Telemedicine and Broadband Access

North Carolina’s Broadband Infrastructure Office and the NC Department of Health and Human Services published a 77-page report that compares the state of healthcare and broadband access in Western North Carolina. I expect to soon see similar reports from around the country as States are taking a hard look at broadband access and related issues.

Western North Carolina is in Appalachia and has higher rates of poverty than the rest of the state. Many of the counties in the region had economies driven by coal extraction and related supply chains. These areas were already seeing economic devastation before the pandemic.

As might be expected, the report shows that deaths from diabetes, stroke, heart disease, opioid use, COPD, and unintentional injuries are higher in western North Carolina than in the state’s metropolitan areas. The region has far fewer doctors per 10,000 population than the rest of the state.

There had already been a start for bringing telemedicine to the region. For example, Mission Health, a large health care provider in Asheville had already been working with rural hospitals in a few western counties to bring access to specialists. But like everywhere else in the country, the need for telemedicine has exploded since the advent of the pandemic.

As might be expected, broadband access is low in many of these counties. Western North Carolina is like the rest of Appalachia, with hilly and mountainous terrain, a lot of woods, narrow and winding country roads, and scattered rural populations. The counties in the region have already identified the lack of broadband as a major problem before the pandemic and have been taking steps to try to attract ISPs to the region.

This study is the first step attempt in correlating broadband access to the availability of health care. One of the first steps taken in the study was to equate the broadband adoption rate in counties to the degree to which a county has higher death rates than the rest of the state. Interestingly, there were no counties with high broadband adoptions that rated below average for health statistics. However, only 3 or the 20 counties were rated as having high broadband adoption rates.

The study surveyed what the report called safety net sites – locations that provide health care to low-income people. They found that 70% of these locations were already using telemedicine before the pandemic. However, most of these health care providers said they were underutilizing telemedicine. The study showed that many of the health care facilities don’t have an affordable or reliable broadband connection, making it hard for them to reliably conduct telemedicine.

The State Broadband Office had identified almost 72,000 homes in these rural counties that don’t have access to broadband at home, meaning there is no ISP able to provide a broadband connection capable of delivering telemedicine. Telemedicine platforms differ, but I’ve been told that most telemedicine connections require both a download and an upload connection of between 3 Mbps and 4 Mbps. Anybody living in a rural area knows that an upload speed of that magnitude is a rarity.

The study also showed that even where broadband is available that 17 of the 20 counties have lower than average rates of computer ownership and broadband adoption. The study correlates this with the level of poverty, which is also lower in these areas than average for the State.

This study is an important step in understanding the broadband gaps in Western North Carolina, and telemedicine is only one of the many ways that lack of broadband is hurting the region. If any good has come out of the pandemic, it’s that state government has turned its attention to the huge problems caused by poor broadband in rural areas. Hopefully, this will translate into finding broadband solutions – which is going to be a huge challenge in Appalachia.

Look Out for those Grant Gotchas

One of the most disappointing things in the broadband world is when broadband grants have ‘gotchas’ that make it hard to use the money as intended. North Carolina has named its state broadband grant program the “GREAT” grants. That’s a pretty bold name, and I’m sure that the homes and businesses in the states that are getting broadband as a result of these grants think it’s great. But like other grant programs around the country, there are some gotchas in the grants.

Even though I live in North Carolina, I hadn’t looked into the details of the program until I got a call from a part-time professor at NC State. He was struggling while working at home due to COVID-19 and trying to hold remote college classes from a slow home broadband connection. He and his neighbors were upset because the State had awarded a grant in 2019 to bring broadband to his area of Caswell County, and yet nothing has happened. The rumor was that there was something amiss about the grant, but nobody locally knew why they weren’t getting broadband.

It didn’t take long to find that Open Broadband, a wireless ISP, had won a $1.54 million Great grant to bring broadband to 1,194 homes in the County – roughly one-fourth of the rural households in the county that the FCC says don’t have 25/3 broadband in the 2019 Broadband Deployment Report. This state grant was to have been matched with another $1.54 million from the ISP.

