Tag Archives: CAF2

Doug Dawson points out three flaws of BEAD

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Doug Dawson knows broadband policy and technology from the ground up. He has written about three main flaws in BEAD funding…

BEAD Satellite Awards. I start with the premise that rural communities are not going to be happy when somebody officially tells them that the federal government is giving money to Starlink or Kuiper to solve their rural broadband gap. It’s likely that NTIA and the FCC will declare that satellite is good broadband so that they can declare that the rural broadband gap has been solved.

There are also natural limitations on the capabilities of satellite broadband. It can be difficult to deliver a satellite signal through heavy tree canopy.  …

Defaults. There will continue to be defaults for existing broadband grant programs. This year saw significant RDOF defaults from Charter and CenturyLink. There will be defaults on networks funded by ARPA grants, where funding ends at the end of 2026.

I expect BEAD defaults. …

Crappy Mapping. The biggest group of locations missed by BEAD will be due to poor FCC maps. The BEAD map challenge was a total joke. It was fairly easy for ISPs to get BEAD-eligible locations removed from the map, including many that should have stayed on. The map challenge made it practically impossible to add locations to the BEAD map where the FCC maps were in error. There are two major flaws in the FCC maps that will surface as people complain about still not having adequate broadband.

Research questions efficacy of federal funding programs for broadband

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Broadband Breakfast reports…

Some of the country’s largest incumbent Internet Service Providers received billions in federal subsidies to build out rural broadband networks through 2021. But the three largest recipients have stopped offering service to many as half the homes and businesses they once vowed to serve since funding stopped three years ago, a new study found.

The study, released in May by several California university researchers, underscored the need for more government oversight and better program design as billions in new broadband grant programs continue to flow, according to the authors. It also revealed some of the difficulties of subsidizing broadband as technologies continue to evolve.

More details from that study…

We use the broadband-plan querying tool (BQT) to curate a novel dataset that complements ISP-reported information with ISP-advertised broadband plan details (i.e., download speed and monthly cost) on publicly accessible websites. Specifically, we query advertised broadband plans for 687 k residential addresses, including a representative sample of 537 k addresses, across 15 states, certified as served by ISPs to regulators. Our analysis reveals significant discrepancies between ISP-reported data and actual broadband availability. We find that the serviceability rate—defined as the fraction of addresses ISPs actively serve out of the total queried, weighted by the number of CAF addresses in a census block group—is only 55.45%, dropping to as low as 18% in some states. Furthermore, the compliance rate—defined as the weighted fraction of addresses where ISPs actively serve and advertise download speeds above the FCC’s 10 Mbps threshold—is only 33.03%. We also observe that for a subset of census blocks, the CAF-funded addresses receive higher broadband speeds than their monopoly-served neighbors. These results indicate that while a few users have benefited from this multi-billion dollar program, it has largely failed to achieve its intended goal, leaving many targeted rural communities with inadequate or no broadband connectivity

The FCC offers guidance for providers who may default on RDOF and CAF goals

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The FCC reports…

With this Public Notice, the Wireline Competition Bureau (WCB or Bureau) provides guidance to Rural Digital Opportunity Fund (RDOF) and Connect America Fund (CAF) Phase II support recipients and other stakeholders regarding the processes for provider defaults.[1]  Support recipients are showing significant progress in meeting their deployment milestones, as noted below, and there is no demonstrated need for widespread relief from the RDOF and CAF Phase II default penalties.  Given the flexibility available under the existing default processes and other Commission rules and the lack of demonstrated need for broad relief, as well as our strong interest in preserving the integrity of the Commission’s broadband deployment programs, we decline to provide a blanket amnesty.

However, we recognize that certain carriers may not be able to meet their broadband deployment obligations[2] or have experienced changed circumstances that may impact their deployment.  To ensure that high-speed broadband is deployed across the country, close coordination between the Commission’s high-cost programs and other federal broadband deployment programs is critically important.  In recent months, the Bureau has quickly responded to default requests for these high-cost programs, has approved transfers of deployment obligations to other carriers which avoids support payment recovery and default penalties, and has waived Commission rules where warranted to reduce support payment recovery and default penalties.  The Bureau also has the ability, where good cause exists based on individual circumstances, to waive other non-compliance rules for defaults in these high-cost programs.

