Regulation - What is it Good For? Technology

Unlicensed Spectrum and BEAD Grants

There is a growing controversy brewing about the NTIA’s decision to declare that fixed wireless technology using only unlicensed spectrum is unreliable and not worthy of funding for the BEAD grants. WISPA, the lobbying arm for the fixed wireless industry, released a press release that says that the NTIA has made a big mistake in excluding WISPs that use only unlicensed spectrum.

I’m not a wireless engineer, so before I wrote this blog, I consulted with several engineers and several technicians who work with rural wireless networks. The one consistent message I got from all of them is that interference can be a serious issue for WISPs deploying only unlicensed spectrum. I’m just speculating, but I have to think that was part of the reason for the NTIA decision – interference can mean that the delivered speeds are not reliably predictable.

A lot of the interference comes from the way that many WISPs operate. The biggest practical problem with unlicensed spectrum is that it is unregulated, meaning there is no agency that can force order in a chaotic wireless situation. I’ve heard numerous horror stories about some of the practices in rural areas where there are multiple WISPs.  There are WISPs that grab all of the available channels of spectrum in a market to block out competitors. WISPs complain about competitors that cheat by rigging radios to operate above the legal power limit, which swamps their competitors. And bad behavior begets bad behavior in a vicious cycle where WISPs try to outmaneuver each other for enough spectrum to operate. The reality is that the WISP market using unlicensed spectrum is a free-for-all – it’s the Wild West. Customers bear the brunt of this as customer performance varies day by day as WISPs rearrange their networks. Unless there is only a single WISP in a market, the performance of the networks using unlicensed spectrum is unreliable, almost by definition.

There are other issues that nobody, including WISPA, wants to address. There are many WISPs that provide terrible broadband because they deploy wireless technology in ways that exceed the physics of the wireless signals. Many of these same criticisms apply to cellular carriers as well, particularly with the new cellular FWA broadband. Wireless broadband can be high-quality when done well and can be almost unusable if deployed poorly.

There are a number of reasons for poor fixed wireless speeds. Some WISPs are still deploying lower quality and/or older radios that are not capable of the best speeds – this same complaint has been leveled for years against DSL providers. ISPs often pile too many customers into a radio sector and overload it, which greatly dilutes the quality of the broadband that can reach any one customer. Another common issue is WISPs that deploy networks with inadequate backhaul. They will string together multiple wireless backhaul links to the point where each wireless transmitter is starved for bandwidth. But the biggest issue that I see in real practice is that some WISPs won’t say no to customers even when the connection is poor. They will gladly install customers who live far past the reasonable range of the radios or who have restricted line-of-sight. These practices are okay if customers willingly accept the degraded broadband – but typically, customers are often given poor broadband for a full price with no explanation.

Don’t take this to mean that I am against WISPs. I was served by a WISP for a decade that did a great job. I know high-quality WISPS that don’t engage in shoddy practices and who are great ISPs. But I’ve worked in many rural counties where residents lump WISPs in with rural DSL as something they will only purchase if there is no alternative.

Unfortunately, some of these same criticisms can be leveled against some WISPs that use licensed spectrum. Having licensed spectrum doesn’t overcome issues of oversubscribed transmitters, poor backhaul, or serving customers with poor line-of-sight or out of range of the radios. I’m not a big fan of giving grant funding to WISPs who put profits above signal quality and customer performance – but I’m not sure how a grant office would know this.

I have to think that the real genesis for the NTIA’s decision is the real-life practices of WISPs that do a poor job. It’s something that is rarely talked about – but it’s something that any high-quality WISP will bend your ear about.

By contrast, it’s practically impossible to deploy a poor-quality fiber network – it either works, or it doesn’t. I have no insight into the discussions that went on behind the scenes at the NTIA, but I have to think that a big part of the NTIA’s decision was based upon the many WISPs that are already unreliable. The NTIA decision means unlicensed-spectrum WISPs aren’t eligible for grants – but they are free to compete for broadband customers. WISPs that offer a high-quality product at a good price will still be around for many years to come.

The Industry

Lobbying for Grants

As you might expect, the lobbying is becoming hot and heavy to position ISPs to win the $42.5 billion of Broadband Equity, Access, and Deployment (BEAD) grants that will likely start being awarded in 2023. This is one of the most interesting lobbying challenges I’ve ever seen because there is no one central place that will be awarding these grants.

