A-CAM 101: federal funding for smaller broadband providers

Sometimes you just need a practitioner to give the 10,000 foot view of what’s going on when policy and technology combine. I’m thankful to Brent Christensen (from MTA) for his time today giving me the low down on A-CAM.

I’ve talked a lot about CAF 2 funding from the FCC – $85 million a year for 6 years going to Price Cap Carriers (big guys such as CenturyLink, Frontier and Windstream ).

For Rate of Return providers (mostly smaller providers, often in rural areas) the FCC has come up with another plan. Providers can choose to reduce their rate of return OR apply for A-CAM funding:

  • Reduce the rate of return means going from 10.25 percent to 9.75 percent over the next few years.
  • The A-CAM option is available for providers where less than 90 percent of their service can access broadband at 10 Mbps down and 1 Mbps up and/or receive less than $200 per loop. A-CAM funding is for 10 years.

For most folks it’s a numbers game – can you make more by applying for A-CAM funding or going with strict cut in rate? For some folks, it’s a stability issue. They’ll take a reduction in support for the certainty over 10 years.

The deadline to apply for A-CAM funding was November 1, 2016. They received $160 million more than they had budgeted; they had budgeted for just over $1 billion. So, the FCC is trying again with a round two of applications. In fact that application should be available soon. The providers will have 30 days to respond. The FCC is hoping to be done with the process by the end of the year – in part I’m sure due to political changes.

So many questions still remain.

Why are they funding 10/1 access when they define broadband as 25/3? The reason is to help the folks who have no service. But this stuff is difficult for community leaders, policy makers and really anyone outside the industry to understand without using multiple speed definitions for broadband (10/1 vs 25/3).

Why the continuation of uncertainty? We’re asking providers to continue to make long term investment – albeit with government support. But the uncertainty can be as difficult as the financial pinch.

The biggest question – what will be the impact of political change on this and other broadband funding and regulation?

Gig offers opportunity to rural areas especially when jobs are tight

The Daily Yonder posted an article last week from a “gigagigger” who has made his livelihood through broadband…

An unexpected turn of events accelerates a community development scholar’s entry into the gig economy. Equal parts challenge and opportunity, gigging is increasingly the way Americans work.

His story caught my eye in contrast to the recent report that broadband doesn’t correlate with greater entrepreneurialism in rural areas. The report found that high levels of broadband adoption actually meant lower incidence of entrepreneurship and creative class employment.

His story seems to ring true with what I wrote about that article earlier – people start their own businesses when jobs are scarce. Certainly that is true with him and broadband made that leap easier…

Gig, as a prefix with an added “a” can be a measure of a lot of something, such as a gigawatt or a gigabyte, or can become part of tons of other slang words, according to the Urban Dictionary. There seem to be a lot of gig workers in the United States, somewhere in the neighborhood of 46 million, according to some estimates. Perhaps we can coin a facetious term, gigagiggers (nowhere near a billion), who are an incredibly positive spur for creativity and job creation in rural communities. On the down side, the growth of gig employment is symptomatic of a larger plutocratic economy that has all too frequently been unable (unwilling) to create a broad range of full-time, permanent positions, especially in rural areas.

Broadband may be necessary to start a business (or at least makes is a heck of a lot easier) but not sufficient.

I am a gigagigger and have been for 15 years. I didn’t need to worry about insurance. That was a help. And my dad is an entrepreneur – that helped even more. If entrepreneurship is a goal in rural areas I think it makes sense to promote broadband but also make sure those other supports are in place – insurance (the author of the article mentions that too) and education or mentoring.

And childcare. That would have been helpful too. I joked while touring a new coworking space that what they really needed was childcare but think of the opportunities there. Gig work is great work if you’re a parent but there are times when you need to make a phone call without Barney singing in the background.

Broadband is a great first step, we just need a few more to make it easier to take the leap into starting a business.

