Illinois Congressional Delegation To FCC: Improve Rural Broadband Maps

Having just spent the last few days looking at maps and data from the Office of Broadband Development, I can tell you how important it is to have good benchmarking. It tells us where we need to bring better service but also historically we can look to see which areas are doing well, when they started to do well and perhaps figure out a why. Same for areas that are doing less well.

If we are going to spend federal, state and local money of broadband (and to reach the high cost areas, we probably need to) we should know where we need to go and what’s happened to areas where we have invested. So it was interesting to see the entire Illinois Congressional Delegation tell the FCC, we need better maps…

Today, the entire Illinois Congressional Delegation sent a letter to Federal Communications Commission (FCC) Chairman Ajit Pai and the four FCC Commissioners urging the FCC to improve the nation’s broadband maps by reforming the mapping process for broadband services. The members noted that currently the mapping process lacks detail, accuracy, and granularity, meaning many underserved areas, including many rural communities in Illinois, could go without critical funding to improve broadband services.  The Commission’s recently released 2019 annual Broadband Deployment Report found that more than 21 million Americans still lack access to high-speed internet service, though this number may be much higher due to inaccuracies in broadband maps.  According to the FCC, only about 61 percent of rural areas in Illinois have access to fixed broadband at speeds of 25 Mbps/3 Mbps.

“As we work to repair and rebuild our nation’s infrastructure, we must ensure that those in rural America have access to high-quality and reliable fixed or mobile broadband.  In addition to developing our nation’s rural economy, broadband helps expand educational horizons for students and allows rural health providers to offer more flexible and cost-effective delivery approaches,” the members wrote in a letter to Chairman Pai.

Today’s letter was signed by the entire Illinois Congressional Delegation: U.S. Senators Dick Durbin (D-IL) and Tammy Duckworth (D-IL), and U.S. Representatives Bobby Rush (D-IL-01), Robin Kelly (D-IL-02), Dan Lipinski (D-IL-03), Chuy Garcia (D-IL-04), Mike Quigley (D-IL-05), Sean Casten (D-IL-06), Danny Davis (D-IL-07), Raja Krishnamoorthi (D-IL-08), Jan Schakowsky (D-IL-09), Brad Schneider (D-IL-10), Bill Foster (D-IL-11), Mike Bost (R-IL-12), Rodney Davis (R-IL-13), Lauren Underwood (D-IL-14), John Shimkus (R-IL-15), Adam Kinzinger (R-IL-16), Cheri Bustos (D-IL-17), and Darin LaHood (R-IL-18).

Full text of today’s letter is available here and below:

June 17, 2019

Dear Chairman Pai:

We write to urge the Federal Communications Commission (FCC) to improve our nation’s broadband maps by reforming the mapping process that illustrates where fixed and mobile broadband services are available within the United States.

What should be of great concern to government, the telecommunications industry, and American consumers is the significant lack of detail, accuracy, and granularity of these broadband maps.  For example, an entire census block may be considered served even though only a single location within the block has access to fixed broadband service.  This misidentification could result in the denial of vital funding which could otherwise bring service to these underserved areas.

Indeed, the Commission’s recently released 2019 annual Broadband Deployment Report found that more than 21 million Americans still lack access to high-speed internet service.  An overwhelming majority of these Americans are living in rural areas.  However, some have called this data into question and argue that broadband connectivity is even worse than the Commission’s data illustrates.  In fact, recent research shows that more than 162 million Americans are not using the internet at broadband speeds of 25 Mbps.

The challenge, in part, lies with the FCC’s current Form 477 process, which is overly reliant upon the data self-reported by service providers.  We urge the Commission to explore developing a process to validate or authenticate the information produced by service providers.  This will lead to more accurate and reliable data collection.  Inaccuracies within the data may currently be translated onto the broadband maps, which are used to allocate important grant funding and federal financing through programs administered by the Commission, the United States Department of Agriculture, and the Department of Commerce to bring broadband access to lacking areas.  A failure to allocate federal investment to where it is needed the most ultimately falls on constituents.  Without sufficient broadband access, small businesses struggle to operate and students are forced to complete their homework in library parking lots just to use WiFi.

