Tag: "subsidies"

Posted April 27, 2021 by Sean Gonsalves

Welcome to In Our View, a new series here at MuniNetworks. From time to time, we'll use this space to explore new ideas and share our thoughts on recent events playing out across the digital landscape, as well as take the opportunity to draw attention to important but neglected broadband-related issues.

Special thank you to ILSR Data and Visualization Researcher Michelle Andrews for noticing the Michigan discrepancy, and for her contributions to this piece.

Earlier this month, the Federal Communication Commission (FCC) released updated Form 477 data, the primary source of information used for the FCC’s broadband coverage maps and the basis upon which federal agencies and states make major funding decisions.

With new interim leadership from FCC Chair Jessica Rosenworcel – who has been well-aware of the FCC’s dubious track record of publishing imprecise, insufficient, and often inaccurate broadband coverage data – you will be disappointed if you were expecting any improvements in the newest data set. 

Filers had until March 26, 2021 to make revisions to data that was submitted by September 1, 2020 for service they provided as of June 30, 2020. When the updated data was first released on April 7, it indicated that nearly the entire state of Michigan had access to 10 Gbps (Gigabit per second) broadband, thanks to Form 477 data provided by Strategic Alliance CDC (see map below, or a high-resolution version here).

Historical Error Repeats Itself

That data has been since scrubbed, probably as someone at the FCC belatedly realized that couldn’t possibly be correct. There are only a relative handful of communities in the entire country where residents have access to 10-gigabit connections (many are municipal networks). For every resident in any state to have access to such high-speed Internet connectivity would be major broadband news shouted from the rooftops of every elected official, economic development board member, and tourism official in the state. But alas, Michigan, which does contain geographical pockets of high-quality Internet access, most definitely does not...

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Posted April 9, 2021 by Jericho Casper

With all the buzz around the prioritization of municipal and cooperative broadband networks in the American Jobs Plan unveiled by President Biden last week, let’s not forget about one leading voice in Congress calling for broadband for all. 

Last year, with assistance from the House Rural Broadband Task Force he created, Rep. James Clyburn, D-SC, introduced the Affordable, Accessible Internet for All (AAIA) Act, a bold bill that proposed a $100 billion investment to build high-speed Internet infrastructure in unserved and underserved parts of the country. 

Although the legislation stalled in the Mitch McConnell-led U.S. Senate prior to the 2020 election, it did set the Democratic agenda on broadband moving forward. Now, as the Biden Administration has settled into the White House and with Democrats in control of Congress, Clyburn has reintroduced a slightly slimmed down $94 billion AAIA, alongside companion legislation in the U.S. Senate sponsored by Sen. Amy Klobuchar, D-MN.

If it passes, the bill would be a game changer, as it goes beyond funding high-speed Internet infrastructure to attack the digital divide from essentially every angle. The bill includes funding and dedicated support to address barriers that prevent millions of Americans from having access to affordable, high-speed Internet connectivity. It backs measures that would encourage pricing transparency, promote Internet adoption and digital literacy initiatives, guarantee affordability, and protect the rights of workers who would build the networks. 

While all of these measures are critical, one of the most important requirements included in the revamped legislation is for input from local, state and Tribal governments to be taken into account when determining what projects AAIA will fund. 

Engaging local governments and local digital equity organizations in determining how billions of dollars in federal grants should be distributed may seem like second nature, yet in previous federal programs the views of these organizations, which understand the digital needs of their surrounding communities the most, have largely not been taken into consideration. Failing to consult with these...

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Posted December 23, 2020 by Sean Gonsalves

If you have been following our series on the Accessible, Affordable Internet for All (AAIA) Act, you already know the proposed legislation calls for a $100 billion investment in expanding broadband access and affordability in unserved and underserved parts of the country. In this fourth installment of the series, we explore the part of the bill that contains the bulk of the funding. Of the $100 billion proposed in the bill, $85 billion of it can be found in the Title III - Broadband Access section.