Congress gave the responsibility for these grants to the NTIA, but the money is going to flow from them to the states. There seems to be a lot of lobbying happening with state legislators, but even that might not be very effective. States must file broadband grant plans that largely follow the rules established by Congress as interpreted by the NTIA. States will have some leeway on how to award grants, but states will still have to follow the basic NTIA rules.

I fully expect many states will have bias. This could mean favoring grants for the large incumbents or favoring grants for cooperatives or municipalities. But even states with a bias will have a hard time turning down solid grant applications that includes a significant amount of matching funding from a local government. This raises the big question of who should be lobbied – the NTIA, state legislators, or individual communities? From what I’m seeing, the answer seems to be all of the above.

We’re starting to see the lobbying position of some of the major industry players. Trade associations have filed comments with the NTIA outlining how they think grants should work. Open letters are being sent to legislators, and to state and federal agencies arguing for various positions. Happening more quietly is one-on-one meetings with local and state government officials. Following are a few of the lobbying positions that I’m starting to regularly see.

The Wireless Internet Service Provider Association (WISPA) represents ISPs using wireless technologies to reach customers. The gist of the WISPA comments is that BEAD funding should not be used to overbuild broadband in any area where an ISP is already delivering broadband of at least 100/20 Mbps service. This position is making the argument that grants should not be used to overbuild any technology, including wireless broadband, that is delivering adequate speeds. It’s easy to understand this position since there has been a lot of discussion about basing grant eligibility on the fastest landline broadband options available today and ignoring the speeds of existing wireless broadband.

The NTCA – The Rural Broadband Association represents independent telephone companies. Its filed comments voice a similar concern against overbuilding but are not quite as rigidly opposed to some overbuilding. NTCA said it is opposed to providing funds to overbuild areas that already have technologies capable of 100/20 Mbps. However, the association said it is open to the idea of combining funding from the BEAD grants to supplement existing federal or state grants if the extra grant funding will boost the speeds of existing technologies to 100/100 Mbps or gigabit speeds. This concept is being referred to as the ‘layering of grants’ to describe combining federal, state, and local grants.

USTelecom, the lobbying arm for the big telcos recently issued a letter to everybody in DC with its thoughts on the best way to administer the grants. They ask to rescind any grant rules that favor municipalities, cooperatives, or non-profits. They want money to go to communities only through partnerships with ISPs. They want past experience as an ISP to be the most important factor in judging who can be funded. This is clearly a wish list that would blatantly slant the money towards the big ISPs.

The Fiber Broadband Association (FBA) represents ISPs that build gigabit fiber networks. The association argues that fiber is the ultimate broadband technology and that federal grant money should not be used to fund any technology that does not create a long-term benefit to a community. This argument is best summarized by saying that grants should only be used to support technologies that are future-proof.

Interestingly, I’m not hearing any lobbying coming directly from the big cable companies – and that makes sense.  For example, Charter is clearly chasing grant money across the country and is promising to build fiber if awarded grant funding. But Charter can’t be publicly talking about how fiber is a future-proofed technology when it owns huge hybrid fiber/coaxial networks.

I think the big ISPs also understand the nuances of the BEAD grants the best. I’m starting to see the big ISPs show up in local communities asking to create partnerships. There is not a lot to be gained by Charter of AT&T lobbying the NTIA or state grant offices to get the policies they want, although I’m sure they are doing so quietly. The best way to win the BEAD grants is to go arm-in-arm with a local community partner to ask for the funding.

Regulation - What is it Good For? The Industry

Gaining Access to Multi-tenant Buildings

In 2007 the FCC banned certain kinds of exclusivity arrangements between ISPs and owners of multi-tenant buildings. At the time of the order, the big cable companies had signed contracts with apartment owners giving them exclusive access to buildings. The FCC order in 2007 got rid of the most egregious types of contracts – in many cases, cable company contracts were so convoluted that building owners didn’t even understand the agreements were exclusive.

