Joan Engebretson

As roughly half of US states consider a FirstNet opt out or opt in decision, considerable confusion has arisen about states’ options – confusion resulting, some say, from pressure tactics applied by FirstNet, the government entity created to administer the nationwide mobile broadband public safety network that carries the same name.

In its latest deal, TPG Capital is backing RCN’s $2.3 billion Wave Broadband acquisition. Wave Broadband will join TPG Capital’s cable and broadband portfolio, which also already includes RCN and Grande Communications – two operators that, like Wave, are focused on multi-play offerings including broadband and video in competition with incumbent telcos and cable companies. The combined company will be the nation’s sixth largest internet and cable operator. Bringing Wave, RCN and Grande together will create a regional market leader in next-generation, high-speed data services for residential and business customers with a presence spanning the West Coast, East Coast, Chicago and Texas. The $2.36 billion deal is expected to close in the second half of 2017.

Stakeholders know that because small cells will have shorter range, operators will need a dense fiber network to support them. Verizon CEO Lowell McAdam offered a sense of just how dense that network will need to be.

Verizon small cells and densification efforts are driving the deployment of 1700-strand fiber in Boston (MA), where the company is undertaking a major network upgrade, McAdam said. In comparison, he said, the company deployed six-strand fiber when it began deploying its FiOS landline broadband and internet service in the early 2000s. Verizon worked closely with its supplier Corning to get 1700 fiber strands in a single sheath, McAdam said, also noting that the company recently placed a $300 million order with another fiber supplier Prysmian. “The largest fiber network in the country will be wireless” and will be operated by Verizon to provide backhaul and other types of connectivity, said McAdam.

The Gigabit Opportunity Act, also known as the GO Act, aims to spur gigabit broadband deployment by using a range of tax breaks.

Sen Shelley Moore Capito (R–WV) said the GO Act “gives states flexibility, streamlines existing regulations and eliminates barriers to investment so we can better connect our low-income and rural communities.” The act calls for state governors to establish Gigabit Opportunity Zones that would be eligible for tax breaks including enabling companies to immediately expense the cost of gigabit-capable equipment and temporarily deferring capital gains for broadband investments and upgrades. It also directs the FCC to release a framework that encourages states, counties and cities to voluntarily adopt streamlined broadband laws, with which Gigabit Opportunity Zones would have to comply.

If this sounds familiar, that’s because the Gigabit Opportunity Act is based, in part, on a Gigabit Opportunity Zone proposal made by FCC Chairman Ajit Pai prior to his chairmanship. Not surprisingly, Chairman Pai issued a statement in support of the proposed legislation. The Gigabit Opportunity Act, he said, is “an important step toward closing the digital divide.” He added that “[w]ith targeted tax incentives and regulatory streamlining, the GO Act aims to remove the major barriers holding back internet access in economically challenged areas.” Some stakeholders argue, however, that while removing regulatory barriers and providing tax incentives can help spur broadband deployment, they are not a complete solution.

Just a few months after having its credentials for participation in the Federal Communications Commission’s low-income Lifeline program revoked, FreedomPop has found a new Lifeline-related revenue stream: The company is licensing a database system originally developed for its own use to service providers approved to offer Lifeline service. FreedomPop CEO Steve Stokols said the FreedomPop Lifeline database took about a year to develop and offers fraud prevention capabilities, as well as providing leads for service providers pursuing Lifeline business.

According to Stokols, former FCC Chairman Tom Wheeler encouraged FreedomPop to participate in the Lifeline program, which is what drove the company to develop a system that essentially provides the functionality that the FCC verification database was intended to provide. Current FCC Chairman Ajit Pai has different views on Lifeline than his predecessor, however. Chairman Pai didn’t support 2016’s Lifeline reforms, and one of his first moves as chairman was to reject nine Lifeline service provider approvals made at the federal level under Wheeler’s chairmanship – including FreedomPop’s. Subsequently, Chairman Pai shifted responsibility for Lifeline service provider approvals back to the states. As a result, according to Stokols, “the approval process is basically shut down.” Stokols estimated that it would take five years and a lot of legal fees to get Lifeline approvals on a state-by-state basis.

