Futurist Alvin Toffler foresaw ubiquitous fiber to the home -- in 1990

Like phones and VCRs, faxes will begin to appear in even the humblest homes, driven by the Law of Ubiquity. And so will fiber optic cables and other advanced technologies, whether paid for by the individual, the public, or by other users whose fees will subsidize service to those who can’t afford it.

The widest diffusion of communication capabilities is an inseparable part of the new system of wealth creation. The direction is almost inevitably toward what the old Bell phone company called “universal service”—i.e., ubiquity—combined with interactivity, mobility, convertibility, and connectibility.

Toffler, Alvin. Powershift: Knowledge, Wealth, and Power at the Edge of the 21st Century (p. 356). Random House Publishing Group. Kindle Edition.  

Not too late to build Al Gore’s “information superhighway.”

If Congress could turn back the calendar to the 1990s when then Vice President Al Gore envisioned a digital “information superhighway,” it could have adopted a different strategy than unsustainably relying on legacy voice telephone service to chip away at its construction and the unrealistic idea that investor-owned service providers would compete to build high cost, long ROI fiber telecommunications infrastructure to replace legacy metallic voice telephone and cable TV plant. Congress should have instead formed a Digital Infrastructure Authority.

The regionally administered authority would similar to the Federal Highway Fund fuel tax that operates as an excise tax on companies that originate and send traffic over this fiber optic freeway, something that has been proposed by service providers and their policy advocates. 

It would provide long term, low interest loans to publicly and consumer utility cooperative owned networks so as to not favor any privately owned provider and function as an open access network – a public resource available to anyone who wants to use it. The authority would also have the ability to purchase existing networks and their rights of way in order to increase economies of scale, cost efficient construction and network reliability.

There would be plenty of economic opportunity for private sector players to design, build and operate the network. And it would reach farther than fiber networks they could afford to build, which limit them to proscribed builds that favor densely developed areas but leave other areas without service.

The Digital infrastructure Authority would also make access more affordable for end users since it would not have to generate profits for investors or pay business taxes. By charter, it would reach any doorstep on the electrical grid.

The good news is it’s not too late four decades later for Congress to choose this course. Call it a course correction.

U.S. telecom policy split: broadbanders versus infrastructuralists

Lacking a global policy to support the modernization of legacy copper analog telephone infrastructure to fiber to support modern Internet protocol-based voice, video and data services, the United States has defaulted to multiple, one off piecemeal subsidy programs. Determining how these programs operate has resulted in further fragmentation into two camps. They are the broadbanders and the infrastructuralists.

The broadbanders have held sway since the 1996 Telecom Act. It directed the Federal Communications (FCC) to annually survey the deployment of advanced telecommunications infrastructure and identify and correct impediments.

The FCC chose broadband speed – how fast bytes travel to and from end user premises – as the metric by which to gauge deployment. As long as the numbers were increasing over the past three decades, the FCC declared sufficient progress.

Various subsidy programs also adopted this metric as an eligibility factor. Only premises offered specified broadband speeds falling below an arbitrary cutoff were deemed eligible. That in turn led to the creation of “broadband maps” to determine which addresses were considered served and thus ineligible and which were “unserved” or “underserved” and thus eligible.

The infrastructuralists argue this is inherently wasteful and short lived since what is deemed adequate “broadband speed” is dynamic and growing rapidly such that by the time subsidies are awarded, projects face imminent obsolescence. They favor subsidizing fiber to the premise delivery infrastructure because of its long-term life, relatively low upgrade costs and its capacity to easily accommodate the longstanding trend of increased device and data use.

The infrastructuralists’ influence peaked in 2021 when the Biden administration’s infrastructure legislation proposed appropriating $90 billion to subsidize public and utility cooperative owned fiber that the president noted have a lower cost structure since they don’t have to produce profit for investors.

Naturally, investor owned providers that dominate America’s market-based telecommunications were opposed. The bill was quickly scaled down and amended to favor the broadbander camp, using the broadband speed metric and related broadband mapping to determine subsidy eligibility.

The Biden administration proposed guidance for the amended measure’s Broadband Equity Access and Deployment Program that allowed states to prioritize fiber projects in parceling out grants awarded to the states under the legislation. That gave the infrastructuralists leverage.

