Decommissioning Rural Copper

I’ve been watching AT&T and Verizon since I’ve been in the industry (including a short stint at Southwestern Bell in the early 80s). We are about to see both of these companies unravel their rural telco properties.

Verizon got ahead of the curve and has been selling off rural properties for a few decades, many of which ending up with Frontier. Verizon still serves some rural areas and probably has shed  half of their rural customers. But there are still big swaths or rural Verizon customers in Pennsylvania, New York, Maryland and other northeastern states. Verizon benefitted from these sell-offs by selling completely depreciated and poorly maintained networks at high prices – as can be evidenced by how much Frontier is struggling to cover their massive debts. AT&T has sold almost no rural properties and still serves gigantic rural areas in dozens of states.

Both companies are clearly on a path to tear down the remaining rural copper networks and replace them with cellular wireless networks. There are both pros and cons for these transitions for rural customers.

On the plus side, many of these rural areas have never had broadband since these big telcos never extended their DSL to their rural service areas. We know that they could have extended DSL, because we have hundreds of examples of independent telephone companies that brought DSL to all of their customers, no matter how remote. But the big companies stopped spending money on rural properties decades ago. The remaining copper is now in terrible shape and one has to imagine that cellular voice is probably often as good or better than voice over these old copper lines.

There will now many customers who can buy fixed cellular broadband. This uses the same frequencies as the broadband for smartphones, but the cellular companies are pricing it to be a little less expensive. For many households the fixed-cellular broadband will be the first real broadband alternative they have ever had.

But there are also big downsides to this shift from old copper to cellular networks. First, cellular networks are effective for only a few miles from any given cell site. Anybody who has driven in rural America knows that there are cellular dead spaces everywhere. Any customers living in the cellular dead spaces are going to be left with no communications to the outside world. They’ll lose their copper and they won’t have cellular voice or data. This will be a huge step backwards for many homes.

The big telcos will be taking advantage of the fact that, as a cellular provider, they have no obligations to try to serve everybody. One of the reasons that we had nearly ubiquitous telephone coverage in the country is that telcos were the carriers of last resort in their service areas. They were required by law to extend telephone service to all but extremely remote customers. But that obligation doesn’t apply to a cellular carrier. We already have tons of evidence that the cellular carriers make no apologies to homes that happen to live out of range of their cellular towers. With no copper landlines left we will now have rural communications dead zones. It will be hard for anybody living in these dead zones to stay there and certainly nobody is going to build new homes in a place that doesn’t have cellular service.

There is a downside even for those households that get fixed-cellular broadband. The speeds on this service are going to be slow by today’s standards, in the range of 10 – 15 Mbps for those that live relatively close to a cellular tower, but considerably slower for customers at greater distances. The real downside to getting cellular data is that the speeds are not likely to get better in rural America for many years, even decades. The whole industry is abuzz with talk about 5G cellular making a big difference, but it’s hard to see that technology making much impact in rural areas.

I think this transition away from copper is going to catch a lot of rural people by surprise. These two big telcos have already started the process of decommissioning copper and once that gets full FCC approval the speed of decommissioning copper is likely to soon accelerate. I think a lot of homes are going to be surprised when they find out that the telcos no longer have an obligation to serve them.

Fixed Wireless and CAF II

USF-logoBill Smith, the President of Technology Operations at AT&T just announced that the company will use fixed wireless to meet CAF II requirements when it is ‘uneconomical to build wireline’. The CAF II requirements are that AT&T (and every other large telco that took the funding) must provide 10/1 Mbps broadband to everybody within defined rural geographical areas. The FCC awarded the telcos billions of dollars over 6 years to complete the upgrades.

On the day I first read of the CAF II awards I expected that AT&T and some of the other telcos would use wireless to fulfill the obligations. I am very familiar with a lot of the rural areas where the CAF II money was awarded and I know it would take a lot more money than what the FCC was providing to build broadband to these areas that have little or no broadband today.