[1] This Public Notice builds on previously issued guidance regarding engagement with states and Tribal governments.  See Wireline Competition Bureau Provides Guidance to High-Cost Support Recipients Regarding Engagement with States and Tribal Governments to Determine Eligibility of Locations for the BEAD Program and to Avoid Duplicative Funding, WC Docket No. 10-90 et al., Public Notice, DA 23-1115 (WCB Nov. 29, 2023).

[2] See Letter Seeking RDOF and CAF II Amnesty from 69 Internet Service Providers, Trade Associations, State and Local Officials, School Districts, and Civil Society Organizations from Gigi Sohn, Executive Director, American Association for Public Broadband, to Jessica Rosenworcel, Chairwoman, WC Docket No. 19-126 et al. (filed Feb. 28, 2024) (Entity Letter) (requesting broad amnesty from default penalties for RDOF and CAF Phase II participants to encourage early defaults).

To ensure federal deployment funds reach the locations where they are needed, we strongly encourage carriers contemplating defaulting on their deployment obligations under the Commission’s competitively bid high-cost programs to reach out to the Bureau, and to the relevant state or territory broadband offices or Tribal governments, about their situation as soon as possible.  Earlier defaults can limit the support recovery and penalty costs to the carrier and also ensure that states and territories timely receive the necessary information for their Broadband Equity, Access, and Deployment (BEAD) planning.  Earlier defaults also ensure that our sister federal agencies timely receive this information to target funding for their broadband deployment programs.[1]

[1] Broadband Interagency Coordination Act of 2020, Pub. L. No. 116-260, § 904, 134 Stat. 1182, 3214 (codified at 47 U.S.C. § 1308 et seq.) (BICA) (requiring the Federal Communications Commission, the Department of Agriculture, and the National Telecommunications and Information Administration to “enter into an interagency agreement requiring coordination between the covered agencies for the distribution of funds for broadband deployment . . . .”).

This seems like a good step to allowing providers to report issues to open up communities to funding alternative routes for getting better broadband.

Do we strive for long term or short term goals when spending taxpayer money?

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Broadband Breakfast reminds readers of the conundrum inherent in CAFII funding. I think it’s helpful to read about the history of broadband investment as we are looking at spending $65 billion in the upcoming years…

In the months before President Joe Biden signed into law the historic infrastructure law on November 15, 2021, Republicans and Democrats wrangled over how much to spend on broadband.

Democratic lawmakers sought $100 billion, while their Republican counterparts countered with $65 billion, saying the former’s proposal was wasteful and excessive. The final score was $65 billion, with $42.5 billion of that earmarked for infrastructure in the Broadband Equity, Access and Deployment program, or BEAD.

Crucially, the BEAD program adopted a new definition of what adequate broadband would look like: 100 Megabits per second download and 20 Megabits per second upload.

It turns out, that speed threshold is serving as a key reason why money from BEAD and other programs will be used to cover already-subsidized projects under an older Federal Communications Commission program that has only recently completed some broadband builds using older technology.

Broadband Breakfast has analyzed the data and spoke with experts and former FCC officials about the pitfalls and problems with the Connect America Fund Phase II, or CAF II, a $10 billion funding program that started in 2014.

FCC officials working on the program said they knew the 10 Mbps download and 1 Mbps requirement was low and would lead to further subsidization down the road.

But they went ahead with it because they needed a political win after the low adoption of the program’s predecessor: Connect America Fund I.

The problems started just six weeks after the CAF II program was finalized, when the FCC in 2015 approved a new definition of adequate broadband: an internet connection of at least 25 Mbps download and 3 Mbps download.

Critically, it didn’t migrate the CAF II threshold over to the new definition out of fear it would disincentivize interest in the program.

“In retrospect I can say it was a mistake having 10 * 1 Mbps be the standard for CAF Phase II,” said Carol Mattey, a former FCC bureau chief who worked on the plan.

The program offered large telecommunications companies, called price cap carriers, annual funding in exchange for providing that 10 * 1 Mbps service to rural areas across the U.S. without access to faster connections.

