CCG Consulting

I was asked an interesting question recently: will fiber help the big telecom companies turn the corner to success? It’s a good question when looking at telcos like Frontier, Windstream, Lumen, and any others who are late to the game for converting copper to fiber. There are a lot of factors that will come into play, so the answer is likely to be different by company. On the plus side is a general consensus by many households that fiber is the best technology. There is a sizable percentage of homes in any market that will move to fiber given a chance.

The current Congress stuck almost 5,000 earmarks costing almost $9 billion into the $1.5 trillion budget that was recently signed by President Biden. An earmark is when each member of Congress gets to designate funds directly to pet projects. There is no reason that earmark spending can’t be used for broadband infrastructure, and it’s likely that there were broadband construction projects buried inside of the 4,962 projects that were just funded this way. The idea of getting an earmark for broadband is intriguing because I’m not sure anybody knows what rules would apply.

The short time frame for many state grants is out of synch with the reality of the way that internet service providers (ISPs) can add customers to a network. Grants generally pay only for the capital cost of assets. The largest cost for fiber grants is likely the cost of the fiber running up and down streets to pass customers. The second largest cost in many grants is the fiber drops that connect from the street to customers. In short, an ISP has two concerns with a grant with a short timeframe. Make sure to ask for enough money upfront.

Dish Network has been quietly building out its new cellular networks and plans to launch in 25 major markets and over one hundred smaller markets before June 2022. This company is shooting to stay on track for its commitment to the Federal Communications Commission to cover 20% of the US population by this summer and 70% by June 2023.

When we’ll be able to file for grants from the Broadband Equity, Access, and Deployment (BEAD) program? The short answer to the question is that we can’t know yet. But we know all of the steps that must be taken by a state before it can start offering grants. We have a date for the first step of the process. On May 15, the National Telecommunications and Information Administration will release a Notice of Funding Opportunity (NOFO) for the BEAD program. This document will flesh out the NTIAs understanding of how the grant process will work.

Will the Federal Communications Commission raise the definition of broadband to 100/20 Mbps? It looks like that probably doesn’t happen until Congress approves a fifth FCC commissioner. But we  need to understand that a 100/20 Mbps definition of broadband is not forward-looking and will start being obsolete and too slow from the day it is approved. We need a mechanism to change the definition of broadband annually, or at least more often than we have been doing. The market has already told the FCC that 100 Mbps is quickly becoming last year’s news.

For anyone planning on funding a broadband project with a grant, there are some important costs to consider. First, grants don’t cover all assets. Most grants cover network assets and assets needed to connect to customers, but grants typically don’t cover vehicles, computers, furniture, test equipment, and any other assets needed to launch a new internet service provider (ISP) or a new market. Grants also aren’t going to cover major software costs like upgrades to billing systems or marketing software.

In April 2021, State District Court Judge Matthew Wilson in New Mexico ordered school officials to take steps to provide the needed devices and broadband connections for students who are forced to attend school remotely. This ruling was made during the deepest part of the pandemic when most schools in New Mexico were shut down. His ruling was based upon complaints that The New Mexico Public Education Department was not complying with a court decision in the case of Yazzie/Martinez v.

The upcoming Broadband Equity, Access, and Deployment (BEAD) Program grants bring a huge once-in-a-generation grant to states to solve the digital divide and build broadband infrastructure. The average state will get over $800 million dollars, with the exact amount per state still to be determined. It seems almost too absurd to imagine for communities with poor broadband, but there are some states that may end up not getting this funding.

For the last twenty years, the industry has talked about broadband in cities as a duopoly, meaning there was competition between cable and telecom companies – competition between cable modem broadband and DSL broadband. Whether coordinated by backroom deals or by listening to smart advisors, both industries have given up trying to compete on price. By the time cable modem speeds hit 30 Mbps speeds, the market competition was over, and cable clearly won the price war.