The Proposed 5G Fund

The FCC is seeking public comments in a Notice for Proposed Rulemaking on how to determine the coverage areas and the timing for the new $9 billion 5G Fund. The money for the 5G Fund will come out of the Universal Service Fund. The 5G Fund is aimed at bringing cellular coverage to rural places that don’t have coverage today and will award the money using a reverse auction. The FCC is proposing to award $8 billion in the first round of auctions with $1 billion awarded later.

The FCC’s attempt to spend this money already has a checkered past. The FCC tried to award $4.5 billion of this same funding in 2019 under the name of Mobility Fund II. When preparing for that reverse auction the FCC asked existing cellular carriers to provide maps showing existing cellular coverage. It turns out that the maps provided by Verizon, T-Mobile, and US Cellular were badly overstated and smaller cellular carriers cried foul. The smaller carriers claimed that the overstatement of coverage was meant to shuttle funding opportunities away from smaller cellular companies. It felt eerily familiar to just watch Frontier and a few other big telcos make similar last-minute claims about their broadband coverage for the RDOF grants.

The FCC eventually agreed with the small carriers and canceled the auction last year. The $4.5 billion in funding from 2019 was augmented by an additional $4.5 billion and reconstituted as the 5G Fund.

The FCC is asking for comments on two different options for awarding the money. The first option would award the funds in 2021 based upon the best current cellular coverage maps available. This option would only award money to areas that have never had 3G or 4G coverage. The second option would delay the auction until 2023, by which time the FCC is hoping for better maps through a process they have labeled as the Digital Opportunity Data Collection initiative.

The need for this fund is further complicated by the T-Mobile / Sprint merger. One of the merger agreements made by T-Mobile is to cover 99% of the people in the country, including 90% of those living in rural areas with 5G of at least 50 Mbps data speeds within 6 years of the merger.

There doesn’t seem to be any logical way the FCC can award this money in 2021. By definition, they’d be awarding using grant coverage using maps that the FCC openly acknowledges are badly flawed. Maybe even more importantly, at this early date the FCC can’t know where T-Mobile plans to cover over the next 6 years. If the FCC proceeds now they will almost surely be spending money to cover areas that T-Mobile is already on the hook to serve. By using flawed maps, the FCC will almost certainly miss areas that need service that T-Mobile will not be serving.

The T-Mobile merger agreement also raises a serious issue about the size of the 5G Fund. The Fund was set at $9 billion before T-Mobile agreed to cover a lot of the areas that were proposed for funding in 2019. Isn’t the $9 billion now too high since T-Mobile will be covering many of these areas?

This raises a bigger policy question. Does the FCC really want to spend $9 billion to cover the last 1% of the US population with cellular when a much larger percentage of rural homes don’t have workable home broadband? Shouldn’t some of this money now be repurposed to fund rural broadband in light of the T-Mobile agreement to cover 99% of people with cellular coverage?

Finally, FCC Chairman Ajit Pai never misses a chance to overhype 5G. In the announcement for the NPRM the Chairman was quoted as saying, “5G promises to be the next leap in broadband technology, offering significantly increased speeds and reduced latency. The 5G Fund for Rural America focuses on building out 5G networks in areas that likely would otherwise go unserved. It’s critical that Americans living in rural communities have the same opportunities as everybody else.”

What the Chairman and the carriers are  never going to say out loud is that 5G is an urban technology. All of the coolest features of 5G only work when cell sites are close together. The areas covered by these grants are the most rural cell sites in the US and will be serving only a few people at any given location. Low density sites gain almost no extra advantage from 5G, so they will effectively act like 4G LTE sites forever. It’s even unlikely that a cellular carrier would bother using extra spectrum at a cell site with only a few customers. Such cell sites need only the basic 4G LTE coverage and spectrum bands, and it’s unlikely that these areas will get true 5G, regardless of the 5G name the FCC has attached to the funding mechanism.

