telecompetitor

Federal Communications Commission Chairman Ajit Pai has established what he is calling the Broadband Deployment Advisory Committee (BDAC) aimed at bridging the digital divide and accelerating the deployment of high-speed broadband services. One of the BDAC’s first tasks will be to draft a model code for broadband deployment that will address topics such as local franchising, zoning, permitting and rights-of-way regulations with the goal of eliminating or reducing red tape that can complicate deployments. If this sounds familiar, perhaps it’s because several other entities already have undertaken aspects of this task. These entities include but are not necessarily limited to:
Google Fiber
CTC Technology & Energy
Gig.U
Pew Center on the States
Next Century Cities

Hopefully the BDAC will avoid re-inventing the wheel by reviewing these and other existing studies as part of the process of developing the model code. Also on tap for the BDAC will be addressing further reforms to the FCC’s pole attachment rules; identifying unreasonable regulatory barriers to broadband deployment and ways to encourage local governments to adopt deployment-friendly policies; and other reforms within the scope of the commission’s authority, according to a press release about the BDAC issued today.

TDS Telecom will be able to improve broadband service to a majority of the company’s wireline locations in the US thanks to a 10-year $75 million annual cash infusion from the Federal Communications Commission high-cost universal service program. TDS is one of about 200 rural rate-of-return carriers that have committed to building out broadband service at specific speeds to a specific number of locations in exchange for receiving the funding based on the alternative Connect America model (A-CAM). TDS A-CAM broadband support will enable the company to upgrade service to nearly 160,000 homes in 25 states.

The majority of rural rate of return carriers that initially opted to receive broadband support based on the Federal Communications Commission alternative Connect America model (A-CAM) have reconfirmed those plans based on revised A-CAM broadband support offers. Those offers were reduced when demand for the A-CAM program was greater than expected. Although the commission raised the budget for the program, the additional funding was not sufficient to cover a total funding gap of $1.6 billion over 10 years. A total of 182 carriers accepted a total of 217 revised A-CAM broadband support offers, the FCC said Jan 24.

The total number of carriers that received revised offers was 191, and the total number of offers that were revised was 228. (Some carriers received more than one offer because they operate in more than one state and offers were made on a state-by-state basis.) Forty-five initial A-CAM offers made to 35 carriers were for less money than the carriers would have received by staying on the traditional program and therefore were not revised. Instead those carriers will receive the total amount of A-CAM funding they initially were offered.

Broadband wireless provider Rise Broadband issued a press release today noting that it had expanded its network in 10 market areas in conjunction with the Federal Communications Commission’s Connect America Fund (CAF) program. Rise apparently is referring to new buildouts supported, at least in part, by the funding that the company received through the rural broadband experiment (RBE) program, part of the overall CAF program for broadband expansion in rural markets. RBE was a one-time $100 million element of the CAF program that was designed to bring broadband to unserved areas but also to gain market information to help in shaping the reverse auction planned for the CAF program. Rise won $16.9 million in this iteration of the CAF program for broadband expansion in Illinois, Iowa, Kansas, Nebraska and Texas — and apparently is using the funding to deploy broadband wireless service using long-term evolution (LTE) technology supporting speeds up to 50 Mbps.

With the 600 MHz auction results expected soon, it’s becoming increasingly clear that those results are likely to be disappointing. More and more industry observers are predicting that prices will be considerably lower than many initially expected — and lower they were in the 2015 AWS-3 auction, the most recent major spectrum auction. The Moffett Nathanson researchers pose several potential explanations for why the 600 MHz auction results appear poised to be considerably lower than the AWS-3 results. One idea relates to the value of lower-frequency vs. higher-frequency spectrum in today’s market. It wasn’t long ago that many industry observers were referring to lower-frequency spectrum as “lakefront property” because of its excellent propagation characteristics, which enable a carrier to cover a large area with a relatively small number of cellsites – albeit with capacity constraints. At the time 600 MHz auction results were first forecast, 5G appeared to be a more distant possibility than it has proven to be. Now that carriers are talking about beginning 5G deployments in 2017, I would expect to see much more intense competition for ultra-high-frequency spectrum best suited for 5G – including spectrum in the 28 GHz, 37 GHz, 39 GHz and possibly 12 GHz bands.

TDS Telecom (TDS) announced it would receive $3 million in Minnesota Dept of Employment and Economic Development (DEED) funds and invest another $3 million to expand and improve rural broadband services in parts of Crow Wing and Cass Counties. Elaborating, TDS said it would expand broadband service and high-speed wireless Internet access to serve more than 3,400 unserved households and a variety of local organizations.

