Another addition to our Community Networks Initiative resources! This fact sheet details the most important aspects of the Connect America Fund (CAF) Auction. What is it? What should it do? Who does it affect? And how can you make a difference?

The Federal Communications Commission (FCC) manages the CAF program, which provides billions of dollars in subsidies to Internet service providers for areas where the cost of building networks is prohibitive. Some large providers decided not to accept some of the subsidies during Phase I - about $198 million annually for 10 years. Now, the FCC plans to host an auction so that providers can submit competing proposals on how best to serve these often rural, high-cost areas. (Check out the map of preliminary areas on the FCC website.)

Before the FCC can hold an auction though, the commission needs advice on how best to conduct it and what criteria they should consider. Jon Chambers, former head of the FCC's Office of Strategic Planning and Policy Analysis, outlined his concerns about the current proposed rules in his article, The Risk of Fraudulent Bidding in the FCC Connect America Fund Auction. Listen to his analysis on Episode 268 of the Community Broadband Bits Podcast.

The first round of public comments has passed, but reply comments are due October 18th, 2017. Read the fact sheet and then submit your own comments at FCC.Gov/ecfs/filings for "Proceedings" Docket 17-182 and Docket 10-90.

Two Ohio State Senators are taking a page from Minnesota’s playbook to expand rural broadband connectivity. Democratic Sen. Joe Schiavoni and Republican Sen. Cliff Hite recently announced that they would be introducing legislation to create a grant program modeled after the Minnesota Border-to-Border Broadband Grant Program.

Putting Money Into It

The program is expected to expand broadband Internet access to approximately 14,000 rural Ohio households per year. State officials estimate that 300,000 homes and 88,500 businesses in rural areas of the state do not have access to broadband connectivity.

In Minnesota, the Department of Employment and Economic Development hosts the Office of Broadband Development, which administrates grant awards and management. The Ohio bill will place the responsibility for the program in the hands of their Development Services Agency (DSA).

Grants will be awarded of up to $5 million for infrastructure projects in unserved and underserved areas; the grants cannot fund more than half the total cost of each project. Recipients can be businesses, non-profits, co-ops or political subdivisions. The bill allocates $50 million per year for broadband development from the state’s Ohio Third Frontier bond revenues.

The Ohio Third Frontier is a state economic development initiative aimed at boosting tech companies that are in early stages and helping diverse startups. The Ohio General Assembly appropriates funds to the program, much like the Office of Broadband Development in Minnesota.

Minnesota Setting The Trend

This isn’t the first time politicians have looked longingly at Minnesota’s plan to build more network infrastructure in rural areas. Ralph Northam, Virginia’s Lieutenant Governor, released an economic plan for his state this summer and addressed the need to improve connectivity in rural areas. In his plan, he suggested that the state adopt clear goals “[s]imilar to the legislation Minnesota has passed.”

Get your applications ready! The United States Department of Agriculture  Rural Utilities Service (USDA RUS) is accepting applications for another round of loans for the Rural Broadband Access Loan and Loan Guarantee Program. This program provides loans of up to $20 million for rural connectivity. The window to apply opened September 1st, and the deadline is September 30, 2017.

Thousands To Millions Of Dollars For Rural Areas

The USDA RUS has at least $60 million available this funding cycle for this program. All loans will be between $100,000 and $20 million. The program will only consider funding projects that offer speeds of at least 25 Megabits per second (Mbps) download and 3 Mbps upload.

For this program, the USDA RUS focuses on completely rural communities where at least 15 percent of households do not have high-speed Internet access. To be eligible, these rural areas cannot have more than two incumbent providers or have previously received USDA RUS funding. 

Although the program is specific to rural communities, most organizations are eligible to apply, including tribal governments, local governments, cooperatives, and corporations. No partnerships and no individuals may apply for funding, however, as the loans must go only to organizations.

This is only one of the Broadband programs that the USDA RUS manages. The agency also handles the Community Connect Grants and the Distance Learning & Telemedicine Program. The report “Broadband Loan and Grant Programs in USDA’s Rural Utilities Service” from the Congressional Research Services describes these programs in more detail.

Online Submission Only

The USDA RUS officially began accepting submissions September 1st and organizations have until September 30, 2017, to apply. If you are working in an area with poor Internet service, it’s important to note that this program only accepts applications through an online system. 