Specifically, in Illinois, we’ve seen a variety of cases that may reflect a nationwide problem.  For example, some Rural Local Exchange Carriers (RLECs) have been unable to apply for or receive funding due to inaccurate maps.  These RLECs have provided detailed engineering studies, collected and prepared customer “testimonial” documents, and submitted an extensive FCC petition for reconsideration regarding competitive overlap.  They also have filed comments and documents with the FCC requesting a review of these core issues.  Despite these efforts, inaccurate mapping has continued to hurt the ability of affected companies to expand broadband to rural communities.  In one case, a small Illinois RLEC was initially declared as one hundred percent competitively overlapped due to inaccurate 477 reporting by another broadband service provider; and as a result, was deemed ineligible to receive funding.  Many other small RLEC companies have attempted to secure loan and grant funding to serve our constituents, only to be denied.  As a result, many rural areas, which cannot realistically be served without federal support, remain unserved.  Both rural providers and consumers would benefit from a validation and challenge process to more accurately depict broadband availability and quality standards.

Therefore, as the country looks to close the digital divide between rural and urban communities through the deployment of and robust investment in fixed and mobile broadband infrastructure, the capacity to accurately depict which communities are the least connected is vital.  We ask that the Commission double their efforts to improve the broadband mapping process through three specific proposals.  First, develop more standardized granular reporting of broadband availability – while also balancing the burdens of reporting especially for smaller operators.  Second, establish a suitable validation process by which the self-reported data from service providers can be verified by the FCC.  And third, develop a process through which state and local governments, as well as other interested parties, can challenge the data displayed in the maps for accuracy while not adding unnecessary costs or delays.  These three common-sense reforms would work to collectively improve the accuracy of the data being used to make decisions on billions of dollars in federal funding and financing.

As we work to repair and rebuild our nation’s infrastructure, we must ensure that those in rural America have access to high-quality and reliable fixed or mobile broadband.  In addition to developing our nation’s rural economy, broadband helps expand educational horizons for students and allows rural health providers to offer more flexible and cost-effective delivery approaches.

Thank you for your attention to this matter.  We look forward to working with you as the Commission works to ensure that every American has access to dependable broadband service.

MoffettNathanson says CenturyLink might as well keep residential customers

There’s a lot to unpack here. Back in May, CenturyLink said they were looking at their options for their consumer/residential service…

Could the CenturyLink consumer business be sold or spun off? CenturyLink CEO Jeff Storey said yesterday that CenturyLink has enlisted advisors to assist the company in a strategic review of the company’s consumer business. Although he emphasized that it is “really early in the process,” he noted on the company’s first-quarter earnings call that the company is “very open” in the options it would consider.

“Let me be clear, we’re early in what I expect to be a lengthy and complex process,” said Story, according to a SeekingAlpha transcript of the earnings call.

At that time, Storey elaborated:  “During our review, we will not modify our normal operations or our investment patterns. I can’t predict the outcome or the timing of this work or if any transactions will come from it at all. Our focus, though, is value maximization for shareholders. If there are better paths to create more value with these assets, we will pursue them.”

He added, though, that the company is doing a good job of growing broadband where it invests in improving the customer experience and profitably expanding the network.

The company’s consumer revenues were $1.4 billion in the first quarter of 2019. The consumer business saw a 1.3% year-over-year and a 2.7% increase over the previous quarter in broadband revenues. While the company lost subscribers purchasing speeds below 20 Mbps, it gained subscribers purchasing higher-speed services.

I’ve added the emphasis. Interesting that CEO Storey  revealed  that  while CenturyLink “grow[s] broadband” where they invest,  decisions about where to invest are driven by a focus on maximizing shareholder value, not community benefit.  Because they are a business, profitability, not community needs, drives CenturyLink’s investment decisions.

Fast forward a month and it looks like the analysis is in

CenturyLink wouldn’t gain much by spinning off its consumer business, argued telecom financial analysts MoffettNathanson in a research note issued today. The cost of a CenturyLink consumer spinoff would leave the company with little in the way of financial benefits, the analysts said.

Telecompetitor goes into detail…

Spinning off the CenturyLink consumer business would generate what the researchers refer to as “dis-synergies” that would result from the difficult task of dividing a network and other operations that serve both the consumer and business sides of the house. These dis-synergies would “simplistically imply roughly $300 million to $600 million in value destruction from separating the businesses,” the researchers argue.

