Tag Archives: smart grid

Digital Discrimination

The FCC recently opened a docket, at the prompting of federal legislation, that asks for examples of digital discrimination. The docket asks folks to share stories about how they have had a hard time obtaining or keeping broadband, specifically due to issues related to zip code, income level, ethnicity, race, religion, or national origin.

The big cable companies and telcos are all going to swear they don’t discriminate against anybody for any reason, and every argument they make will be pure bosh. Big corporations, in general, favor more affluent neighborhoods over poor ones. Neighborhoods that don’t have the best broadband networks are likely going to be the same neighborhoods that don’t have grocery stores, gas stations, retail stores, restaurants, banks, hotels, and a wide variety of other kinds of infrastructure investment from big corporations. The big cable companies and telcos are profit-driven and focused on stock prices, and they make many decisions based on the expected return to the bottom line – just like other large corporations.

There is clearly discrimination by ISPs by income level. It’s going to be a lot harder to prove discrimination by ethnicity, race, religion, or national origin, although it’s likely that some stories of this will surface in this docket. But discrimination based on income is everywhere we look. There are two primary types of broadband discrimination related to income – infrastructure discrimination and price discrimination.

Infrastructure discrimination for broadband has been happening for a long time. It doesn’t take a hard look to see that telecom networks in low-income neighborhoods are not as good as those in more affluent neighborhoods. Any telecom technician or engineer can point out a dozen of differences in the quality of the infrastructure between neighborhoods.

The first conclusive evidence of this came years ago from a study that overlaid upgrades for AT&T DSL over income levels, block by block in Dallas. The study clearly showed that neighborhoods with higher incomes got the upgrades to faster DSL during the early 2000s. The differences were stark, with some neighborhoods stuck with first-generation DSL that delivered 1-2 Mbps broadband while more affluent neighborhoods had been upgraded to 20 Mbps DSL or faster.

It’s not hard to put ourselves into the mind of the local AT&T managers in Dallas who made these decisions. The local manager would have been given an annual DSL upgrade budget and would have decided where to spend it. Since there wasn’t enough budget to upgrade everywhere, the local manager would have made the upgrades in neighborhoods where faster cable company competition was taking the most DSL customers – likely the more affluent neighborhoods that could afford the more expensive cable broadband. There were probably fewer customers fleeing the more affordable DSL option in poor neighborhoods where the price was a bigger factor for consumers than broadband speeds.

These same kinds of economic decisions have been played out over and over, year after year by the big ISPs until affluent neighborhoods grew to have better broadband infrastructure than poorer neighborhoods. Consider a few of the many examples of this:

  • I’ve always noticed that there are more underground utilities in newer and more affluent neighborhoods than in older and poorer ones. This puts broadband wires safely underground and out of reach from storm damage – which over time makes a big difference in the quality of the broadband being delivered. Interestingly, the decision of where to force utilities to be underground is done by local governments, and to some degree, cities have contributed to the difference in infrastructure between affluent and low-income neighborhoods.
  • Like many people in the industry, when I go to a new place, I automatically look up at the conditions of poles. While every place is different, there is clearly a trend to have taller and less cluttered poles in more affluent parts of a city. This might be because competition brought more wires to a neighborhood, which meant more make-ready work done to upgrade poles. But I’ve spotted many cases where poles in older and poorer neighborhoods are the worst in a community.
  • It’s easy to find many places where the Dallas DSL story is being replayed with fiber deployment. ISPs of all sizes cherry-pick the neighborhoods that they perceive to have the best earnings potential when they bring fiber to a new market.

We are on the verge of having AI software that can analyze data in new ways. I believe that we’ll find that broadband discrimination against low-income neighborhoods runs a lot deeper than the way we’ve been thinking about it. My guess is that if we map all of the infrastructure related to broadband we’d see firm evidence of the infrastructure differences between poor and more affluent neighborhoods.

I am sure that if we could gather the facts related to the age of the wires, poles, and other infrastructure, we’d find the infrastructure in low-income neighborhoods is significantly older than in other neighborhoods. Upgrades to broadband networks are usually not done in a rip-and-replace fashion but are done by dozens of small repairs and upgrades over time. I also suspect that if you could plot all of the small upgrades done over time to improve networks, you’d find more of these small upgrades, such as replacing cable company power taps and amplifiers, to have been done in more affluent neighborhoods.