When it comes to rural areas, it’s no secret that national providers have little interest in serving the sparsely populated communities. Cooperatives and small local providers typically pick up the slack but it isn’t easy. In a recent survey indicated that small rural telephone companies are overcoming hurdles to deploy fiber and making long-term plans to continue the trend. Furthermore, rural subscribers are proving that they are hungry for high capacity connectivity.

Local ISPs Are Doing It

Approximately 89 percent of “NTCA 2016 Broadband/Internet Availability Survey Report” revealed that the expense of Fiber-to-the-Home (FTTH) deployment was the most difficult barrier to break through. Even though they faced the difficult problem of financing, 52 percent of survey respondents in the midst of fiber deployments in the spring of 2017 were serving at least half of their customers with FTTH.

Planning For The Future

Fiber is the future for most of the survey respondents. Eighty-two percent reported long-term fiber strategies with 66 percent of those with strategies planning on offering FTTH to at least half of their customers. Another 39 percent of those with long-term fiber strategies will offer fiber to the node to more than 75 percent of their customers by the end of 2019. Thirty-one percent of local telcos with long-term fiber plans who responded to the survey report said that they have already completed their fiber deployment plans.

Subscribers Want More

According to survey respondents, rural subscribers are choosing faster speeds tiers. Relative to the same survey one year ago, the demand for download speeds in excess of 25 Megabits per second (Mbps) more than doubled from eight percent of subscribers to 17 percent of subscribers. As the percentage of subscribers choosing a faster speed tier is increasing, the number of subscribers signing up for slower speeds is decreasing. The report describes rural subscriber behavior as, “moving up the broadband speed chain” and says that “…providers need to be prepared to offer them the level of service they demand.”

What Does The Survey Tell Us?

Cell phones as a substitute for home Internet service? That’s what the Federal Communications Commission (FCC) suggested in an August 2017 document. Buried within the Notice of Inquiry for the Section 706 Report, the FCC quietly proposed that mobile service could be considered broadband deployment.

In a recent article, Jon Brodkin at Ars Technica dove into why that suggestion is laughable. Mobile Internet service, especially at speeds less than 25 Megabits per second (Mbps) download and 3 Mbps upload, is not equivalent to high-speed home Internet service. 

This proposal also raises concerns for rural communities exploring funding options.

Overstating Rural Connectivity Has Consequences

If the FCC treats mobile Internet access as broadband deployment, rural areas will suddenly look better connected. On paper, the FCC statistics will show that rural America has sufficient Internet access, but the reality in the trenches will remain as it is today - poor connectivity in many rural communities.

A similar situation has already happened in Iowa, where the inclusion of satellite Internet service is now considered broadband access. The interactive FCC 2016 Broadband Deployment Map clearly shows that almost all of Iowa has high-speed Internet access via satellite. One can use satellite service to browse the web, but it has significant limitations, especially when uploading data.

With funding from the state to jumpstart their initiative, the city of John Day in Grant County, Oregon, is working with local communities to deploy fiber to nearby Burns. The infrastructure will bring better connectivity to local residents in the mostly rural community.

Beginning Of A Plan

City Manager of John Day Nick Green told the Blue Mountain Eagle that the plan is still in the works, but representatives from the county and local towns will be part of the Grant County Digital Coalition. The group, which is still being organized, will own and manage the infrastructure. They anticipate the network will likely be some sort of hybrid design, rather than Fiber-to-the-Home (FTTH) throughout the entire 4,529 square mile county. “Our goal is to address the entire county’s needs, but we will start with the urban corridor,” said Green.

Green told the Eagle that average download capacity in the county is 10 Megabits per second (Mbps) and local officials want the new infrastructure to boost averages to at least 30 Mbps. There is some fiber in the region for businesses but residential access is poor.

County To County

The city of John Day received $1.82 million from the state, which will fund the project. The county will deploy a 75-mile fiber optic line from Burns in Harney County to the Grant County seat, where about 1,800 people live. John Day is the most populous community in the county, where only about 7,500 people reside. Phase 1 will deploy an additional 85 miles of fiber to connect Grant County facilities, such as city halls, schools, and the county court. For Phase 2, local communities will construct municipal networks to offer residential service in the south and east of the county seat. Phase 3 will follow with a similar effort in the northern and western communities.

