Tag Archives: Virginia

Showdown at the BEAD Corral

The telecommunications industry has not had many instances when a momentous decision could drastically change the industry. The only big one I remember was when Judge Harold Greene issued the landmark ruling in 1982 that resulted in the divestiture of AT&T into multiple local Baby Bells and the remaining AT&T long-distance company. While a small number of insiders knew what was coming, the announcement of the divestiture rocked the industry and drastically changed it going forward.

Rural broadband is facing a similar dramatic moment when the NTIA decides what its going to do with the BEAD proposals that States have presented to it. State Broadband Offices (SBOs) have been submitting final BEAD plans that are still mostly fiber. This seems to fly in the face of NTIA, which changed the rules to give a lot of funding to alternative technologies, meaning satellite and fixed wireless.

A little history is needed to explain why I categorize this as a showdown. In the original NOFO for BEAD, the NTIA clearly stated that its preference was for as much of the BEAD money as possible to go to build fiber. The fiber preference came from wanting to use this once-in-a-generation grant to create long-term broadband networks in rural areas. Over time, the NTIA eased its stance a little and came out with rules to describe how satellite broadband can be used to serve remote locations. But the preference was still to use BEAD for fiber.

The new administration upended the BEAD program. In June, it issued new BEAD guidelines that made it much harder to award money for fiber. The NTIA rules essentially turned the BEAD review process into a one-round reverse auction and said that BEAD funding should go to the ISP that asks for the least amount of grant per location. The only caveat was that the NTIA could consider a second applicant that was within 15% of the cost of the lowest bidder. When the new rules were published, the industry collectively saw it as a fiber killer.

But the new rules had a small loophole. SBOs could designate some BEAD applications as ‘priority broadband projects’, as long as they met three criteria. A proposed technology had to meet the speed, latency, reliability, and consistency criteria established by the BEAD legislation. A proposed technology had to be able to scale over time to meet foreseeable future broadband demand. Finally, a proposed technology had to support the deployment of 5G and other successor technologies.

SBOs have seemingly aggressively used this loophole to disqualify alternative technologies and still award BEAD to fiber projects. It’s not hard to understand how they could do this. For example, there are many articles about how satellite doesn’t always meet the 100/20 Mbps test today, and it’s not hard to set a future speed threshold that satellite can’t guarantee. The third requirement of supporting 5G and future technology deployments can be interpreted to mean deploying fiber backbone networks in rural areas that can support future cell towers. It’s clear that satellite doesn’t meet this requirement, and a fixed access network that only uses microwave backhaul also fails to meet it.

West Virginia issued a Final BEAD Plan for public comment that awards 99% of the state’s BEAD money to fiber to reach 94% of the eligible passings. Virginia proposes to bring fiber to 81% of its eligible passings. Part of the BEAD review process for BEAD is to elicit public comments on the proposed use of the funding. Starlink filed comments in Virginia and Louisiana, aimed at the NTIA, that the States are not adhering to the revised NTIA guidelines that say that funding should go to the lowest bidder.

Even with States still proposing fiber, the new NTIA guidelines have had an impact. Louisiana had completed its BEAD process before the new guidelines. The State originally proposed to bring fiber to 95% of the locations in the state. The NTIA rules required Louisiana to restart the grant process, and in the revised process, the State lowered the allocation to BEAD to 80% of the locations. During the process, fiber ISPs sharpened their pencils and lowered the requested amount of funding.

NTIA now faces a big choice. SBOs (and actually the Governors they work for) have clearly said that they want BEAD money to build fiber. All three of these early states have Republican governors, and as I have always said, broadband is not a partisan issue at the state and local levels.

This is definitely a showdown moment. NTIA can concede to the requests from these States. In doing so, it will have a hard time not doing the same thing for other states, red or blue. Or the NTIA can play the bad cop and tell States to kill most of the proposed grants for fiber.  But perhaps whatever the NTIA decides isn’t the final word since the process now hangs under the threat of lawsuits – perhaps from Starlink, or perhaps from States who lose grant awards aimed at fiber.

Grant Bottlenecks

Cardinal News, a newspaper for Southwest and southside Virginia recently published an article that says that as many as two-thirds of the State broadband grants awarded in 2022 have fallen behind schedule.

The reasons for the delays in the Virginia grant projects are familiar to every ISP who has built a new network. The primary issue in Virginia has been the make-ready process for poles. This is work that must be done to make poles ready to accept a new fiber. Some poles require no make-ready, some require a rearrangement of existing wires, and many unfortunately require replacing an existing pole.

Some of the projects were delayed due to the paperwork needed before the physical make-ready process could begin. This includes getting pole attachment agreements in place and having engineers decide on the make-ready work needed for each pole. Once that process is complete, there are rules that dictate the make-ready timeline.

