CCG Consulting

Our broadband policies always seem to lag the market. If and when the Federal Communications Commission seats the fifth Commissioner, it’s expected that the agency will raise the definition of broadband from 25/3 Mbps to 100/20 Mbps. That change will have big repercussions in the market because it will mean that anybody that can’t buy broadband speeds of at least 100/20 Mbps would not have broadband. There is a much easier way to define broadband.

Section 80401 of the Infrastructure Investment and Jobs Act new law allows for the use of private activity bond financing for qualified broadband projects. It’s an interesting new form of financing that has never been easily available to commercial internet service providers before. This bond funding can only be used for projects that fit the criteria for broadband projects that are covered by the other provisions of the Infrastructure Act.

For years the industry used the word redundancy when talking about how we protected our networks. The primary aspects of redundancy are having multiple fiber routes in place so that areas don’t become isolated if a fiber is cut or having enough spare electronics to quickly recover from problems. But in recent years, we’ve started to talk about resiliency, which encompasses redundancy but means a whole lot more. Resiliency means taking proactive steps to prepare against reasonably expected problems of all sorts.

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.