An uncommon model for municipal broadband network deployment comes from Eugene (OR) where the local utility company is partnering with the city and other entities to build the network, dubbed EUGNet. The entities involved in the partnership to create EUGNet include the Eugene Water and Electric Board (EWEB); the city of Eugene; the Lane Council of Government, an association of local governments in Lane County; and the Technology Association of Oregon.

In an effort to encourage local businesses to connect to the network, a substantial portion of connection costs will be subsidized for those who sign up during the initial construction period, explained Matt Sayre, director of EUGNet partner Technology Association of Oregon. “During the downtown construction project, the one-time connection fee for each building is $2,000,” says the EUGNet website. “After that time, property owners will have to pay the full cost of their connection, which we estimate will be about $10,000 per building.”\ EUGNet hopes to connect about 120 buildings in downtown Eugene. Funding for the project comes primarily from Eugene’s Downtown Urban Renewal District.

CenturyLink and Frontier apparently see the current Federal Communications Commission administration as potentially sympathetic to their concerns about business data services regulation. The carriers asked the commission to grant them non-dominant business data service status, arguing that they do not dominate that market because they have ample competition. The move comes just a few months after the previous FCC administration in October attempted to impose FCC oversight on packet-based business data offerings and indicated plans to continue to regulate time- division multiplexing(TDM)-based business services from incumbent carriers such as CenturyLink and Frontier based on price cap regulation.

A West Virginia Broadband Bill introduced in the state house of representatives aims to spur broadband competition and deployment by allowing local communities to form cooperatives to build broadband networks. House Bill 3093 also would re-establish a state broadband enhancement council charged with collecting data about internet speeds, seeking and dispensing non-state funding and grants, and making recommendations to the legislature. Additionally, the bill includes rules about the use of conduit, microtrenching and pole access, and would prevent broadband providers from making false claims about the speeds their broadband service is capable of delivering.

Importantly, the bill is designed to require no state funding. Nevertheless,a local media outlet expects the bill to face opposition in the state senate, considering that the senate president also works as sales director for Frontier Communications, which already has expressed concerns about whether the bill would achieve its intended goals.

Telecommunication companies are likely to use a mixture of technologies — including fixed wireless, copper bonding and vectoring – to meet deployment requirements of phase two of the Connect America Fund (CAF), said Kurt Raaflaub, head of strategic solutions marketing for broadband equipment supplier Adtran.

While fiber-to-the-home would be the most future-proof broadband upgrade, Raaflaub doesn’t see it as being cost-effective for CAF II deployments, at least not on a widespread basis. He noted that carriers will be able to meet CAF II broadband speed requirements with these other technologies. CAF II requirements range between 10 Mbps downstream/ 1 Mbps upstream and 25/3 Mbps, depending on deployment costs. “You have to leverage what you have,” Raaflaub commented. While CAF II applies specifically to the nation’s largest price cap carriers, requirements are similar for smaller rate of return carriers who get funding through the high-cost Universal Service Fund to serve many of the nation’s most rural areas.

Wireless carriers, known as competitive eligible telecommunications carriers (CETCs), who currently receive Universal Service funding in areas that will no longer be eligible for support will have that funding phased out over a two-year period beginning one month after completion of an upcoming mobility fund reverse auction. Details about the CETC support phase-out are included in an Federal Communications Commission order adopted Feb 23 and released to the public this week.

Areas are ineligible for funding if at least one company offers LTE service in the area at speeds of at least 5/1 Mbps without CETC support. The FCC estimates that about $300 million of the $483 million in USF funding that currently goes to wireless carriers, excluding Alaska, is for areas that will not be eligible for support. The FCC was not persuaded to extend the phase-out period to five years, despite concerns expressed by some wireless carriers that failure to do so could leave some areas without service, at least for some time. That would occur if the winning bidder does not currently offer service but instead must build a new network and if current carriers opt to pull out of the market when funding is cut back or cut off. The Rural Wireless Association also argued that, based on previous FCC documents, CETCs had expected to continue to receive funding for a longer period. Companies subject to the two-year CETC support phase-out will receive two-thirds of their traditional support level in the first year and one-third in the second year.