Virginia has elected to remain under FCC jurisdiction and rules for pole issues, but the State passed a law in July specifically intended to speed up make-ready work. But frankly, any rules or laws about pole access are nearly meaningless in places like the Appalachian regions of southern Virginia, where poles run through heavily wooded areas. It takes longer to tackle this work in rural, hilly areas on windy roads. It’s not going to help that some of the projects in southwestern Virginia now had to deal with damages from Hurricane Helene.

The reason I wrote the bog was not to highlight the Virginia issues, because it sounds like the State is on top of the issues and that the projects will likely get completed before hitting the end of 2026 when the federal funding for these projects expires. Virginia is also ahead of most other states in that the State set aside additional funding to help keep broadband projects on track. The reason for the blog was to highlight the likely delays that are going to happen when BEAD grants hit the ground.

It was originally thought that States would be on significantly different schedules for BEAD. However, the NTIA implemented a 365-day shot clock that requires States to make grant awards within a year after getting approval of a State’s Volume II BEAD rules. This means that within a six to nine month window, all BEAD grant projects are going to get rolling at the same time.

I’ve always anticipated that there will be bottlenecks created by the large volume of BEAD grants, but having all of the grants launched within a narrow time window will aggrevate the issue. Consider a big electric company like Duke Energy that operates in multiple states in the Southeast. The company is going to be asked to deal with a lot of BEAD projects at the same time. All of the regulatory rules in the world are not going to help the inevitable bottleneck that a large utility will face in 2025 when multiple ISPs and projects try to get a response from the legal teams and engineers at a utility at the same time. Most States are going to throw extra money at trying to overcome the make-ready bottlenecks as Virginia has done.

Make-ready is only one of the issues that is going to cause delays. I’ve written before about the issues involved in permitting, acquiring rights-of-way and easements, and locating underground utilities that can all bog down fiber projects before they even get started.

Most State Broadband Offices have already indicated that they are going to pressure ISPs to sign contracts to complete projects in two, three, or four years, depending on the size of a project. ISPs will likely have to agree to these timelines, even when they know that delays may make it impossible to meet such a promise.

The good news is there is a longer time frame until BEAD dollars expire, but I fully expect in a few years to see more articles like the one in the Cardinal News wondering why it’s taking so long to build the promised broadband networks.

Virginia’s Proposed BEAD Grant Rules

Virginia just published its draft BEAD proposal that defines how the state plans to make BEAD grant awards. Virginia will be awarding almost $1.5 billion in BEAD grants using these rules. The plan is still a draft. Next is a public comment period on the proposed rules, and the final draft of the plan will have to be approved by the NTIA. But even as a draft, this is my first real peek into how the BEAD grants might happen. Note that each state is a distinct plan, and some of the features in the Virginia rules might not be in other state plans. This summary is from my first quick reading of the Virginia plan, so forgive me if I missed important nuances.

Following are some of the most interesting things about the Virginia plan:

  • Virginia plans to ‘deconflict’ multiple grants that ask to serve the same geographic area by requiring all grant applicants to file a pre-application that defines the areas they plan to serve. This will allow the state to determine distinct application areas before the full grants are due. The plan discusses a secondary process to find ISPs to serve areas where nobody has asked for grant funding.
  • Virginia plans to post everything filed by ISPs online. One of the biggest complaints about many past grants is that the process was done behind closed doors. It looks like Virginia is going to make everything available to the public. It will be interesting to see if they will allow for things like financial information to be kept confidential.
  • Virginia has a goal of awarding all of its BEAD money in 2024. I read this to mean that there will be only two grant steps – every applicant will file a pre-application with maps, and once the State has digested the maps, ISPs file the full application – this means one big grant round for everybody at the same time.
  • I think folks are going to be intrigued by the grant scoring. It’s different than any other grant I can recall. Virginia has two slightly different scoring plans, and here is the first one:
    • 45% for Program Outlay. This is essentially a one-round reverse auction. If more than one ISP asks to serve the same area, the ISP with the lowest cost per passing will get the full 45 points, and other applicants will get fewer points based on how much more they are requesting from the grant program. This has to be a concern for anybody who is thinking of asking for a full 75% grant.
    • 20% for Affordability. This is going to be based on the proposed price for a symmetrical gigabit of service. To get points, the price must be at or below $100. Prices are compared between applicants asking to serve the same area.
    • 10% for Fair Labor Practices. This will be based on the history and the proposed commitment to compliance with Federal labor and employment laws.
    • 5% for Speed of Deployment. Timelines for construction will be compared after accounting for delays such as complying with things like environmental studies.
    • 10% for a Local Consulting Meeting. An ISP must meet with local or tribal governments to explain its qualifications and plans for deploying BEAD.
    • 10% for Local Letter of Support. This requirement gives a lot of power to local governments. A government that only supports one ISP gives that applicant a big boost in grant scoring
  • All of the other BEAD requirements are not part of the scoring. Instead, it seems there will be a checklist of mandatory requirements. This includes a long list of BEAD requirements like environmental studies, extremely high-cost area plans, the technology being used, the letter of credit, the history and capability of the ISP, binding commitments from labor, credentialed workforce, affirmative action for vendors, climate plan, middle-class rate plan, cybersecurity, supply chain management, etc.