There are only a few technological approaches that can be considered in the rural areas covered by CAF II:

  • Fiber is the ultimate broadband delivery mechanism, but there is no chance that any of the big telcos will build rural last-mile fiber to satisfy this requirement. I’ve looked at some rural counties recently where the cost to build fiber can be 5 – 10 times more than what CAF II is providing.
  • Expanded DSL. Most of the CAF II areas have either no DSL or incredibly slow DSL where the customers are too far from the DSL hub. The only way to bring 10/1 DSL to rural America is to build a lot of fiber deep into rural areas and then initiate the DSL out in the hinterlands. This is also expensive, but because it keeps the existing copper lines it costs a lot less than building fiber everywhere.
  • Point-to-Multipoint Wireless. In this technology transmitters are put onto towers and where the 3.65 GHz spectrum is available can deliver 10 Mbps or more up to perhaps 6 miles. The distance are only out to about 4 miles at most if using WiFi spectrum. There are several problems with this technology. First, existing towers are sometimes scarce in rural areas and this means building new towers. Second, this isn’t a great solution where there are a lot of trees or a lot of hilly terrain. It’s a great solution in the plains, not so great in Appalachia. Finally, this equipment has a life-cycle of perhaps 7 – 10 years before it has to be replaced. After the CAF II funds are spent and this equipment wears out it might mean that in decade that customers on this technology will revert to no broadband.
  • Cellular Data. This is data delivered using licensed spectrum and AT&T has a mountain of it, and in rural areas this spectrum is largely unused. But to get 10/1 speeds everywhere means building new towers, and probably fiber to reach those towers.

Most people think of cellular data as something that only works on cellphones. But there are all sorts of devices that can receive cellular bandwidth, such as phones and data modems that work directly from cellular signals.

But the biggest issue with the cellular solution isn’t technological. As long as somebody is close enough to a cell site it will work (with the caveat that if the cell site is too busy a user might get no signal). The real issue is price. If AT&T is going to price fixed data similarly to cellular data, then this is not a broadband solution. Cellular broadband in the US is about the most expensive broadband in the developed world. At an average cost of about $8 per downloaded gigabit of data, it doesn’t take much for a normal household to rack up huge bills.

Comcast recently said that their average customer download is around 100 gigabits per month. At cellular prices that would cost $800 to $1,000 a month, which is not what the FCC had in mind for CAF II. There are many homes in rural America already using their cellphones for data. I recently talked to a rural household that sees bills of $500 per month in the summer when the kids are home all of the time – and that’s with constantly telling the kids to stay off broadband.

AT&T has a dilemma if they sell their cellular data to cellphone users at today’s high prices but sell it to fixed broadband customers at a lower price. Since fixed data customers will use a lot more data if it’s not too expensive, this will kill their argument that cellular data needs to be so expensive due to congestion at the towers. So I’ll be very interested to see how AT&T’s plan is implemented. I hope that if AT&T implements their first CAF II market at cellular data prices that the FCC pulls the plug on the rest of the funding. And if AT&T offers cellular data for CAF II customers at a reduced rate then all of their cellphone customers ought to raise holy hell.

Lifeline and Rural America

FCC_New_LogoEarlier this year Chairman Tom Wheeler of the FCC proposed to change the Lifeline program to support broadband in addition to voice. In that proposal he suggested that a household should get at least 10 Mbps download and 1 Mbps upload in order to qualify for a Lifeline subsidy.

Here is where it gets weird. Frontier has filed comments that the 10/1 Mbps threshold is too high and that using such a high standard will stop a lot of rural households from getting Lifeline assistance. They are right, of course, but their solution is to lower the Lifeline threshold to whatever level is necessary to meet actual speeds in a given rural market.

Meanwhile, Frontier has taken a huge amount of money recently from the Connect America Fund for the purpose of raising rural DSL up to the 10/1 Mbps level. But they have six years to get to those speeds, and most of us in the industry think that even after all of their upgrades a lot of the rural households in the upgraded areas still won’t get 10/1 speeds. It’s going to be very hard for Frontier to do that with DSL in a rural setting where people are on scattered farms or back long lanes. I find it unlikely that Frontier, or any of the big telcos, are going to put enough fiber in the rural areas to actually achieve that goal.

But far more importantly, 10/1 DSL is not broadband. It’s not broadband by today’s current FCC definition that says broadband must be at least 25/3 Mbps, and it’s not broadband for real life applications.

I use my own household as the first example. There are two adults and one teenager. We work at home and we are cord cutters and get all of our video online. We have a 50 Mbps cable modem, and as cable modems tend to do, sometimes it slows down. When our speed hits 25 Mbps we’re all asking what is wrong with the Internet. So our household needs something greater than 25 Mbps for normal functioning. If we get less than that we have to cut back on something.

I have a friend with two teenage boys who are both gamers. He has a 100 Mbps Verizon FiOS connection on fiber, and when there are multiple games running everything else in the house comes to a screeching halt. For his household even 100 Mbps is not enough speed to meet his normal expected usage.