We tend to think of broadband infrastructure as the network of wires that brings fast Internet to homes, but modern broadband has grown to be much more than that, and there is a lot of broadband infrastructure that is not aimed at home broadband. Broadband infrastructure has also come to mean small cell sites, smart grid infrastructure, and smart city infrastructure. I believe that if we could map everything related to these broadband investments we’d see more examples of discrimination.

Consider small cell sites. Cellular companies have been building fiber to install small cell sites to beef up cellular networks. I’ve never seen maps of small cell installations, but I would wager that if we mapped all of the new fiber and small cell sites we’d find a bias against low-income neighborhoods.

I hope one day to see an AI-generated map that overlays all of these various technologies against household incomes. My gut tells me that we’d find that low-income neighborhoods will come up short across the board. Low-income neighborhoods will have older wires and older poles. Low-income neighborhoods will have fewer small cell sites. Low-income neighborhoods won’t be the first to get upgraded smart grid technologies. Low-income neighborhoods won’t get the same share of smart city technologies, possibly due to the lack of other infrastructure.

This is the subtle discrimination that the FCC isn’t going to find in their docket because nobody has the proof. I could be wrong, and perhaps I’m just presupposing that low-income neighborhoods get less of every new technology. I hope some smart data guys can find the data to map these various technologies because my gut tells me that I’m right.

Price discrimination has been around for a long time, but I think there is evidence that it’s intensified in recent years. I first noticed price discrimination in the early price wars between the big cable companies and Verizon FiOS. This was the first widespread example of ISPs going head-to-head with decent broadband products where the big differentiator was the price.

I think the first time I heard the term ‘win-back program’ was related to cable companies working hard not to lose customers to Verizon. There are stories in the early days of heavy competition of Comcast keeping customers on the phone for a long time when a customer tried to disconnect service. The cable company would throw all sorts of price incentives to stop customers from leaving to go to Verizon. Over time, the win-back programs grew to be less aggressive, but they are still with us today in markets where cable companies face stiff competition.

I think price competition has gotten a lot more subtle, as witnessed by a recent study in Los Angeles that showed that Charter offers drastically different online prices for different neighborhoods. I’ve been expecting to see this kind of pricing for several years. This is a natural consequence of all of the work that ISPs have done to build profiles of people and neighborhoods. Consumers have always been leery about data gathered about them, and the Charter marketing practices by neighborhood are the natural endgame of having granular data about the residents of LA.

From a purely commercial viewpoint, what Charter is doing makes sense. Companies of all sorts use pricing to reward good existing customers and to lure new customers. Software companies give us a lower price for paying for a year upfront rather than paying monthly. Fast food restaurants, grocery stores, and a wide range of businesses give us rewards for being regular customers.

It’s going to take a whistleblower to disclose what Charter is really doing. But the chances are it has a sophisticated software system that gives a rating for individual customers and neighborhoods based on the likelihood of customers buying broadband or churning to go to somebody else. This software is designed to offer a deeper discount in neighborhoods where price has proven to be an effective technique to keep customers – without offering lower prices everywhere.

I would imagine the smart numbers guy who devised this software had no idea that it would result in blatant discrimination – it’s software that lets Charter maximize revenue by fine-tuning the price according to a computer prediction of what a given customer or neighborhood is willing to pay. There has been a lot of speculation about how ISPs and others would integrate the mounds of our personal data into their businesses, and it looks like it has resulted in finely-tuned price discrimination by city block.

Is There a Fix for Digital Discrimination?

The big news in the broadband industry is that we are in the process of throwing billions of dollars to solve the ultimate case of economic discrimination – the gap between urban and rural broadband infrastructure. The big telcos completely walked away from rural areas as soon as they were deregulated and could do so. The big cable companies never made investments in rural areas due to the higher costs. The difference between urban and rural broadband networks is so stark that we’ve decided to cure decades of economic discrimination by throwing billions of dollars to close the gap.

But nobody has been seriously looking at the more subtle manifestation of the same issue in cities. The FCC is only looking at digital discrimination because it was required by the Infrastructure Act. Does anybody expect that anything will come out of the stories of discrimination? ISPs are going to say that they don’t discriminate. If pinned down, they will say that what looks like discrimination is only the consequence of them making defensible economic decisions and that there was no intention to discriminate.

Most of the discrimination we see in broadband is due to the lack of regulation of ISPs. They are free to chase earnings as their top priority. ISPs have no regulatory mandate to treat everybody the same. The regulators in the country chose to deregulate broadband, and the digital discrimination we see in the market is the direct consequence of that choice. When AT&T was a giant regulated monopoly we required it to charge everybody the same prices and take profits from affluent customers to support infrastructure and prices in low-income neighborhoods and rural places. Regulation wasn’t perfect, but we didn’t have the current gigantic infrastructure and price gaps.

