• NTIA has taken action to streamline and accelerate the federal permitting process by:
  • Improving its environmental and historic preservation review
    • National Environmental Policy Act (NEPA) streamline where they are adding 30 new categorical exclusions from the First Responder Network Authority to expedite review of projects with minimal environmental effects.
    • Adoopting FirstNets Programatic Environmental Impacts to take advantage of existing analyses when applicable to reduce time and effort for those not categorically excluded.
  • Mapping tools for early permitting identification and environmental screening to help plan projects and identify permitting considerations as early as possible.
  • BEAD NEPA Partnership strategy to maximize all efficiencies.
  • National Historic Preservation Act streamlining of rules.
• FCC signed MOU with FTC taking back some oversight duties over broadband providers and voted to reclassify broadband providers as “common carriers” under Title II of the Communications Act.
  • FCC can stop providers from throttling or prioritizing certain kinds of traffic.
  • Goes into effect with FCC net neutrality order set for 60 days after publication in federal register.
  • Broadband groups are challenging this.
• Most ISPs state that the largest impediment they encounter for building new fiber networks list pole issues at the top of the list – who pays for replacement?
  • Most poles are owned by electric utilities, telephone companies or municipalities.
  • Pole replacement occurs mainly when not enough room on existing pole for required safe distance between wires required for safety codes.  Common fix is taller pole and move wires from old pole to new poles.  This is a lot of expense.
  • Some must be replaced because they are obsolete or in bad condition.  FCC issued new rules to identified poles out of compliance would have shared costs.
  • It is expected that BEAD grants will be used to replace huge numbers of poles.
  • Poles are typically expected to last from 30 to 50 years.
• FCC announced plans to introduce a rule that would expand customer choice in apartments, condos, public housing and other multi-tenant buildings.
  • Applies to landlords doing bulk billing.
  • Allows tenants to opt out of a bulk billing agreement with landlord and get their own internet.
  • This brings concern as allowing tenants to opt out to save money or lower rent could kill the model of bringing broadband to public housing.
• FCC increased the definition of broadband from 25/3 Mbps to 100/20 Mbps. Experts say this should have occurred a long time ago.
  • Before pandemic 46% of households subscribed to speeds under 100 Mbps. Today only 10% buy slower speeds.
  • Information shows that people want to buy faster broadband when given the option.
  • Definition of broadband has financial and political overtones and it determines where grant funds can be spent. Upping the definition also has market consequences.  Any ISP offering speeds less than 100/20 Mbps today is no longer selling broadband.
  • It took nine years to move the definition from 25/3 to 100/20 Mbps.  Congress already acknowledges that 100/20 is obsolete and that federal grants should be spent to build gigabit networks.  Studies show the demand for gigabit broadband is already here today.

• Is there enough BEAD Funding:
  • It is not just high-cost areas that can demand more funds. The condition of poles can be a huge cost driver everywhere.
  • Another factor driving up costs is the way that the FCC awarded RDOF. RDOF awards chopped many counties into swiss cheese serving areas that left large percentages of the county uncovered.  In doing so, RDOF left behind “scattered pockets” of the least dense homes.  The cost to serve these locations are high,
  • Inflation and BEAD grant rules are driving up the cost of construction. BEAD rules can easily add up to 30% of the cost of building a rural network due to factors like prevailing wages, letters of credit and environmental studies.  Many engineers estimate that inflation has also increased costs by 15% to 20% since the BEAD grants were announced.
  • States are relying too heavily on using fixed wireless as the3 solution for high cost areas (depending on location).

• How the Pandemic Changed Broadband
  • Upload Speeds – people tried to work from home and students tried to attend class from home and increased zoom meetings. The pandemic turned the upload speeds into a crisis.  Providers are having to take upload speeds into consideration with their technology.
  • Working at Home – The pandemic sent huge numbers of people home to work and many have never gone back to the office. Before pandemic about 10% of homes had somebody working from home even part time.  Today that number is 15% of homes having someone working full time and 50% of homes have somebody working part time at home.
  • Outrage over Lack of Rural Broadband – The pandemic brought to national attention that rural folks do not have broadband.
• Home broadband adoption rates in rural ar3eas have historically been 5-10 percentage points lower than those in urban locations – due to availability and higher monthly costs.  Urban was 21% and 46% same timeframes.

• Senator Fetterman proposed bill to make a permanent program by folding ACP into the Universal Service Fund. Broadband providers and tech companies pay for the expansion with no charges to the users.
• Senator Clarke filed a discharge petition to force a vote on the ACP Extension Bill for 1-year renewal but it needs a majority of the house to sign on – it is stalled. This is a controversial bill as many believe that making ISP’s pay would lead to highe3r consumer rates so the customers would still pay.
• Charter, the program’s largest participant, is providing 5 million subscribers an extra $1 if they continue receiving service.