However, the FCC order was still a far cry away from ordering open access for ISPs to buildings and there are many landlords still today who won’t allow in competitors. The most common arrangements liked by landlords are revenue share arrangements where the building owner makes money from an arrangement with an ISP. While such arrangements aren’t legally exclusive, they can be lucrative enough to make landlords favor an ISP and give them exclusive access.

WISPA, the industry association for wireless ISPs has asked the FCC to force apartment owners to allow access to multiple ISPs. WISPA conducted a survey of its members and found that wireless companies are routinely denied access to apartment buildings. Some of the reasons for denying access include:

  • Existing arrangements with ISPs that make the landlord not want to grant access to an additional ISP.
  • Apartment owners often deny access because wireless ISPs (WISPs) are often not considered to be telephone or cable companies – many WISPs offer only broadband and have no official regulatory status.
  • Building owners often say that an existing ISP serving the building has exclusive rights to the existing wiring, including conduits that might be used to string new wiring to reach units. This is often the case if the original cable or telephone company paid for the inside wiring when the building was first constructed.
  • Many landlords say that they already have an existing marketing arrangement with an ISP, meaning they get rewarded for sending tenants to that ISP.
  • Many landlords will only consider revenue sharing arrangements since that’s what they have with an existing ISP. Some landlords have even insisted on a WISP signing a revenue-sharing arrangement even before negotiating and talking pricing and logistics.

These objections by landlords fall into two categories. One is compensation-based where a landlord is happy with the financial status quo relationship with an existing ISP. The other primary reason is some contractual relationship with an existing ISP that is hard or impossible for a landlord to preempt.

The concerns of WISPs are all valid, and in fact, the same list can be made by companies that want to build fiber to apartment buildings. However, landlords seem more open to fiber-based ISPs since saying that their building has fiber adds cachet and is valued by many tenants.

WISPs sometimes have unusual issues not faced by other ISP overbuilders. For example, one common wireless model is to beam broadband to a roof of an apartment building. That presents a challenge for gaining access to apartments since inside wiring generally begins in a communications space at the base of a building.

The issue is further clouded by the long history of FCC regulation of inside wiring. The topic of ownership and rights for inside wiring has been debated in various dockets since the 1990s and there are regulatory rulings that can give ammunition to both sides of wiring arguments.

The WISPs are facing an antagonistic FCC on this issue. The agency recently preempted a San Francisco ordinance that would have made all apartment buildings open access – meaning available to any ISP. This FCC has been siding with large incumbent cable and telephone companies on most issues and is not likely to go against them by allowing open access to all apartment buildings.

Regulation - What is it Good For? Uncategorized

Continued Lobbying for White Space Spectrum

In May, Microsoft submitted a petition to the FCC calling for some specific changes that will improve the performance of white space spectrum used to provide rural broadband. Microsoft has now taken part in eleven white space trials and makes these recommendations based up on the real-life performance of the white space spectrum. Not included in this filing is Microsoft’s long-standing request for the FCC to allocate three channels of unlicensed white space spectrum in every rural market. The FCC has long favored creating just one channel of unlicensed white space spectrum per market – depending on what’s available.

A number of other parties have subsequently filed comments in support the Microsoft proposals including the Wireless Internet Service Providers Association (WISPA), Next Century Cities, New America’s Open Technology Institute, Tribal Digital Village and the Gigabit Libraries Network. One of the primary entities opposed to earlier Microsoft proposals is the National Association of Broadcasters (NAB), which worries about interference with TV stations from white space broadband. However, the group now says that it can support some of the new Microsoft proposals.

As a reminder, white space spectrum consists of the unused blocks of spectrum that are located between the frequencies assigned to television stations. Years ago, at the advent of broadcast television, the FCC provided wide buffers between channels to reflect the capability of the transmission technology at the time. Folks my age might remember back to the 1950s when neighboring TV stations would bleed into each other as ghost signals. As radio technology has improved the buffers are now larger than needed and are larger than buffers between other blocks of spectrum. White space spectrum is using those wide buffers.

