • I’ve been working with a sparsely populated county that has large rural census blocks – which is pretty normal. The incumbent telco claims 25/3 Mbps coverage for almost all of the rural areas of the county. We’ve been working with the county to have residents perform speed tests and have seen almost no speeds faster than 5 Mbps, with some speeds on DSL below 1 Mbps. The incumbent telco does widely offer DSL, but the claimed 25/3 Mbps capability reported to the FCC is pure fantasy.
  • I’m working with another rural county where two WISPs claim to provide 100 Mbps wireless service covering the whole county. The WISPs don’t operate towers in the county and their nearest towers are in a nearby county. The county has undertaken a large canvass of residents to identify the ISPs in the county and so far hasn’t found even one customer of these WISPs. Even if they find a few customers, the WISPs can’t deliver 100 Mbps wireless broadband from towers more than 10 miles away – it’s doubtful they deliver that much speed even next to the existing towers.

I am not convinced that the revised FCC mapping is going to fix these two situations. The incumbent telco is going to say that they can install DSL within ten business days everywhere in the county – so they might not shrink their claimed coverage when going to the polygons. The problem with the telco isn’t the coverage area – it’s the claimed speeds. If the new FCC reporting still allows ISPs to overstate speeds, then nothing will be fixed in this county with the new mapping.

The two WISPs have a double problem. First, the coverage area of the two WISPs seem to be highly exaggerated. The WISPs are also exaggerating the broadband speeds available and there is zero chance that the WISPs are delivering speeds even remotely close to 100 Mbps broadband from a distant tower. These WISPs seem to be guilty of overstating both the coverage areas and the speeds. Unfortunately, the WISPs might still claim they can install in this area within 10 business days and might not shrink their claimed coverage. And unless they are somehow forced, the WISPs might not lower the claim of 100 Mbps.

There are real life consequences to the claims made in these two examples. In the first example, the FCC believes the whole county has access to 25/3 Mbps DSL, when in fact it looks like nobody has DSL even close to that speed. The county with the two WISPs is in even worse shape. The FCC considers this county completely covered with 100/10 Mbps broadband, when in fact there is no fast broadband coverage. In reality, the fastest broadband option in some parts of the county is a third WISP that markets speeds of 15 Mbps but mostly delivers less.

The consequences of the current mapping are dire for both of these counties. These counties are not included in the FCC’s eligible areas for $20 billion RDOF grants that was just published because the FCC thinks these counties have good broadband. If the ISP data being reported was honest, both counties would be eligible for these grants. These counties might be eligible for other grants that would allow the grant applicant to challenge the FCC speed data – but such challenges are a lot of work and don’t always get accepted.

I know there are hundreds of other counties in the same situation, and I have little faith that new mapping is going to fix this in rural areas. What is needed are severe fines for ISPs that overstate speed or coverage areas. In this case, the existing ISPs are causing huge economic harm to these counties and the fines ought to be set accordingly. I don’t understand what motivates ISPs to claim speeds that don’t exist – but if we are going to fix rural broadband, we need to start by kicking the bad ISP actors hard in the pocketbook.

The Broadband DATA Act allows for a challenge process so that localities can force honest reporting. The FCC needs to implement this immediately, without more study or delay.

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.

The Rural Broadband Gap is Widening

A lot of attention is being paid to the broadband gap between urban and rural America. There are a lot of different estimates of the number of rural homes and businesses that don’t have broadband. At the low end of the scale are the FCC estimates that come from the overstated FCC broadband maps that are derived from overstated 477 data from ISPs. States and counties have made estimates of broadband coverage which invariably show more places without broadband than the FCC data. What everybody agrees on is that there are still a lot of rural places with poor broadband, be that number 18 million or 30 million people or 50 million – there is a definite urban versus rural broadband gap.

The FCC has been publicly touting that they are solving the gap by funding programs that bring broadband to places that don’t have it. The upcoming $20 billion RDOF grants will make a dent in the places without broadband, although the 6-year required construction buildout that doesn’t start until next year will feel glacial to places that desperately need broadband today. We’ll have to wait for the reverse auction to see how many millions of homes eventually get broadband from this program – at best it’s likely to only help a fraction of those with no broadband. Unless Congress acts, there isn’t going to be a solution for the many millions that are not going to be covered by FCC programs.

There is another broadband gap that is not getting the press coverage. The average speed of broadband is growing rapidly. FCC Chairman Ajit Pai took credit for this growth in a recent tweet and claimed faster speeds are due to the end of net neutrality and to ending broadband regulation: “Two years ago today, some Washington politicians promised you that the Internet would slow down. What’s happened since? Average U.S. fixed broadband speeds are UP over 76% according to Ookla. It [repealing net neutrality] wasn’t the end of the Internet as we know it—not even close.”