Another concern about a spinoff is whether it would receive necessary approvals from state public utility commissions.

The analysts also question how much upside there is for CenturyLink’s consumer business. They argue, for example, that the company’s opportunity to provide connectivity for small cells is limited because small cells will be deployed only in densely populated areas and CenturyLink is the incumbent local carrier in only two of the nation’s 50 most densely populated cities.

Again, the emphasis is mine. The worry about value destruction is real for any business; you don’t want to lose value. BUT the worry for communities is that this isn’t really a rousing rationale for investing in upgrading  residential service, rather a recognition that the cost of disaggregating business customers is just too high.

Also of note in the analysis is recognition that small cell technology (necessary for 5G) will only be deployed in densely populated areas. This is not new news, but does reinforce the fact that 5G is not coming to  rural areas anytime soon.

Finally…

Not all of MoffettNathanson’s analysis of CenturyLink opportunities is so downbeat, however.  For example, the researchers see the recent news about FCC plans for a replacement for the Connect America Fund, due to expire in just a couple of years, as a positive, as CenturyLink was one of the largest recipients of CAF funding.

The “potential upside risk is what keeps us on the sidelines,” the researchers wrote.

The upshot is that MoffettNathanson sees CenturyLink’s consumer business remaining within the merged company, where it would be better off anyway.

Again, emphasis is mine. I have heard  industry insiders question the wisdom of CenturyLink accepting CAF funding. The main problem is that they didn’t receive enough funding to adequately cover upgrades to areas where the potential for ROI is slow or uncertain. And the required buildout speeds aren’t fast enough to satisfy all customers. It’s a lose-lose situation.

To create a win-win for both providers and communities, federal funding must be adequate to incent providers to invest in networks that meet consumer needs. The current CAF II requirements of a 10/1 network don’t meet community needs: economic development is in the upload speed. Minnesota state speed goals of 100 Mbps down and 20 Mbps up by 2026 seem much closer aligned to the community needs than the 10/1 speeds currently required by the Connect America Fund (CAFII).

The final line in the industry analysts’ research note reminds us that this is a look from and for the company of CenturyLink – not for the communities they serve…

The upshot is that MoffettNathanson sees CenturyLink’s consumer business remaining within the merged company, where it would be better off anyway.

Blandin released a report in 2017  that points out that industry ROI and community ROI are different. Households with broadband realize $1850 in economic benefits per year. So, the communities need better broadband. The gap is between that community need and the business needs of the provider to deliver profits to their shareholders.

FCC authorizes $166.8 million in funding over the next decade; $3.3+ million for MN Projects

The FCC reports

The FCC today authorized $166.8 million in funding over
the next decade to expand broadband to 60,850 unserved rural homes and businesses in 22 states, representing the second wave of support from last year’s successful Connect America Fund Phase II auction. Providers will begin receiving funding this month.

Here are the projects authorized in Minnesota…

Minnesota: Paul Bunyan Rural Telephone Cooperative
Minimum Speed: 1 Gbps/500 Mbps
Locations: 315
Support /10 Years: $1,313,543

Minnesota Garden Valley Telephone Company
Minimum Speed: 1 Gbps/500 Mbps
Locations: 95
Support /10 Years: $880,346

Minnesota West Central Telephone Association
Minimum Speed: 1 Gbps/500 Mbps
Locations: 532
Support /10 Years: $611,934

Minnesota Interstate Telecommunications Cooperative
Minimum Speed: 1 Gbps/500 Mbps
Locations: 209
Support /10 Years: $552,330

 

FCC Proposes Capping Fund Used to Close the Digital Divide

The Benton Foundation reports…

On Friday, May 31, the Federal Communications Commission launched a proceeding to seek comment on establishing an overall cap on the Universal Service Fund (USF). USF programs provide subsidies that make telecommunications and broadband services more available and affordable for millions of Americans. The Notice of Proposed Rulemaking (NPRM) asks a lot of questions about how an overall cap to the fund would work. But does this NPRM actually move the U.S. nearer to closing the digital divide?