If people decide to respond to this FCC docket, we’ll see more evidence of discrimination based on income. We might even get some smoking gun evidence that some of the discrimination comes from corporate bias based on race and other factors. But discrimination based on income levels is so baked into the ways that corporations act that I can’t imagine that anybody thinks this docket is going to uncover anything we don’t already know.

I can’t imagine that this investigation is going to change anything. The FCC is not going to make big ISPs spend billions to clean up broadband networks in low-income neighborhoods. While Congress is throwing billions at trying to close the rural broadband gap, I think we all understand that anywhere that the big corporations take the rural grant funding that the infrastructure is not going to be maintained properly and that in twenty years we’ll be having this same conversation all over again. We know what is needed to fix this – which is regulation that forces ISPs to do the right thing. But I doubt we’ll ever have the political or regulatory will to force the big ISPs to act responsibly.

Counting Broadband Locations

All of the discussion of the FCC maps lately made me start thinking about broadband connections. I realized that many of my clients are providing a lot of broadband connections that are not being considered by the FCC maps. That led me to think that the old definition of a broadband passing is quickly growing obsolete and that the FCC mapping effort is missing the way that America really uses broadband today.

Let me provide some real-life examples of broadband connections provided by my clients that are not being considered in the FCC mapping:

  • Broadband connections to farm irrigation systems.
  • Broadband to oil wells and mining locations.
  • Broadband to wind turbines and solar farms.
  • Fiber connections to small cell sites.
  • Broadband electric substations. I have several electric company clients that are in the process of extending broadband to a huge number of additional field assets like smart transformers and reclosers.
  • Broadband to water pumps and other assets that control water and sewer systems.
  • Broadband to grain elevators, corn dryers, and other locations associated with processing or storing crops.
  • I’m working with several clients who are extending broadband for smart-city applications like smart streetlights, smart parking, and smart traffic lights.
  • Broadband to smart billboards and smart road signs.
  • Broadband for train yards and train switching hubs.
  • There are many other examples, and this was just a quick list that came to mind.

The various locations described above have one thing in common. Most are locations that don’t have a 911 street address. As such, these locations are not being considered when trying to determine the national need for broadband.

A lot of these locations are rural in nature – places like grain elevators, mines, oil wells, irrigation systems, wind turbines, and others. In rural areas, these locations are a key part of the economy, and in many places are unserved or underserved.

We are putting a huge amount of national energy into counting the number of homes and businesses that have or don’t have broadband. In doing so, we have deliberately limited the definition of a business to a place with a brick-and-mortar building and a 911 address. But the locations above are often some of the most important parts of the local economy.

I’ve read predictions that say in a few decades there will be far more broadband connections to devices than to people, and that rings true to me. I look around at the multiple devices in my home that use WiFi, and it’s not hard to envision that over time we will connect more and more locations and devices to broadband.

After a decade of talking about the inadequate FCC broadband maps, we finally decided to throw money at the issue and devise new maps. But in the decade it took to move forward, we’ve developed multiple non-traditional uses for broadband, a trend that is likely to expand. If we are really trying to define our national need for broadband, we need to somehow make sure that the locations that drive the economy are connected to broadband. And the only way to do that is to count these locations and put them on the broadband map, so somebody tries to serve them. The current maps are doing a disservice by ignoring the huge number of these non-traditional broadband connections.

Electric Grants and Broadband

The U.S. Department of Energy finally announced the first round of grant applications for funding that was created by the Infrastructure Investment and Jobs Act. While these grants are aimed at improving the electric grid, any projects built with these grants could also build some fiber. The grants will total $13 billion. It’s worth noting that 30% of the funding will go to small utilities that sell no more than 4 million MWh of electricity per year.

There will be $10.5 billion in grants from the Grid Resilience and Innovation Partnership, or GRIP grants. Within the GRIP grant program are three separate programs:

  • $2.5 billion will go to grid resiliency grants to provide infrastructure to improve the survivability of the electric grid from weather-related and other events.
  • There are $3 billion for smart grid grants that can be used for projects that add intelligence to the electric grid.
  • Finally, $5 billion in grants is aimed at grid innovation. This grant is looking for creative ideas for improving the electric grid.