Amending the Communications Act of 1934, Section 3101 of the bill appropriates $80 billion for “competitive bidding systems” to subsidize broadband infrastructure. That is to say, it requires the Federal Communications Commission (FCC), and states, to use “competitive bidding systems” for Internet Service Providers (ISPs) to bid on broadband deployment projects in “areas with service below 25/25 Megabits per second (Mbps), and areas with low-tier service, defined as areas with service between 25/25 and 100/100 Mbps.” The term “competitive bidding” seems to suggest a reverse auction process, though it hardly makes sense for each state to set up such a system given the logistical challenges. A legislative staffer responded to our email earlier this year saying he believed that language would allow for state programs that solicited applications from ISPs and scored them for evaluation, much like Minnesota’s Border-to-Border Broadband program operates. However, he noted that the FCC would interpret that language ultimately. More on this below. 

Prioritizing Higher Upload Speeds

It’s worth noting that this part of the bill implicitly acknowledges the insufficiency of the current FCC definition of a minimum broadband speed of 25/3 Mbps. As it stands now, the FCC defines “unserved areas” as parts of the country where there is either no Internet access or broadband speeds under 25/3. This legislation raises the bar and broadens the definition of “unserved areas.” It’s a step in the...

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Posted December 17, 2020 by Sean Gonsalves

Without good information from Internet Service Providers (ISPs), the federal government is essentially shooting in the dark when it comes to determining how to best target the allocation of resources for underserved and unserved communities. Even private sector investments are less efficient because of the lack of good data about broadband availability and pricing. That’s why the second major section of the Accessible, Affordable Internet for All Act (AAIA), currently languishing in the U.S. Senate, aims to address the nebulous nature of broadband data at the Federal Communications Commission (FCC).

In this third installment of our series on the AAIA, we explore the ”Title II – Broadband Transparency” section of the Act, which requires the FCC to adopt rules to gather accurate and up-to-date information from ISPs about broadband service plan prices and subscription rates. It also requires the FCC to collect data that will allow the federal government to assess the resiliency of the nation’s broadband network in the event of a natural disaster or emergency.

Better Data is Needed

Anyone who closely follows FCC news is already familiar with the problems associated with the agency’s broadband coverage maps, which most experts agree overstate actual broadband coverage. Though recent studies indicate there may be as many as 41 million people who lack access to fixed broadband in the United States that meets minimum speed of 25/3 Megabits per second (Mbps), the FCC claims that number is closer to 18 million. It’s a big discrepancy with big dollar implications, as the coverage maps are the basis upon which agencies and states make major funding decisions.

The problem lies with the FCC’s existing Form 477, which seeks service availability data from ISPs. There’s widespread agreement that the form gleans data that is inaccurate, outdated, and misconstrued, as we detail here...

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Posted December 11, 2020 by Sean Gonsalves

Last week we began our broad overview of the Accessible, Affordable Internet for All Act, sweeping legislation that calls for a $100 billion investment in broadband infrastructure in unserved and underserved parts of the country, as well as federal funding and coordinated support to meet the myriad of barriers that prevent tens of millions of Americans from having access to affordable and reliable Internet connectivity.

The bill (H.R. 7302) has already passed in the U.S. House of Representatives led by House Majority Whip James E. Clyburn (D-SC) and members of the House Rural Broadband Task Force. The Senate version of the bill (S. 4131), which was filed by Minnesota Senator Amy Klobuchar, co-chair of the Senate Broadband Caucus, has stalled, thanks to Senate Majority Leader Mitch McConnell who has “has buried the legislation in his graveyard,” in the words of Rep. Clyburn.

In this second-installment of a series of posts exploring the major sections contained in the proposed legislation, we look at the “Title I – Digital Equity” portion of the bill.

New Office of Internet Connectivity and Growth (OICG)

The first thing the legislation does is requires the Assistant Secretary of Commerce for Communications and Information to establish an Office of Internet Connectivity and Growth (OICG) within the National Telecommunications and Information Administration (NTIA). The new office, which would be allocated a $26 million annual budget, would run point on federal outreach to communities who lack access, or need better broadband access, via regional workshops, trainings, and the drafting of reports that would provide guidance on best-practices.

