Broadband Labels

There is one quiet provision of the Infrastructure Investment and Jobs Act that slipped under the radar. Congress is requiring that the FCC revamp broadband labels that describe the broadband product to customers, similar to the labels for food.

The Act gives the FCC one year to create regulations to require the display of a broadband label similar to the ones created by the FCC in Docket DA 16-357 in 2016. A copy of the FCC’s suggested broadband label from 2016 is at the bottom of this blog. The original FCC docket included a similar label for cellular carriers.

ISPs are going to hate this. It requires full disclosure of prices, including any special or gimmick pricing that will expire. ISPs will have to disclose data caps and also any hidden charges.

As you can see by the label below, it includes other information that big ISPs are not going to want to put into writing, such as the typical download and upload speeds for a broadband product as well as the expected latency and jitter.

To show you how badly big ISPs don’t want to disclose this information, I invite you to search the web for the broadband products and prices for the biggest ISPs. What you are mostly going to find is advertising for special promotions and very little on actual prices and speeds. Even when it’s disclosed it’s in small print buried somewhere deep in an ISP website. And nobody talks about latency and jitter.

What is even harder for ISPs is that they often don’t know the speeds. How does a telco describe DSL speeds when the speed varies by distance from the hub and by the condition of the copper wire on each street. I’ve seen side-by-side houses with different DSL speeds. Cable companies can have a similar dilemma since there seem to be neighborhoods in every city where the network underperforms – most likely due to degradation or damage to the network over time.

The sample label asks for the typical speed. Are ISPs going to take the deceptive path and list marketing speeds, even if they can’t be achieved? If an ISP tells the truth on the labels, shouldn’t it be required to submit the same answers to the FCC on the Form 477 data-gathering process?

I’m sure that big ISPs are already scrambling trying to find some way out of this new requirement, but that’s going to be hard to do since the directive comes from Congress. It’s going to get interesting a year from now, and I can’t wait to see the labels published by the biggest ISPs.

Broadband Adoption Grants

The recently enacted Infrastructure Investment and Jobs Act (IIJA) created two new grant programs to address digital equity and inclusion. This section of the IIJA recognizes that providing broadband access alone will not close the digital divide. There are millions of homes that lack computers and the digital skills needed to use broadband. The grant programs take two different approaches to try to close the digital divide.

The State Digital Equity Capacity Grant Program will give money to States to then distribute through grants. The stated goal of this grant program is to promote the achievement of digital equity, support digital inclusion activities, and build capacity for efforts by States relating to the adoption of broadband. I haven’t heard an acronym for this grant program – it’s likely that each state will come up with a name for the state program.

The Act allocates $1.5 billion to the States for this program – that’s $300 million per year from 2022 through 2026. Before getting any funding, each state must submit a plan to the NTIA on how it plans to use the funding. States will have to name the entity that will operate the program, and interestingly, it doesn’t have to be a branch of government. States could assign the role to a non-profit or other entity.

The amount of funding that will go to each state is formulaic. 50% will be awarded based upon the population of each state according to the 2020 Census. 25% will be awarded based upon the number of homes that have household incomes that are less than 150% of the poverty level, as defined by the U.S. Census. The final 25% will come from the comparative lack of broadband adoption as measured by the FCC 477 process, the American Community Survey conducted by the U.S. Census, and the NTIA Internet Use Survey.

The second new grant program is called the Digital Equity Competitive Grant Program. These are grants that will be administered by the NTIA and awarded directly to grant recipients. The budget for this grant program is $1.25 billion, with $250 million per year to be awarded in 2022 through 2026.

These grants can be awarded to a wide range of entities, including government entities, Indian Tribes, non-profit foundations and corporations, community anchor institutions, education agencies, entities that engage in workforce development, or a partnership between any of the above entities.

This will be a competitive grant program, with the rules to be developed by the NTIA. While the broadband infrastructure grants in the Act include a long list of proscribed rules, Congress is largely letting it up the NTIA to determine how to structure this grant program.

That’s going to make for some interesting choices for entities involved in digital inclusion. They can go after funding through the state or compete for nationwide grants. I doubt that anybody can make that decision until we see the specific grant rules coming out of each program.

I’ve been hearing about digital inclusion at every conference I’ve attended for the last fifteen years. For many years we talked about this as finding ways to solve the digital divide. We’ve known for all these years that there are homes that don’t have broadband because they can’t afford a broadband connection. We’ve known that homes can’t afford computers or other devices. And we’ve known for a long time that a lot of people don’t have the digital skills needed to use broadband.

There have been efforts over the years to address the issues, mostly done at the local level and mostly through non-profits. This is the first time that real funding is being aimed at solving these issues. It’s going to be interesting to see what comes out of this funding. I’m sure there will be some dazzlingly successful programs as well as some that will fizzle – but these grants will provide the grand experiment to find out what works the best. I like that these grants make new awards each year for five years – and I hope Congress pays attention because some of the best programs that get this funding will deserve to be funded when these grants are over.

We are only going to best thrive as a nation when everybody comes along for the ride, and this is the first set of grants that will take a serious shot at bringing broadband to those who are not benefitting from broadband technology.

New Middle-Mile Grants

One of the new programs established by the Infrastructure Investment and Jobs Act (IIJA) is $1 billion in grants to build middle-mile fiber. The grant program will be administered directly by the NTIA. The grant program defines middle-mile as any broadband infrastructure that does not directly connect to an end-user location. Projects that might be considered for the grants include building fiber, leasing of dark fiber, submarine cable, undersea cables, transport to data centers, carrier-neutral internet exchanges, and wireless microwave backhaul.

