Advanced telecommunications fraught with heightened political peril with enactment of infrastructure bill

Due to excessive reliance on privatized advanced telecommunications infrastructure and weak regulatory and market incentives, the United States is many years behind where it should be when it comes to replacing ubiquitous copper telephone lines built for an era of voice telephone service with fiber for today’s Internet-protocol enabled services. That became painfully apparent with public health social distancing measures during the COVID-19 pandemic that made households very reliant on advanced telecommunications for work, education, purchasing goods and services, virtual medical care and entertainment. Impatience with lack of reliable, affordable access -- present pre-pandemic -- reached a boiling point.

The enactment of advanced telecommunications infrastructure subsidies in the Infrastructure Investment and Jobs Act last November has raised expectations of rapid relief after years of dashed political promises by elected officials to address the issue. The billions in subsidies set aside for advanced telecommunications infrastructure has been characterized as a once in a lifetime investment to finally put it to rest.

But the legislative provisions of the subsidies to be granted states as well as recently issued rules governing the grants will likely introduce additional delay even before any infrastructure is built. Expect months if not years of delays as incumbent investor-owned telephone and cable companies battle states, smaller upstarts and publicly owned projects over eligibility rules governing the subsidies and how they can be used.

Unlike transportation infrastructure such as roads, highways and airports that are expected to take many years to plan and build, voters may well have far less patient expectations. They’ll want to see fast, tangible progress when it comes to advanced telecommunications infrastructure. Especially with neighbors just down the road or around the bend who have fiber connections, envious while they try to get by on DSL over aged copper and wireless workarounds. Or fiber on a nearby utility pole but no affordable residential service in the case of Vermonter Claudia Harris. They’ll naturally think since they’ve been waiting for years for fiber, all those billions in federal subsidies should easily bridge the gap to their homes in short order. When it doesn’t quickly materialize, elected officials at all levels of government could face angry blowback from voters. They are well aware of the high level of concern among their constituents, noting complaints about Internet access and affordability are among the top issues raised by them.

NTIA chief's comments on subsidizing non-fiber telecom infrastructure as "escape hatch" raises questions

Do the BEAD rules mean satellite and other non-fiber services won’t be eligible for funding?

Again, no. It’s true the NTIA in its BEAD rules said it will count areas covered only by satellite broadband or service based on unlicensed spectrum as unserved and also expressed a preference for fiber. However, Davidson said he expects satellite and other non-fiber technologies will receive plenty of funding.

“This is an infrastructure project that’s designed to last for years. And we do put our thumb on the scale on the most resilient, future-proof technologies that we can,” he said. But NTIA knows “there has to be an escape valve for states. And for the really high-cost areas we fully expect that there will be states who have significant portions of other technologies.”

Source: NTIA chief answers 5 burning broadband funding questions

Alan Davidson, the NTIA administrator, didn't elaborate in this piece as to what those other non-fiber to the premise (FTTP) technologies will be. States can authorize Broadband Equity, Access, and Deployment (BEAD) Program grant funding for up to 75 percent of project costs in high cost areas, with the 25 percent match waivable. These are defined in the rules as areas with higher than average construction costs for projects where at least 80 percent of homes and businesses cannot order service with minimum throughput of 25Mbps down and 3Mbps up.

Davidson is quoted as specifying satellite as one of the fiber alternatives. But satellite has been around for years in these areas, calling into question why it would need subsidization to expand it. Moreover, it's a substandard, costly option that no one really wants to rely upon for connectivity. Satellite is also omitted from the BEAD rules as a form of reliable service where it is the only service option.

The other possible technology is fixed terrestrial wireless. The BEAD rules implicitly allow funding of fixed wireless using licensed spectrum or a mix of licensed and unlicensed spectrum as they recognize it as "reliable" service. As with satellite, fixed wireless has been around for many years in areas of the nation as a stopgap until FTTP can be deployed, calling into question the need to subsidize its expansion. It's best suited to areas of the nation with relatively flat terrain and modest tree growth since it utilizes frequencies that require a clear line of sight to end users -- areas because of these attributes are also likely to be less costly to build FTTP.

Administration favors fiber advanced telecom infrastructure for IIJA funding. Law could advantage governments and utility cooperatives.