NYT: Helping Rural America Catch Up – Invest in infrastructure while interest rates are low

The New York Times recently posted a series on Helping Rural American Catch Up. The article that caught my mind was Jason Bailey’s opinion that Rural Areas are in Great Need of Technological Infrastructure...

However, with interest rates at historic lows, it is an opportune time for the federal government to make public investments that create more jobs today and build a foundation for growth in the future. In struggling rural areas, there is a need for investment in the physical, natural and technological infrastructure that has been a critical building block for a better economy elsewhere. That entails laying broadband lines, restoring and reforesting degraded land, repairing parks, and renovating housing and building stock to make it more energy efficient. Such investment has the added benefit of creating jobs that are accessible now to the working class men who have experienced some of the steepest job losses in recent years.

He says we owe it to the communities to support in them…

Rural economies experiencing transition will look different in the future, and the point is not to recreate the past. But we owe communities that have provided us with food, fiber, energy and water the support to shape their own destinies — especially when they face hard times because of broad changes beyond their control.

I don’t know if we owe it to them – but it does feel like an investment that will return benefits. Just yesterday I quoted an article in the Daily Globe that cited research on that ROI…

A 2011 study from Ericsson, Arthur D. Little and Chalmers University of Technology found that doubling the broadband speed for an economy increases GDP by 0.3 percent. This would equate to a $5.4 billion increase to the U.S. GDP.

I think it’s a case of when we all do better we all do better – we just need the tools to do it!

Vibrant rural economies need high-speed Internet

A letter sent to local media by the Blandin Foundation…

High-speed Internet (broadband) is essential for rural communities to thrive, and even survive, in the 21st century. From our experience and many research findings, we believe this to be truer today than ever.
Rural Minnesotans agree. In our 2016 Rural Pulse survey, three out of four rural Minnesota respondents believed that improved Internet could help improve local economic vitality.
This perception was tested by a report, cited in a recent Forum newspapers article, from Oklahoma State University (OSU) titled “Does Broadband Matter for Rural Entrepreneurs and Creative Class Employees?”
The report finds that higher broadband availability and adoption may reduce the number of entrepreneurs and “creative class” employees in rural communities. The authors attribute this to individuals finding a job elsewhere, because they are connected to the world, or choosing a local job over starting a business.
In our work with more than 100 rural communities across Minnesota, we see a different picture.
And even the OSU study authors acknowledge that their findings on “creative class” employees are only a partial glimpse into the need for broadband to support rural economies. There’s so much more to tell.
They write, “None of this is to say that pursuing improved broadband availability or adoption rates is something that rural areas should avoid. There is mounting evidence that achieving higher broadband adoption rates can lead to improved economic outcomes in rural areas.”
A 2015 Strategic Networks Group report, specifically studying Minnesota, found that for every dollar invested in broadband access and use, $10 is returned in direct and spinoff impacts to the local economy. Broadband Communities Magazine found that counties with better broadband access are adding population at 10 times the rate of counties that lack good broadband connections.
This month our Blandin team is meeting with ten rural communities that have pulled together a diverse group of broadband champions to partner with Blandin Foundation to enhance broadband access and use in their local businesses, schools and health care facilities. We’ve heard wonderful stories of rural entrepreneurship and innovation, workforce enhancement, digital equity and community marketing that quickly fill the two-hour meeting. These stories motivate us to continue our commitment to rural Minnesota broadband.
Rural Minnesotans clearly recognize the benefits of broadband and increasingly expect them in their community. In this year’s Rural Pulse, 64 percent of respondents said their community does a good job improving access to the Internet, down from 82 percent in 2013. As rural Minnesotans increasingly experience how important broadband is, dissatisfaction with the slow progress in deploying broadband that meets state goals is mounting.
Rural leaders know their communities best and they recognize the need for a fully-connected future. They are working hard and focusing on the prize – vibrant, resilient communities that work for everybody.
Know that Blandin Foundation stands with you.

