The Connect America Fund provides annual federal funding to some of the largest telecommunications providers, but it can be hard for local officials to know where these dollars go.

A recent report digs deep into the federal subsidies for Internet service in Minnesota. Researcher Bill Coleman of Community Technology Advisors led a Blandin Foundation project that explored how federal Connect America Fund dollars have been used in two Minnesota telephone exchanges. In the end, researchers found that these networks would likely not meet Minnesota’s state connectivity goals.

Boots on the Ground

While digging through a paper trail of right-of-way agreements and local permits, researchers also went out into the field to find the actual infrastructure in the communities. They identified DSLAMs where fiber-optic lines connect to the copper DSL lines that run to people’s homes.

Using the locations of the DSLAMs, researchers mapped where people can likely receive federal government defined broadband of 25 Mbps download and 3 Mbps upload. The maps also show where people can likely get 10 Mbps download and 1 Mbps upload which is the standard for the Connect America Fund subsidy. 

Result: Little Broadband Access

The 27-page report goes into detail on the connectivity available in the two telephone exchanges. The researchers conclude by explaining:

“In sum, CAF II investments in Minnesota are being spent to build networks that don’t meet today’s federal definition of broadband and won’t meet state goals for the future. Moreover, lack of transparency in proposed CAF II network plans and timelines is making it difficult for impacted communities to plan accordingly to ensure their broadband needs are being adequately met.“ (Page 22)

Read the full report from the Blandin Foundation.

At the Institute for Local Self-Reliance, we analyze data and explore public policies to empower local communities. Our initiative staff work on varied issues from composting to broadband, but all these issues affect our daily lives and our communities. In the Community Broadband Networks Initiative, we often analyze high-speed Internet service availability using the best data that is publicly available. Some of this data, however, is inaccurate, outdated, and misconstrued.

FCC Form 477 Fails in at Least Four Ways

The most common source of this data is the Form 477. It is designed to be standard, uniform, and provide the Federal Communications Commission (FCC) with detailed information to make sound decisions. The FCC distributes form 477 to Internet Service Providers (ISPs) in order to collect data on their service availability. This form is only accessible online through a government web portal, and it has an accompanying 39-page instruction document. Some of the information is confidential and stripped away before the FCC releases the data to the general public.

The FCC Form 477 may not accurately reflect broadband availability in four main ways: 

1). ISPs may fill out the form improperly. Some ISPs may misplace key information into the form, creating havoc for those analyzing the data. They may input numbers in Kbps instead of Mbps, causing further confusion. For example, a fixed wireless ISP outside of Rochester, Minnesota, offers a maximum speed of 10 Mbps on their website, but the FCC Form 477 states that this ISP advertises a speed of 244 Mbps. Perhaps the ISP meant customers can usually expect a maximum speed of 244 Kbps? Even then, that doesn’t make sense. 

2). The data is out of date. ISPs submit the form twice a year, but the FCC takes time to process this data. By the time we produce maps and research, the underlying data may already be too old to be useful. Mergers may not yet be adequately reflected. For example, at this writing in May 2018 the most recent data currently available is from December 2016. That means the data, the maps, and the research are about a year and a half out of date.

The application window for the Connect America Fund (CAF) II Auction recently closed among debate about eligibility criteria. A recent editorial from the WVNews, where multiple counties were hit hard by flawed FCC data, urged their federal elected officials to act before rural residents lose more funding opportunities.

Wha’ Happened?

As multiple experts have shown, the Form FCC data collection uses an overly broad measurement by relying on census blocks to show areas with broadband service. The FCC has admitted that their methodology overstates who does or does not have FCC defined broadband speeds of 25 Megabits per second (Mbps) download and 3 Mbps upload. This year, seven West Virginia counties that hoped to access CAF II funding have been deemed ineligible because the new FCC Form 477 data indicates that each county has 100 percent broadband access.

Folks in the region are reasonably confused, concerned, and upset. In 2015, the FCC’s data indicated that these same areas were underserved and there have been no deployments to cause such a seismic change.

The editors at the WVNews noted that the chairman of the West Virginia Broadband Enhancement Council described the new FCC determination as “not even close to being correct” and that he had predicted there might be difficulty obtaining CAF II funding.

The president of a local fixed wireless provider offered a useful analogy:

“The problem is, with the Form 477, if one person in that census block gets [broadband], then that whole census block is counted as served…That’s like saying if someone in the U.S. has access to fresh lobster, then they all do. That’s just not really true.”

He also described the dilemma companies like his face because they might want to apply for funding:

Federal broadband grant programs start accepting applications in the spring. 2018 is an especially exciting year because the Connect America Fund (CAF) II Auction is finally open. This program has been years in the making, but it still has its flaws. Learn more about the federal grant opportunities and how we can improve federal broadband data below.

Due March 30th, 2018 -- CAF II Auction

At noon ET on March 19, 2018, the much anticipated CAF II Auction opened. Application are due by 6pm ET on March 30th, 2018.  

The Federal Communications Commission (FCC) will distribute $2 billion to Internet Service Providers (ISPs) to build new Internet infrastructure in rural areas. This auction is the latest program of the larger CAF program that started offering funds in 2012. In the past, most CAF funds have gone to the largest incumbent ISPs, such as Frontier or Verizon. This auction is a chance for small rural ISPs to win funding for their communities through innovative projects.