Bipartisan Infrastructure Law-funded networks should be built to stand the test of time and be fast enough to accommodate current and future needs. Given current demand and evolving technologies, Bipartisan Infrastructure Law programs should prioritize the fastest speeds possible and require a minimum of at least 100/20 Mbps. Relatedly, Bipartisan Infrastructure Law funding should prioritize fiber-to-the-home wherever practical to future-proof the infrastructure. At the same time, respondents expressed the need for states to have flexibility to utilize both fixed and wireless technologies to fully reach all Americans and called for the ability to substitute fixed wireless and satellite options where fiber is not cost-effective or where no provider is willing to offer fiber. (Emphasis added)

The administration today clearly affirmed its preference for fiber optics for advanced telecom delivery infrastructure funded by the Infrastructure Investment of Jobs Act of 2021 (IIJA), shifting away from the technology neutral policy of the 1996 Telecom Act.

The IIJA prioritizes grant funding for up to 75 percent of capital costs of deploying advanced telecommunications infrastructure for projects where at least 80 percent of the premises to be served are not advertised landline or wireless connectivity of at least 25 Mbps for downloads and 3 Mbps for uploads.

But capital project construction is only part of the overall cost. The fiber infrastructure must also be maintained and repaired. Field electronic equipment must be updated and replaced every several years. These additional costs may deter a commercial entity that must earn a profit for its investors from building fiber in the sparsely populated areas deemed "unserved" under the IIJA and prioritized for funding. That would favor governmental operators and consumer utility cooperatives that operate without the burden of generating profits and paying income taxes, particularly if the federal government deems that grants awarded under the IIJA are taxable income.

U.S. advanced telecom policy has produced highly fragmented infrastructure, wide access disparities

Before the National Broadband Plan, policy groups did not truly work together to create broadband implementation strategy, Baller said. The project in which he was involved helped establish that a national unified plan for expansion was necessary in order for internet access to actually increase.Groups did not “think how their interests and others worked together,” he said.

 

This unified approach still impacts the strategy behind implementation today of Congress’ 2021 bipartisan infrastructure bill, the Infrastructure Investment and Jobs Act. Further, his experiences consulting with Google’s Fiber for Communities project influenced how he has approached his work to ensure implementation of the bipartisan infrastructure bill.

 

The goal is to maximize the effect to close the digital divide. And the tool to do that, according to Baller, is to focus on local broadband deployments: Look at where incumbents lagging in their efforts to deploy higher capacity broadband.

 

https://discuss.broadband.money/c/get-broadband-grant-alerts-news/jim-baller-is-a-resolute-champion-of-municipalities-building-broadband

 

This assessment is way off the mark. The U.S. Federal Communications Commission's National Broadband Plan issued in 2010 hasn't produced a unified national approach to modernizing the nation's outdated copper-based telecommunications delivery infrastructure to fiber. Instead, it's highly fragmented with only about a third of all homes with access to fiber connections from a mix of investor-owned, utility cooperative and government owned infrastructure. In many areas, stopgap wireless technologies have been employed to fill the gaps. Nor does the Infrastructure Investment and Jobs Act (IIJA) set a unified national approach or infrastructure standard, instead allocating grants to the states based on the degree to which they fall short of an arbitrary minimum "broadband" throughput.

 

The local municipal focus advocated here has accentuated the fragmentation, with policymakers making patchwork efforts to increase "broadband throughput" instead of regarding advanced telecommunications infrastructure more widely in a regional and interstate context as universal telephone service was before it.

Infrastructure Bill "broadband mapping" timeline: The fighting begins this fall

Washington, March 31, 2022 – The chair of the Federal Communications Commission said Thursday that the improved broadband maps needed to adequately disburse billions in federal infrastructure dollars will come this fall. During a House Energy and Commerce Committee Oversight hearing Thursday, Chairwoman Jessica Rosenworcel said, “Absolutely, yes. We will have [complete] maps in the fall.”

Completed Maps Will ‘Absolutely’ Be Available This Fall, FCC’s Rosenworcel Says

That will start the clock on multiple rounds of disputes over the accuracy of the maps as well as proposed advanced telecom infrastructure projects whose eligibility for 75 percent planning and construction grant funding under the Infrastructure Investment and Jobs Act of 2021 (IIJA)  is linked to the maps. The maps will determine projects ineligible for funding because less than 80 percent of addresses are deemed under IIJA provisions as "unserved:" areas where no incumbent providers offer "broadband" service of at least 100 Mbps down and 20 Mbps up. 