The other grant program is the Transmission Facilitation Program, which will provide $2.5 billion to improve the long-haul electric grid between communities.

The first and immediate round of funding for the GRIP program will be for $3.9 billion, with additional rounds of funding being announced next year. Unlike broadband grants, the first-round GRIP grants are on a rapid timeline. It took the DOE over a year to announce the specifics of the grants, but there are almost immediate deadlines coming. The White House has said that it wants to see more of the infrastructure spending being used, and this timeline will see grant awards made in 2023.

  • Anybody interested in applying for the smart grid or resiliency grants must submit a concept paper by December 16 that explains the proposed project. Concept papers for the innovation grants are due January 13. Concept papers for the transmission grants are due February 1. The DOE will have to accept a concept paper in order for an applicant to move on to the next phase of the grant application.
  • Full grant applications for the smart grid, grid resilience, and innovation programs will be due in March, April and May, respectively.

All of these grants could propose building fiber as part of the solution. Fiber is a way to get more brains into the electric grid and as a tool for making networks more resilient. There is no reason why any constructed fiber from these grants couldn’t serve the dual role of supporting a broadband network.

The short timelines for the first round of funding are going to make it a challenge for anybody that doesn’t already have a grant proposal on the drawing board. It seems unlikely that anybody who hasn’t already done so could create a partnership with an electric company and meet the concept paper deadlines. But electric companies can do this quickly, and I would expect that municipal electric companies and electric cooperatives will propose concept papers that will both improve the electric grid and also improve fiber infrastructure.

These grant announcements are a wake-up call for communities that have not already had discussions about how to improve the electric grid. There is still time to create partnerships for future grant cycles, but the time to start these discussions is now.

According to the DOE, these grants are only the down payment for the funding needed to improve electric grids. Jennifer Granholm, the Secretary of Energy, says the country might need to triple transmission capacity by 2050. Unfortunately, there were insufficient votes in the Senate to approve a large amount of proposed additional funding for the electric grid.

Using Electric Grants for Fiber

The Infrastructure Investment and Jobs Act includes grant funding to rebuild electric grids. A smart community might be able to leverage these grants to also build some needed fiber. The following is a description of the various forms of funding for electric networks included in the infrastructure legislation.

The infrastructure legislation includes more than $15 billion in grants and another $12 billion in low-cost loans aimed at the electric grid. Just like with the broadband grant funding, this money is intended to be spent between 2022 and 2026. The federal grants will be administered by the Department of Energy. The following are some of the specific pots of funding coming available:

  • There is a $5 billion grant program aimed at grid hardening to protect the grid against extreme weather events.
  • There is a new $3 billion Smart Grid Investing Matching Grant program that is aimed at deploying technologies that enhance the flexibility of the electric grid.
  • There is $2.5 billion of funding split between a Transmission Facilities Fund and a Transmission Facilities Program, aimed at beefing up the major electric transmission routes (these are the electric grid version of middle-mile).
  • There is $6 billion for grid reliability and resilience research and development. At least $1 billion of this must be spent on rural electric grid research. The purpose of this funding is to explore innovative programs that improve transmission, distribution, and storage projects.
  • $500 million is being given to the State Energy Program that allows states to better plan and coordinate transmission and distribution.
  • Allocates $350 million to implement advanced cybersecurity technologies for electric utilities.
  • Finally, the legislation kicks off a federal process of better defining the interstate electric grid networks through better a definition of national interest electric corridors.

From everything I know about the condition of some parts of the electric grid, this doesn’t seem like enough funding. It’s certainly a lot less than what is being expended for broadband. However, there are many more billions of additional funding included in the Build Back Better Act that has passed in the House, but not yet the Senate. That bill would allocate many more billions over ten years to improve electric grids. The BBB Act also includes $24 billion in investment tax credits aimed at building at least 20 GW of high-voltage transmission lines. The BBB Act also includes a number of clean energy initiatives.

The new grant funding can be leveraged to extend fiber for a clever community.

  • The $6 billion for grid reliability research is likely going to be used for pilot projects to try innovative new technologies like cutting-edge smart grid. Part of implementing these solutions means building fiber, and there is no reason that grant-funded fiber can’t also be used for other purposes like broadband. Many know about the awesome municipal fiber network in Chattanooga, Tennessee – but many might not know the network got a kick-start from a smart grid pilot project funded by the ARRA Stimulus grants in 2009.
  • The $5 billion for hardening the grid against extreme weather is likely to be used to rebuild vulnerable pole lines or to move critical electric routes underground. Again, any electric company tackling this ought to put in fiber at the same time.
  • The same is true for the transmission fund grants – upgrading or extending transmission lines is another good time to build fiber simultaneously.

