Tag Archives: rural broadband experiment

$55 million in rural broadband grants cancelled by FCC

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FCC avoids a “resource-intensive effort”

The FCC chopped 16 more applicants from its rural broadband experiment program. By removing uncertainty as to the outcome, FCC staff is making a mockery of the experiments, creating the appearance that they want an easy ride, rather than a rigorous process designed to test prospective rural broadband systems and business models. Without the possibility of failure, it’s not an experiment and the lessons learned will be meager.

Last month, 37 winning bidders in the subsidy competition were announced. Six either pulled out or missed a key deadline, leaving 31. Of those, 15 asked for waivers of financial and technical requirements, and one just sorta ignored deadlines. Last week, FCC staff decided not to grant the waivers

We conclude that strict enforcement of the deadlines and filing requirements adopted by the Commission is appropriate given the accelerated time frame for the rural broadband experiments. Granting such relief would preclude consideration of other applicants that were able to submit the requisite financial and technical showings within the time frame established by the Commission. Denying the waiver requests and proceeding to identify next-in-line bidders fulfills the Commission’s objective for the rural broadband experiments to inform key decisions that the Commission would be making regarding the design of the competitive bidding process that will occur in Phase II of the Connect America Fund, while not delaying implementation of Phase II.

The FCC now has an extra $55 million to hand out, and it will look at the next best bidders to see if they qualify. Forty-eight companies (and other “entities”) are still in the running, but also have financial hurdles they need to clear first. The new list of winners will be announced later.

All three of the Californian companies on the FCC’s original list were among the 16 axed last week. That includes two companies – De Novo Group and Cricelli, Inc – that are involved in projects in the Salinas Valley, here in the central coast region. In reading through the list of the remaining 48 possibles, only company names are given, not project locations or other information, but none jump out as being from California.

FCC needs to recognise that paying for knowledge isn’t the same as buying service

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Negative results can be a positive benefit.

Thirty-seven companies and other organisations were on the list of winning bidders vying to take part in the FCC’s rural broadband experiments. Of those, six are already off the list because they “either withdrew from consideration for rural broadband experiments funding or did not submit the required information by the Friday, December 19 deadline”, according to the FCC.

Another 15 have asked the FCC to waive some of the rules, in particular one that requires certification of technical plans by a professional engineer and another that asks for audited financial statements. Applicants and interested parties filed comments on those points, arguing both sides. No decision has been reached, yet.

On Friday, the FCC restated another rule: applicants need to submit a letter of credit – similar to a performance bond – that guarantees that subsidies would be repaid “in the event a recipient was not using such support to further the objectives of universal service”.

Requiring technical and financial due diligence makes sense: the money is supposed to be “used to build and maintain robust voice and broadband capable networks” that’ll operate for at least 10 years. It takes a lot do that. Dodgy operators need to be weeded out at the get go, and that’s particularly true given the preponderance of winners proposing fixed wireless systems.

Certified plans, audited financials and letters of credit are relatively easy for established and well run businesses to produce and are reasonably objective requirements. For many, it’s a simple way to prove they can do the job.

On the other hand, these are experiments and some of the companies are, well, experimental. The FCC should allow an alternative due diligence process for proposals or proposers that are out of the box. That alternative process should be rigorous, but it doesn’t need to lazily rely on a handful of bureaucratically safe documents.

A successful experiment is one you can learn from. Positive and negative results are equally valuable, so some of the experimental projects should fail. An experiment that’s so tightly controlled that it can only produce positive results is no experiment at all. It’s a sham.

The FCC can’t make 25 Mbps a genuine national broadband standard by itself

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Raising the FCC’s definition of acceptable home broadband from the current 4 Mbps down/1 Mbps up level to 25 Mbps down/3 Mbps up would certainly be symbolic. The practical effect, though, depends on what the FCC and other agencies – state and local – do with it.

An article on Ars Technica says that FCC chairman Tom Wheeler has a draft report under review that would raise the bar to 25/3. Wheeler made it clear during his time on stage at CES on Wednesday that he thinks it’s achievable.