The office would also be required to track federal spending on any broadband related expenditures, as well as coordinate with other federal agencies to conduct a study on how affordability factors into households’ lack of connectivity...

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Posted May 27, 2020 by Katie Kienbaum

Over the weekend, Frontier filed comments with the Federal Communications Commission (FCC) announcing that it would “welcome the inclusion” of the census blocks where it claims to newly offer broadband service into the upcoming Rural Digital Opportunity Fund (RDOF). Phase one of RDOF will distribute $16 billion to providers to expand rural broadband access in unserved areas later this year.

We wrote previously on Frontier’s attempt to remove 17,000 census blocks, representing over 400,000 Americans, from the first phase of RDOF by reporting that the company could now provide broadband speeds of 25 Megabits per second (Mbps) download and 3 Mbps upload, the federal minimum definition of broadband, in those areas. At the time, we expressed concern that Frontier, which has a long history of neglecting its rural networks, was exaggerating its broadband coverage in an effort to prevent competition. The Institute for Local Self-Reliance (ILSR) filed comments with the FCC requesting that the agency investigate Frontier’s claims before removing any of the identified census blocks.

But while Frontier’s recent filings suggest that the company will not fight to remove those census blocks from the subsidy program, it leaves the door open for the FCC to remove the contested areas anyway.

Filings Offer Inadequate Explanations

On May 23, Frontier filed a short notice with the FCC seeking to “clarify” its position, indicating that it would not fight to exclude the 17,000 census blocks in question despite maintaining that it does offer 25/3 Mbps speeds in those areas. The company followed up on May 26 with a longer filing that responded to comments filed by ILSR and others and asserted that its claimed broadband speeds are correct.

In our comments to the FCC, we pointed out past inconsistencies with the company’s...

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Posted April 23, 2020 by Christopher Mitchell

Last week, Frontier Communications told the Federal Communications Commission (FCC) that there are 17,000 census blocks in which it is now offering 25 Megabits per second (Mbps) download and 3 Mbps upload. This means well over 400,000 Americans now live in areas no longer eligible for the FCC's Rural Digital Opportunity Fund, a $20.4 billion program to expand rural broadband. The first phase will auction off up to $16 billion in subsidies later this year.

In the filing, the company also identified census blocks where it believes other providers will deploy broadband access through state-funded programs, making those locations ineligible for the federal funds as well.

Frontier is Flailing

Frontier recently declared bankruptcy, following a history of increasingly unsustainable acquisitions. It also just missed its milestone for the Connect America Fund, which required the company to deploy obsolete 10/1 Mbps service to 80 percent of the funded locations by the end of 2019 in return for more than $1.5 billion in subsidies. Some 774,000 locations should have at least 10/1 Mbps service by the end of 2020 from a company Consumer Reports repeatedly finds to be one of the worst Internet Service Providers in the nation.

Frontier is so bad that it went through repeated outages of 911 in Wisconsin, dealt with state investigation after state investigation (including but in no way limited to Minnesota, Ohio...

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Posted April 3, 2020 by Katie Kienbaum

Like most other aspects of life, the ongoing pandemic has disrupted the federal government’s plans to disburse grants, loans, and subsidies for the construction of rural broadband networks. But unlike the sporting events and concerts that can be put on an indefinite hold, these funds are now needed more than ever by the Internet access providers trying to connect rural households during a time when everything has moved online. Federal agencies, like the Federal Communications Commission (FCC) and the US Department of Agriculture (USDA), must find ways to manage the challenges caused by the spread of the novel coronavirus and to leverage their funds to support essential networks for families stuck at home.

These agencies’ main rural broadband programs — the FCC’s Rural Digital Opportunity Fund (RDOF) and USDA’s ReConnect — are at different stages, both in their funding cycles and in their response to the Covid-19 outbreak. The pandemic has already led to changes at the USDA, which has extended the ReConnect application deadline and is set to receive additional funds from Congress. Meanwhile, the FCC has yet to alter the upcoming RDOF subsidy auction, but it could speed up the process to address the current crisis, which threatens to linger through the summer.

