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.