Tag Archives: West 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.

Getting Access to Existing Fiber

Fiber CableFrontier, the incumbent in West Virginia that bought the property from Verizon, is fighting publicly with Citynet, the biggest competitive telco in the state, about whether they should have to share dark fiber.

Dark fiber is just what it sounds like – fiber that has not been lit with electronics. Most fibers that have been built have extra pairs that are not used. Every fiber provider needs some extra pairs for future use in case some of the existing lit pairs go bad or get damaged too badly to repair. And some other pairs are often reserved for future construction and expansion needs. But any pairs above some reasonable safety margin for future maintenance and growth are fiber pairs that are likely never going to be used.

The FCC has wrangled with dark fiber in the past. The Telecommunications Act of 1996 included language that required the largest telcos to lease dark fiber to competitors. The FCC implemented this a few years later and for a while other carriers were able to lease dark fiber between telephone exchanges. But the Bell companies attacked these rules continuously and got them so watered down that it became nearly impossible to put together a network this way. But it is still possible to lease dark fiber using those rules if somebody is determined enough to fight through a horrid ordering process from a phone company that is determined not to lease the dark fiber.

The stimulus grant rules also required that any long-haul fibers built with free federal money must provide for inexpensive access to competitors willing to build the last mile. I don’t know the specific facts of the Citynet dispute, but I would guess that the stimulus fiber is part of what they are fighting over.

The stimulus grants in West Virginia are about the oddest and most corrupt of all of the stimulus grants that were awarded. The stimulus grant went originally to the State of West Virginia to build a fiber line that would connect most counties with a fiber backbone. There were similar fiber programs in other states. But in West Virginia, halfway through construction, the network was just ‘given’ to Verizon, who was the phone company at the time. The grant was controversial thereafter. For instance, the project was reduced from 915 miles to 675 miles, yet the grant was not reduced from the original $42 million. This means the final grant cost a whopping $57,800 per mile compared to similar stimulus grants that cost $30,000 per mile.

According to the federal rules that built the fiber, Citynet and any other competitor is supposed to get very cheap access to that fiber if they want to use it for last mile projects. If they don’t get reasonable access those grants allowed for the right to appeal to the FCC or the NTIA. However, the stimulus grants were not specific about whether this was to be dark fiber or bandwidth on lit fiber.

But this fight raises a more interesting question. Almost every long-haul fiber that has been built contains a lot of extra pairs of fiber. As I just noted in another recent blog, most rural counties already are home to half a dozen or more fiber networks that almost all contain empty and un-used fiber.

We have a rural bandwidth problem in the country due to the fact that it’s relatively expensive to build fiber in rural places. Perhaps if the FCC really wants to solve the rural bandwidth shortage they ought to take a look at all of the dark fiber that is already sitting idle in rural places.

It would be really nice if the FCC could force any incumbent – be that a cable company, telco, school system, state government, etc.– that has dark fibers in rural counties to be forced to lease it to others for a fair price. This is something that could be made to only apply to those places where there is a lot of households that don’t have access to FCC-defined broadband.

We don’t actually have a fiber shortage in a lot of places – what we have instead is a whole lot of fiber that has been built on public rights-of-way that is not being used and that is not being made available to those who could use it. It’s easy to point the finger at companies like Frontier, but a lot of the idle fiber sitting in rural places has been built by government entities like a school district or a Department of Transportation, that is not willing to share it with others. That sort of gross waste of a precious resource is shameful and there ought to be a solution that would make truly idle fiber available to those who would use it to bring broadband to households that need it.