But the broadbanders -- particularly wireless and low earth orbit satellite services – claimed that was unfair. Americans in areas with obsolete legacy metallic infrastructure needed better service decades ago and suffered long enough. We can provide it much faster than building out fiber to them "to get people online," they claimed, urging the feds to liberalize BEAD so some of the subsidies flow our way.

The broadbanders gained influence in the waning months of the Biden administration and now hold sway in the current Trump administration. In the BEAD battle, some states are claiming they know what’s best to meet the needs of their residents and businesses and insist fiber is the best use of taxpayer dollars. But the billions needed to build it largely come from Washington, giving federal policymakers the ultimate say.

As they have for decades, the broadbanders remain dominant over the infrastructuralists.

Quantum enabled SDN

The company operates over a million miles of fiber and cable that deliver internet to 31.5 million homes and businesses. That means that for any piece of data to travel from Point A to Point B, there’s a near infinite number of combinations, said Elad Nafshi, Comcast’s chief network officer. 

Data going into New York for example, could travel along the George Washington Bridge, the Lincoln Tunnel or the Amtrak train tracks, he said. And the fastest route also depends on other factors like, if there’s a fiber cut somewhere or a big surge of data into New York while everyone streams the Giants game. 

Being able to calculate, in real time, all those variables to determine the optimal flow of data and deliver it at the fastest speeds for the highest number of people is something conventional computers struggle with. But, “that’s something that Quantum could do extremely well,” Nafshi said. 

 https://www.wsj.com/articles/heres-how-quantum-computing-could-change-the-world-c7a995b1

This recalls the Cold War origins of the Internet. It was designed as ARPANET in the 1960s by the U.S. Department of Defense to provide a computerized governmental communication network that was self healing -- meaning it could automatically route around metro areas destroyed by nuclear weapon attacks.

Here, it is routing around network congestion. 

Playing the long game in the fiber gold rush: Large investor owned provider overbuilding publicly owned network in small town that didn't initially pencil for private investment.

Fidium’s arrival has flummoxed local officials, partly because its parent company, Consolidated Communications, declined to build broadband infrastructure in Arrowsic years earlier, said Don Hudson, another commissioner. “It came as some surprise when all of a sudden we started seeing, essentially, a duplicated system being built on top of ours,” he said. “If it wasn’t actually happening, it would be laughable.”

Consolidated Communications, Fidium’s parent, owns many of the telephone poles in town. The local group had to pay tens of thousands of dollars to put its cables on them. That ownership has made it simple for Fidium to begin installing its own fiber without any approval from Arrowsic officials.

Machias-based internet service provider Axiom Technologies runs the town’s broadband service. Its CEO, Mark Ouellette, was also surprised to hear of Fidium’s entrance into Arrowsic. His company, which provides internet to several Maine towns, isn’t backing down.

“Typically, when another provider is in the community with fiberoptics, it’s quite a challenging business case to be made to build out fiber on top of fiber already there, especially in small places,” he said. “We are going to make a strong case that community cyber connectivity is an important asset for the community … because we return a percentage of our fees to the customer, back to the town.”

https://themainemonitor.org/arrowsic-broadband-challenge-fidium-fiber-network/?ref=broadbandbreakfast.com 

This is an interesting situation. A bigger for profit fiber ISP is overbuilding publicly owned fiber distribution infrastructure and taking advantage of its reduced barrier to entry with its ownership of the pole distribution infrastructure. 

Consolidated Communications is likely playing the long game. A premises fiber connection has long term value given the 30-50 year life of the fiber plant. Large investor owned providers enjoy greater economies of scale and ability to spread costs than publicly owned networks serving a single small town such as the case here  -- where both public and privately financed fiber desire to capture and keep end users.

This is the dynamic driving the fiber gold rush. A decade or two earlier, the business case for investor owned fiber turned on short term ROI that disfavored investment in smaller, less densely populated areas like Arrowsic, Maine. Now it recognizes the long term value of owning the fiber premise connection as well as the potential to sell it to an even larger player with a similar outlook. 

Lutnick’s right. Americans aren’t getting the benefit of the bargain -- of universal service.

U.S. Commerce Secretary Howard Lutnick announced June 6 that the Trump administration would be revising the program rules for the $43.45 billion Broadband Equity and Deployment (BEAD) program, authorized by the Infrastructure Investment and Jobs Act of 2021 (IIJA).