While more must be done to address the many digital divides exacerbated by the pandemic, federal agencies should at least use existing programs to their full advantage to connect rural Americans during this unprecedented time.

ReConnect Extends and Expands

USDA logo

USDA launched the ReConnect broadband program last year to award more than $1 billion in grants and loans to connect unserved and underserved rural areas. In round one of the program, the agency distributed more than $600 million to 70 providers across 31 states. Many of these awards went to community-owned networks, including rural cooperatives and local...

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Posted January 14, 2020 by Katie Kienbaum

The federal government is about to spend more than $120 million on subsidies that, rather than improving rural connectivity, will make tens of thousands of families worse off.

These funds are part of a 2018 federal program intended to expand rural broadband access called the Connect America Fund phase II (CAF II) reverse auction. The program, in which Internet access providers competed for subsidies, will distribute nearly $1.5 billion over the next 10 years to connect unserved rural residents. But in some communities, the auction may do more to widen the digital divide than diminish it.

While some winning bidders committed to building out high-speed fiber optic networks, satellite company Viasat will rake in more than $120 million in subsidies to continue providing inadequate geostationary satellite connectivity to rural households that are clamoring for something better. Not only does satellite Internet access offer slower speeds, greater latency, and less reliability for a higher cost compared to other technologies, but Viasat’s subsidies are making those areas ineligible for future broadband funds, deterring other providers from building truly high-quality networks. Instead of bridging the digital divide, the process will relegate certain communities to satellite Internet access while others receive ultra-fast fiber and do nothing more than deepen the fissure.

Mo’ Money . . .

The Connect America Fund (CAF) is a multi-phase subsidy program that supports improved connectivity in rural, high-cost areas as part of the Federal Communications Commission's (FCC’s) Universal Service Fund. The most recent phase of the program, the CAF phase II reverse auction, auctioned off regions to providers using a complicated formula that prioritized bids for low subsidy amounts and high-quality service.

Previous rounds of CAF mainly subsidized the large incumbents, such as AT&T and CenturyLink, but for the reverse auction, the FCC opened participation to other entities, including non-traditional providers like electric cooperatives. Eligible areas included rural locations where the incumbents had previously refused subsidies (and the accompanying commitment to expand Internet access).

Viasat was one of the largest winners in the CAF II reverse auction...

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Posted November 13, 2019 by Katie Kienbaum

Despite raking in hundreds of millions in government broadband subsidies, Frontier Communications has failed time and time again to bring reliable, high-speed connectivity to the rural communities it serves. Instead of investing in network upgrades, Frontier has neglected its rural infrastructure to the detriment of its subscribers and the company’s own financials, with its worsening service quality paralleling its plummeting stock value.

Our new fact sheet, Frontier Has Failed Rural America, presents evidence of Frontier’s negligence and suggests that rather than continuing to trust Frontier, government officials should look to publicly owned and community-minded providers to connect rural residents, businesses, and institutions.

Download the Frontier Has Failed Rural America fact sheet [pdf].

Subsidies Can’t Fix Frontier

Federal and state government agencies have given Frontier nearly $2 billion to expand and upgrade its rural broadband networks. The company has received approximately $1.7 billion from the Connect America Fund Phase II federal subsidy program and millions more in grants from states like Minnesota and New York.

Even with the subsidies, Frontier ultimately failed to connect rural communities with high-quality broadband. The company has repeatedly chosen not to upgrade rural networks, leaving subscribers with poor, unreliable service that doesn’t fulfill their basic communications needs.

Frontier’s “Systemic Problems”

Our fact sheet, Frontier Has Failed Rural America, features events from the past five years that demonstrate Frontier’s inability to solve the rural broadband problem, including:

  • Numerous state investigations into Frontier’s poor service quality
  • Settlements with state agencies for overstating speeds
  • The company’s plummeting stock price and impending bankruptcy
  • Repeated indications that Frontier...
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