MN PUC meeting on LTD Broadband certification for CAFII: video and notes

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The MN PUC today met to discuss LTD Broadband’s annual Eligible Telecommunications Carriers (ETC) certification related to CAFII funding. I’ll paste my notes (however scattered) and related background information below. The quick take is that the MN PUC wanted to decide on a number of items (listed directly below). They agreed on options 1,3,4,6 and 8, with some modification on number 4. The main change would be adding a note to indicate that the MN PUC is only recertifying the ETC for this purpose. Not in light with anything happening with LTD Broadband and RDOF money.

Does the Commission have sufficient documentation through the filed FCC form 481 to be assured that the high cost funds received by each ETCs have been, and will be, used for their intended purpose, pursuant to 47 C.F.R. 54.314?

1.Certify all companies as indicated in Tables 1, 2, and 4 of Attachment A of the staff briefing papers (Department).

OR

  1. Recertify all companies as indicated in Tables 1, 2, and 4 of Attachment A of the staff briefing papers except for the following, which shall not be recertified: [specify any ETCs that are not being recertified].

AND

  1. Provide USAC with a list of carriers (including their SACs) that should be certified in a letter to the FCC (Department). Should the Commission certify LTD Broadband for CAF II Funding Program?

Should the Commission certify LTD Broadband for CAF II Funding Program?

  1. Certify LTD Broadband to continue to receive CAF II funding as was done by the Commission in Docket No. P999/PR-22-8.

OR
5. Do not certify LTD Broadband to continue to receive CAF II funding and defer certification on this carrier (Department). Should the Commission order all high-cost funding program ETCs to submit Performance Measure (PM) Testing results with all future 481 filings?

Should the Commission order high cost funding program ETCs to submit Performance Measure (PM) Testing results with all future 481 filings?

6. Require all high-cost funding recipients to submit Performance Measure (PM) Testing results with all future 481 filings (Department).
OR
7. Do not require all high-cost funding recipients to submit Performance Measure (PM) Testing results with all future 481 filings. Should the Commission continue to require quarterly filings of Tribal engagement from the ETCs consistent with the requirements in the Commission’s October 21, 2021 and November 8, 2022 Orders?

Should the Commission continue to require quarterly filings of Tribal engagement from the ETCs consistent with the requirements in the Commission’s Oct 21, 2021 and Nov 8, 2022 orders?
8. Continue to require quarterly filings of Tribal engagement from the ETCs consistent with the requirements in the Commission’s October 21, 2021 and November 8, 2022 Orders. (Department)

(You can related materials on the MN PUC site.)

More notes: Continue reading →

The US needs a National Broadband Strategy – so said GAO study

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The study isn’t new but it was discussed Before the Subcommittee on Oversight and Investigations, Committee on Energy and Commerce, House of Representatives. I’ve tried to pull out the highest-level points. The need for better coordination and collaboration has never been higher as so much gets poured into rural broadband. The amount is not enough to get everyone covered, but certainly there are ways to maximize investment…

How much federal money has been invested and how much to come?

Our prior work found that federal investments from 2009 through 2017 totaled nearly $50 billion for broadband infrastructure in unserved or underserved areas. Starting in 2020, COVID-19 relief laws, along with regular appropriations, have provided an infusion of funding for broadband, including for many new broadband programs. Most recently, the Infrastructure Investment and Jobs Act appropriated nearly $65 billion for new and existing broadband programs. Further, the President has set a goal of universal American access to broadband by 2030.

How many programs are there?

We identified at least 133 funding programs—administered across 15 agencies—that can be used to support broadband access, including support for planning and deploying infrastructure, making service affordable, providing devices, and building digital skills. Some of these programs support broadband as their main purpose or one possible purpose, and others can be used for multiple purposes related to broadband. Eligible recipients for these programs range widely and include: internet providers; other private sector entities; nonprofits; tribal, state, and local governments; education agencies; and healthcare providers. Through these programs, federal agencies invested at least $44 billion in broadband-support activities from fiscal years 2015–2020, according to our analysis of agencies’ data.6 See our report for a list of broadband funding award information by agency and program.

Having numerous broadband programs can be helpful to address a multifaceted issue like broadband access, but this fragmentation can also mean that programs overlap and lead to the risk of duplicative support.

What are the challenges in accessing funds?