Lutnick said the program requires retooling in order to ensure Americans can obtain the full “benefit of the bargain” Congress intended in enacting the IIJA: broadband deployment. The Biden administration, in keeping with the infrastructure construction and modernization intent of the IIJA, administered BEAD with an infrastructure focus and specifically fiber to the premises (FTTP) and middle mile advanced telecommunications infrastructure.

The current administration however is reverting to the policy framework in place since the 1990s. It defines “broadband” as a service based on specified “high speed” throughput. The infrastructure to deliver it isn’t specified in this “technology neural” policy. In the original version of the IIJA, it was: FTTP. That fell away in a subsequent amendment of the legislation. (See earlier blog post here).

By deemphasizing landline infrastructure and instead making BEAD subsidies available for cheaper and less reliable non-landline infrastructure delivered service as fixed wireless and low earth orbit satellite, the Trump administration will “connect more Americans to broadband more quickly, and at a lower cost to the American taxpayer,” said Lutnick, who also serves as acting administrator of the National Telecommunications and Information Administration (NTIA), charged with implementing BEAD.

However, Americans have never gotten the real benefit of the bargain: universal service of Internet protocol-based advanced telecommunications delivered by landline like voice telephone service before it. The expectation of that bargain was expressed as public policy in the Telecommunications Act of 1996.

According to the Federal Communications Commission, the Act “expanded the traditional goal of universal service to include increased access to both telecommunications and advanced services …for all consumers at just, reasonable and affordable rates.”

The closest federal policy came to mandating universal access to advanced telecommunications was in 2015 when the FCC placed Internet protocol telecommunications under Title II of the Communications Act of 1934, classifying it as a common carrier utility requiring reasonable requests for service be honored and barring neighborhood redlining. The FCC declined to enforce its regulation adopting the reclassification and ultimately reversed course in 2018, repealing it.

The IIJA did not affirmatively express public policy of universal service. It merely stated findings that access is “essential to full participation in modern life in the United States.” Universal service is described in the legislation by its inverse: a “persistent ‘digital divide’ in the United States.” It charged states receiving planning grants to only determine how long it would take to construct infrastructure providing universal service.

That Americans have not seen universal landline delivered advanced telecommunications reflects a longstanding problem of insufficient political will for policy ensuring fiber would reach most every American doorstep. That would constitute “belt and suspenders” advanced telecommunications infrastructure that would serve well into the 21st century.

Instead, Americans have seen numerous, limited one off subsidies largely directed to investor owned providers with limited capacity to invest. Often that has meant no FTTP belt and only wireless suspenders to reliably hold up the trousers of its connectivity needs over the long term.

Multiple factors align against universal FTTP over near term

Each state and territory then must set up and administer its own broadband infrastructure grant program using the statutory framework to distribute the money to the internet service providers that will be building the networks. Importantly, Congress directed that each state and territory must ensure every broadband serviceable location in its jurisdiction gets connectivity as a condition of receiving the bulk of BEAD funding. (Emphasis added)

https://broadbandbreakfast.com/tim-stelzig-a-new-approach-to-connecting-all-americans-to-the-internet/

The Infrastructure Investment and Jobs Act of 2021 (IIJA) as the 1996 Telecommunications Act before it states public policy intent of universal advanced telecom service. The IIJA placed responsibility on the states to implement it. The IIJA appropriated $43.45 billion for delivery infrastructure to the states as “once in a generation” seed funding under the law’s Broadband Equity and Deployment (BEAD) program.

BEAD required states to develop Five Year Action Plans with timelines to achieve universal service. It also requires states to "rigorously explore ways” to cover the cost of advanced telecommunications infrastructure builds eligible for BEAD subsidies with other sources of funding. BEAD program rules developed by the Biden administration require they include “a comprehensive, high-level plan attain universal service.”

As the plans were filed with the National Telecommunications and Information Administration (NTIA) in 2023, it became clear states would have to come up with significant organic funding sources. Oregon’s plan indicated the state would need nearly five times its $689 million BEAD allocation to build universal fiber to the premises (FTTP) infrastructure at an estimated cost of $3.3 billion deployed over a five year period.

Similarly, California’s plan stated the Golden State is unable to assure timely construction of universal FTTP infrastructure – estimated to cost $9.78 billion including infrastructure hardening in areas with high wildfire risk – because less than half that amount is available as federal and state subsidy funding. The plan offered no strategy to bridge the gap such as a state bond measure.