Microsoft has proposed the following:

  • They are asking for higher power limits for transmissions in cases where the spectrum sits two or more channels away from a TV station signal. Higher power means greater transmission distances from a given transmitter.
  • They are asking for a small power increase for white space channels that sit next to an existing TV signal.
  • They are asking for white space transmitters to be placed as high as 500 meters above ground (1,640 feet). In the US there are only 71 existing towers taller than 1,000 feet.
  • Microsoft has shown that white space spectrum has a lot of promise for supporting agricultural IoT sensors. They are asking the FCC to change to white space rules to allow for narrowband transmission for this purpose.
  • Microsoft is asking that the spectrum be allowed to support portable broadband devices used for applications like school buses, agricultural equipment and IoT for tracking livestock.

The last two requests highlight the complexity of FCC spectrum rules. Most people would probably assume that spectrum licenses allow for any possible use of spectrum. Instead, the FCC specifically defines how spectrum can be used and the rural white space spectrum is currently only allowed for use as a hot spot or for fixed point-to-point data using receiving antennas at a home or business. The FCC has to modify the rules to allow use for IoT for farms sensors, tractors and cows.

The various parties are asking the FCC to issue a Notice of Proposed Rulemaking to get comments on the Microsoft proposal. That’s when we’ll learn if any other major parties disagree with the Microsoft proposals. We already know that the cellular companies oppose providing multiple white space bands for anything other than cellular data, but these particular proposals are to allow the existing white space spectrum to operate more efficiently.

Regulation - What is it Good For?

The Ongoing Fight Against Network Neutrality

There was such a big ruckus over the net neutrality battle that it’s easy to think that the fight against it is over and that net neutrality is now the rule of the land. But I see news on a regular basis that indicates that the fight is not over.

First, the lawsuit filed by USTelecom is still being fought in court. A few months ago there were comments filed in that case by USTelecom, AT&T, CenturyLink, the National Cable and Telecommunications Association (NCTA), the Wireless Association (CTIA), the Wireless Internet Service Providers Association (WISPA), and the American Cable Association (ACA), all of which argued that the FCC had exceeded its authority when it adopted the net neutrality rules. AT&T subsequently dropped this suit as part of the agreement to buy DirecTV,

This is quite a diverse group and they don’t all share identical concerns about the net neutrality rules, but together these trade groups represent both the smallest and the largest telcos, cable companies, cellular providers, and ISPs in the country, all of whom would like to see net neutrality overturned.

And there is no surety that the court will uphold the net neutrality order. I’ve read legal opinions on both sides of the issue that paint a pretty good story about why the FCC ought to be upheld or overturned. Most of these arguments revolve around whether the FCC had the authority to act as they did – with obviously very different opinions on the issue.

And then there are the politicians. The politicians have gotten somewhat quiet on the issue since it has been in the court. But overturning net neutrality is still part of the Republican Party platform and one would expect this issue to come up every time Congress looks at funding the FCC. The House Energy and Commerce Committee will be ” taking a closer look at how the Commission’s net neutrality rules impact our fragile economy, as well as what can be done to foster continued deployment of broadband networks,” in the words of its chairman Rep Greg Walden (R-Ore).  And very recently, Jeb Bush came out against neutrality in one of his stump speeches.

I can understand why carriers would be against some aspects of net neutrality since it puts limitations on the things they can do to make money. But I’ve never understood why any politician would take a strong stance against it. When this is explained to people in the simplest terms – that net neutrality basically says that your ISP can’t make deals that would impede your ability to use the Internet freely – then most people think this is a good idea. I certainly understand that politicians are often beholden to the large corporations that fund them. But one would think that on a topic that is this popular with the general public that politicians would find backdoor ways to fight against something like net neutrality rather than being staunchly and publicly against it.

I’m even a little surprised that the industry is still fighting this battle as hard as they are. The one thing Wall Street hates is uncertainty, and if net neutrality is overturned we would return to a period of major regulatory uncertainty. Wall Street seems to have favored the industry since net neutrality was passed. For example, until the recent market correction the large cable companies had seen a major surge in stock prices, due at least in part to the fact that net neutrality has brought regulatory stability to the market.

There were dire predictions before net neutrality was passed that it would kill capital investments in the industry. And yet we see companies like CenturyLink pouring billions into expanding their fiber networks. And AT&T didn’t massively cut back on capital spending as they had threatened during the net neutrality debate.

As someone who partially makes my living on helping companies keep up with regulations, it seems that net neutrality hasn’t made any drastic changes so far in the way that companies do business. I find it interesting that the WISPA group is so against net neutrality, because I see their member companies expanding like crazy in rural areas and I can’t imagine that any of them have seen and drastic changes due to regulation due to net neutrality.

