CCG Consulting

The US Department of Agriculture (USDA) recently filed a request for a six-month waiver from the Build America, Buy America Act (BABA) – more colloquially referred to as the Buy American rules. The Infrastructure Investment and Jobs Act (IIJA) legislation updated the BABA rules to apply to all projects that receive federal funding for infrastructure as of November 18, 2021, the date the IIJA was published in the Federal Register.

The National Telecommunications and Information Administration (NTIA) set a new definition of broadband at 100/20 Mbps for purposes of the Broadband Equity, Access and Deployment (BEAD) Program grants – if a customer fails that test they are considered either unserved or underserved. Everybody nationwide has been so focused on download speeds that we are largely ignoring the fact that a huge number of nationwide broadband customers are not getting upload speeds of 20 Mbps.

One of the aspects of the $42.5 billion Broadband Equity, Access and Deployment (BEAD) Program that many communities might have overlooked is that communities can request grants to bring fast broadband or improve existing broadband to anchor institutions.

There are new predictions of a possible recession, and it’s fair to ask if internet service providers (ISPs) should be worried about it. The question of whether broadband is recession-proof is really asking if people will willingly give up the many things that they do online. Is there a point in people’s lives where broadband becomes a necessity that they will fight to keep when times get tough? I suspect most of the people who read this blog think that broadband is essential for daily life.

I’ve already written about the complexity of applying for the Broadband Equity, Access and Deployment (BEAD) Program grants. Unfortunately, the paperwork doesn’t stop there. There are reporting requirements both for States and for grant recipients that begin when grant funds have been awarded that ask for a lot more information than any other grant I can recall. The requirements for States matter because States will likely request much of the same information from each grant recipient.

I’m starting to wonder if big cable companies and telecom companies are assuming that a fifth Federal Communications Commissioner will soon be seated because the lobbying arms of these companies have been publishing documents that are an open plea to not regulate them. The latest comes in the form of a whitepaper from ACA Connects, which represents the mid-sized internet service provider (ISP) like Cable ONE, WOW! Internet, Mediacom, TDS, Armstrong, Hotwire, and ISPs of a similar size.

One of the more interesting requirements of the Broadband Equity, Access and Deployment (BEAD) Program grant process is that States must reach out to communities and stakeholders to make sure that everybody gets a voice in setting the state grant rules. This is something that communities of all kinds should be participating in. It’s easy to think of the $42.5 billion BEAD grants as only for rural broadband.

A recent analysis of Starlink broadband speeds from Ookla gathers huge numbers of speed tests from across the country. According to the study, the US average download speeds on Starlink have improved over the last year, from an average of 65.72 Mbps in first quarter 2021 to 90.55 Mbps in first quarter 2022. But during that same timeframe, upload speeds got worse, dropping from an average of 16.29 Mbps in first quarter 2021 to 10.70 Mbps in first quarter 2022.

Leichtman Research Group (LRG) recently released the cable customer counts for the largest providers of traditional cable service at the end of the first quarter of 2022. LRG compiles most of these numbers from the statistics provided to stockholders, except for Cox, which is privately held and estimated. Leichtman says this group of companies represents 96 percent of all traditional US cable customers. The industry continues to bleed customers, losing over 1.4 million customers in the fourth quarter, up from 1.3 million customers the previous quarter.

I’ve been getting the question lately about raising broadband rates. I don’t think there is a decision that smaller internet service providers (ISPs) agonize over more than the idea of increasing prices to customers. The question is obviously being raised now due to inflation. The need for rate increases during times of inflation is basic math. If your predominant product is broadband, and if costs are rising, you either raise rates or suffer a loss of margin – there isn’t any other alternative after you have done whatever belt-tightening you might do with expenses.