  • Identifying relevant programs
  • Administrative complexity
  • Complementary use of programs
  • Unintended results of program restrictions

Is there a plan?

…there is no current overarching strategy that synchronizes these efforts and establishes agency accountability. FCC developed the National Broadband Plan in 2010, and while FCC officials said they still consider the plan relevant as a framework for modernizing policies, they acknowledge it is now outdated.14 Furthermore, officials from several agencies told us that no national broadband strategy of this scope is currently in effect.

What are the recommendations?

In our May 2022 report, we recommended that NTIA consult with relevant agencies, as well as the Office of Management and Budget and other White House offices, and present to Congress a report that identifies the key statutory provisions that limit the beneficial alignment of broadband programs and offers legislative proposals to address the limitations, as appropriate. At the time we issued the report, the Department of Commerce agreed with our recommendation. Since then, NTIA told us it plans to solicit input about statutory limitations and legislative proposals from relevant agencies during interagency broadband meetings. NTIA also told us that it plans to provide a report to Congress by May 31, 2026 that will, among other things, identify barriers and statutory limitations that limit the beneficial alignment of broadband programs and offer potential legislative changes, as appropriate.19

We also recommended that the Executive Office of the President develop and implement a national broadband strategy and that it include a national strategy for closing the gap in broadband access on tribal lands.20 Both strategies should include clear roles, goals, objectives, and performance measures to support better management of fragmented, overlapping federal broadband programs and synchronize coordination efforts. At the time of our report, the Executive Office of the President was considering if a national strategy was needed. As of this testimony, it has not developed a national strategy for broadband. However, the National Economic Council said it is prioritizing broadband coordination, including by chairing a leadership committee attended by key agency heads and convening a broadband working group that coordinates interagency efforts.

Fond du Lac Communications withdraws from/defaults on CAF II funding in MN

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The FCC reports…

By this Public Notice, the Wireline Competition Bureau (WCB) announces that Gila Local Exchange Carrier, Inc. d/b/a Alluvion Communications, Inc. (GLEC) and Fond du Lac Communications, Inc. (Fond du Lac) have notified the Commission of their decisions to withdraw from the Connect America Fund (CAF) Phase II auction support program.1 Fond du Lac’s and GLEC’s letters constitute notification to the Commission that they are defaulting on their obligations to meet their service milestones.2 At WCB’s direction, the Universal Service Administrative Company (USAC) suspended future support payments for these support recipients, and we now direct USAC to recover CAF Phase II support from GLEC and Fond du Lac pursuant to the Commission’s rules.3

On August 28, 2018, GLEC and Fond du Lac Reservation Business Committee were announced as winning bidders in the CAF Phase II auction.4 Fond du Lac Reservation Business Committee assigned its winning bids to its wholly-owned communications company, Fond du Lac.5 Fond du Lac and GLEC subsequently filed long-form applications seeking to become authorized to receive CAF Phase II auction support for their winning bids.6 GLEC was authorized in May 2020 to receive a total of $104,499.00 in support over a 10-year term to offer voice and broadband service to 29 locations in Arizona, and Fond du Lac was authorized in July 2020 to receive a total of $55,010.80 in support over a 10-year term to offer voice and broadband service to 13 locations in Minnesota.7 In April 2022, WCB sent letters to Fond du  Lac and GLEC expressing concern with the carriers’ ability to meet upcoming build-out milestones because they had certified in the High Cost Universal Broadband portal that they had deployed voice and broadband services meeting the CAF Phase II auction requirements to zero locations.8

GLEC and Fond du Lac filed letters in the relevant dockets notifying the Commission of their decisions to withdraw from the CAF Phase II auction support program in December 2022 and March 2023, respectively.9 Accordingly, we consider GLEC and Fond du Lac to have defaulted on their CAF Phase II auction service milestones. Each will receive no further CAF Phase II auction support payments,10 and we hereby instruct USAC to recover funds consistent with the Commission’s rules.11 While GLEC and Fond du Lac will no longer receive CAF II auction support, they remain subject to recordkeeping rules for the high-cost program.12 GLEC and Fond du Lac also remain subject to all Eligible Telecommunications Carrier (ETC) obligations unless and until they follow the relevant procedures to relinquish their designations.13 Additionally, GLEC and Fond du Lac cannot discontinue voice service without Commission approval.14