We Need a Challenge Process for Broadband Maps

We all know that the broadband maps maintained by the FCC are terrible. Some of the inaccuracy is due to the fact that the data in the maps come from ISPs. For example, there are still obvious examples where carriers are reporting their marketing speeds rather than actual speeds, which they might not know. Some of the inaccuracy is due to the mapping rules, such as showing broadband by census block – when a few customers in a block have decent broadband it’s assumed that the whole census block has it. Some of the inaccuracy is due to the vagaries of technology – DSL can vary significantly from one house to the next due to the condition of local copper; wireless broadband can vary according to interference and impediments in the line-of-sight. The maps can be wrong due to bad behavior of an ISP who has a reason to either overstate or understate their actual speeds (I’ve seen both cases).

None of this would matter if the maps were just our best guess at seeing the state of broadband in the country. Unfortunately, the maps are used for real-life purposes. First, the maps are used at the FCC and state legislators to develop and support various policies related to broadband. It’s been my contention for a long time that the FCC has been hiding behind the bad maps because those maps grossly overstate the availability of rural broadband. The FCC has a good reason to do so because they are tasked by Congress to fix inadequate broadband.

Recently the maps have been used in a more concrete way and are used to define where grants can or cannot be awarded. Used in this manner the maps are being used to identify groups of homes that don’t already have adequate broadband. The maps were the basis of determining eligible areas for the CAF II reverse auction and now for the e-Connectivity grants.

This is where bad mapping really hurts. Every rural county in the country knows where broadband is terrible or non-existent. When I show the FCC maps to local politicians they are aghast at how inaccurate the maps are for their areas. The maps often show large swaths of phantom broadband that doesn’t exist. The maps will show towns that supposedly have universal 25/3 Mbps broadband or better when the real speeds in the town are 10 Mbps or less. The bad maps hurt every one of these places because if these maps were accurate these places would be eligible for grants to help fix the poor broadband. A lot of rural America is being royally screwed by the bad maps.

Of even more dismay, the maps seem to be getting worse instead of better. For example, in the CAF II program, the big telcos were supposed to bring broadband of at least 10/1 Mbps to huge swaths or rural America. A lot of the areas covered by the CAF II program are not going to see any improvement of broadband speeds. In some cases, the technology used, such as AT&T’s use of fixed cellular can’t deliver the desired speeds to customers who live too far from a tower. I also believe we’re going to find that in many cases the big carriers are electing to only upgrade the low-hanging fruit and are ignoring homes where the CAF upgrade costs too much. These carriers are likely to claim they’ve made the upgrades on the maps rather than admit to the FCC that they pocketed the subsidy money instead of spending it to improve broadband.

There have been a few suggested fixes for the problem. A few states have tried to tackle their own broadband maps that are more accurate, but they can’t get access to any better data from the ISPs. There are a few states now that are asking citizens to run speed tests to try to map the real broadband situation, but unless the speeds tests are run under specific and rigorous conditions they won’t, by themselves, serve as proof of poor broadband.

The easiest fix for the problem is staring us right in the face. Last year the FCC got a lot of complaints about the soon-to-be-awarded Mobility Fund Phase II grants. This money was to go to cellular carriers to bring cell coverage to areas that don’t have it. The FCC maps used for those efforts were even worse than the broadband maps and the biggest cellular companies were accused of fudging their coverage data to try to stop smaller rival cell providers from getting the federal money. The outcry was so loud that the FCC created a challenge process where state and local governments could challenge the cellular coverage maps. I know a lot of governments that took part in these challenges. The remapping isn’t yet complete, but it’s clear that local input improved the maps.

We need the same thing for the FCC broadband maps. There needs to be a permanent challenge process where a state or local government can challenge the maps and can supply what they believe to be a more accurate map of coverage. Once counties understand that they are getting bypassed for federal grant money due to crappy maps they will jump all over a challenge process. I know places that will go door-to-door if the effort can help bring funds to get better broadband.

Unfortunately, only the FCC can order a challenge process, and I don’t think they will even consider it unless they got the same kind of outcry that came with the Mobility II Funding. It’s sad to say, but the FCC has a vested interest in burying their head in the sand and pretending that rural broadband is okay – otherwise they have to try to fix it.

