Fast, affordable Internet access for all.
auction
Content tagged with "auction"
Native Nations and Federal Telecom Policy Failures: Lessons from the Rural Digital Opportunity Fund
A new report published today by the Institute for Local Self-Reliance (ILSR) reveals how the sovereignty of Tribal Nations and their own efforts to solve connectivity challenges on Tribal lands can be undermined by the poor design and maze of bureaucracy associated with some federal broadband programs.
The report – Native Nations and Federal Telecom Policy Failures: Lessons from the Rural Digital Opportunity Fund [pdf] –shows how even as the National Telecommunications and Information Administration (NTIA) takes over administration of the largest federal funding programs and re-situates Tribal closer to where they belong, the Federal Communications Commission (FCC) continues its long-standing practice of scant engagement and infrequent consultation, complicating the terrain and stymieing Tribal efforts to close the digital divide in Indian Country.
Completed in December 2020, the Rural Digital Opportunity Fund auction underscores the pernicious consequences of federal policy. While the report begins with a real-life example of how Tribal nations now working to build their own broadband networks can be blindsided by bureaucratic neglect and non-Tribal ISPs, it goes on to detail why the FCC’s approach to broadband funding has fostered tension between providers and Tribal ISPs, and why RDOF has earned a particularly bad reputation among many Tribes.
The report also examines how RDOF impacts the roll-out of the federal government’s major broadband infrastructure funding program known as BEAD (Broadband Equity, Access, and Deployment), which is being administered by the National Telecommunications and Information Administration (NTIA).
New Report: Native Nations and Federal Telecom Policy Failures: Lessons from the Rural Digital Opportunity Fund
A new report published today by the Institute for Local Self-Reliance (ILSR) reveals how the sovereignty of Tribal Nations and their own efforts to solve connectivity challenges on Tribal lands can be undermined by the poor design and maze of bureaucracy associated with some federal broadband programs.
The report – Native Nations and Federal Telecom Policy Failures: Lessons from the Rural Digital Opportunity Fund [pdf] – begins with a startling example of how one Tribe learned about the plans of a major fiber Internet provider to serve “a handful of locations in the heart of the Tribal Reservation.”
Authored by Dr. Jessica Auer, Tribal Broadband Policy Analyst with ILSR’s Community Broadband Networks initiative, the report captures the pernicious consequences of a program that was supposed to help bring high-speed Internet service to rural communities who lacked access:
A non-Tribal telecommunications company had received federal funding to build broadband infrastructure on Tribal lands without consent, had appeared to shirk required federal Tribal engagement requirements, had ignored the Tribe’s attempt to raise concerns about it, and now seemed to be expecting to dictate what would happen next.
While the report begins with a real-life example of how Tribal nations now working to build their own broadband networks can be blindsided by bureaucratic neglect and non-Tribal ISPs, it goes on to detail why the FCC’s approach to broadband funding has fostered tension between providers and Tribal ISPs, and why RDOF has earned a particularly bad reputation among many Tribes.
“Some recent federal broadband programs do actually require ISPs to secure Tribal consent prior to receiving funds,” Auer says. “But, the FCC still has not adopted this approach. The problems outlined in this report reinforce the need for such a requirement.”
LTD and Starlink Booted from Rural Digital Opportunity Fund by FCC
In a release today, the Federal Communications Commission (FCC) announced it was voiding applications by two of the biggest Rural Digital Opportunity Fund (RDOF) bidders from December 2020. This includes more than $885 million for Low-Earth Orbit (LEO) provider Starlink and more than $1.3 billion for LTD Broadband, Inc.
LTD’s original winning bids are spread across 15 states, but there has been speculation brewing since late last year from industry experts as to if funds would be released at all. We’ve seen 12 releases from the FCC since late winter authorizing funds for most of the winning bidders (from the monopoly providers to consortia of rural electric cooperatives), which we’ve collected in our Rural Digital Opportunity Fund Dashboard here. Conversely, there has been relatively little conversation about why Starlink had not yet received any of its winning bids.
Skepticism about Speed, Deployment and Cost
The Rural Digital Opportunity Fund Auction: One Year Later
The FCC’s Rural Digital Opportunity Fund (RDOF) Reverse Auction was completed a little more than a year ago to much fanfare and spilled ink, and though we’ve seen irregular updates over the last twelve months, we thought it worth the time to round up what we know so far in an effort to see where we’re at and determine what is likely to come.
The RDOF was built to award up to $20.4 billion in grants over 10 years using competitive reverse auctions generally won by the lowest bidder. The money comes from the Universal Service Fund fees affixed to consumers’ monthly telecom bills. The previous FCC announced $9.2 billion in auction winners in December of 2020.
To date the FCC has announced five rounds of Authorized funding released, six rounds of applicants whose bids they have decided are Ready-to-Authorize, and three rounds of Default bids. In total, a little more than half of the $9.2 billion won during the auction has been handed out as of January 14th, 2022, with another $1.3 billion announced on January 28th as ready to be disbursed shortly.
It’s clear that the final picture is still taking shape, but looking at things a year later leaves us feeling a little better than we were immediately after the auction closed. To date, it appears the FCC is closely scrutinizing many of the bidders that most worried industry veterans and broadband advocates, while releasing funds for projects that will bring future-proof connectivity to hundreds of thousands of homes over the next ten years.