How at the MN CAF II funded providers doing with deployments? It varies

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USAC has just released an update on how providers that received CAF II funding are doing with their deployments. Here’s a high level summary from the USAC website…

Connect America Fund (CAF) Phase II Auction, commonly called “CAF II Auction,” provides support to carriers to deliver service in areas where the incumbent price cap carrier didn’t accept CAF Phase II model-based funding and in extremely high-cost areas located within the service areas of the incumbent price cap carriers. After a reverse auction bidding process (Auction 903) completed in 2018, the FCC awarded a total of $1.49 billion over 10 years to more than 100 winning bidders to provide fixed broadband and voice services to over 700,000 locations in 45 states. Learn more.

CAF II Auction data reflecting total deployment as of December 31, 2021, and reported to USAC as of March 7, 2022, can be found here. This spreadsheet lists the total number of CAF II Auction locations deployed through the end of 2021 by Study Area Code (SAC) and state.

They have a table of how many units each provider has reached; I added a column of how many each provider was assigned/award.

Holding Company State Certified_Units Assigned Units
Federated Telephone Cooperative MN 1,165 808
Paul Bunyan Rural Telephone Cooperative MN 1,207 315
Midcontinent Communications MN 42 7,410
Farmers Mutual Telephone Company MN 68 163
Metronet Holdings, LLC MN 370 672
Garden Valley Technologies MN 86 95
Halstad Telephone Company MN 7 7
Interstate Telecommunications Cooperative, Inc. MN 207 209
West Central Telephone Association MN 491 532
Broadband Corp MN 0 128
Consolidated Telephone Company MN 315 358
Roseau Electric Cooperative, Inc. MN 149 326
Wikstrom Telephone Company MN 53 56
LTD Broadband LLC MN 442 840
Fond Du Lac MN 0 13

As you can see some folks are rocking it; Paul Bunyan is and Midcontinent is not. That being said, the race isn’t over yet. Providers had six years to meet their obligation and we’re only into year three. There are staggered goals. (Posted below.) Especially given the labor and supply chain shortages, there are many reasons a project may not look to be on track. And network building isn’t linear, you deploy communities at a time. But all things being equal, the folks living in areas exceeding required deployments are probably happier.

Carriers must complete:

  • 40 percent of deployments by the end of year 3 (2022)
  • 60 percent of deployments by the end of year 4 (2023)
  • 80 percent of deployments by the end of year 5 (2024)
  • 100 percent of deployments by the end of year 6 (2025)

Wisconsin looks at failed history of federal funding for broadband

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The Milwaukee Journal Sentinel does a nice job detailing the illustrious history of federal funding for broadband over the past few Administrations. The title of the article says it all…

With poor data, deficient requirements and little oversight, massive public spending still hasn’t solved the rural internet access problem

There isn’t a lot new in the summary but it’s a good and succinct account, starting with the stories of people who have been waiting for decades for the federal funds to trickle down to deploy broadband to their homes and including lots of good details, facts and figures. They boil the issue to a few high level points: inadequate mapping of the problem and minimal requirements and even less administration.

The need…

The Federal Communications Commission has said that nationwide around 14 million people lack access to broadband, also known as high-speed internet. However, the firm Broadband Now, which helps consumers find service, estimates it’s closer to 42 million. And although Microsoft Corp. doesn’t have the ability to measure everyone’s actual internet connection, the tech giant says approximately 120 million Americans aren’t using the internet at true broadband speeds of at least 25-megabit-per-second downloads and 3 Mbps uploads — a further indication of how many people have been left behind.

The attempts so far…

None of the efforts under any of the administrations succeeded, and some of the reasons were fairly straightforward. The data on who has broadband  — and who doesn’t  — has been flawed. Some of the upgrades quickly became obsolete. There’s been limited accountability.

“We have given away $40 billion in the last 10 years … and haven’t solved the problem,” said Tom Wheeler, who was FCC chairman in Obama’s administration. “I always thought the definition of insanity was doing things the same way over and over and believing that, somehow, something will change.”

And so the digital divide, which some say has become a chasm, remains.