Consequently, states and also the federal government that assumed office this year are looking to wireless delivery technologies such as fixed terrestrial wireless and low earth orbit satellite. That has sparked controversy over whether dollars appropriated under the IIJA are best invested funding durable infrastructure in line with the bill’s infrastructure focus or emphasizing service delivery to get more American homes connected.

The likely outcome of this debate as far the as the IIJA is concerned will favor the later. The IIJA’s telecom infrastructure funding formula isn’t oriented to infrastructure despite the bill’s purpose and title. Rather, it’s based on need and specifically deepening bandwidth constraints that exist because FTTP has not timely been deployed to replace legacy copper telephone delivery infrastructure incapable of handling ever increasing Internet protocol-based service demand. Only half of all U.S. households had access to FTTP connections in 2024 according to the Fiber Broadband Association’s 2024 Fiber Deployment survey by RVA LLC Market Research & Consulting (RVA).

While the Biden administration nevertheless prioritized funding FTTP, impatience with poor service options in less densely populated areas that have existed for many years as well as short term fiscal conservatism – are combining with the IIJA’s service orientation and the lack of adequately funded state plans to attain universal FTTP to mitigate against universal FTTP over the near term. Another major factor is deteriorated utility poles that increases costs via replacement or resort to more costly underground infrastructure as well as patchwork of pole ownership and access hurdles.       

Origin of “tech neutral” shift for BEAD subsidies lies in 2021 infrastructure bill

This week’s policy shift on the advanced telecommunications infrastructure subsidy component of the Infrastructure Investment and Jobs Act (IIJA) to make it “tech neutral” and give less preference to fiber to the premises (FTTP) has its origins in 2021 as the IIJA was being enacted. The change -- which emphasizes rapid deployment -- is expected afford greater consideration to subsidizing providers of fixed terrestrial wireless and low earth orbit (LEO) satellite Internet.

The original bill sponsored by the Biden administration would have appropriated $100 billion for fiber infrastructure to be primarily deployed by local governments, nonprofits and consumer cooperatives. The administration noted supporting these entities would allow subsidy dollars to go further since they operate without the need to generate profits for investor-owned entities.

Opposition from legacy telephone and cable companies watered down the bill to cut the funding to $43.45 billion for delivery infrastructure. Instead of FTTP, the bill employed a throughput versus infrastructure-based standard for the subsidies.

Accordingly, the funding program was chartered as Broadband Equity Access and Deployment (BEAD). Funding was restricted to premises not able to obtain bandwidth of 25Mbs down and 3Mbps up. “Broadband” was defined as 100Mbps down and 20Mbps up with latency of 100 milliseconds or less.

At that point, the legislation – nominally dedicated to improving various categories of essential infrastructure – deemphasized infrastructure and instead the level of “broadband” service available at a given address. It retained a market-based policy despite widespread market failure the bill was intended to mitigate. This favored incumbent telephone and cable companies looking to incrementally edge out their existing infrastructures and providing a substantial degree of protection from publicly owned and utility cooperative operators.

The administration however sought to maintain an FTTP infrastructure focus in its rules for the BEAD program, describing it as less prone to obsolescence and thus able to deliver the best long-term value.

This week’s policy shift and the designation of throughput – broadband – in the IIJA now puts fixed wireless and satellite providers on a strong footing for subsidization. They could plausibly argue that any technology that can deliver “broadband” as specified in the IIJA should be eligible.

Survey: About half of all households passed by fiber in 2024 -- with less than half of those connected.

Internet connectivity is regarded as a utility as was voice telephone service before it where most every address had service. Nevertheless as legacy telephone companies replace the twisted pair copper that delivered voice telephone service, less than half of the homes where it is available have fiber service, according to the Fiber Broadband Association’s 2024 Fiber Deployment survey by RVA LLC Market Research & Consulting (RVA).

The 2024 survey estimates suggests that fiber now passes 56.5 percent of U.S. households with a bit less than half – around 45 percent – having fiber service. With IP connectivity considered a utility, one might expect that figure to be much higher, around 90 percent or more. Particularly given the pent up demand accumulated over decades as Internet Protocol (IP)-based services such as the web, email, and streaming video accelerated and IP connectivity became an essential element of commerce, education and medical care. Also, given fiber’s high desirability for reliability and capacity.