I think states ought to consider this. If a state undertakes a program to allow challenges to the map, then governors and federal legislators can use the evidence gathered to pressure the USDA to accept alternate maps for areas with poor broadband. These challenges have to come from the local level where people know the broadband story. This can’t come from a state broadband mapping process that starts with carrier data. If local people are allowed to challenge the maps then the maps will get better and will better define areas that deserve federal grants. I believe a lot of county governments and small towns would leap at the opportunity to tell their broadband story.

Another FCC Giveaway

The FCC just voted implement a plan to give up to $4.53 billion dollars to the cellular carriers over the next ten years to bring LTE cellular and data to the most remote parts of America. While this sounds like a laudable goal, this FCC seems determined to hand out huge sums of money to the biggest telecom companies in the country. This program is labeled Mobility II and will be awarded through an auction among the cellular companies.

As somebody who travels frequently in rural America there certainly are still a lot of places with poor or no cellphone coverage. My guess is that the number of people that have poor cellphone coverage is greater than what the FCC is claiming. This fund is aimed at providing coverage to 1.4 million people with no LTE cellphone coverage and another 1.7 million people where the LTE coverage is subsidized.

Recall that the FCC’s knowledge of cellphone coverage comes from the cellphone companies who claim better coverage than actually exists. Cellphone coverage is similar to DSL where the quality of signal to a given customer depends upon distance from a cellphone tower. Rural America has homes around almost every tower that have crappy coverage and that are probably not counted in these figures.

My main issue with the program is not the goal – in today’s world we need cellphone coverage except to the most remote places in the country. My problem is that the perceived solution is to hand yet more billions to the cellular carriers – money that could instead fund real broadband in rural America. Additionally, the ten-year implementation is far too long. That’s an eternity to wait for an area with no cellular coverage.

I think the FCC had a number of options other than shelling out billions to the cellular companies:

  • The FCC could require the cellular companies to build these areas out of their own pockets as a result of having taken the licensed spectrum. Other than Sprint, these companies are extremely profitable right now and just got a lot more profitable because of the recent corporate tax-rate reductions. The FCC has always had build-out requirements for spectrum and the FCC could make it mandatory to build the rural areas as a condition for retaining the spectrum licenses in the lucrative urban areas.
  • The FCC could instead give unused spectrum to somebody else that is willing to use it. The truth is that the vast majority of licensed spectrum sits unused in rural America. There is no reason that spectrum can’t come with a use-it-or-lose it provision so that unused spectrum reverts back to the FCC to give to somebody else. There are great existing wireless technologies that work best with licensed spectrum and it’s aggravating to see the spectrum sit unused but still unavailable to those who might use it.
  • Finally, the FCC could force the cellular carriers to use towers built by somebody else. I work with a number of rural counties that would gladly build towers and the necessary fiber to provide better cellphone coverage. It would cost the cellular carriers nothing more than the cell site electronics if others were to build the needed core infrastructure.

This idea of handing billions to the big telecom companies is a relatively new one. Obviously the lobbyists of the big companies have gained influence at the FCC. It’s not just this FCC that is favoring the big companies. Originally the CAF II program was going to be available to everybody using reverse auction rules. But before that program was implemented the Tom Wheeler FCC decided to instead just give the money to the big telcos if they wanted it. The telcos even got to pick and choose and reject taking funding for remote places which will now be auctioned this summer.

That same CAF II funding could have been used to build a lot of rural fiber or other technologies that would have provided robust broadband networks. But instead the telcos got off the hook by having to only upgrade to 10/1 Mbps – a speed that was already obsolete at the time of the FCC order.

Now we have yet another federal program that is going to shovel more billions of dollars to big companies to provide broadband that will supposedly meet a 10/1 Mbps speed. But like with CAF II, the carriers will get to report the results of the program to the FCC. I have no doubt that they will claim success even if coverage remains poor. Honestly, there are days as an advocate for rural broadband that you just want to bang your head against a wall it’s hard to see billions and billions wasted that could have brought real broadband to numerous rural communities.