Watch the FCC’s Application Process Workshop Video and then explore the map of eligible grant areas.

Due May 14th, 2018 -- Community Connect Grants

The U.S. Department of Agriculture (USDA) also announced that the Community Connect Grant program is open. Webinar presentations on the process will be available on April 5th and April 10th. Applications are accepted through May 14th.

Community Connect Grants are each $100,000 to $3 million and focus on improving rural broadband infrastructure. Areas are eligible if they do not have access to speeds of 10 Mbps (download) and 1 Mbps (upload). Nonprofits, for-profits, federally-recognized tribes, state governments, and local governments can propose projects. Winners must match 15% of the grant and the program has a budget of about $30 million.

Sign up for a webinar on how to apply for the Community Connect Grants: 

This is the transcript for Episode 281 of the Community Broadband Bits podcast. Will Rinehart of the American Action Forum in Washington D.C. discusses telecommunications and economics with our host Christopher Mitchell. Listen to this episode here.

Will Rinehart: And I do think that obviously good policy is very very important and that's where you and I agree a lot. You know there's obviously some good policies that can be enacted. There's probably better conversations that could be had in this space and that's also something else that I really do really want to see. You're

Lisa Gonzalez: listening to episode 281 of the Community Broadband Bits podcast from the Institute for Local Self-Reliance. I'm Lisa Gonzales as a research organization. We here at the institute make it a habit to hear all sides of the debate along the way we make connections with people who offer perspectives on policy that differ from ours. We consider these conversations critical as we analyze factors that help us create policy recommendations and resources for local communities. This week Christopher talks with Will Rinehart from the American Action Forum. They got together at the recent broadband community's economic development conference in Atlanta. In this conversation you'll hear the two discuss a variety of topics they talk about the area of telecommunications and economics and the forum's approach. You'll also hear that these different perspectives aren't as black and white as they first appear. Now here's Christopher with Will Rinehart from the American Action Forum.

Christopher Mitchell: Welcome to another edition of the community broadband bits podcasts. I'm Chris Mitchell with the Institute for Local Self-Reliance. Coming to you from Atlanta sitting practically on a runway at the Atlanta airport with Will Rinehart the Director of Technology and Innovation Policy with the American Action Forum. Welcome to the show. Thanks Chris. Thanks for having me. We're at the broadband community's event here. We just had our second panel which is called a blue ribbon panel and general session kind of thing. And you and I are typically brought on as people who have very opposing points of view.

This fall, nonprofits and other organizations with an interest in constructive broadband policy have worked to help the new administration’s FCC through the public comment process. We’ve let readers know about opportunities to share their thoughts with the Commission and we’ve submitted comments separately and with other likeminded groups.

Modernizing the Form 477 Data Program

The Commission asked for comments on the method in which it collects data regarding where broadband is accessible. ISPs provide information to the FCC based on which census blocks they serve. We’ve often criticized this approach because it grossly overstates where coverage is available, especially in rural areas where census blocks tend to be large. 

Read our ideas for improvements to the Form 477 data collection, which include obtaining more detailed geographic information, minimum and maximum speeds, and pricing information.

Connect America Funding Phase II Bidding Procedures and Program

In order to help bring better connectivity to rural areas, the FCC distributes Connect America Funds (CAF) to entities such as companies and cooperatives to build broadband infrastructure. The process involves bids from these entities. The FCC is considering changes to the current process and bidding procedures, including what types of projects qualify for funding. The Commission asked for comment after proposing a long list of possible changes.

We recently spoke with Jon Chambers of Connexon, who provided more detail about the program and offered his thoughts on CAF and the possible changes.

Read our Reply Comments, that address issues we feel need attention, including the Carrier of Last Resort guarantee, more opportunities for rural cooperatives, and our concern that the FCC will attempt to equate subpar satellite and mobile broadband with high-quality connectivity. We filed our Reply Comments with Public Knowledge, Appalshop, and a long list of other organizations concerned about Internet access in rural America.

We’ve written about the Connect America Fund (CAF) on multiple occasions and recently alerted interested MuniNetworks.org readers to the FCC’s ongoing efforts to re-examine the CAF Phase II Auction procedures. On October 26th, the Schools, Health & Libraries Broadband Coalition (SHLB) is presenting a free webinar on CAF as part of their Grow2Gig+ Webinar Series.

SHLB will be offering a Universal Service Symposium in Washington, DC, on November 2nd and the information presenting in the webinar will help attendees prepare. Even if you’re not planning to attend the workshop, the webinar will offer information that will be useful if you have any interest in applying for CAF funds or if you are monitoring the FCC’s policies moving forward.

The webinar speakers are Carol Mattey and Rebekah Goodheart; John Windhausen will moderate. SHLB describes the event as:

The Connect America Fund (CAF) is a federal program that provides funding to defray the cost of operating and extending both fixed and mobile broadband networks to serve consumers and small businesses in rural, high-cost areas in the United States. CAF was created by the Federal Communications Commission (FCC) to fulfill the statutory mandate that all Americans have access to communications service that is reasonably comparable to what’s available in urban areas.

Join two former senior FCC officials as they discuss the History of the Connect America Fund, the Phase II  Auction (Performance Standards, Application Process, and Auction Mechanics), as well as Reporting Requirements. 

You can register online at the SHLB website and also review past webinars and check out other events on the calendar.