And the funders having little to say about who gets service…

Under the Connect America Fund requirements, grant recipients had a great deal of latitude in where they deployed upgrades. They were allowed, for example, to bypass thinly populated sections of rural counties and make up the difference in other CAF II-eligible areas that had more customers.

It’s really hurt places like Price County, according to Hallstrand, who says the government subsidies should be used to cover the areas most in need of better service before the money’s spent in other places.

“That’s how rural America gets broadband,” he said.

In one rural Wisconsin county after another, Connect America Fund II has left a trail of skepticism and frustration. Many communities have initiated their own broadband expansion projects, seeking state grants and local partnerships, because they haven’t seen much help from the federal government and big-name service providers.

Is MN a broadband winner or loser? A look at Federal Funding RDOF and CAF

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Telecompetitor reports on the RDOF ranking by state. Turns out Minnesota ranks highly for funding per rural resident…

The states with the most funding per rural resident, in descending order, were California ($830), West Virginia ($530), Arkansas ($377), Minnesota ($328), Massachusetts ($327), Mississippi ($313), Pennsylvania ($254), Wisconsin ($248), Illinois ($205) and Michigan ($201).

You’d think that would make Minnesotans feel like winners but it doesn’t because there is great concern over what that money is going to buy and when. The biggest concern is about LTD, undeniably a big winner with an opportunity to bid for almost $312 million project to build FTTH (fiber to the home) to 102,005 homes. This is especially surprising because they are a small company that always has focused on fixed wireless not fiber.

I’ve written a lot about this – so a quick rundown:

This story may sound familiar. It reads an awful lot like what I posted about CAF II awards in 2015…

If I’ve learned nothing else from the TV show Toddlers in Tiaras, I learned that sometimes you don’t want to win the first crown. Winning the first crown is better than winning nothing, but it usually puts you out of the running for Best in Show. Getting access at speeds of 10/1 is better than what the communities receiving CAF 2 funding have now. And any improvement is an improvement. BUT those speeds are slower than the Minnesota speed goals of 10/5 (The MN Broadband Task Force is looking to update those speeds.) and they seem even slower when you compare them to rural areas that have Gig access, such as Grand Rapids, Red Wing, Lac qui Parle County, New Prague, Rogers, Melrose and others.

Five years later, CAF II winners CenturyLink (Lumen) and Frontier report that they “may not have met” CAF II deployment deadlines for 2020. Here’s what I said when that announcement was made in January…

The frustration is that this leaves many people without broadband – again. The goal is to build to 25/3 (even lower in some areas) and they haven’t done that. To put that in perspective, it does not get them closer to the MN State speed goal of 100/20 by 2026. In Minnesota we are used to the State MN border to border broadband grant rules where project must build networks that are scalable to 100/100. That is not the case with these networks and getting to 25/3 does not mean getting to 100/20 will be easier.

Also there is the concern for customers that the promise or threat of building has kept competitors out of their market. The promise of a CAF II network has made it more difficult for the communities to get funding from other sources. CAF II funding focused on the providers only – communities didn’t not sign up or on to the program.

Einstein said, insanity is doing the same thing over and over again and expecting different results. Frustration is watching from the sideline as decision makers make the same decision again and again, especially when you are the community that suffers the consequence.

CenturyLink expands internet access to parts of Kanabec County

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According to the Kanabec Times…

Rural residents that have struggled to find ways to access the internet from their homes may be in luck as Century Link is expanding services to include an additional 1,400 homes in the Braham area, and 3,000 homes in the Mora area.

While this will boost internet access and speeds in under-served areas, Doyle Jelsing of the Kanabec Broadband Initiative said it still isn’t ideal.

“This is a step in the right direction, but there is still a long way to go,” he said. Jelsing explained that even though Century Link advertises speeds of at least 10 Mbps download and 1 Mbps upload, actual speeds tend to vary. For Jelsing, he had hoped upload speeds would be considered equally as important as download speeds. While download speeds help consumers who are interested in streaming video, upload speeds are essential for supporting local businesses that need to send data —not just receive it.

While 10 Mbps bandwidth will be a huge improvement for those with no wired internet options, it’s still below the FCC’s definition of broadband which is 25Mbps download / 3Mbps upload.

“We welcome the improvement,” Jelsing said. “However, time will work against us as the need for broadband increases.”