• FCC fined AT&T ($75,000) and AMG Technology Investment Group ($100,000) for communicating about bidding strategies during CAF II auction. This was a violation of the “quiet period” when registered bidders are not allowed to communicate about FCC auctions (anti-collusion laws).FCC fines wireless carriers $200-M for sharing access to location data
  • T-Mobile $91 M
  • AT&T $57 M
  • Verizon $47 M
  • Sprint $12 M
  • Carriers are to protect customers information and the above carriers sold access and then resold again to 3^rd Appeals by the 4 providers are in process.
• FCC and RDOF Defaults
  • Fines have been set at $3,000 per passing (location) for the defaults.
  • 1^st fine to Etheric Communications for $732,000 for 244 locations – they failed to become designated as an Eligible Telecommunications Carrier (ETC) for the affected locations.
  • GigFire (or LTD) was fined $21.7 M for defaulting on 7,238 locations. LTD was the largest RDOF auction winner claiming $1,.32 B.  They failed to obtain ETC status for the affected locations and because the FCC does not believe the company met the funding requirements.
  • Other defaults to Charter, Nextlink and Breezeline.
• RDOF deployment rules
  • Deploy 40% by the end of 3 years
  • 60^ by end of 4 years
  • 80% by the end of 5 years
  • 100% end of 6 years
  • The 3^rd year will be in 2024
  • NOTE -the percentages are measured on a statewide basis so if a winner won multiple counties in a state they could be meeting the statewide requirements without doing any construction in some counties.

• Humans are needed for digital inclusion to be successful.  Technology is not going to solve the digital divide without people involved to “guide” or “navigate” those who need help managing technology and the internet.

• 5-Step ladder to digital inclusion:

• • Affordable connectivity

• • Appropriate digital devices

• • Digital skills

• • Technical support

• • Applications
• Difficult to measure and evaluate digital equity completion and success so goals are typically shown as broader outcomes.  It would be labor intensive to get the details especially when community partners are involved.

• It has become common for ISPs to claim they are making upgrades that would bring faster speeds prior to BEAD fund awards. NTIS is recommending to states that they have policy for ISP to sign a binding contract with the state that defines when the upgrades would be completed and guarantee the faster speeds (maybe no more than 12 months) 
• ISPs are allowed to declare marketing speeds instead of actual speeds. This allows them to declare a speed capacity of higher speeds but deliver something slower.  This turns the responsibility on a community to somehow prove that actual speeds are slower than the claim (for challenge).  Policy should be changed from marketing speeds to actual speeds for reporting purposes.

• FCC adopted change to its pole attachment rules in December 2023:
  • Rules do not apply to everyone.
  • DOES apply to poles owned by investor-owned utilities and telephone companies but NOT those owned by cooperatives and municipalities
  • Only effective in 27 states that follow FC pole jurisdiction.
  • MISSOURI is not one of the 27 states as we have our own authority.
  • Our state has the option to adopt or ignore these revised rules.
  • Changes to the FCC rules include.
    • Created a Rapid Response Process to expedite pole attachment disputes.
    • If FCC jurisdiction, the disputes are handled by FCC, and they are taking too long. This rule change requires FCC to expedite this process.
    • Make the pole attachment process more transparent. Pole owners have 10 business days to provide report in information about the poles condition to a potential applicant.
    • Most contested piece is that FCC modified the conditions under which a pole attacher has to pay for the full cost of replacing a pole when there is not enough room to add fiber.
      • Old rule – when pole replaced for the benefit of new attacher, the new attacher picks up full cost.
      • New rule – defines term “red-flagged” poles to define poles already out of safety compliance or that are already scheduled for upgrade or replacement. In these cases, the new pole attacher would not be responsible for cost of replacing these red-flagged poles but instead the cost would be pro-rated.

• Community Anchor Institutions (CAI) must have access to symmetrical gigabit speeds, or they are eligible for the BEAD process

• Suggestions to be prepared for the challenge process:
  • Use location specific evidence.
  • Register early in the challenge portal, test it out.
  • Submit challenges early – don’t wait until the last minute.
  • Include dates on type P challenges – evidence of planned build with date expected deployment (must be before June 30, 2024)
  • Provide speed data for Community Anchor Institutions

• 51 organizations, most from the Midwest, are questioning FCC national broadband maps for BEAD eligibility. They have identified 5 key findings:
  • Over reported service availability (specifically fixed wireless network capabilities and reach). Also reporting companies that are making name changes to avoid challenges.
  • Challenge process inadequacies – suggests updating challenge code categories and permitting challengers an opportunity to rebut provider responses
  • Need for independent verification requests – outside verification and additional justification for retroactive map adjustments
  • Enforcement against bad actors – against providers that submit consistently inaccurate data.
  • Technical and access information gaps – hard to verify broadband service due to lack of publicly available information about provider networks.