“80% of americans have access to speed of 25 Mbps down and three up, but only three-quarters of those have a choice”, he said. “Hopefully we can overcome that”.

In practical terms, bringing competitive 25 Mbps broadband to the 60% of the U.S. that only has one ISP delivering at that level means convincing incumbent telcos to upgrade their plant: cable companies generally do that well or better already. Neither AT&T nor Verizon have much interest in residential wireline investments now, and if the FCC brings broadband under common carrier rules, they’ve warned they’d have even less.

The 20% of U.S. homes that don’t even notionally have access to high speed Internet access skew heavily rural, as the FCC’s 25 Mbps availability map shows. The rural broadband experiments the FCC is funding includes both high speed systems – 100 Mbps down and 25 Mbps up – and less capable networks specced at 10 down and 1 up. If the FCC rolls the new 25 Mbps standard into the Connect America Fund program, it should have a good base of experience to draw from.

Beyond that, it’ll be up to the U.S. department of agriculture and state agencies, such as the California Public Utilities Commission, to adopt the new standard. The CPUC’s eligibility threshold for broadband infrastructure subsidies is 6 Mbps down and 1.5 Mbps up. USDA is worse, setting the bar as low as 3 Mbps total in some cases – 1.5 Mbps down and up would be sufficient, for example.

FCC crushes old limits on rural broadband speeds

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The minimum download speed for FCC-subsidised broadband projects and services in rural areas is now 10 Mbps. The commission raised the standard on Thursday. Required upload speeds haven’t change, though…

The FCC will now require companies receiving Connect America funding for fixed broadband to serve consumers with speeds of at least 10 Mbps for downloads and 1 Mbps for uploads. That is an increase reflecting marketplace and technological changes that have occurred since the FCC set its previous requirement of 4 Mbps/1 Mbps speeds in 2011.

According to recent data, 99% of Americans living in urban areas have access to fixed broadband speeds of 10/1, which can accommodate more modern applications and uses. Moreover, the vast majority of urban households are able to subscribe to even faster service.

The vote was split in a bipartisan sort of way, with 2 democrats – Tom Wheeler and Jessica Rosenworcel – joined by republican Michael O’Rielly in fully approving it, and democrat Mignon Clyburn and republican Ajit Pai objecting to parts.

The rural broadband experiments currently under consideration by the FCC provide a firm basis for the decision. Nearly 200 applications came in, all purporting to offer service at least as fast as the new minimum. Of the 40 projects provisionally approved, 19 actually propose speeds of at least 100 Mbps down/25 Mbps up. There’s still quite a bit of due diligence to complete to verify all those claims, but right now 10 down/1 up is looking pretty ordinary.

The California Public Utilities Commission’s standard for subsidised projects is 6 Mbps down/1.5 Mbps up. (Unless perhaps you live in public housing – lower standards there are on the table this week). That benchmark was set in February 2012, when the limit was raised from 3 down/1up. It’s time to re-examine Californian minimums too, as demand and the gap between have and have nots, rural and urban, grows.

FCC blocks ViaSat’s end run around rural experiment standards

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You’ve got to hand it to the people at ViaSat. They don’t give up. If FCC tests – correctly – show that satellite Internet service has both advantages and disadvantages, then shout the good news loud enough to shake the rafters and browbeat the FCC into suppressing the bad. If the FCC wants to conduct an experiment to see if there are technologies and business models that can deliver urban-quality broadband service to rural customers, try to duck the quality requirements when no one is looking.

That’s basically what ViaSat tried to do when it asked the FCC to forget about latency standards in its rural broadband experiments. The FCC solicited a ton of suggestions about how it should run those experiments in a very public process earlier this year. The rules that resulted set a limit of 100 milliseconds of latency for funded experimental projects. Pretty simple.

Not simple enough, it seems. ViaSat – which can’t operate within those experimental parameters because of the laws of physics – tried a back door approach, asking the FCC to waive that requirement. The FCC’s answer was no

We conclude that waiving one of the core requirements for one bidder in the rural broadband experiments without public input after the close of the filing window would be prejudicial to the integrity of the competitive bidding process…Because ViaSat submitted its waiver request in its [application] submitted into the FCC Auction System, rather than separately in the docket, other bidders and the general public have not had the opportunity to provide input on the request.

