Buffalo Providing WiFi to Student Homes

Buffalo New York is facing the same homework gap that most school systems are seeing. The city had spent millions of dollars to upgrade broadband to bring computer technology into the classroom but now has numerous students unable to use a digital curriculum due to not having broadband at their homes. Like everywhere else, the city sees that students without home broadband lag behind everybody else.

The City recently decided to tackle a portion of the homework gap and has approved building a WiFi network that will reach the homes of 5,500 students living in downtown Buffalo. They have approved a $1.3 million project to construct a wireless network that will extend the bandwidth available at the schools to surrounding neighborhoods.

Buffalo has what it calls digital deserts, with neighborhoods where more than half of households have no Internet access. This contrasts sharply with other parts of the city and with Erie County as a whole, where 80% of all households are online (with that statistic is depressed by including the digital deserts). The richest parts of the city have neighborhoods with nearly 90% broadband coverage, while there is one neighborhood in downtown with only a 31% household broadband penetration. The WiFi project is targeting two neighborhoods on the east side of downtown where the neighborhoods collectively have only a 40% broadband penetration.

The city is mounting antennas on top of eight downtown schools and other government-owned buildings. These installations take advantage of the gigabit bandwidth already available at City buildings. The network is being designed to reach students living within about two miles of each of the locations. For now, this first trial covers perhaps 5% of the total area of the city but covers neighborhoods with some of the highest needs in terms of students without home broadband.

Students will be able to log onto the school network using the same login used at school. The broadband connection will be limited to access the school network and is not intended to provide normal household broadband. The network will allow students into the highly controlled and curated school network that gives students access schoolwork, school-sponsored video and some access to the web for homework research.

Having access to a computer or tablet is the other half of the homework gap problem. Homes without broadband likely also don’t have computers. The city is working on a plan to let students take home laptops. Last year only seniors were able to take home school laptops, but in this coming year that is being expanded to all high school students in some schools. The city is exploring how to provide devices to students in grades 3 to 8.

Like other school systems, the city understands that smartphones are not the answer. While many students have smartphones, the devices are inadequate for doing homework, and students that try to wade through homework with smartphones fall behind from the frustration of using a small screen for big-screen applications.

Affordability is the main barrier to broadband in many households. In downtown Buffalo, there are three broadband options. The most affordable package from Charter, the incumbent cable company is $64.99. Verizon offers a slow low-price DSL option at $29.99, but this connection is too slow to connect to the school network to do homework. There is also an ISP, BarrierFree, that offers $100 broadband for businesses.

The city is also exploring free citywide WiFi that would bring broadband to everybody, not just to students. There is no easy answer to the homework gap, but perhaps Buffalo’s start is a model that can be explored by others. Recently the Government Accounting Office recommended that the FCC study the idea of using Schools and Libraries funds from the Universal Service Funds to reach students at home. If that fund can help pay for this kind of application, perhaps we can solve the homework gap neighborhood by neighborhood.

How Should We Fund Universal Service?

USACThe Universal Service Fund today is funded primarily from telephony revenues. That made a lot of sense historically because the fund was used to support programs that were mostly telephony related. Consider the following uses of USF for 2013:

High Cost Fund                      $4.17 B

Lifeline                                    $1.80 B

Rural Healthcare                    $0.16 B

Schools and Libraries            $2.20 B

Total                                         $8.33 B

The High Cost Fund and Lifeline Funds have always been used almost entirely to support telephony. And there has also always been a telephony component of the Schools and Libraries Fund even though in recent years it has been targeted more for data. With the Connect America Fund ruling of a few years ago the FCC is about to embark on a major shift in the way that USF funds are used. The High Cost Fund support, which is about half of the disbursement will be directed over time to support broadband for places that are either unserved or underserved by broadband today. This fund historically went to support rural telephony but now will support rural broadband.

Further, the Schools and Libraries program was recently redirected to use more of it’s funding to support bringing fast internet connection to schools. The goal is to bring very high-speed Internet to 99% of schools within the next five years.

Since a large portion of the USF is now being redirected towards broadband, it raises the natural question if broadband customers in the country should pay to support this fund. Years ago the FCC’s logic was that urban telephone users ought to chip in to support rural telephone users and one must ask if that same logic now makes sense for data. Today the USF is funded through surcharges on landline phones, cellular phones and special access.

The fee on landline phones has grown to as much as 16%. The USF levy on cell phones is currently around 5.8%. The surcharge on special access is also as much as 16% and this is the fee that most makes me ask the question if we are funding this correctly. These circuits are traditional TDM-based telephony and include such things as T1s, DS3s and OC48s that are sold to large customers. Consider a DS3. This is normally used to provide dedicated transport and it is equal to about 45 Mbps of dedicated bandwidth. But if a customer instead purchases a dedicated 50 Mbps Ethernet product they avoid the USF surcharge. It doesn’t make sense that two nearly identical products are treated so differently. The main reason for this difference is that the special access circuit is considered as an Interstate telephony service by the FCC while the Ethernet service is considered as an information service. Even if both are used for the identical purpose.

