Analysis

In a recurring theme, Lumen finds itself facing financial challenges. At the end of the third quarter of 2023, Lumen CEO Kate Johnson announced some restructuring with current debt holders to extend the due dates of some debt to ‘reduce the noise” around the company’s debt. The company is also eliminating staff to reduce expenses by $300 million annually. Lumen’s revenues dropped over 17 percent compared to 2022, but a large part of that drop comes from its spin-off of copper networks to Brightspeed for $7.5 billion and the sale of its Latin American business to Stonepeak for $2.7 billion.

In 2024, the first Broadband Equity Access and Deployment (BEAD) Program grants will go out — an ambitious $42 billion in subsidies to build broadband infrastructure to close America’s digital divide. While excited and hopeful, I’m not alone in worrying that there is a significant gap between BEAD’s ambition and what it will likely deliver. BEAD alone is not enough. Here are five reasons why:

New polling shows that the Affordable Connectivity Program (ACP) continues to be overwhelmingly popular among Republican, Democratic, and Independent voters alike. Among Independents, the margin of support for ACP has jumped from 40 percent to 56 percent over the last year.

It’s easy to say that fiber is better than cable technology or fixed wireless when in real life, broadband customers make this decision. My firm does a lot of broadband surveys every year, and we find customers who are happy with most broadband technologies. The bottom line is that any broadband technology or provider that a customer likes is good for them. For a customer to remain happy for a long time requires technology that works, customer service that is responsive, and a price that customers are happy with. Are there superior technologies?

Over the last year, there has been a significant increase in the number of federal broadband grant programs that require a domestic preference (“Buy America”) for the purchase of manufactured products. The problem, however, is that there are two different Buy America standards that apply across multiple federal agencies and there are 4 different waivers available for 6 different programs.

The Commonwealth of Pennsylvania strives to achieve universal and equitable connectivity to support the state's social, economic, and quality of life outcomes. The Pennsylvania Broadband Development Authority (PBDA) has released Connected and Empowered: A Digital Equity Plan for the Commonwealth of Pennsylvania to work towards digital inclusion for every resident of the Commonwealth. PBDA's draft plan is available for public comment until January 8, 2024.

Each year, Grace Hill partners with the National Multifamily Housing Council (NMHC) to conduct a Renter Preferences Survey. Here are some of the highlights:

Illinoisans paid the highest state and local taxes for wireless cell phone service in the nation in 2023, spending more monthly than the combined rates of the two lowest states—Idaho and Nevada. Illinois wireless plan holders paid 23% in state and local taxes, fees and government surcharges on their monthly wireless bills in 2023. Residents in each state also paid 10.8% in federal taxes to the Universal Service Fund for cell phone service in 2023. That gave Illinois a grand total of 33.8% in government taxes on the cell bills compared to the 24.5% U.S. average.

While there was a huge amount of fiber built in the US in 2023, the largest providers almost universally cut back their plans during the year. There are a lot of reasons for the fiber construction slowdown. The high cost of borrowing put a crimp in a lot of service provider plans, and slowed new home startups, which are part of any plans for fiber expansion. Inflation played a role in the slowdown, too: it cost at least 20% more to build a fiber network by the end of 2023 than just a few years earlier. What are the consequences of a fiber construction slowdown?

The Texas Broadband Development Office (BDO), under the Texas Comptroller of Public Accounts, developed the Texas Digital Opportunity Plan to guide non-infrastructure-related digital opportunity investments. Another aim is to position the BDO to receive State Digital Equity Capacity Grant Program funds from the U.S. Department of Commerce's National Telecommunications and Infrastructure Administration (NTIA).