I’m not sure what Ookla numbers he’s referring to. In the Ookla Speedtest Global Index, the company says that the average fixed broadband speed in the US climbed from 111.69 Mbps to 134.77 Mbps during 2019 – an impressive 21% increase. This matches with recently announced statistics from OpenVault that says that average speeds in the US increased from 103 Mbps to 128 Mbps for the year ending in the third quarter of 2019 – a growth rate of 24%.

I’m not that sure any of the speed increase is due to FCC actions. Faster speeds come from several sources. Most of the increase comes from the big cable companies unilaterally increasing broadband speed in urban markets to as much as 200 Mbps. Since the big cable companies serve two-third of the broadband market, any changes they make in speeds immediately affects the average. The urban speeds are further increased by the continued migration of urban customers from DSL to cable modem. There is also an increase in customers buying gigabit broadband, which according to OpenVault is now 2.8% of all broadband customers – nearly doubling in 2019. Finally, there is a small increase due to some rural markets getting broadband upgrades – but the rural customers added to the market are too small to make much of an impact on the national average. I guess I’d like Chairman Pai to be more specific, because I don’t see an FCC fingerprint on these industry trends.

It’s great that broadband speeds are improving. Anybody who has been paying attention saw this coming, since average speeds having been growing at a rate of over 20% annually for several decades. What Chairman Pai and most others have missed is that these speed increases come almost entirely from urban customers. The speed gap between urban and rural America is widening rapidly as urban speeds climb.

This urban / rural speed gap is important to recognize because urban customers are finding ways to use the faster broadband. Consider the many uses of broadband in urban areas that are out of reach for a rural household. We routinely back-up data files into cloud storage. Our computers, cellphones, cars, TVs and numerous devices routinely and automatically download updates and upload data into the cloud. We use cloud-based security cameras that we can access when away from home. When we walk into our homes our cellphones automatically start using our home broadband. We are free to work from home, even if it’s only to log into a corporate WAN in the evening. Our kids routinely do online homework and practically all of the communications between schools, students, and parents is online. We now use a huge amount of machine-to-machine data that has nothing to do with video and entertainment.

People living without good broadband can’t do any of these things. In just the last week CCG interviewed several rural residents that tell a different story than that list above. Parents drive an hour so kids can use library broadband for schoolwork. Rural businesses can’t maintain a quality signal on satellite broadband to be able to take credit card payments. Residents frantically try to shut off automatically updating software to avoid going over their data caps. I could fill a week of blogs with the horror stories about rural broadband.

If we look back even just seven or eight years ago, the urban versus rural speed gap didn’t feel so wide. When the average urban home got speeds of 25 Mbps there wasn’t such a giant gap with rural residents because urban residents didn’t use broadband as extensively as they do today. But urban speeds are getting faster and faster while the broadband for too many rural homes has stayed stagnant – where it even exists. To quote a rural resident that we spoke to last week, rural people with poor broadband now feel like they aren’t part of the 21st century.

Sharing Grant-funded Fiber

The FCC misses no opportunity to talk about how much they support rural broadband, so hopefully they will take advantage of an opportunity to open up a lot of new fiber in rural America. The FCC is going to fund $9 billion for the 5G Fund later this year that is intended to bring better cell phone coverage to rural areas. That funding will go to cellular carriers.

A lot of the 5G Fund is going to be used to build fiber to rural cell towers and the FCC should make any such middle-mile fiber available to others at affordable rates. One of the biggest impediments to building last-mile networks in remote areas is still the absence of fiber backhaul. If the FCC is going to pay to run fiber to rural areas, then it only makes sense they would make such fiber available to last-mile ISPs.

The big cellular carriers will say that this is a burden they don’t want to bear, but that is bosh. Big companies like Verizon and AT&T are already are among the largest seller of fiber transport in the country, so they have everything needed to sell transport on these new fiber routes. The cellular companies will already be obligated to maintain the new fiber routes, so carrying additional traffic in the fibers doesn’t increase ongoing costs. Since the fiber will be free to the cellular carriers, the transport rates ought to be set low – any revenue derived on these fibers would still be pure gravy for the cellular companies

There will be smaller cellular carriers in the auction, and I would expect most of them to already be planning on selling transport on any new fiber routes. But not all of the smaller carriers will do so, so the FCC should make this mandatory – as they should for any middle-mile fiber route funded by the federal coffers.

States should also adopt this same policy. I’ve seen state grants go towards middle-mile fiber that was not made available to other carriers at affordable rates. Middle-mile fiber subsidized by the government should always be made available to others, and at subsidized rates that recognize the government contribution towards paying for the fiber.

