CCG Consulting

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?

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?

I’m working with several small cities that were recently notified that the existing cable company plans to upgrade its network. In these cities, the cable company still operates a DOCSIS 3.0 network. The networks have download speeds a little faster than 100 Megabits per second (Mbps), and upload speeds are under 10 Mbps. These cities are currently considered to be underserved and are eligible for BEAD grants. I talked to the State Broadband Offices in several states about the issue of announced upgrades coming just in front of the final BEAD map challenges.

Every few years since municipal broadband was new, a lobbying group comes out against the concept of municipal competition. The lobbying effort has taken many different tactics over the years, but generally the attacks against municipal broadband haven’t been very public and were aimed at generating lobbying materials to give to politicians. An anti-municipal lobbying effort using a new tactic recently surfaced. There is a huge lobbying effort underway against Utopia, a municipally-owned network in Utah.

Where are cellular carriers finding the millions of customers they are adding to fixed-wireless access (FWA) cellular broadband? In urban areas, the customers would have to be coming from cable companies, telephone company DSL, or fiber. In rural areas, customers would be coming from DSL, satellite, or cellular hot spots. I’ve been doing some digging, but my research is far from scientific.

In October 2023, Governor Gavin Newsom (D-CA) signed the Digital Equity Bill of Rights. This is an interesting law that guarantees that Californians have the right to, among other things:

One of the most interesting rules in the BEAD Program is that broadband needs to be offered to every unserved location in the country—not 98 percent, not 99 percent, but all of them. This sounds like a terrific policy goal, but as I’ve been thinking about it, the goal is going to be incredibly hard to meet in many places. There are homes throughout the West that are far away from everybody else and will be extremely expensive to reach. There might be even more such homes in Alaska.

The White House Office of Information and Regulatory Affairs recently released new rules that will be used to quantify and evaluate proposed new regulations. Many economists have been arguing for this change for a decade and believe that the new formulas are more accurate. There are several important changes to the new scoring methodology, notably that the new formulas give more value to future impacts of regulation. Critics of the new formulas argue that the new regulations are a way to impose high regulatory costs today that are justified by some theoretical future benefit.

Many internet service providers (ISPs) who operate mature fiber networks have been recently approached to sell their businesses to buyers who want to roll up and amass multiple fiber networks into a larger business. I know fiber network owners who are being offered prices for their business that they never expected. I’ve heard of offers at a multiple in the range of twenty times adjusted earnings. High multiples are a sure sign of plans for rolling up many ISPs into a larger business.

For well over a decade, it was fairly easy to understand the trajectory of the broadband industry. But the industry is now in total turmoil. Within a short time, cable companies have stopped growing. Currently, all of the industry growth among big internet service providers (ISPs) is coming from cellular fixed wireless access (FWA). Last-mile fiber networks are being built across the country. Wireless internet service providers (WISPs) finally have the radios and enough spectrum to be serious competitors. When I talk about trajectory, I’m not talking about predicting 2024.