Open Broadband told me that the state had yanked the grant due to a change in the grant rules that was introduced after the grant award – a rule that had not been disclosed in the original grant rules. The state administrator of the grant, the Broadband Infrastructure Office, notified Open Broadband after the grant had been awarded that the ISP had to meet one of the following financial tests to receive the funds:

  • Letters from the applicant’s Board of Director or investors guaranteeing the total project cost.
  • A letter or actual statements from a bank or other financial institution verifying total available cash or lines of credit meet or exceed the anticipated total project costs.
  • Letters from a verifiable third-party entity guaranteeing the total project cost.

In case those rules didn’t sink in, the state is requiring an ISP to guarantee 100% of the cost of the project, including the portion of grant being supplied by the State. In this case, the state wants Open Broadband to guarantee over $3 million, even though they are only receiving $1.5 million of grant funding. Most grants that seek proof of financial viability would ask an ISP to guarantee their out of pocket costs – in this case that’s significantly less than $1.5 million since customer installation fees will cover a large portion of the ISP’s grant matching.

It’s ludicrous that the state wants an ISP to guarantee the portions of the grant paid by the State – is North Carolina worried that its own grant money is no good? The state wants Open Broadband to have $3.08 million in free cash or else a guarantee of that amount from a bank or a private investor. Whoever came up with this after-the-fact rule doesn’t understand ISPs or the banking industry.

ISPs don’t sit on much free cash – even fairly large ISPs. We are living at a time when every ISP I know is expanding – something that governments at all levels should support because government constantly says that the private sector should solve the broadband problems in rural America. Few ISPs are sitting on the free cash needed to make this guarantee.

The State will alternatively accept a guarantee from an owner or investor. This request is massively out-of-line with the nature of the project. A personal guarantee means putting your home and retirement savings on the hook. Many small and medium ISPs are already partially financed by personal loan guarantees by owners, and they can’t pledge this twice – even the rare owner that has over $3 million in net personal wealth.

The idea of an ISP having $3 million in an unused line of credit is even more absurd. Only a really large ISP would have a $3 million line of credit. A business line of credit is a loan that hasn’t yet been drawn. Banks are not like credit card companies and they don’t set big credit limits without an expectation that a borrower will use the money quickly.

The only other way to meet this requirement from a bank is with a bank letter of credit. A letter of credit is a formal negotiable instrument – a promissory note like a check. A letter of credit is a promise that a bank will honor the obligation of the buyer of letter of credit should that buyer fail to meet a specific obligation. Banks consider a letter of credit to be the equivalent of a loan. The banks must set aside the amount of pledged money in case they are required to disburse the funds. Most letters of credit are only active for a short, defined time. A letter of credit for a 2-year grant would be unusual and expensive – the ISP would likely to have to pay full interest expense as if this was a loan. The bottom line is that banks don’t issue a letter of credit for this kind of purpose.

I never heard of the concept of guaranteeing grants in this manner until last year. Out of the blue, the FCC suggested that winners of the $16.4 RDOF grants should be required to guarantee matching funds by either holding the cash or supplying a letter of credit. There was such an immediate outroar from the industry that this idea was killed in a matter of weeks. The industry conjectured that the idea came from the big ISPs, which have the FCC’s ear. The big ISPs know this requirement would stop most ISPs from applying for an RDOF grant – which would allow the incumbents to keep milking money out of rural properties with lousy and overpriced broadband. This may not be the reason for the North Carolina requirement, but the timing is suspicious.

This is not the only gotcha in the grant. The state also only reimburses funds that have been spent by a grant awardees once per quarter. Every other grant program I know of reimburses ISP expenses monthly. It’s a major financial penalty to make ISPs wait for months to get expenses reimbursed.