Technology The Industry

Changes to Unlicensed Spectrum

Earlier this year in Docket ET No. 13-49 the FCC made a number of changes the unlicensed 5 GHz band of unlicensed spectrum. The docket was intended to unify the rules for using the 5 GHz spectrum. The FCC had made this spectrum available over time in several different chunks and had set different rules for the use of each portion. The FCC was also concerned about interference with some parts of the spectrum with doppler radar and with several government uses of spectrum. Spectrum rules are complex and I don’t want to spend the blog describing the changes in detail. But in the end, the FCC made some changes that wireless ISPS (WISPs) claim are going to kill the spectrum for rural use.

Comments filed by WISPA, the national association for WISPs claim that the changes that the FCC is making to the 5725 – 5850 MHz band is going to devastate rural data delivery from WISPs. The FCC is mandating that new equipment going forward use lower power and also use better filters to reduce out-of-band emissions. And WISPA is correct about what that means. If you understand the physics of wireless spectrum, each of those changes is going to reduce both the distance and the bandwidth that can be achieved with this slice of spectrum. I didn’t get out my calculator and spend an hour doing the math, but WISPA’s claim that this is going to reduce the effective distance for the 5 GHz band to about 3 miles seems like a reasonable estimate, which is also supported by several manufacturers of the equipment.

Some background might be of use in this discussion. WISPs can use three different bands of spectrum for delivering wireless data – 900 MHz, 2.4 GHz and 5 GHz. The two lower bands generally get congested fairly easy because there are a lot of other commercial applications using them. Plus, those two spectrums can’t go very far and still deliver significant bandwidth. And so to the extent they use those spectrums, WISPs tend to use them for customers residing closer to their towers. They save the 5 GHz spectrum for customers who are farther away and they use it for backhaul between towers. The piece of spectrum in question can be used to deliver a few Mbps to a customer up to ten miles from a transmitter. If you are a rural customer, getting 2 – 4 Mbps from a WISP still beats the heck out of dial-up.

Customers closer to a WISP transmitter can get decent bandwidth. About the fastest speed I have ever witnessed from a WISP was 30 Mbps, but it’s much more typical for customers within a reasonable distance from a tower to get something like 10 Mbps. That is a decent bandwidth product in today’s rural environment, although one has to wonder what that is going to feel like a decade from now.

Readers of this blog probably know that I spent ten years living in the Virgin Islands and my data connection there came from a WISP. On thing I saw there is the short life span of the wireless CPE at the home. In the ten years I was there I had three different receivers installed (one at the end) which means that my CPE lasted around 5 years. And the Virgin Islands is not a harsh environment since it’s around 85 degrees every day, unlike a lot of the US which has both freezing winters and hot summers. So the average WISP will need to phase in the new CPE to all customers over the next five to seven years as the old customer CPE dies. And they will need to use the new equipment for new customers.

That will be devastating to a WISP business plan. The manufacturers say that the new receivers may cost as much as $300 more to comply with the filtering requirements. I take that estimate with a grain of salt, but no doubt the equipment is going to cost more. But the real issue is the reduced distance and reduced bandwidth. Many, but not all, WISPs operate on very tight margins. They don’t have a lot of cash reserves and they rely on cash flow from customers to eke out enough extra cash to keep growing. They basically grow their businesses over time by rolling profits back into the business.

If these changes mean that WISPs can’t serve customers more than 3 miles from an existing antenna, there is a good chance that a lot of them are going to fail. They will be faced with either building a lot of new antennas to create smaller 3-mile circles or else they will have to abandon customers more than three miles away.

Obviously spectrum is in the purview of the FCC and some of the reasons why they are changing this spectrum are surely valid. But in this case they created an entire industry that relied upon the higher power level of the gear to justify a business plan and now they want to take that away. This is not going to be a good change for rural customers since over time many of them are going to lose their only option for broadband. While it is important to be sensitive to interference issues, one has to wonder how much interference there is out in the farm areas where these networks have been deployed. This impacts of this change that WISPA is warning about will be a step backward for rural America and rural bandwidth.

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