• One rule of BEAD is that broadband needs to be offered to every unserved location, not 98% or 99% – but all of them. Some opinion is even if there was a 100% grant to reach locations, these remote pockets will always lose money since revenues will never cover the cost of maintenance. ISP’s are not going to be interested.  Even wireless providers will not reach every home without a lot of extra effort and cost.

• The average broadband monthly gigabyte usage in the US was:
  • 2018 – 270.2
  • 2019 – 344.0
  • 2020 – 482.6
  • 2021 – 536.3
  • 2022 – 586.7
  • 2023 – 641.0
  • 9% annual increase of gigabytes – this a large!
  • There was also a huge shift to homes subscribing to faster speeds.

• Survey of Internet Costs (US News and World Report) – of respondents, 1 in 3 (39%) said:
  • They have had to cut personal expenses in order to pay their monthly internet bill.
  • They are settling for speeds that are often sluggish and inadequate.
  • 85% go online every day.
  • 8% had no home broadband access.
  • 20% had one or no other choice of ISP.
  • 61% say inflation is making it difficult to pay monthly broadband bills.
  • 28% are unhappy with the speed they get for the price they pay.
    
• Article titled “Pigeons an Be Faster than the Internet” (Washington Post) – using pigeons to communicate has a long history, back to ancient Greece where they were used to spread the word of the winners of the Olympic games. Racing pigeons have been clocked at 40 MPH with a range of up to 400 miles. The article compared where pigeons could be faster, specifically in “rural” America where slow upload speeds are common. Summary – pigeons carrying a thumb drive are far faster for sending small data files across town

• 2023 had slow down of fiber network buildouts
  • High interest rates when borrowing money (2 times the rate from last year)
  • New home start ups down affecting proposed fiber expansion needs.
  • Inflation – cost at least 20% more to build a fiber network by end of 2023 than a few years earlier.

• Upload speed usage and demand is growing faster than download speed.
  • Increased zoom and other video calls
  • 30% of homes have someone who works from home.
  • Use of more security cameras
  • Using cloud software needs a constant upload path.

• ACP will not be available forever.  States need to begin discussions of a backup plan to make broadband affordable once ACP is no longer funded federally.

• RDOF, phase one, awarded $9.2. Of this amount $2.8 has gone into default
  
• The idea of whether the RDOF areas will be 100% served when those networks are built is doubtful. The RDOF rules did NOT mandate 100% coverage.  People skipped by RDOF will remain unserved after BEAD. 

• Humans are needed for digital inclusion to be successful.  Technology is not going to solve the digital divide without people involved to “guide” or “navigate” those who need help managing technology and the internet.

• 5-Step ladder to digital inclusion:

• • Affordable connectivity

• • Appropriate digital devices

• • Digital skills

• • Technical support

• • Applications
• Difficult to measure and evaluate digital equity completion and success so goals are typically shown as broader outcomes.  It would be labor intensive to get the details especially when community partners are involved.

• FCC considering new broadband definition to 100/20 but they believe that an upload speed of 20 Mbps will not be enough for the future.  If they increase the speed definition, many areas and users would now not meet the definition of broadband that was funded in previous programs.  FCC has also talked of increasing speed to symmetrical 100/100.

• • FCC has held back on 100/100 but many providers cannot provide the 100 Mbps upload.

• • The changes in technology will dictate this in the future.

• The last time FCC set a standard speed was in 2015 with speed set at 25/3 Mbps

• • Bandwidth consumption continues to increase steadily.

• • 27% of private sector establishments have some or all employees teleworking.

• • More devices connect to home networks.

• • More teleworking and telehealth.
• FCC has discussed if they should adopt a universal service goal to help address affordability.  The USF is 26 years old and with changes from the original intent, they are looking nationally at a major rehaul of the program.

• It is likely that states will try to award all BEAD grants in 2024 (although it is questionable whether it is even feasible for states to meet the 1-year NTIA requirement) but will unlikely have any BEAD construction completed in 2024.

• RDOF winners are required to have 40% of the RDOF construction completed by the end of 2024.  If providers have not met this requirement, they will be in default, but it will probably be too late for BEAD funding.

• In-kind contributions for BEAD grants will be one of the ways to lower the cost of grant and increase use of non-cash benefits.  