Since it’s hard to imagine an applicant not holding the local meetings, the rest of the scoring is a 90-point scale. Half of the grant scoring comes from the willingness to take the lowest level of grant funding. The next important is affordable rates. The local letter of recommendation takes on a high importance.

Since everything is going to be published and transparent, Virginia’s scoring plan seems to eliminate almost all discretion from the state grant office in choosing winners. I read this scoring to say that whoever gets the most points in a given grant area will win the grant.

It’s impossible to tell with these high-level rules how scoring will account for differences between ISPs. For example, how will these rules account for technologies that deliver different speeds? I assume before grants are due that the scoring will be explained in more detail.

These rules also open other big questions. Will there be a chance for a local community to prove that the FCC maps are still wrong, or will grant applicants be limited to asking for grants for areas shown as unserved and underserved on the latest FCC map?

In closing, note again that these are the proposed rules for Virginia – but no other state. Other states might use a totally different philosophy for scoring. I know there are states that are considering multiple rounds of grant applications. These rules are also a draft and could change in Virginia before they are final. But this is one view of how the BEAD grants will work – and it’s totally different than what I expected.

Serving Hard-of-Hearing and Deaf Customers

English: A Deaf, Hard-Of-Hearing or Speech-Imp...

English: A Deaf, Hard-Of-Hearing or Speech-Impaired person at his workplace, communicating with a hearing person via a Video Relay Service video interpreter (a V.I., a Sign Language interpreter, shown on-screen), using a videophone. The hearing person with whom the video interpreter is also communicating can not be seen. The videophone camera rests above his computer monitor. Note as well the additional videophones on his desk. (Photo credit: Wikipedia)

The 21st Century Communications Video Accessibility Act of 2010 expanded the obligations of carriers to increase the access of persons with disabilities to modern communications. The CVAA makes sure that accessibility laws enacted in the 1980s and 1990s are brought up to date with 21st century technologies, including new digital, broadband, and mobile innovations. This expanded requirement to provide voice communications to include VoIP, text messaging, e-mail, instant messaging, and video communications.

This law covers a number of different types of disabilities, but today I will just discuss what this law means for a carrier when dealing with hard-of-hearing or deaf customers. In order to understand your obligations you must first understand how hard-of-hearing and deaf people communicate with others.

Today, the preference for communicating between two hard-of-hearing or deaf people, or with somebody who knows American Sign Language (ASL) is to use Skype, Apple Facetime, or one of the many other web-based services that allow the called parties to see each other. But when hard-of-hearing or deaf customers want to communicate with anybody else they have to use one of the more traditional methods.

There are two basic systems in place for placing calls between hearing and non-hearing people.  Telephone Relay Services (TRS) was a system started in the 80’s that created a call center of live operators who act as intermediaries for calls between a deaf caller and any other person. In this system the deaf caller uses a device known as a TDD that allows them to type to the operator, who then reads what is typed to the called party. In the other direction the operator types whatever the non-deaf party says and sends it to the TDD device.

Since 2000 the states have all created Video Relay Services (VRS) where the hard-of-hearing or deaf caller uses a video phone or camera system so that they can be seen by the operator. This allows the deaf caller and the operator to both us sign language to communicate, which greatly speeds up the process.

Video Relay Service has mostly supplanted Telephone Relay Service. For example, in Virginia (and each state runs their own centers) VRS centers carried over 65% of the hard-of-hearing and deaf minutes in 2012. One would suppose that in a few years that TRS centers will become obsolete.

So what are the obligations of a carrier in providing calling to hard-of-hearing and deaf customers?  I believe your obligations are as follows:

  • You must be ready to inform a hard-of-hearing customer about their options on how to connect to TRS or VRS centers. The connection methods are different in each state.
  • To the extent that customers cannot afford the equipment needed to make these connections you must provide it. However, there is $10 million annual funding as part of the new TRS fund (the USF fund) which may reimburse you for any such costs.
  • You are required to keep records of inquiries and complaints by hard-of-hearing or deaf customers and must maintain these records for five years.
  • Any connection you make to advanced 911 must be made available to hard-of-hearing and deaf callers.
  • If you provide closed caption programming on a cable system, those same obligations must be met if you stream the same content on the web.
  • Any emergency alerts on your cable system must be broadcast both in writing and orally to accommodate hard-of-hearing and blind customers.
  • If you offer Video on Demand or VCR recording of programming, they both must capture the closed captioning for later playback.

I will cover requirements for blind customers in another blog. Those requirements are somewhat more complicated. Contact us if you want more information or if you want to understand how to get funding for hard-of-hearing equipment from the TRS Fund.