The most likely explanation is the growth of IP service over coax cable television infrastructure that grew rapidly since the mid-2000s as telephone companies delayed the transition to fiber, instead using their existing copper networks with digital subscriber line (DSL) technology.

Another probable factor that began to take off in the following decade is the smartphone. That allowed people to gain both mobile and home IP connectivity. Over the past few years, mobile providers like Verizon and T-Mobile have rolled out fixed wireless technology that some households are using instead of higher priced cable service.

The infrastructure for this service can be put in place much faster than fiber to the home. Until it reaches a natural capacity limit due to the technical limitations of high radio frequencies to reliably deliver service, it will satisfy at least some household demand for connectivity and deemphasize the role of fiber in meeting it.

Incoming federal government could place greater emphasis on “broadband” bandwidth over fiber, cut subsidies

For the past three decades, U.S. advanced telecommunications policy has been bandwidth focused: defining and delivering “broadband” speed – and not modernizing the nation’s legacy metallic telephone and cable TV delivery infrastructure to fiber. That policy focus is likely to gain greater emphasis with a new federal government taking office in 2025.

Blair Levin, a widely quoted analyst and former U.S. Federal Communications Commission official, told Fierce Network that “the biggest question is whether the new administration will take the view that satellite broadband is equal or better than terrestrial alternatives.”

More than likely it will given president-elect Donald Trump’s indicated approval for LEO satellite internet service over subsidizing fiber to the premises (FTTP) landline infrastructure preferred by the Biden administration’s Broadband Equity, Access, and Deployment (BEAD) Program.

In an interview with podcaster Joe Rogan less than two weeks before his election, Trump impliedly suggested Congress could end subsidies for FTTP, pointing to Elon Musk’s Starlink LEO satellite Internet service. “We're spending a trillion dollars to get cables all over the country, right up to upstate areas where you have like two farms,” Trump told Rogan. “And they're spending millions of dollars [via BEAD]…Elon can do it for nothing.”

Fiber Broadband Association (FBA) President Gary Bolton holds out hope modernizing twisted pair copper and coax cable delivery infrastructure to fiber will nevertheless remain on the table in the incoming government. "We’re optimistic the new Congress and administration will provide opportunities to build out more robust rural fiber connectivity," Bolton said in a statement to Fierce Network.

Industry sponsored white paper points to public, consumer utility coop ownership of fiber telecom delivery infrastructure to achieve broad socioeconomic benefit.

In the fourth decade since telecommunications began to shift to Internet protocol-based technologies, about half the connections to U.S. homes have not yet been modernized to fiber optic lines. That’s according to a recently published white paper commissioned by the Fiber Broadband Association and Frontier Communications.

The paper points to a clear reason: excessive reliance on investor owed deployers who lack incentive to fully build out fiber. According to the paper, this is because they naturally look to benefit their own economic interests and are not directly seeking the broader socioeconomic benefits that come with fiber connections reaching most every doorstep. Those are identified in economic terms in the paper as positive externalities: unintended, incidental (i.e. external) benefits beyond the narrow economic incentive of investors to earn the highest level of profit in the shortest time. That leads to micro market segmentation as seen on so-called “broadband maps” that an East Texas local government official compared to the spotted coat of a Dalmatian. (Related story from The Texas Tribune)

 

Lonnie Hunt, with his spotted map to visualize broadband availability in East Texas, at the McKenzie-Merket Alumni Center at Texas Tech University in Lubbock on Nov. 18, 2022. Credit: Mark Rogers for The Texas Tribune  

The paper’s authors estimate deploying fiber to 56 million households that are in tracts unserved by fiber has the potential to generate at least $3.24 trillion in terms of net present value (NPV) in incremental economic impact.

“Society as a whole benefits from the positive externalities of fiber deployment,” the paper notes. “However, no group of private investors can fully capture these benefits. As a result, a private market equilibrium that balances the marginal revenue and marginal cost of fiber deployment will lead to an under-provision of fiber resources, resulting in market failure.”

The 1996 Telecom Act and the Telecommunications Infrastructure Act of 1993 before it recognized the broader socioeconomic knock on effects of ubiquitous access to advanced telecommunications infrastructure. But the flaw in both is their exclusive reliance on investor-owned providers and market forces to bring them to fruition. They overlooked the economic misalignment identified in the white paper between the more limited, short-term interests of private players and the longer-term public interest. Both failed to establish clear, well thought out public policy to balance them.