Moving Slowly on Problematic Awards
The biggest news so far is that of the top ten winners, seven look to have received no funds at all (see table below or high-resolution version here). That’s $4.1 billion worth of bids for almost 1.9 million locations, and includes LTD Broadband, SpaceX’s Starlink, AMG Technologies (NextLink), Frontier, Resound Networks, Starry (Connect Everyone), and CenturyLink. This is a big deal.
A History of Errors Catches Up with LTD Broadband in Iowa
When the FCC announced the winners of the Rural Digital Opportunity Fund (RDOF) last December, many industry veterans were surprised by the appearance of LTD Broadband as the largest recipient of funds. The company managed to snag more than $1.3 billion to serve 528,000 locations across 15 states, but its capability to do so immediately drew skepticism from many (including us).
Now, a little less than a year later, the company's chickens are coming home to roost. In a recent ruling denying the company the expanded Eligible Telecommunications Carrier (ETC) status it needs to offer service in RDOF-awarded areas, the Iowa Utilities Board took LTD to task for a history of noncompliance and late payments:
Specifically, LTD had not complied with the Board’s February 22, 2019 order, as LTD had not yet filed a registration as a telecommunications service provider, was past due on its DPRS assessment, and had not yet filed an annual report with the Board for reporting years 2019 and 2020.
[B]eyond the procedural flaws in LTD’s Application, the company’s responses to Board . . . illustrate that LTD has routinely submitted regulatory filings with obvious errors, if filings were submitted at all . . . It is for this reason that the Board takes seriously LTD’s history of inconsistent compliance with this provision, as the regulatory burden is minimal and the consequence of failing to uphold the obligation ETCs pledge to carry out impacts the rest of the industry, the Board, and most importantly, the Iowans served by the program.
But the regulatory board took its comments a step further, basing its ruling also on the fact that the company's behavior in the state betrays what looks like a lack of ability to meet its bidding commitments during the auction:
The record in this docket does not merit the expansion of a credential that signals to the public that LTD has evidenced the technical and financial capabilities required to carry out the public interest obligations of those entrusted with federal funds. LTD’s responses and actions lack the candor that the Board would expect from a carrier seeking to evidence the expertise to take on this degree of expansion.
“This Isn’t a Game:” The RDOF Auction, Unforced Errors, and Getting Infrastructure Funding Right - Episode 448 of the Community Broadband Bits Podcast
The conclusion of the RDOF auction was met with a good deal of drama and uncertainty, leaving many of us working after the fact to understand the policy and practical impacts of its outcomes.
This week on the podcast Christopher talks with Jonathan Chambers, a partner at Conexon, a network solutions provider for electric cooperatives around the United States who helped organize a consortium of nearly 100 cooperatives to successfully bid for more than $1 billion in funding from the recent Rural Digital Opportunity Fund Auction administered by the FCC.
Christopher and Jonathan unpack the design and implementation of RDOF not only in the context of the current broadband landscape, but the history of FCC auctions and federal infrastructure subsidy policy. They discuss how the funding will support upcoming projects which will bring fiber networks — many of them owned and operated by electric cooperatives — to hundreds of thousands of Americans over the next decade.
But they also talk about the multitude of winning bids that went for a worryingly low percentage of what it will actually cost to build those networks across the country. Jonathan and Christopher discuss why we saw that happen, but also what kind of guardrails we don’t but should have in place to make sure that public money for broadband infrastructure doesn’t go to waste and, equally importantly, so that households in those areas don’t go another decade without a quality Internet connection.
This show is 53 minutes long and can be played on this page or via Apple Podcasts or the tool of your choice using this feed.
Transcript below.
We want your feedback and suggestions for the show-please e-mail us or leave a comment below.
Listen to other episodes here or view all episodes in our index. See other podcasts from the Institute for Local Self-Reliance here.
Thanks to Arne Huseby for the music. The song is Warm Duck Shuffle and is licensed under a Creative Commons Attribution (3.0) license.
Big Bucks for Broadband in the Balance: Explaining the Affordable, Accessible Internet for All Act - Part 4
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
RDOF Auction Ends but Confusion and Corruption May Just Be Beginning
The FCC's Rural Digital Opportunity Fund results are a puzzle. RDOF was the recent auction for large swaths of rural areas of the U.S. that have no broadband access, in large part because they were the territories of big companies like AT&T, CenturyLink (now rebranding as Lumen in hopes of improving its dismal image among its subscribers), Frontier, Windstream, and others. Up to $16 billion was at stake though the auction will actually disperse some $9+ billion dollars because many areas were bid well below what was expected.
Please understand that this post is the best I can do right now - this is confusing and we are sorting our way through it. Please let me know if you can help us understand it. See our past coverage for more information.
The auction resulted in far more gigabit - 85% of locations I believe - than anyone expected, at far lower subsidy than expected. However, there is a lot of frustration and confusion because it is not clear that some of the top bidders can deliver. NTCA - The Rural Broadband Association - shared my original enthusiasm for RDOF and our concerns - best articulated over the years by Jon Chambers from Conexon - that the FCC was going to blow this auction by not ensuring those who bid had the capacity to deliver on the promised level of service. Shirley Bloomfield, CEO of NTCA, wrote this and recently tweeted on this:
Not feeling quite as bullish about this final outcome for RDOF #1 and worry that it will take years to show that rural America is still waiting for #broadband and resources needed will be gone. Hoping @FCC has a robust back-end review so the process won’t fail Americans again.