I’ve been saying for a few months that communities need to collaborate with many stakeholders to find the best broadband solution. This funding allows bringing local power utilities into the mix to fix broadband. Municipal electrics and rural electric coops are well poised to coordinate the use of this funding with other broadband efforts – and nothing will stop commercial power companies from joining in local efforts.

Smart Cities and Fiber

I’ve noticed that a lot more cities are talking about becoming ‘smart cities.’ Only a few years ago this was something that only NFL cities talked about, but now I see it as a goal for much smaller cities. ‘Smart city’ is an interesting concept. If you listen to the various vendors pushing the idea this means investing in massive amounts of sensors and the computing power to make sense of them. But there are also a lot of lower-tech ideas that fit under this same umbrella.

I’ve had discussion with folks at cities who think that they need fiber in order to have a smart city. Nobody is a bigger proponent of fiber than I am, but fiber is not necessarily needed for many of the concepts that are part of this high-tech vision.

Having smarter traffic flow is generally at the top of everybody’s list. It’s common sense that having vehicles needlessly waiting for lights wastes fuel and wastes time. Smarter traffic lights in cities would improve the quality of life and the economy. A decade ago a lot of cities built fiber networks just to provide a real-time connection to each traffic signal. Those fiber networks allowed the city to change signal timing in reaction to emergencies and similar events, but the whole effort is largely still manual.

But with AI starting to become a realistic technology it looks like truly smart traffic lights are a possibility in the near future. A smart traffic system could change lights on the fly in response to real-life traffic to reduce the average time that vehicles wait for a green light. But the question that must be asked is if this really requires fiber? A decade ago it did. Fiber was needed just to provide the traffic cameras needed to allow somebody at traffic headquarters to eyeball the situation at a given intersection.

But we are now seeing a revolution in sensing devices. We are not too many years removed from the big push to do all heavy-computing in the cloud. A decade ago the vision was that a smart traffic light system would rely on cloud computing power. But faster computers have now reversed that trend and today it makes more sense to put smart computers at the edge of network. In the case of traffic lights, smart computers at the edge reduces the need for bandwidth. Sensors at an intersection no longer need to broadcast non-stop and only need to relay information back to the central core when there is some reason to do so.

For example, one of the uses of a smart traffic system is to identify problem intersections. Sensors can be programmed to record every instance when somebody runs a red light or even a late yellow light and this can alert authorities to problems long before a tragic accident. But these sensors only need to send data when there is an actionable event, and even that doesn’t require a gigantic burst of data.

The same goes for smart traffic control. The brains in the device at an intersection can decide to allow for a longer green for a turn lane if there are more cars than normal waiting to turn. That doesn’t need a big continuous bandwidth connection. The city will want to gather data from intersections to know what the devices are doing, but with smart edge devices a wireless connection provides adequate broadband and a lower cost solution for data gathering.

This same trend is happening with other kinds of sensors. Sensors that listen for gunshots, smart grid sensors used to monitor water and electric networks, and smart sensors used to provide smarter lighting all can be done wirelessly and do not need a fiber connection.

The real purpose behind the concept of a smart city is to provide better government service to constituents. Many of the best ideas out there don’t involve much bandwidth at all. For example, I recently watched a demo of a system in a mid-western city that allows citizens to see, in real time, the location on a map all of the snow plows and trash trucks operating in the city – much like is done when you can see a Lyft ride coming to pick you up. This will drastically cut down on calls during snowstorms since citizens can see a plow making its way towards their street. (And watching the plow inch towards you on a snowy day is good entertainment!)

Cities are undertaking all sorts of other initiatives to improve quality of life. I see cities working on computer systems that put all government forms and processes online, making it easier to get a permit or to report a problem to the city. Cities are reducing pollution by passing ordinances that promote roof-top gardens, that require that new high-rises that are energy self-sufficient and that promote safe bicycling.

There are still big corporations out pitching the expensive smart city vision. But there are now smaller boutique smart city vendors that working towards more affordable and reasonably-priced sensors to spread around a city.

Like anyone who lives in a city I would love to see my city implement smart city ideas that improve the quality of life. But as much as I am a fiber-proponent, I am finding it hard to make a case that a lot of urban fiber is needed to implement the best smart-city ideas.