Here's the timeline of how these battles will likely play out, assuming the maps are issued as projected by the fall:

Fall 2022: FCC releases maps for state input as to their accuracy.

Fall 2022-Spring/Summer 2023: States dispute maps accuracy claiming they overstate “served” areas as with prior FCC "broadband maps."

Fall 2023:  After FCC deems new maps accurate, states and incumbents/WISPs continue to disagree over their accuracy.

Late 2023-Early 2024: Incumbents/ WISPs file challenges of proposed projects with states, contending they cover “served” areas.

Summer/fall 2024: Incumbents/WISPs appeal state determinations to the National Telecommunications and Information Administration (NTIA) as allowed by the IIJA.

Early 2025: States and incumbents/WISPs appeal NTIA determinations to the courts.

IIJA language on “digital discrimination:” Happy talk with no real world impact.

Title V and specifically Section 60506 of the federal Infrastructure Investment and Jobs Act (IIJA) enacted in November 2021 contains provisions titled “digital discrimination.” They state federal policy that “insofar as technically and economically feasible— subscribers should benefit from equal access to broadband internet access service within the service area of a provider of such service.” Section 60506 defines ‘‘equal access’’ as “the equal opportunity to subscribe to an offered service that provides comparable speeds, capacities, latency, and other quality of service metrics in a given area, for comparable terms and conditions.”

It directs the Federal Communications Commission to take steps to ensure that “all people of the United States benefit from equal access to broadband internet access service” and adopt rules by November 2023 to facilitate equal access to broadband internet access service, “taking into account the issues of technical and economic feasibility presented by that objective, including— preventing digital discrimination of access based on income level, race, ethnicity, color, religion, or national origin and identifying necessary steps for the FCC to take to eliminate discrimination.”

That definition sounds in language similar to provisions of Title II of the Communications Act that regards telecommunications as a common carrier utility and mandates reasonable requests for service to be honored while barring neighborhood discrimination. The FCC’s Open Internet rulemaking adopted in 2015 applied Title II to Internet protocol-enabled advanced telecommunications services. It was repealed and replaced in 2018. The Biden administration in a July 2021 executive order urged the FCC to readopt the 2015 Open Internet rulemaking.

The IIJA also requires the FCC to report to Congress on the FCC’s options for improving its effectiveness in achieving the universal service goals. The report, due by August 15, “will focus on examining options and making recommendations for Commission and Congressional actions toward achieving those goals,” according to a proceeding the FCC opened to gather public comment.

The administration was more likely to move the nation toward universal service as it was initially inclined to do by subsidizing public sector and consumer cooperative owned advanced telecommunications infrastructure, aptly noting these entities don’t operate with the economic burden of earning profits for their shareholders. The administration abandoned that stance in negotiations leading up to the IIJA’s enactment last year.

While few would object to Section 60506’s provisions, they are essentially happy talk with no real world impact. In the predominant market-based U.S. telecommunications landscape, commercial providers have incentive to discriminate since their shareholders naturally object to serving neighborhoods that are less profitable. That’s why only about a third of American homes that should have been connected to modern fiber optic delivered advanced telecommunications infrastructure at least a decade ago are not and still have copper telephone connections.

Section 60506’s language while nominally barring “digital discrimination” gives commercial deployers an out with exculpatory language, applying only where “economically feasible.” Fiber connections simply aren’t economically feasible within the business models of investor-owned providers, an economic reality seemingly unacknowledged by Section 60506. Digital discrimination is baked into the market segmentation strategies of those business models that favor newer and more densely developed neighborhoods in urban and suburban areas. Additionally, commercial providers have and will continue to argue it’s not technologically feasible to deploy fiber connections to homes and businesses within their service territories citing challenging geography.

O'Rielly incorrect on IIJA advanced telecom infrastructure funding eligibility

Former FCC Commissioner O'Rielly Emphasizes 'Unserved' As Priority for Infrastructure Bill Funds : Broadband Breakfast:

WASHINGTON, March 15, 2022 – Setting the speed threshold too high for federal infrastructure funding will move money away from a focus on the unserved, said a former Federal Communications Commissioner.

Mike O’Rielly said on a Broadband Breakfast Live Online event late last month that the 100 Megabits per second download and 20 Mbps requirement for money from the Infrastructure, Investment and Jobs Act will see funding flow to better-connected areas, which cost less to update versus installing basic speeds in unserved areas. The argument is in-line with critics who say that speeds in some rougher and harder-to-reach areas require at least some connectivity at first, with gradual increases.