I don’t think the same thing should be true for last-mile fiber. Most grant funding today is being used to build last-mile fiber in areas of low density. Even with grant funding, many of these last-mile projects barely pay for themselves. It would make no sense to allow competitors into last-mile fiber, because doing so might bankrupt the ISP that won the grant to build to a remote area.

The FCC mandated the sharing of middle-mile fiber built with the stimulus grants fifteen years ago. Many of those middle-mile networks have been leveraged to enable last-mile broadband projects that might otherwise never have materialized. But there are middle-mile projects from that program that didn’t follow the rules, like the middle middle-mile network in West Virginia that was basically handed to Frontier to use and charge as they wish.

The big carriers have a poor record of sharing fiber with competitors. The Telecommunications Act of 1996 mandated that the big telcos make excess dark fiber available to others with rates set at incremental cost. While some persistent ISPs have been able to lease dark fiber under those rules, the big telcos have worked hard to make it too difficult for somebody to buy. The telcos have also convinced the FCC over the years to change the rules to make it harder to buy dark fiber.

If this new batch of fiber is made available to others there must be rules. Without guidelines, the big telcos will declare that they need all of the fiber strands being built, even if they only use two fiber out of a 24-fiber. The FCC rules should include guidelines for setting a reasonable number of spare and reserve fibers.

The rules for the 5G fund have not yet been finalized, and hopefully, the FCC will do the right thing. These new fiber routes are going to some of the most remote places in the country and not all middle-mile routes will be of any use to others. Even if only one out of ten of the fiber routes built with the 5G Fund is used to create last-mile networks, the 5G Fund will have accomplished more than just improving rural cellular coverage.

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.

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.

Is the FCC Killing State Matching Grants?

In a bizarre last-minute change of the language approved for the upcoming $16.4 billion RDOF grant funds, the FCC inserted new language into the rules that would seem to eliminate grant applicants from accepting matching state grants for projects funded by the RDOF grants.

The new language specifically says that the RDOF grant program now excludes any geographic area that the Commission “know[s] to be awarded funding through the U.S. Department of Agriculture’s ReConnect Program or other similar federal or state broadband subsidy programs or those subject to enforceable broadband deployment obligations.”

It’s fully understandable that the FCC doesn’t want to award grant money from multiple federal grant programs for the same project, and that was a loophole that is sensible to close. I think most industry folks understood this to be true even if it wasn’t in writing.

But the idea of blocking states from making grants to supplement RDOF is counterintuitive. More than half of the states now have state broadband grant programs. It makes no sense for the FCC to tell states how they can spend (or in this case how they cannot spend) their state grant monies.

The whole concept of blocking state matching grants goes against the tradition of federal funding. The vast majority of federal funding programs for infrastructure encourage state matching funds and many programs require it. Matching state grants are used along with federal grants for building infrastructure such as roads, bridges, water and sewer systems, airports, etc. Why would the FCC want to block this for broadband?

The state grant programs that I’m most familiar with were planning to provide matching grants for some RDOF grants. Broadband offices at the state level understand that building broadband networks can be expensive and they know that in some cases the extra funding is needed to make broadband projects viable.

It’s important to remember that the RDOF grants are aimed at the most remote customers in the country – customers that, by definition, will require the largest investment per customer to bring broadband. This is due almost entirely due to the lower household densities in the RDOF grant areas. Costs can be driven up also by local conditions like rocky soil or rough terrain. Federal funding that provides enough money to build broadband in the plains states is likely not going to be enough to induce somebody to build in the remote parts of Appalachia where the RDOF grants are most needed.

State grant programs often also have other agendas. For example, the Border-to-Border grants in Minnesota won’t fund broadband projects that can’t achieve at least 100 Mbps download speeds. This was a deliberate decision so that government funding wouldn’t be wasted to build broadband infrastructure that will be too slow and obsolete soon after it’s constructed. By contrast, the FCC RDOF program is allowing applicants proposing speeds as slow as 25 Mbps. It’s not hard to argue that speed is already obsolete.

I know ISPs that were already hoping for a combination of federal and state grants to build rural infrastructure. If the FCC kills matching grants, then they will be killing the plans for such ISPs that wanted to use the grants to build fiber networks – a permanent broadband solution. Even with both state and federal grants, these ISPs were planning to take on a huge debt burden to make it work.

If the matching grants are killed, I have no doubt that the RDOF money will still be awarded to somebody. However, instead of going to a rural telco or electric coop that wants to build fiber, the grants will go to the big incumbent telephone companies to waste money by pretending to goose rural DSL up to 25 Mbps. Even worse, much of the funding might go to the satellite companies that offer nothing new and a product that people hate. I hate to engage in conspiracy theories, but one of the few justifications I can see for killing matching grants is to make it easier for the big incumbent telcos to win, and waste, another round of federal grant funding.