Handful of states draft BEAD Five-Year Action Plans

A handful of states have drafted Five-Year Action Plans required under the National Telecommunications and Information Administration’s (NTIA) Broadband Equity, Access and Deployment (BEAD) program – part of the Infrastructure Investment and Jobs Act (IIJA). The Action Plans due this year must include “a comprehensive, high-level plan for providing reliable, affordable, high-speed internet service throughout the (state) including the estimated timeline and cost for universal service.”

Montana estimates universal service between 2026 and 2029, cautioning several factors could delay universal service including a labor gap, supply chain issues and industry participation. “In keeping with the BEAD NOFO, Montana has analyzed the estimated amount of subsidy needed to serve all unserved and upgrade all underserved in Montana with fiber,” the plan states. It notes the state is not anticipated to have sufficient funding to connect all unserved and underserved locations with fiber but does not address how the funding shortfall will be bridged. The state estimates it would need an estimated subsidy allocation of $628-754M to serve all unserved locations. Montana was awarded $629M in BEAD funds this week by the NTIA.

Utah “will ultimately make broadband adoption universal for all Utahns by December 31, 2028, based on the expected funding amounts from the BEAD program as well as an assumption that the other funding programs maintain their historical investment levels in Utah.” The plan calls for fixed wireless or alternative solution to serve 4,000+ locations beyond the extremely high cost per location threshold. No cost estimate for universal service was provided in the Beehive State’s plan.

“Barring significant variation between actual deployment costs and initial estimates, Ohio is therefore estimated to reach universal service by the conclusion of BEAD in 2030, according to the Buckeye State’s draft plan. “When all funds – both allocated and modeled – for unserved and underserved locations are combined, the estimated deployment cost of reaching universal service in Ohio ranges between ~$1.142 billion and ~$1.612 billion.” The plan estimates the cost of extending fiber connections to all unserved and underserved locations would range from $515 million to $830 million. Ohio was awarded $794 million in BEAD funding by the NTIA.

AT&T apparently hoping for BEAD subsidies to replace DSL over copper with FTTP

AT&T is apparently hoping for BEAD subsidies to replace its legacy DSL services delivered over twisted pair copper with fiber to the premise (FTTP). States should take a flexible approach in subgranting the subsidies allocated by the National Telecommunications and Information Administration’s (NTIA) Broadband Equity, Access and Deployment (BEAD) program to afford “ISPs flexibility to identify project areas to include a mix of unserved and underserved locations will allow for the most efficient use of limited funds,” suggested Erin Scarborough, president, Broadband and Connectivity Initiatives in an April blog post. In a blog post this week, Scarborough stated that would allow providers to “identify project areas that combine unserved and underserved locations to enable the most effective and efficient deployments.” For AT&T, those would be locations served by legacy ADSL and VDSL, respectively.

That would comport with the BEAD program rules spelled out in the NTIA’s Notice of Funding Opportunity (NOFO). It permits states to subgrant up to 75 percent of construction costs to builds “constituting 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.” The NOFO defines “unserved” locations as those not marketed connectivity with throughput of less than 25/3 Mbps and latency exceeding 100ms. “Underserved” locations are those not offered at least 100/20 Mbps. That would encompass premises served by AT&T’s legacy DSL offerings delivered over obsolete twisted pair copper initially designed to support voice telephone service.

Whether states will have sufficient BEAD funding to subgrant subsidies for underserved locations remains to be seen after the NTIA announces state allocations next week. The BEAD NOFO requires states to award subgrants “that ensures the deployment of service to all unserved locations within the Eligible Entity’s jurisdiction.” These unserved locations are likely to be in lower density areas lacking wireline connections, requiring higher capital construction costs and subsidization.

Affordable Connectivity Fund uncertainty reveals key breakdown point in market-based advanced telecom policy

WASHINGTON, June 20, 2023 – Experts are pushing Congress to extend the funding available to the Affordable Connectivity Program or else it will hamper efforts to build out infrastructure in other parts of the country.

The essence of the argument is that the $14.2-billion ACP, which provides a $30- and $75-per month subsidies to low-income Americans, is helping internet service providers with revenues used to build more infrastructure in underserved areas. But experts are warning that the ACP – which currently enrolls about 18.5 out of 48 million eligible Americans – could run out of money as soon as early 2024, which observers have said could affect private investment in broadband deployment.

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“This is the first time we’re seeing these deployment grants make a specific requirement for recipients to actually include and participate in an affordability program,” said Kathryn. “They are trying to stabilize revenue for internet service providers who are connecting areas that might not offer a high return on investment.”

This funding from the ACP would provide the groundwork for a decade-long investment in internet infrastructure, according to Jonathan Cannon, technology policy counsel at think tank R Street Institute.

https://broadbandbreakfast.com/2023/06/lack-of-affordable-connectivity-fund-money-could-hobble-broadband-deployment-experts/

This is a critical point of breakdown in the current market-based policy for modernizing legacy metallic telecom infrastructure such as copper to support analog telephone service to fiber for advanced telecom services.

Legacy telephone service has high cost area and low income customer subsidies. But they were properly paired with a universal service/non discrimination mandate and state utility rate regulation under Title II of the Communications Act. By contrast, advanced telecom is not subject to Title II and instead is lightly regulated as an optional information service under Title I of the statute.