Just the opposite. The language of the legislation defines "unserved" areas as eligible for funding as those where no less than 80 percent of addresses are not offered service with throughput of at least 25 Mpbs down and 20 Mbps up.

Charter CEO: Focus on symmetrical speeds due to marketing, not need | Fierce Telecom

Charter CEO: Focus on symmetrical speeds due to marketing, not need | Fierce Telecom: Echoing comments made by Comcast CEO Brian Roberts earlier in the week, Rutledge dismissed the competitive threat from fixed wireless access technology, arguing it will fall by the wayside much like DSL has as bandwidth and speed demands rise.

Mettalic COAX cable TV distribution infrastructure won’t be able to keep up either. The U.S. should have started a massive transition to fiber to the premise (FTTP) advanced telecom infrastructure 30 years ago. Instead, it adopted a laissez faire policy of allowing a wild west, constrained commercial market in "broadband" bandwidth. That created perverse incentive for legacy telephone and cable companies to sell higher bandwidth tiers at a price premium rather than invest in FTTP that would effectively end the scarcity-driven "broadband" market created by their underinvestment in distribution infrastructure.

Now the nation is caught in a never ending game of catch up, attempting to keep the advanced telecom infrastructure sufficient to end user needs with the minimum possible investment. That's beneficial to shareholders of these companies. But despite their relatively much smaller number, national policy of the past three decades has accorded their interests far greater weight than the broader public's.

Infrastructure Act gives FCC option to route around “broadband map” delays

The Infrastructure Investment and Jobs Act (IIJA) allocates $43.45 billion in grants to the states for the construction of advanced telecommunications infrastructure. The IIJA links the amount of that funding for a given state to geographic service availability data collected by the U.S. Federal Communications Commission as required by the 2020 Broadband Deployment Accuracy and Technological Availability (DATA) Act. That data is integral to determining eligible infrastructure projects for which the states can fund up to 75 percent of construction costs. The FCC announced this week announced data as of June 30, 2022 is due to the FCC by September 1, 2022.

However, final datasets are likely be delayed into 2023 and possibly beyond. Provisions of the DATA Act and FCC regulations implementing it authorizing state, local, and tribal governments and other entities or individuals to challenge their accuracy. The IIJA requires the FCC to timely resolve challenges within 90 days after the final response by a provider to a challenge.

States and local governments have complained for years FCC data overstates the availability of landline and mobile wireless advanced telecommunications availability. That historical point of tension between federal and state/local government will likely to be heightened given the large amount of funding the IIJA appropriates for advanced telecommunications infrastructure. Some states anxious to remedy infrastructure deficits magnified over the past two years by pandemic public health measures have developed their own data and suggested it should be utilized rather than the FCC’s for IIJA funding given the urgent funding need.

Additionally, the IIJA requires states to establish a process allow nonprofits, local governments and service providers to challenge grant awards. The IIJA also authorizes the National Telecommunications and Information Administration to modify the challenge process and overturn state determinations on challenges. Challenges to these IIJA funded projects are likely from incumbent commercial landline and wireless service providers claiming a proposed infrastructure project would “overbuild” their proprietary infrastructure and duplicate their advertised services as shown in availability data.

The IIJA provides the FCC the option to circumvent the service availability data-based eligibility standard and associated controversy and delay. Section 60102(a) of the IIJA defines project eligibility based on either the availability data being compiled by the FCC or for areas lacking access to “broadband service” as defined by the FCC’s 2018 Internet Freedom rulemaking “or any successor regulation.”

Such a regulation could be in the offing. In a July 2021 executive order, President Joe Biden encouraged the FCC to adopt new rules similar to the FCC’s superseded 2015 Open Internet rulemaking that classified Internet protocol delivered service as telecommunications utilities regulated under Title II of the Communications Act of 1934. This gives the FCC an opportunity to redefine “broadband service” using a utility delivery infrastructure definition and specifically fiber optic infrastructure.