Kathleen Annette President and CEO, Blandin Foundation

Paul Bunyan GigaZone reaches 1,400 in Cohasset and Grand Rapids MN

Good  news from Paul Bunyan Communications

The GigaZone Activated for over 1,400 more locations in Cohasset and Grand Rapids area
Over 18,800 now have access to Gigabit Internet speeds
(Grand Rapids, MN) (August 31, 2016) –Over 1,400 more locations in the Cohasset and Grand Rapids area have been upgraded and are now in the GigaZone, Paul Bunyan Communications announced today.
“We continue to make great progress on upgrading our network to incorporate even more member locations into the GigaZone.  We will continue to do as much as we can to bring the GigaZone to all our members and the communities we serve as fast as we can.” said Gary Johnson, Paul Bunyan Communications CEO/General Manager.
The GigaZone is currently available to over 18,800 locations including all of the cooperative’s service area of rural Park Rapids, Lake George, Trout Lake Township east of Grand Rapids, most of Grand Rapids, and areas of Bemidji.
Paul Bunyan Communications recently mailed out information to the new locations that are now in the GigaZone and the cooperative has an online map available at http://paulbunyan.net/gigazone/map/ showing the active areas of the GigaZone as well as those areas that will be constructed/upgraded in the future.
“If you are wondering when the GigaZone will reach you, the online map of the active areas and plans for this year is a great resource.” added Brian Bissonette, Paul Bunyan Communications Marketing Supervisor.
GigaZone service options include unprecedented Broadband Internet speeds of up to 1000 Mbps – a Gigabit.  Members who subscribe to GigaZone Broadband can also add PBTV Fusion and/or low cost unlimited local and long distance GigaZone voice service.  All current service options also remain available to cooperative members within the GigaZone.
Most current wireless routers cannot support blazing GigaZone Internet speeds.  To help, the cooperative is offering GigaZone Integrated Wi-Fi that uses the latest in advanced Wi-Fi technologies to maximize the in-home wireless experience. This service is free to all new GigaZone customers for the first six months, with a minimal charge thereafter.
Paul Bunyan Communications has the region’s largest and fastest all fiber optic network with over 5,000 square miles throughout most of Beltrami County and portions of Cass, Hubbard, Itasca, Koochiching, and St. Louis Counties.  The Cooperative provides Broadband High Speed Internet Service up to a Gigabit per second, digital and high definition television services, Smart Home services, digital voice services, and more.

Wireless is a good interim solution (and constant requirement) for rural communities

A couple of weeks ago I noticed a few articles pushing wireless as a good solution for rural areas. It comes up a lot – especially around legislative season and inevitably the question comes up – Can wireless replace fiber?

It comes up so often I thought I’d ask my friendly experts before I wrote anything. Here’s what I learned:

You need fiber to support wireless. Still one of the best explanations I’ve heard of the need for fiber to support wireless is from a conference a few years ago when Kevin Beyer at Farmer’s/Federated explained costs to pull fiber to towers to accommodate wireless. Wireless is good for last mile, but won’t cover the whole connection.

Wireless is more affordable to deploy and cheaper for the end customer. (Assuming no data-caps!) So it can be a good interim solution as you build fiber. One of the recent article details how this can play out with long term plans and has with RS Fiber…

RS Fiber decided, based on the recommendation of their Internet service provider (ISP), Hiawatha Broadband Communications, that they would build a hybrid network.

“It was going to take three years to build out fiber to the larger towns and another two to three to build fiber to farms in the two counties,” says Erickson. “Hiawatha said they could build a 25 Mbps symmetrical wireless network that they would complete in six months while the fiber buildout takes place. This strategy was a stroke of genius.”

This easily could become the norm in both rural and urban U.S. communities.