Included among the latter are more than 60 businesses, 142 small enterprises, and a number of community “anchor” institutions. The project will impact residents and businesses in parts of Backus, Hackensack, Ideal Corners, Pequot Lakes, Pine River, and Woman Lake, according to a TDS press release. DEED is part and parcel of Minnesota’s effort to bridge the urban-rural digital divide. DEED announced it would invest a total of $34 million to fund 42 broadband infrastructure projects in rural areas across the state.

There are 30 percent more computing devices, as well as 45 percent more connected devices, on average in US broadband households with Wi-Fi access as compared to those without it, according to new market research from Parks Associates. Parks found 71 percent of broadband households with Wi-Fi or Apple AirPort networks. Other key findings include:
Over 50% of US broadband households with Internet speed under 1 Gbps would upgrade to gigabit-speed services if offered, and 34% are very likely to upgrade.
7% of US broadband households have only one device connected directly to the broadband modem using Ethernet.
Wi-Fi households own an average of 5.7 computing devices and 8.1 connectable CE devices.

The state of Massachusetts has asked the Federal Communications Commission to release federal broadband Connect America funding to states. The funding in question was rejected by the nation’s largest price cap carriers in 2015. Granting the Massachusetts request would mean the FCC would hand over approximately $1 billion to 20 states over a period of six years, according to Telecompetitor’s estimate.

Massachusetts is one of several states served in large part by Verizon for local service. Verizon, unlike most large incumbent carriers, rejected the FCC’s initial offers of Connect America Fund (CAF) broadband funding. Accordingly, Massachusetts and other Verizon states have not received little or no federal CAF cash infusion of the sort that carriers in some other states have begun to use to help cover the costs of bringing broadband to high-cost areas where broadband is not available today.

Rural stakeholders are hoping state governors can help in obtaining additional federal rural broadband funding. Just before the winter holiday break, Shirley Bloomfield, chief executive officer of NTCA – The Rural Broadband Association, sent a letter to the National Governors Association asking them to highlight broadband as a critical infrastructure initiative in their communications with President-elect Donald Trump’s transition team.

In the letter, Bloomfield also made two specific recommendations for boosting rural broadband deployment, including closing a budget gap in the Universal Service Fund program and creating a new capital infusion program. NTCA sent the letter when staffers learned that the Trump transition team had asked governors for input on critical infrastructure initiatives and had given the governors just a few days to respond. “Placing a priority on deployment of such networks makes sense when one considers the economic payback of such investments for individual consumers and businesses and for the States more broadly,” wrote Bloomfield in the letter. She cited a recent Hudson Institute study which found that companies investing in and operating rural broadband networks contributed $24.1 billion to the economies of the states in which they operated in 2015. A particularly notable finding was that two-thirds of the economic output actually accrued to urban areas.

2016 was a big year for telecommunications mergers and acquisitions. Telecompetitor covered more than two dozen mergers and acquisitions in 2016 and they involved numerous facets of the industry. Here’s a summary of key trends and how they are reshaping the communications service provider playing field:

The biggest changes occurred in the cable industry, where the desire to obtain increased scale spurred a mega-merger that brought three of the nation’s largest cable providers into a single entity. The operations of Charter, Time Warner Cable and Bright House are now combined into a single entity under the Charter name, and they are the number three video provider in the market (behind AT&T/DirecTV and Comcast).
France-based Altice also has been acquiring cable properties in the US. In 2016, it acquired Cablevision after previously acquiring Suddenlink.
After purchasing DirecTV in 2015, AT&T is now pursuing the acquisition of Time Warner with the goal of acquiring content to support its video and other media offerings.
Verizon made plans to acquire XO Communications in order to obtain the competitive carrier’s spectrum licenses, which Verizon plans to use to support 5G wireless service.
Meanwhile, CenturyLink’s 2016 acquisition strategy was focused on gaining scale in the enterprise market. The company’s plan to acquire Level 3 Communications, announced in October, will make the combined company number two in the enterprise market, behind AT&T.
Although not known primarily as a communications provider, Google entered that market when it began deploying its gigabit fiber-to-the-home service in select markets several years ago. Google’s acquisition of wireless Internet service provider WebPass, completed in October, indicated the Internet giant is still interested in the service provider market, but that it is likely to shift toward a broadband wireless strategy.