Hope is not a strategy: America's aspirational and unrealistic advanced telecom infrastructure policy cannot attain universal access

It's been said that hope is not a strategy. The United States doesn't truly have a strategy to attain universal access to advanced telecommunications service for all Americans because its telecom policy of the past 25 years is largely aspirational. It's based on the hope that:

1. By having the telephone companies report annually on the broadband bandwidth they sell in a given census block, unspecified actions can be taken to increase competition notwithstanding that telecom infrastructure like other utilities is a natural monopoly.
2. Increased competition in turn will encourage investment in areas where the return on infrastructure is riskier, ensuring relative parity of access to advanced telecommunications among urban and less urbanized areas of the nation.
3. By creating "broadband maps" (based on #1) delineating levels of throughput offered by various wireless and landline technologies, the maps will guide early and efficient construction of advanced telecommunications infrastructure by showing where it’s needed in order to ensure universal access to advanced telecommunications.
4. The maps can be updated in 2022 to show where throughput is the lowest to guide federal grant subsidies to states to cover 75 percent of the cost of building advanced telecommunications distribution infrastructure at least comparable to that of existing cable TV providers.

PG&E undergrounding project could potentially benefit with co-location of distribution fiber conduit

Planting wires underground is one of the most expensive wildfire-risk strategies any utility can undertake — and it remains to be seen if the $25 billion estimate is high enough to cover the entire 10,000 miles that are to be placed underground in the areas deemed at most risk to wildfire across PG&E’s territory. The price tag is based on PG&E’s belief that it can do the job for $2.5 million per mile. Yet PG&E plans to spend $3.75 million per mile this year, when it expects to complete 175 miles of work. And in a white paper published four years ago, PG&E said underground work costs $3 million per mile.

Nonetheless, Chief Executive Patti Poppe said she’s confident that as the project ramps up, economies of scale and new technologies will bring costs into line. The utility expects to be planting 1,200 miles a year underground by 2026. “We can dramatically reduce our costs every year,” she said on a conference call with Wall Street investment analysts. “With scale, we can improve the unit costs.” 

CA utility PG&E says underground wire project will cost $25B | The Sacramento Bee

PG&E could potentially gain additional economies of scale by partnering with local governments, utility districts and consumer utility cooperatives to co-locate fiber conduit as it buries its electric lines. PG&E is prioritizing areas of its mostly Northern California service territory where wildfire risk is the highest. 

These areas also have major telecommunications infrastructure deficiencies. Residents and businesses would doubly benefit from both reduced risk of wildfires sparked by overhead electrical distribution lines as well as access to fiber delivered advanced telecom services.

Such a partnership would also potentially benefit PG&E by speeding up its burial of electric distribution lines, demonstrating good faith effort to regulators. The partners could also potentially tap into funding in the recently enacted federal Infrastructure Investment and Jobs Act that appropriates funds for electrical infrastructure improvements as well as advanced telecommunications infrastructure.

USTelecom: Rescind #infrastructurebill grant guidance preferring networks built by municipalities, non-profits and electric co-ops

"Deployment is hard, complicated, and expensive work. It’s also not a ‘set it and forget it’ technology. Congress was clear: competition for these public funds should occur on a level playing field. Yet concerning rules have emerged from the Treasury and Agriculture Departments that encourage states to favor entities like non-profits and municipalities when choosing grant winners, despite their well-documented propensity to fail at building and maintaining complex networks over time. The unconnected—not to mention American taxpayers—can’t take that gamble. Experience should not be a mark against an applicant, but a strong attribute in their corner.

Source: A Blueprint for Government to Finally and Fully Connect Our Nation

USTelecom is right. Building advanced telecommunications infrastructure is challenging and complicated. And expensive. As the history of the past three decades has shown, too expensive for telephone companies to timely modernize their legacy copper analog plant that reaches nearly every American home, business and institution to fiber as about two thirds of homes lack fiber connections as 2022 begins. 

That's because the industry has adopted a business model of selling bandwidth by the price tier. Indeed, USTelecom dubs itself "The Broadband Association." That's not a template that favors infrastructure but rather capital investment only where bandwidth can be sold with the highest and fastest return on investment. Federal grant funding cannot remedy this structural issue.

USTelecom is also correct in asserting that experience counts. Its members know how to design, build, maintain and operate advanced telecommunications infrastructure. But that does not mean they should or have the right own it. Because telecom infrastructure is a natural monopoly and not amendable to market forces to ensure access, affordability and high quality service and support, it is best held by publicly owned utilities and consumer utility cooperatives whose purpose is to serve the public interest and not the more narrow interest of telephone company shareholders. The appropriate role for these companies to assure all Americans have access to affordable and high quality advanced telecommunications is contracting with these entities to perform these functions that leverage their expertise and experience.