In a record high turnout for a non-general election, voters in Lyndon Township, Michigan, decided to approve a bond proposal to fund a publicly owned Fiber-to-the-Home (FTTH) network. The measure passed with 66 percent of voters (622 votes) choosing yes and 34 percent (321 votes) voting no.

Geographically Close, Technologically Distant

The community is located only 20 minutes away from Ann Arbor, home to the University of Michigan and the sixth largest city in the state, but many of the Township’s residents must rely on satellite for Internet access. Residents and business owners complain about slow service, data caps, and the fact that they must pay high rates for inadequate Internet service. Residents avoid software updates from home and typically travel to the library in nearby Chelsea to work in the evening or to complete school homework assignments.

Lyndon Township Supervisor Marc Keezer has reached out to ISPs and asked them to invest in the community, but none consider it a worthwhile investment. Approximately 80 percent of the community has no access to FCC-defined broadband speeds of 25 Megabits per second (Mbps) download and 3 Mbps upload.

“We don’t particularly want to build a network in our township. We would rather it be privatized and be like everybody else,” Keezer said. “But that’s not a reality for us here.”

When local officials unanimously approved feasibility study funding about a year ago, citizens attending the meeting responded to their vote with applause. 

A Little From Locals Goes A Long Way

With the FCC taking another look at the advancements in network neutrality rules passed during the Obama administration, the topic has been on the lips of many segments of the population. Many of us consider a free an open Internet a necessity to foster innovation and investment, but the words from the lips of the big ISPs are changing, depending on whom they’re talking to.

The Internet Association, who went on record in 2015 in support local authority for Internet infrastructure investment, recently released a video about the fickle financial reporting of Comcast, AT&T, and Verizon. 

The Internet Association describes the situation like this:

In our latest video, Internet Association takes a look at what Internet Service Providers (ISPs) told the government about net neutrality’s impact on investment and what they told their investors about its impact. They don’t quite match up.

Something to keep in mind: when companies like ISPs talk to their investors, they’re legally obligated to tell the truth.

The question of infrastructure investment is an important one because network investment helps the entire Internet economy grow and thrive. Innovative websites and apps fuel consumer demand for the Internet, which in turn fosters further network investment, which then fosters further innovation by websites and apps.

At Internet Association, we believe that the only way to preserve the free and open internet – and this cycle of innovation – is through strong, enforceable net neutrality rules like the ones currently on the books.

Check out the video and hear the contradictions from the lips CFOs who head up these big ISPs. What’s the real story here?

This is the transcript for episode 263 of the Community Broadband Bits Podcast. Anne Fifield and Nick Nevins discuss how Eugene, Oregon, uses a dark fiber network to encourage economic development. Listen to this show here.

Anne Fifield: I think we're going to start running out of office space downtown that we've had firms grow. We've had firms come just to locate here. They're here because of the fiber.

Lisa Gonzalez: This is episode 263 of the Community Broadband Bits Podcast from the Institute for Local Self-Reliance. I'm Lisa Gonzalez. This week, Chris talks with two folks from Eugene, Oregon where the community is working on a dark fiber project to improve connectivity to the downtown area. He's joined by Anne Fifield who works in economic development and Nick Nevins from the Eugene Water and Electric Board, also known as EWEB. In this conversation, we learn about the collaboration between the two entities, including how the infrastructure is already improving Eugene's downtown, how they're funding the project, and more about the decision to expand existing fiber in Eugene. Before we start the interview, we want to remind you that this commercial-free podcast isn't free to produce. Please take a moment to contribute at ILSR.org. If you're already contributing, thank you for playing a part and keeping our podcast going. Now, here's Christopher with Anne Fifield and Nick Nevins from Eugene.

Christopher Mitchell: Welcome to another edition of the Community Broadband Bits Podcast. I'm Chris Mitchell with the Institute for Local Self-Reliance. Today, I'm talking with Anne Fifield, Economic Development Planner for the city of Eugene in Oregon. Welcome to the show.

Anne Fifield: Hi, Chris.

Christopher Mitchell: We also have Nick Nevins on the line and he is the Engineering Technician for Eugene Water and Electric Board. Welcome to the show.

Nick Nevins: Thanks for having me, Chris.