I was surprised to see major gotchas in North Carolina grants. This comes from a state that brags about its history of being first in broadband. For example, North Carolina says it was the first to have brought fast broadband to every school. I have no idea where the State got the idea for the grant guarantees, but it’s an absurd requirement that will do little more than discourage ISPs from investing in the state. ISPS can easily move across the border to nearby Virginia or Tennessee where the grant process is friendlier. North Carolina needs to kill this absurd rule. Those homes in Caswell County deserve the broadband they were promised, and it’s still not too late to make this grant work.

The State of Broadband in North Carolina

Recently I was asked to compare broadband in my state of North Carolina to the rest of the country. It’s an interesting question that folks in many states have been asking.

Parts of North Carolina have the best broadband in the country. There are neighborhoods in the research triangle area where there is fiber from Google Fiber and AT&T and where the cable company offers an affordable gigabit product. That means the lucky homeowners in those neighborhoods are one of a handful of places that have a competitive choice between three gigabit ISPs – something that’s extremely rare.

Like in other states, the cities and larger towns in the state all have a cable provider that offers the basic speeds of more than 100 Mbps, in some cities now 200 Mbps. Since this was traditional AT&T territory, the company has built fiber in small neighborhoods around the state – so there are small pockets of fiber in many communities. However, for most urban residents the cable companies are the only option faster than 50 Mbps and are slowly moving towards becoming the monopoly broadband provider.

Like in most states, North Carolina has huge rural areas with little or no broadband. And like in most places you don’t have to go far outside of any city to find places with dreadful or non-existent broadband. The big telcos have ignored rural copper here like they have done almost everywhere in the country. There are many rural counties with virtually no broadband outside the county seat, and no county that has good broadband everywhere.

Also like most states, there are ISPs providing fiber in rural communities. The state has telephone cooperatives and independent telephone companies that have built or will soon finish the fiber in their traditional service areas. A few of these companies are building outside their traditional footprint, with Riverstreet Networks, owned by Wilkes Telephone Cooperative the most aggressive, and which is building in numerous counties around the state.

There is also a vibrant small WISP industry in the state of ISPs bringing wireless broadband. Like in most states the big issue for the WISPs is finding fiber backhaul. In the western half of the state the impediments to wireless broadband are the mountainous terrain and the thick forests.

The state just voted last year to allow electric cooperatives to enter the broadband business and there are a few of them already considering building fiber. However, unlike many states, there is a lot of rural areas in the state that are served by commercial power companies rather than cooperatives.

Like many other states, North Carolina has an effective ban on municipalities entering the broadband business. Back when fiber-to-the-home was a new technology, the communities of Wilson and Salisbury built fiber networks in their communities and the incumbent providers quickly pushed through legislation stopping municipalities from being ISPs. Municipalities can build and lease broadband facilities to ISPs, but there are enough strings in the law to make it hard to achieve, and difficult to financially justify.

The state has a new broadband grant program set at $15 million this year. While it would probably take more than a century to solve the broadband gaps in the state at $15 million per clip, the funding is still welcome and is bringing solutions to pocket of homes that have had no broadband.

The state takes pride in being first to tackle broadband and had the first statewide government broadband network and was the first state to get fast broadband to all of the schools.

Like most states the broadband gap is widening in some places. Like most states there have been rural hospitals closings, mostly in areas with poor broadband, meaning it’s difficult to provide telemedicine services. There are plenty of stories in the state of families sitting outside of WiFi hotspots so that kids can do homework each night. There are some big stretches of the state where there is little or no cellular service to go along with no broadband. And like everywhere in the country, broadband is priced out of reach of poorer households.

There are a few things unique about broadband in North Carolina, but overall, we look a lot like much of the rest of America. We have homes with great broadband and homes with no broadband. Broadband is creeping into the rural parts of the state but at a glacial pace. Like most states, we still have a long way to go to provide everybody with decent broadband.