For analog voice telecommunications, public policy is to regulate them as common carrier utilities under Title II of the Communications Act of 1934 to ensure widespread, affordable access. However, even though Internet access is now seen as a de facto utility, it is still not legally recognized as such four decades after the Internet digitized and transformed telecommunications.

While the FBA/Frontier paper doesn’t do so explicitly, it makes a strong argument for public and consumer utility cooperative ownership of advanced telecommunications infrastructure. By definition, these ownership structures are affirmatively intended to realize the positive socioeconomic benefits of access and affordability. For them, these are not merely incidental externalities but an organizing principle.

Incoming Congress, administration could revamp direction of BEAD from sell to buy side subsidization

Longtime telecom blogger Doug Dawson speculates the $43.45 billion Broadband Equity, Access, and Deployment (BEAD) Program funded by Infrastructure Investment and Jobs Act (IIJA) of 2021 could see its appropriation reduced to $10 billion under the incoming Congress and Trump administration. Dawson further postulated that reduced allocation could instead of subsidizing fiber to the premise (FTTP) landline delivery infrastructure go toward Starlink LEO satellite service.

If there is a big political movement to undo President Biden’s signature accomplishment [the IIJA], then infrastructure spending of all types could be curtailed, and it’s naïve to think that broadband spending couldn’t get swept into a bigger effort to cut spending. It’s not hard to imagine cutting the program to $10 billion, giving the money to Starlink, and declaring rural broadband to be solved.

https://potsandpansbyccg.com/2024/11/12/the-new-administration-and-bead/

Since LEO-delivered Internet requires far less infrastructure than deploying fiber delivery infrastructure, it calls into question whether subsidies are even needed to deploy it to reach homes and small businesses lacking fiber connections. They recover their costs through relatively high service charges. For example, Starlink runs $120 per month with a one-time hardware cost of $499.

If Dawson’s $10 billion scenario comes to pass, we could see that reduced appropriation converted from sell side to buy side subsidization since households lacking fiber access could find those costs unaffordable, limiting access and impeding BEAD’s programmic goal of promoting universal service.

But LEO service may come with some significant limitations since it requires a clear sky that may not be available at homes and small businesses in heavily wooded areas. "If they try putting BEAD mostly in the LEO basket, lumberjacks will be replacing drilling crews," writes Chris Scharrer of DCS Technology Design. "The idea of Starlink being a cure-all for the nation is literally, not seeing the forest through the trees."

Connecticut's inexplicable archipelago strategy for BEAD subsidies

In breaking up the state into workable regions, the Connecticut broadband office is asking grant applicants to propose bringing fiber to every location. But, Pisacich says, “terrestrial-based providers may not be able to serve those locations without huge costs, so they may not even bid.”

As a result, the office is allowing the islands to be separated into their own region, when needed. That way, one provider can bring fiber to the area aside from the islands, and other providers employing alternative technologies can deliver broadband to the islands.

By using this approach, Pisacich expects to receive “multiple applications, have multiple options, and then we’ll be able to get those harder locations served within the timeframe.”

https://blandinonbroadband.org/2024/10/16/connecticut-has-99-percent-broadband-coverage-but-so-do-many-mn-counties-what-can-we-learn/ 

Assuming locations in the surrounding "sea" are on the electrical grid, what doesn't add up is why the "islands" can't be reached with fiber to the premises (FTTP) particularly with substantial subsidization from the Infrastructure Investment and Jobs Act's BEAD program intended to reach high cost areas. Are they off the grid? Most likely not. If they can be served by electrical power infrastructure, why can't they be reached with fiber?

First with fiber: Private capital maneuvers for first mover advantage

Some critics, including telecom writer Karl Bode, have characterized Tier 1 players’ sudden embrace of public-private partnerships, including those based upon an open access approach, as a strategic move to capture federal subsidies before smaller players can. In comments on Broadband Breakfast’s website, Bode said that this shift was less about promoting competition and more about securing government funding while maintaining market dominance.