Rather than have constituents continue to suffer with bad – or no – broadband for years, RS Fiber’s wireless infrastructure has been lit for several months and users are reaping the benefits. All RS Fiber had to do was requisition space for transmitters and receivers on water towers and grain legs, tall structures that protrude above grain bins. Then they integrated the fiber into transmission hubs that deliver wireless signals to homes and businesses. Once customers get data receivers in their homes, they’re ready to go. The wireless services enabled quick cash flow, plus RS Fiber now has a loyal customer base for fiber before that buildout is complete.

Wireless is getting faster but the range is still limited. With advances such as millimeter wave technology, top broadband speeds are available but only at very close range

This week, a new startup, Starry, announced it would bring gigabit-speed internet access to consumers, without data caps, at a price that is equal or less than your average broadband plan.  …

The only difficulty is that you have to locate the transmitter suitably close,” says Sundeep Rangan, an associate professor of electrical engineering at New York University who specializes in wireless communications. As part of the NYU Wireless project, a team of academics made a number of extensive measurements in a dense urban environment trying to emulate transmission for cellular type applications with millimeter waves, similar to those proposed by Starry. “We could serve people up to 200 meters away at high speeds, even without direct line of sight. It was quite remarkable.”

And even the vendors seem a little shaky about that detail…

The problem is that 200 meters is just a fraction of the range promised by Starry, which is claiming its technology can deliver a fast, reliable signal to homes up to 2 kilometers away.

There will always be room for both. Wireless may build customer loyalty and customer fees may build cash to deploy fiber and people will always want the mobility of wireless. I’ve written before about which is better in an emergency. (Depends on the emergency.) And I’m sure anyone reading this (especially if on your smartphone while waiting in line for something – or maybe as you’re on your tractor monitoring precision ag apps) can think of dozens of reasons wireless is essential.

Broadband adoption in rural households still lags behind urban households

This feels like old news – but unfortunately it’s still true, the NTIA (National Telecommunications & Information Administration) have been shuffling their numbers (from July 2015) and have found that folks in rural America are adopting Internet technology at slower paces that urban areas.

rural urban

And other demographic characteristics don’t really change the landscape…

All persons, regardless of race or ethnicity, were less likely to use the Internet when living in rural areas, but certain groups of rural residents face a particularly large digital divide.  For example, 78 percent of Whites nationally used the Internet in 2015, compared to 68 percent of African Americans and 66 percent of Hispanics. In rural areas, 70 percent of White Americans had adopted the Internet, compared to 59 percent of African Americans and 61 percent of Hispanics.

And it’s not just access to broadband – it’s access or use of devices as well…

Living in a rural area was also associated with lower levels of device use, Internet use at particular locations, and participation in online activities. Overall, we found rural users were less likely than their urban counterparts to report using a desktop (29 percent for rural users to 35 percent for urban users), a laptop (39 percent to 48 percent), a tablet (24 percent to 30 percent), or an Internet-enabled mobile phone (45 percent to 54 percent). Rural residents were also less likely to use the Internet from home (61 percent to 69 percent) and at work (22 percent to 29 percent). In terms of online services and functions, rural residents who indicated they did use the Internet were still less likely than urban residents to use email (86 percent to 92 percent), social media (68 percent to 71 percent), and online video or voice conferencing (28 percent to 38 percent) than Internet users in urban areas. While some of these differences may seem relatively modest, they are statistically significant. Lastly, rural individuals were more likely than their urban counterparts not to own any Internet compatible devices (33 percent to 26 percent), and were less likely to own more than one device.

Based on these results, it appears there is a continuing need to address the obstacles rural residents face in Internet use. For instance, some households may require subsidies to make the Internet more affordable, while others may need digital literacy training to make the Internet more useful to them. Even today, some remote rural communities still lack Internet access at all or the service available may be poor or prohibitively expensive.

It is interesting to note that while being in rural areas clearly has an impact – when you look at education attainment and income those characteristics have a seemingly greater impact. Percentage of rural residents with college degree who use the internet is 80 percent compared 59 percent of urban residents without a high school diploma.