And yet here we are having discussion at the federal level of setting up two major programs that are using 10/1 Mbps as the standard goal of Internet speed. As a nation we are pouring billions of dollars into a project to improve rural DSL up to a speed that is already inadequate and by the time it is finally finished in six years will be massively below standard. It won’t take very many years for the average household to need 100 Mbps and we are instead taking six years to bring a huge amount of the rural parts of American up to 10/1 DSL.

I know that the FCC is trying to help. But it’s sad to see them crowing about having ‘fixed’ the rural broadband problem when instead they are condemning millions of households to have nearly worthless broadband for the next couple of decades. Imagine if they had instead allowed those billions of dollars to become matching funds for communities willing to invest in real broadband? Communities wanting to do this are out there and many of them were hoping to get some federal help to bring broadband to their areas. Building rural fiber is expensive, and even a little federal help would be enough to allow many rural areas to find the rest of the funding needed to build their own solutions.

And the problems are going to get worse, not better. Verizon didn’t even bother to take the federal subsidies to improve DSL because they don’t want to invest anything in rural copper. AT&T has told the FCC repeatedly that they want to tear down copper to millions of households and put rural households on cellular data. And while Frontier is going to try to make their rural copper plant better, how much can they realistically accomplish with 50–70 year-old copper that was neglected for decades before they bought it?

I just shake my head when I see that Frontier and the FCC are going to be wrangling about households getting Lifeline subsidies for speeds slower than 10/1 Mbps. The FCC has already decided that they are going to throw billions at rural copper and call it job done. It’s about time that we instead start having a conversation about bringing real broadband to rural America.

Farmers and Big Data

johndeereoutsideProbably the biggest change coming soon to crop farming is precision agriculture. This applies GPS and sensors to monitor field conditions like water, soil, nutrients, weeds, etc. to optimize the application of water, pesticides, and fertilizers in order to maximize the crop yields in different parts of the farm. Anybody who has ever farmed knows that fields are not uniform in nature and that the various factors that produce the best crops differ even within one field.

Precision agriculture is needed if we are to feed the growing world population, which is expected to reach almost 10 billion by 2050. As a planet we will need to get the best possible yield out of each field and farm. This might all have to happen against a back drop of climate change which is playing havoc with local weather conditions.

A number of farmers have started the process of gathering the raw data needed to understand their own farms and conditions. Farmers know the best and worst sections of their fields, but they do not understand the subtle differences between all of the acreage. In the past farmers haven’t known the specific yield differences between the various microcosms within their farm. But they are now able to gather the facts needed to know their land better. It’s a classic big data application that will recommend specific treatments for different parts of a field by sifting through and making sense of the large numbers of monitor readings.

In order to maximize precision agriculture new automated farm machinery will be needed to selectively treat different parts of the fields. The large farm equipment manufacturers expect that farming will be the first major application for drones of all types. They are developing both wheeled vehicles and aerial drone systems that can water or treat sections of the fields as needed.

This is a major challenge because farming has historically been a somewhat low technology business. While farms have employed expensive equipment, the thinking part of the business was always the responsibility of each farmer, and the farmers with the best knowledge and experience would typically out-produce their neighbors. But monitoring can level the playing field and dramatically increase yields for everybody.

There are several hurdles in implementing precision agriculture. First is access to the capital needed to buy the monitors and the equipment used to selectively treat fields. This need for capital is clearly going to favor large farms over small ones and will be yet one more factor leading to the consolidation of small farms into larger enterprises.

But the second need is broadband. Gathering all of the needed data, analyzing it, and turning it into workable solutions presupposes the ability to get data from the fields and sent to a supercomputer somewhere for analysis. And that process needs broadband. A farmer who is still stuck with dial-up or satellite broadband access is not going to have the bandwidth needed to properly gather and crunch the large amount of data needed to find the best solutions.

This doesn’t necessitate fiber to the fields because a lot of the data gathering can be done wirelessly. But it does require that farms are fed with high-speed Internet access and good wireless coverage, something that does require rural fiber. I published a blog a few weeks ago that outlined the availability of broadband on farms and it is not currently a pretty picture. Far too many farms are still stuck with dial-up, satellite, or very slow rural DSL.

Some farmers are lucky to live in areas where communications co-ops and rural telcos are bringing them good broadband, but most are in areas where there is neither broadband nor anybody currently planning on expanding broadband. At some point the need for farming broadband will percolate up as a national priority. Meanwhile, in every rural place I visit, the farmers are at the forefront of those asking for better broadband.