• • In-kind matches can be provided by the grant applicant or by 3rd party, perhaps through local government.

• • BEAD allows the following costs that might be considered as an in-kind match (can be changed by the states):

• • • Employee or volunteer services

• • • Equipment

• • • Supplies

• • • Indirect costs

• • • Computer hardware and software

• • • Use of facilities

• • • Access to rights-of-way

• • • Pole attachments

• • • Conduits

• • • Easements

• • • Access to other types of infrastructure

• BEAD Program – even with the requirements established by NTIA for the BEAD grant program, there will be 50 different state programs and they can vary considerably.  For example:

• • Georgia

• • • Will only accept grants in first round that offers to build fiber.  The second round will be open it up to other technologies.

• • • Rewards ISP’s who propose to build out an entire county.

• • • Give 50 of 100 points based on amount of grant requested per location (the more matching funds the more points awarded)

• • Illinois

• • • Give 25 of 100 points based on amount of matching funds.  To get the full 25 points ISPs must cover 60% of the cost of the project.

These two states have very different priorities and scoring criteria.  It will be interesting to see what NTIA is going to be willing to approve.

• NTIA has a dashboard that shows the status of states BEAD grant programs – https://www.internetforall.gov/bead-initial-proposal-progress-dashboard

• Change in Line of Credit requirements for BEAD grants.

• • In addition to the line of credit letter (if used), provider must also get a bankruptcy opinion letter stating the LOC will be exempt if the provider files for bankruptcy.  This is outside the norm and may be difficult to obtain.

• • If obtain the 100% performance bond, the bankruptcy opinion will not be required.

• • Still possible that the 100% performance bond may be as expensive as the line of credit (yet to be determined).

• • Must have proof of performance bond at time of application.  This is not a typical operating procedure when it is theoretical that the grant will be awarded.  

• • NTIA allows the LOC of performance bond to be reduced as construction is completed but again, this is not a typical operating procedure and may increase cost due to additional reviews and requirements.

• Different sources talk about the “broadband gaps” of the digital divide and vary from 4 to 7. 

• • Source that showed the 7 gaps identified the following:

• • • Rural areas gap – with all the current federal funding this gap will be reduced (the forecast is that 989-99% of all US locations will have fiber or cable of at least 100/20 Mbps after the BEAD funding)

• • • Affordability gap – there needs to be a sustainable revenue stream.  There now is the ACP program but the future in questionable.  It will be necessary to continue to provide a baseline of support for low-income individuals.

• • • Operating gap – especially for high-cost rural providers.

• • • Adoption gap – this will require on-going training programs.

• • • Institutional gap – this is relating to schools, libraries and rural health facilities (2 of these receive assistance from the universal service fund but this fund is on shaky ground)

• • • Cable/copper gap – this relates to the outcomes of this type (as well as wireless) as opposed to cable/fiber.

• • • Utilization gap – this relates to how we are currently using the network to how we could be using the network to improve our uses and purposes.

• • Source that showed 3 gaps identified the following:

• • • Rural broadband – both availability and affordability

• • • Urban affordability – available but not affordable

• • • Competition gap – most places in US have only 1 ISP that can deliver 100/20 + Mbps.

• The 3rd quarter OpenValut measures the growth of broadband usage in the US.  Recently they released a comparison of monthly gigabytes usage for 3rd quarter 2023 with previous years as follows:

• • 3rd quarter 2019 275.1 monthly gigabytes

• • 3rd quarter 2020 383.8 monthly gigabytes

• • 3rd quarter 2021 433.5 monthly gigabytes

• • 3rd quarter 2022 495.5 monthly gigabytes

• • 3rd quarter 2023 550.2 monthly gigabytes

To put these numbers in perspective, in the 3rd quarter of 2023, the average US household used 54.7 gigabytes of data than one year earlier which is a lot of usage in a month.  With roughly 120 million residential broadband subscribers this equates to over 6.5 billion more gigabytes of data used each month than just a year ago.  That is 11% more usage hitting the internet backbone, just from residential usage.

• ACP will not be available forever.  States need to begin discussions of a backup plan to make broadband affordable once ACP is no longer funded federally.

• CAF Funding

• • $10B spent through 2021.

• • 93% households received only 10/1 Mbps (does not even count as broadband under today’s definition so areas receiving this funding will be eligible for BEAD funding.  Wasted federal dollars or duplicate funding, whatever it is called.  

• • CAF II reverse auction had the requirement of 25/3 Mbps.
• A group of RDOF awardees have filed an emergency petition with FCC for extra funding or other relief options.  To date, FCC has not been receptive to the requests.