When DSL and cable modems were new there was a big push by the telcos and the cable companies to keep taxes away from these products. The argument made then was that the FCC should not do anything that might quash the fledgling data industry. The cry at the time was. “Do not tax the Internet”. So in response to the taxation and other issues the FCC declared that Internet connections are information services and are not telco services. This is the same classification that is causing all of the furor in the net neutrality discussion.

There have been various unsuccessful bills introduced into congress since 2006 to change the way that USF is funded. Part of this is due to the intense lobbying from the industry, but a lot of it has to do with this very sticky classification of Internet service. Congress recently asked for input to this question and got the same responses it’s gotten for a decade. Companies that sell Internet connections don’t want Internet access to be taxed and just about everybody else does.

But it makes no sense to charge as much as a 16% surcharge on landline telephones, which continue to slowly die as a product line. And it makes even less sense to penalize a company that buys a high-speed connection from a special access tariff rather than buying an alternate Ethernet product. And it makes no sense to tax the voice portion of cellphones but not the data portion. It’s time to assess the USF fee on everything telco related. In doing so the surcharge rate would be reasonably low on all products. It’s gotten out of hand now that some of the USF surcharges have grown as high as 16%.

But changing the USF formula then gets wrapped up into the whole issue of whether the FCC can regulate the Internet, because levying a surcharge in Internet product will be seen as a form of regulation. All I know is, if there is going to continue to be a Universal Service Fund that it ought to be funded as broadly as possible so as to not discriminate against some telecom products but not others. Otherwise, as landline voice continues to wane as a product the USF allocation will be shifted largely to cellphone voice. There has to be a more sensible solution.


Funding Faster Internet in Schools

Indianola_High_SchoolThe FCC announced this week that they will be providing an additional $750 million in the E-Rate program to promote high speed broadband to schools. This was mentioned in President Obama’s State of the Union address. And this is a follow-up to the announcement last year that the administration wants all schools to have access to 100 Mbps by 2015 and access to a gigabit by the end of the decade.

I want clarify that this does not increase the size of the Schools and Library Fund that is part of the Universal Service Fund. That fund is still at $2.4 billion per year and will stay at that level of funding. So this announcement, while sounding like a big increase, is really a reallocation of the existing fund.

More of the fund will help to pay for fast internet connections, but that means other things will no longer be funded. Many who are getting reimbursed from this fund today for older technologies are going to see their payments decrease or cease. Today this fund pays for a lot of old technologies, and so funding for things like voice lines, dial-up connections for faxes, paging services, and email programs will be eliminated or severely curtailed. For every school who gets more funding there will be another that gets less and this is a zero sum game.

For those who don’t follow this program, let me give you a short primer in how it work. Schools receive funding based upon the percentage of their students who are eligible for the school lunch program. Schools with the highest percentages of school lunches will get some or all of their communications costs for the schools covered by the fund. The lower the percentage of school lunch students, the smaller the amount that the fund will pay, as a percentage of the bill. The funds are awarded from neediest downward until all of the funds for a year are allocated.

The funds pay for a variety of different costs, and one assumes that the menu of things that can be compensated from the plan is going to change with this announcement. But today the fund will not only cover some monthly recurring costs, such as for an Internet connection, but it will pay for one-time costs like wiring a school for Internet.

Every school who gets funding must have an ISP partner who provides the services. Let’s use an example of a school that gets a 60% reimbursement to show how this works. The ISP will sell services to the school at competitive rates. In most places the ISPs are picked using state purchasing laws requiring the low cost bidder to win the job. The school will pay the ISP its unfunded percentage of the bill, in this case 40%. The ISP must be registered with the USF fund to get paid, and they would bill the fund for the remaining 60%. This means that the ISP gets full payment, but that the school in this example saved 60% on their bill.

One has to imagine that the fund is now going to have some sort of incentive to reimburse schools for connections that are at least 100 Mbps download. Connections that are slower than that are going to have to somehow be given a lower rating for the fund to help foster the goal of faster Internet.

I worry a bit in that revising the rules to promote fast Internet might inadvertently disadvantage those schools with the slowest Internet. There are schools that happen to be located in a broadband desert who have no access to fiber, and those schools might lose compensation that helps them to pay for the fastest speed they can get.

Many ISPs already take part in this program. But if you are in a position to sell a high-speed connection to a school or library you should get registered with the USF fund. It’s fairly easy to do and CCG can help you with the paperwork. This program is run well and ISPs report no problems getting reimbursed. There is no reason for ISPs and school partners who qualify to not get help from this fund.