The amount of funding is disappointingly small. For comparison, the California legislature created a $3.25 billion middle-mile fund just within the state. Rural America is woefully underserved by middle-mile infrastructure. Rural communities can all attest to the pain of losing broadband, cellular coverage, and public safety systems anytime the backbone fiber into a rural area goes out of service.

The stated purpose of the grants is to reduce the cost of connecting unserved and underserved areas to the Internet and to promote resiliency – which is the phrase currently being used as a surrogate for redundancy. Resiliency means bringing a second transport route into an area so that a single fiber or microwave failure won’t strand a community without broadband.

The federal grants will provide up to 70% of the cost of constructing middle-mile connectivity. Priority will be given to projects that:

  • Leverage existing rights-of-way to minimalize regulatory and permitting challenges.
  • Enable the connection of unserved anchor institutions.
  • Facilitate the creation of carrier-neutral interconnection facilities (places where multiple carriers can meet and exchange traffic).
  • Improve the redundancy of existing middle-mile infrastructure.

Grant applicants must demonstrate financial, technical, and operational capability to be eligible. Grant applicants must also satisfy at least two of the following conditions (and more than two would be better):

  • Has a fiscally sustainable middle-mile strategy.
  • Will offer non-discriminatory access to other carriers and entities.
  • Projects which identify specific last-mile networks that will benefit.
  • Projects with identified investments or support that will accelerate the construction and completion of a project.
  • Projects that will benefit national security interests.

The NTIA is directed to prioritize grant applications that:

  • Connect middle-mile infrastructure to last-mile networks that plan to serve unserved areas.
  • Connect non-contiguous trust lands.
  • Offer wholesale broadband service to other carriers and entities.
  • Can complete the buildout in a timely manner.

It’s likely to be until late 2022 until the grant program is taking applications. While not gigantic compared to other parts of the infrastructure bill, this grant would still translate into 20,000 miles of middle-mile fiber at $50,000 per mile. These grants are going to most easily be awarded to solid financial recipients that have assembled a consortium of entities that will pledge to use the new middle-mile routes. I strongly suggest that regional groups start talking now to be ready when these grants when announced. At only $1 billion, it seems likely that there will only be one grant cycle.

BEAD – The $42.5 Billion Infrastructure Grants

The new acronym used in the title of this blog refers to the official name of the new $42.5 billion grant program just approved by Congress last Friday – The Broadband  Access, Equity, and Deployment program. Another new acronym is IIJA, for Infrastructure Investment and Jobs Act – the name of the bill just passed by Congress. Today’s blog will talk about a few high-level rules governing the BEAD grants. I’ll cover other issues of the IIJA in upcoming blogs – things like middle-mile grants and broadband adoption. Since the following provisions are in the legislation they will be in the grant – but there are always tweaks made for final grant rules that will emphasize some points and downplay others.

  • You don’t need to rush to be ready to file for BEAD grants. This funding is going to flow between the NTIA and the States before going to specific grant projects. The Act gives the NTIA 180 days to come up with a plan for inviting states to apply for the funding. After the NTIA approves state plans, the states will have to develop and announce grant programs. I find it highly unlikely that there will be any grant applications due to states until the end of 2022, more likely in early 2023. States will get at least $100 million each, with the rest distributed based upon the number of unserved households in each state. This is a good time to remind those who think that the lousy FCC maps don’t matter that the States with the worst FCC maps are going to lose funding.
  • Cross your fingers that your State is competent because there are several crucial steps that states must adhere to before funding is provided.
  • As expected, grants must adhere to two key definitions of broadband. Unserved are places with broadband speeds under 25/3 Mbps. Underserved are areas with speeds between 25/3 and 100/20 Mbps. Grants must first go to unserved areas before being used for underserved areas. Funding for anchor institutions is only to be considered after serving underserved areas.
  • Grant projects must provide speeds of at least 100/20 Mbps, but faster broadband speeds must be given priority. States must give priority to grants that are deployed in counties with persistent poverty. Projects that are shovel-ready will be given priority. Projects that pledge to pay Davis-Bacon wages will get priority.
  • States will likely not award all of the grants immediately, and the Act asks states to provide a 5-year plan for the use of the funds.
  • Grants don’t have to all go for broadband to unserved and underserved areas. States can use the money for data collection, broadband mapping, and planning. Funding can be used to bring low-cost broadband or WiFi to qualifying multi-family apartments.
  • Unlike the recent NTIA grant program, BEADA doesn’t give priority to any class of grant recipients. The grants can’t exclude cooperatives, nonprofit organizations, public-private partnerships, private companies, public or private utilities, public utility districts, or local governments from eligibility – but none get a preference.
  • There is a challenge process where incumbent ISPs can challenge the validity of a grant area. Interestingly, the NTIA can override States in these challenges.
  • Grant applications must provide at least a 25% matching for the cost of the project. Matching funds can include CAREs funding and ARPA funding – so hang on to those funds for a while! Matching can also come from state grants.
  • Deployed technology must only meet two 9’s reliability, meaning that a network can be out for two days per year and still be considered adequate – that’s a low standard for the industry.
  • Grants must cover every home in a grant coverage area within four years of receiving the grant.
  • Grant recipients must provide at least one low-cost broadband option for eligible households. The NTIA is expressly forbidden to regulate rates in any manner.
  • Interestingly, any fiber built along highways must include access points at regular and short intervals. This money is not for middle-mile fiber.
  • Grant recipients must carry out public awareness programs in grant areas extolling the benefits of better broadband.
  • There is plenty of paperwork. Grant recipients must file semiannual reports tracking the effectiveness of the grant funding.

This grant program dwarfs all previous grant programs combined, so there is going to be a lot of money coming to every State. What is still to be determined is how States will administer these grants – and there will be differences. But the legislation provides enough detail for communities and ISPs to start looking at how to be positioned for these grants.