“Now that there's billions of dollars of potential subsidies there for them to glom onto, they want to get a hold of this cash before a municipality, cooperative, or city-owned utility does,” Bode said. “I find the flip funny given their historical, often virulent lobbying opposition to both open access policies, open access networks, and open competition – especially municipal or cooperatives – more generally.”

https://broadbandbreakfast.com/exclusive-series-at-t-t-mobile-bet-big-on-open-access/?ref=alerts-newsletter

Bode's analysis goes to the fundamental tension between investor owned advanced telecom infrastructure and the socialization that tends to occur when the availability of private investment capital is insufficient relative to market demand for advanced telecom services. Private investment capital however realizes the long term value is in owning the fiber connection to homes and other premises as well as first mover advantage that accrues to whomever first installs it.

That's what's attracting private equity as in the case of AT&T's Gigapower joint venture with BlackRock, mentioned in this article. That infuses private capital to finance those fiber connections that AT&T couldn't otherwise without displeasing its current and future investors. AT&T gets help with the sizeable capital expenditures needed and BlackRock retains the option to sell out its stake in the future to AT&T or other network assets consolidator. 

Private capital also wants to foreclose public and consumer utility cooperative ownership since it too would benefit from first mover advantage and disadvantage private investment over the long term.

Draft BEAD program update would give states more leeway to use LEO, FWA services using unlicensed spectrum when more economical than FTTP.

In a March 2023 interview, U.S. Secretary of Commerce Gina Raimondo said, “If we're going to connect every American, including the tens of millions of Americans who now don't have the internet, we're going to have to lay fiber all across this country.” But $43.5 billion in construction subsidies appropriated in the Infrastructure Investment and Jobs Act of 2021 appears insufficient to bring fiber connections to most every American doorstep as with copper telephone lines in the previous century.

Instead, Low Earth Orbit (LEO) satellite and fixed wireless service (FWA) using unlicensed spectrum may have to suffice to fill the many thousands of holes in the Swiss cheese deployment of landline advanced telecommunications infrastructure over the past three decades. That has left a considerable number of discrete locations lacking it or served by older telephone and cable infrastructure that falls short of current federal standards for reliable internet protocol-based voice, video and data service.

That’s the upshot of draft Broadband Equity, Access and Deployment (BEAD) program guidance issued this week by the Department of Commerce’s National Telecommunications and Information Administration (NTIA). Those voids are seen on splotchy federal and state “broadband maps” of existing service where investor owned providers bypassed discrete locations they determined would not produce an adequate return on investment or profit.

While the draft guidance reiterates a preference for fiber to the premise (FTTP) projects in existing program guidance, it permits state subgrants to LEO satellite service providers and ground-based fixed wireless providers using unlicensed spectrum for projects where FTTP would require such a large degree of subsidization (up to 75% of project costs) -- or a lack of interest from service providers -- that states would be challenged to connect all premises to service meeting specifications for minimum throughput and reliability as required by the BEAD program. Accordingly, the draft revised guidance states these “alternative technologies” can to be used when it would be “less expensive” to do so.

Moreover, the draft guidance would bar states from funding projects where LEO satellite or fixed wireless service meeting minimum service specifications already exists or is being subsidized by another government program, which could potentially render large portions of the nation ineligible for BEAD subsidies.

The draft guidance would authorize states to use their grant funds to make subgrants to these providers to help customers pay for non-recurring installation and premise equipment costs, which for LEO service can run several hundred dollars. However, it’s unclear whether these services would meet the existing BEAD program guidance requiring states to ensure subgrant funded projects offer service at rates affordable to low and middle income households.

Former FCC Chair Pai urges states to direct BEAD funds to sparsely populated counties as countywide projects

The $42.45 billion BEAD program tasks each state with identifying unserved and underserved communities for funding. States have been thinking about the size of their project areas since they submitted their initial proposals in December 2023, but were not required to define the size of their project areas for sub-grant awards when they filed their initial proposals.

“Searchlight urged [states] to think about an entire county as the relevant project area, as opposed to say a service location or even a census block or census tract,” Pai said. This strategy is important to prevent "cherry picking" higher-value areas that are more densely populated, or have a higher per capita income, among those locations slated for funding, he said.