They look at the various USF programs…

  1. Connect America Fund (formerly known as High-Cost Support) — The largest of the four programs, CAF provides subsidies to telecommunications companies to expand connectivity infrastructure (wired and wireless, telephony and broadband) in unserved or underserved areas.
  2. Schools and Libraries (E-Rate) Program — Provides discounts to schools and libraries to ensure affordable access to high-speed broadband and voice services.
  3. Rural Health Care Program — Allows rural health care providers to pay rates for broadband services similar to those of their urban counterparts, making telehealth services affordable.
  4. Low-Income (Lifeline) Program — Assists people with lower-incomes to make monthly telephone (wireline or wireless) and broadband charges more affordable. The Lifeline program is the only USF program that lacks a self-enforcing cap, but it is under its own “soft cap” limit.

The article goes into great (and interesting!) detail about the hows and whys the programs might change. What gets to the point to those who are counting on government partnership to get better broadband might be most interested in their concerns…

1. Pits Programs Against Each Other

2. Mapping, Not Capping

3. At Odds with FCC’s Statutory Duty

And their conclusion…

The adoption of the NPRM — on a 3-2 party-line vote — now means the FCC will take public comment (technically, after the NPRM is published in the Federal Register) for three months before, theoretically, considering this input and moving to a final vote.

The Benton Foundation released a press release after the NPRM was released last week. Being late on a Friday afternoon, you will hopefully excuse us for being a bit blunt: “The FCC once again proves that Friday is ‘take out the trash day’ in our national capital; its latest proposal is pure garbage.”

You can follow along with the debate around USF daily by subscribing to Headlines — the only free, reliable, and non-partisan daily digest that curates and distributes news related to universal broadband.

The FCC may need to look at the value of the investments they are making but it seems that how much is spent is not the greatest issue. It seems like they need to look at the long term impact of the speed requirements they are currently making in rural broadband deployment. Providers are getting funded to upgrade or expand to 10 Mbps down and 1 up. That is not future proof, or even future likely development.

I have three daughters in Minnesota and Winnipeg. I don’t save money buying their spring jackets for winter because they are cheaper. I make sure we buy good winter coats they can wear for several years.

 

FCC says A-CAM funding expected to bring 25/3 Mbps broadband to 11,000 homes

The Brainerd Dispatch reports on impact of FCC funding (A-CAM) on Minnesota…

“Today’s announcement means that many more rural Americans will have access to high-speed broadband service that will enable them to fully participate in the digital economy—entrepreneurship, telemedicine, precision agriculture, online education, and more,” stated FCC Chairman Ajit Pai in a news release Monday, April 29. “This is yet another example of how the FCC is working hard to close the digital divide.”

Pursuant to new rules adopted by the commission last December, a total of 186 companies participating in the FCC’s Alternative Connect America Cost Model program accepted $65.7 million in additional annual support over the next decade. In return, these carriers have committed to deploying 25/3 megabits per second service, relating to internet speed, to 106,365 homes and small businesses that would have otherwise only received slower 10/1 Mbps service.

The boost represents a 31.8% increase in the number of locations that will have faster service available through the Alternative Connect America Cost Model program. Carriers must deploy 25/3 Mbps service to 40% of locations by the end of 2022, and increase deployment by 10% annually until buildout is complete at the end of 2028.

In Minnesota, the additional funding is expected to increase the number of homes receiving 25/3 Mbps service by more than 11,000 homes, or 26.3 percent.

A Better Wireless has a Solution for Rural MN – but they need access to spectrum

The Benton Foundation has posted a column from Mitchell Koep, CEO of A Better Wireless, about the need in rural areas (specifically rural Minnesota) for better broadband to create a level playing field for students…

I know firsthand what it’s like living on the wrong side of the digital divide because my local community in rural Minnesota has been experiencing it for far too long. That is one of the reasons why I founded A Better Wireless, a wireless ISP that is seeking to connect rural Minnesotans who lack affordable broadband access.

The most upsetting part about the digital divide is the lack of access our students face. As more teachers assign homework that requires an internet connection, students without home access are at a severe disadvantage. My granddaughter and her third-grade classmates are living in this divide known as the “Homework Gap.” At Battle Lake Independent School District in Otter Tail County, Minnesota – where my granddaughter attends school – 23 percent of all families with an enrolled student lack broadband access. This Homework Gap not only impacts families from participating in digital life but also severely inhibits students from accessing the same educational opportunities that benefit their urban peers.

