Doug Dawson (POTs and PANs) recently wrote about AT&T’s plans to spend CAF 2 funding on extending its current network. I nearly said “upgrading” but the point is that they aren’t upgrading, they are extending the network to areas that didn’t have it before but not upgrading…
So it looks like AT&T will use the CAF II money to upgrade cell sites to LTE (something they were certainly going to do anyway). They also might build a few new rural cell sites and build some fiber to feed them. Finally, they will buy the customers the LTE receivers. My guess is that they are going to have a very hard time showing that they spent all of the CAF II money and so I expect some overinflated reporting of CAF II costs to the FCC. But these upgrades are far less costly than the rural DSL upgrades being contemplated by CenturyLink and Frontier.
AT&T promises that the bandwidth will meet the 10 Mbps down and 1 Mbps up speeds required by the FCC’s CAF II order. They also promise that there will be no monthly data caps smaller than 150 gigabits, also a threshold set by the CAF II rules. They have not yet specified specific prices, but say that prices will be at ‘market rate’ for broadband.
Even though we’ve seen this coming, this is a giant disappointment. Already today a 10/1 Mbps connection is inadequate for a large percentage of households. Cisco recently published statistics showing that the average home in the US today wants 24 Mbps to meet their needs, just a hair under the FCC definition of broadband. Cisco predicts that by 2020 that the average household demand is going to grow to 54 Mbps. That means the 10/1 speeds are going to feel really slow even by the end of the CAF II period ending in 2021.
I’ve heard worry about this sort of incremental improvement in communities. People in the impacted areas are happy to see better speeds than they have – but for how long? Doug points out that these changes may stick around for a long time…
These upgrades will improve broadband in the affected areas, but only by a small amount. Some residents in these areas today can get very slow DSL, under 1 Mbps. There are also numerous WISPs operating in the area offering speeds under 5 Mbps. And everybody always has the option of satellite broadband, which is universally disliked due to the latency and data caps.
The really bad news for these areas is that this upgrade is going to be in place for a long time. The FCC is probably not going to think about the CAF II areas again until well past the end of the CAF timeline, perhaps not until 2025.
It’s kind of like buying the crappy dishwasher for the home you thought you were going to leave and then having to use it for 10 years. It seems better than washing by hand, except after a while you really have to wash the dishes pretty well before you run the cycle. So it’s really not that much better.