Former FCC Chairman Urges County-Level BEAD Project Areas

Pai’s suggestion would have states direct BEAD subgrants to large infrastructure projects in sparsely populated counties. The reason is BEAD program guidance would require 8 out of 10 prems in each county (or potentially regional projects involving multiple counties) to be currently unserved, meaning they cannot order Internet service with throughput of at least 25/3 Mbps and latency of 100ms or less or underserved, 100/20 Mbps or higher:

(t) Project—The term “project” means an undertaking by a subgrantee to construct and deploy infrastructure for the provision of broadband service. A “project” may constitute a single unserved or underserved broadband-serviceable location, or a grouping of broadband-serviceable locations in which not less than 80 percent of broadband-serviceable locations served by the project are unserved locations or underserved locations.

In the larger scheme, Pai's suggested allocation of BEAD dollars may be to help ensure projects they fund don't infringe upon the service area "footprints" of large incumbent investor owned telephone and cable companies by steering them away from more densely populated counties. Their footprints have been made by deployment "shoes" with holes in their soles -- creating unserved or underserved pockets -- that could be potentially funded as BEAD projects. Per the cited BEAD program guidance, these could be a small group of prems or even a single premise.

U.S. appellate court grants stay of FCC Title II reclassification of Internet as common carrier utility, citing lack of clear congressional authority

The Sixth District United States Court of Appeals has granted a stay of a rulemaking issued by the Federal Communications Commission that would regard Internet protocol services as a common carrier telecommunications utility under Title II of the Communications Act. The stay puts on the rulemaking on hold pending a hearing before the court later this year on the merits of a challenge against the reclassification brought by telecommunications industry interests.

In granting the stay, the court determined it was likely the challengers would prevail on the merits of the major questions doctrine, finding that the Congress failed to clearly authorize the FCC to classifying Internet Protocol as a common carrier telecom utility. The court signaled its decision on the merits will turn on interpreting Congress’s intent vis 47 USC § 153(51) and specifically whether internet service providers meet the definition of “telecommunications carrier” in the statute, enacted in the 1996 Telecom Act.

The law clearly defines telecommunications as “the transmission, between or among points specified by the user, of information of the user’s choosing without change in the form or content of the information as sent and received.”

However, the court found that “Nowhere does Congress clearly grant the Commission the discretion to classify broadband providers as common carriers. To the contrary, Congress specifically empowered the Commission to define certain categories of communications services and never did so with respect to broadband providers specifically or the internet more generally.”

“Absent a clear mandate to treat broadband as a common carrier, we cannot assume that Congress granted the Commission this sweeping power, and Petitioners have accordingly shown that they are likely to succeed on the merits.”

1996 Telecom Act affords FCC clear, unambiguous authority for Title II rulemaking

Investor owned telephone and cable companies and their trade associations hope the courts will put the U.S. Federal Communications Commission’s recently issued Open Internet rulemaking on ice, slated to become effective July 22. They believe their case has been strengthened by the U.S. Supreme Court’s recent ruling in Loper Bright Enterprises v. Raimondo that held the courts and not executive branch agencies must interpret the legislative intent of a statute when it’s unclear or ambiguous under the Administrative Procedures Act.

They hope to convince the courts the FCC lacked authority to issue the rulemaking classifying Internet protocol-based services -- advanced telecommunications – as a common carrier telecom utility service under Title II of the Communications Act. The rationale is the agency previously relied upon the now disapproved Chevron doctrine that accorded administrative agencies authority to issue rules based on their interpretation of the legislative intent of a statute that’s unclear or ambiguous. Or which fails to confer clear rulemaking authority to an agency.

That would conceivably bolster their case if the underlying statute here – the 1996 Telecom Act – was unclear or ambiguous or failed to grant the FCC authority for its rules. The problem is doesn't meet any of these tests. It clearly defines telecommunications as “the transmission, between or among points specified by the user, of information of the user’s choosing without change in the form or content of the information as sent and received.”

Sending an email certainly would meet the definition. So would posting to a website or social media site. The transmitted content isn’t changed; it’s communicated over the Internet to one or more parties.

In so providing this telecommunications service, the Act states providers “shall be treated as a common carrier” (i.e. a utility under Title II of the Communications Act) and further authorizes the FCC to “determine whether the provision of fixed and mobile satellite service shall be treated as common carriage.” That’s a pretty clear and unambiguous grant of authority for the FCC’s rulemaking.

The Act also clearly brings providers of advanced telecommunications providers within the scope of the Open Internet rulemaking, defining telecommunications service as “the offering of telecommunications for a fee directly to the public, or to such classes of users as to be effectively available directly to the public, regardless of the facilities used.’’