Koep offers a solution with wireless…

Last year, Otter Tail County approached commercial providers asking to help solve our digital divide. Incumbent telephone companies told the county it would take $49 million to expand fiber along roadways in just the southern third of the county. This plan would require rural residents to pay to bury fiber from the road down their driveways—some of which are half a mile long or longer.

A Better Wireless submitted a proposal to connect these same households with fixed wireless for a fraction of that cost. For just $8.6 million, we would upgrade capacity for county schools — which currently pay $2,300 per month for 200 Mbps service — to gigabit access for just $750-$1000 per month. For students who ride the bus up to an hour one way to and from school—a journey that takes even longer when we receive 30 inches of snow—we plan to equip school buses with internet access to turn travel time into homework time. And families with enrolled students that qualify for free and reduced lunch plans would get 25/10 Mbps service for just $15/month.

Our plan also includes offering fixed wireless broadband access to every resident in the county for just $45 per month. In addition, we will offer our public safety officials access to a mobile, public safety network.

But they need access to spectrum to make it happen,,,

But our plan hinges on the Federal Communications Commission making currently unused Educational Broadband Service (EBS) spectrum available to educational entities. While EBS has been licensed in roughly half of the United States, geography covering 85 percent of Americans, the remaining half covering roughly 50 million Americans has never been licensed. The FCC has now proposed to finish licensing this spectrum — which has essentially been frozen since 1995 — to local educational entities. A Better Wireless has already developed partnerships with schools interested in applying for licenses if the spectrum is made available. We have also joined an advocacy group with 70 other companies and educational entities called Educators and Broadband Providers for American Rural Communities (EBPARC) to help make this proposal a reality. I recently traveled to Washington (DC) to tell the FCC and Congress about the critical need for smaller operators like mine to access this key spectrum band.

The biggest threat to our plan is that large, national, wireless providers are urging the FCC to sell these licenses to them instead of continuing to license to educational entities. Rural schools like those in Otter Tail County will not be able to compete in a spectrum auction against large telecommunications companies—the same companies that have been ignoring our community for far too long. Even if resources were available, schools in some states are not legally allowed to spend resources on spectrum.

FCC talking about spending caps on Universal Service Funds?!

Apparently FCC Chair Pai is talking about spending caps on Universal Service Funds.

Here is Benton Foundation’s response

The Benton Foundation unequivocally opposes any proposals from the Federal Communications Commission that would allow the FCC to shirk its responsibilities to meet its Congressionally-mandated mission. The FCC is supposed to ensure:

  • Quality services are available at just, reasonable, and affordable rates.

  • Access to advanced telecommunications and information services are provided in all regions of the Nation.

  • Consumers in all regions of the Nation, including low-income consumers and those in rural, insular, and high cost areas, have access to telecommunications and information services, including interexchange services and advanced telecommunications and information services, that are reasonably comparable to those services provided in urban areas and that are available at rates that are reasonably comparable to rates charged for similar services in urban areas.

  • There are specific, predictable, and sufficient Federal and State mechanisms to preserve and advance universal service.

  • Elementary and secondary schools and classrooms, health care providers, and libraries should have access to advanced telecommunications services.

And according to Politico, here’s the response from other FCC Commissioners…

FCC SUBSIDY CAP PUSHBACK — Count FCC Democrat Jessica Rosenworcel and Sen. Ed Markey (D-Mass.) as critics of a proposal from FCC Chairman Ajit Pai to explore a spending cap on telecom subsidies to expand broadband access. “Any effort that could harm classroom learning, broadband deployment, rural health opportunities, or connecting more individuals should be shelved and never considered again,” Markey said of the FCC proposal, which would target Universal Service Fund programs.

— Rosenworcel said the item, which was circulated among commissioners Tuesday, “flies in the face of the agency’s own rhetoric about bridging the digital divide.” The measure seeks comment on what the cap should be, including whether it should be set at $11.4 billion, the sum of all USF program budgets in 2018. (Actual disbursements from the fund were about $9.6 billion that year.) Still, the idea has strong support from Republican Commissioner Mike O’Rielly, who voted to approve it Tuesday, calling an overall spending cap “overdue and incredibly needed.”

I’ve been looking for the circulated proposal, but as often the case that doesn’t seem to be available. There’s nothing on the Universal Service Headlines. Maybe we’ll see more later – maybe readers will help me out!