Satellite technology’s advantages enable broadband service in desperate locations and under impossible conditions. The disadvantage is that capability comes at a cost, in terms of dollars and particular service metrics. The FCC is trying to find ways to dial down the desperation and expand the possible. It’s not a competition between interested corporations. It’s a quest for knowledge that will benefit customers.

California beats the odds in FCC rural broadband experiments

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Sometimes things turn out better than you might expect.

California came out pretty well in the FCC’s provisional rural broadband experiment decisions. Of the 40 bidders that were accepted, 3 proposed a total of 9 projects in California. That’s 11% of the total number of accepted projects. In dollar terms, projects in our state did even better, claiming $16 million of the $99.5 million, 16% of the money tentatively awarded by the FCC.

There wasn’t much information given about the projects or the bidders by the FCC, just names, number of bids selected, total amount of the grant requested and total number of census blocks covered.

Cricelli, Inc. is connected to Red Shift Internet Services in Monterey, which is an ISP that has been expanding its fixed wireless footprint in Monterey County. De Novo is a Google-funded non-profit that has one operating fixed wireless system in Mendocino County and has been looking at other areas, including Soledad in Monterey County. Both Red Shift and De Novo have been involved in testing new wireless technologies, but De Novo in particular has been working on cutting edge, open source systems – ergo the Google funding.

Given the companies’ backgrounds and, in Cricelli’s case, the large number of census blocks covered, it’s a fair assumption that the proposals involve wireless service.

CompanyProjectsCensus BlocksRequest
Cricelli, Inc.3666$522,300
De Novo Group224$609,600
Michael D. Donnell
dba San Joaquin Broadband
42,585$14,833,187
California Total93,275$15,965,087
Percent of U.S. Total10.5%12.2%16.1%

I don’t have any particular information about Michael Donnell’s proposal. The amount requested means he is likely chasing the $75 million bucket that the FCC allocated for projects that deliver 100 Mbps down/25 Mbps up to every location within the census blocks requested. And the vast spread of the proposal – 2,585 census blocks, presumably somewhere in the San Joaquin Valley, where there is no shortage of eligible area – lends itself to the assumption that it’s also a wireless project. Not certain, but I’d bet on it. I did a web search and found a Mike Donnell listed on LinkedIn who was COO of a Denver-based WISP until last May.

Getting 16% of the total money is a welcome – and unusual – win for California. The hope going into the bidding was that the state would get something like 10%, based on its share of the rural population nationwide. The California Public Utilities Commission stepped up with a 10% spiff for projects here, but there’s no way of knowing yet whether the three applicants want to take advantage of that – no pre-application was required.

Going forward, all three need to complete their financial, technical and regulatory due diligence in the next couple of weeks. In order to get the money, each needs to be certified as a telephone company by the CPUC and get a designation as an eligible telecommunications carrier from either the CPUC or FCC. As of yesterday morning, none of the companies showed up on the CPUC’s website as having filed the necessary paperwork. That could be because they haven’t, or because they did so recently and the CPUC’s system hasn’t caught up with it yet. The alternative would be to partner with a company that has the necessary regulatory blessings, but it’s not clear that the FCC would give the money to a company that didn’t actually bid.

The FCC’s press release says that more information about the provisionally approved experiments will be released later.

FCC’s chosen rural broadband experiments likely skew heavily towards wireless

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The FCC has provisionally blessed 86 project bids submitted by 40 different companies for the rural broadband experiments program. The total tab is $99.5 million, just inside the $100 million limit for the program’s kitty. The companies selected have 10 days to submit the rest of the required financial, technical and other information.

It’s hard to tell much from the information released by the FCC – just total dollars and census blocks for each company. No information on the geographic areas covered or number of homes or technology involved. But in looking at the data, it seems a fair guess that most of the proposals involve wireless technology.

You can download my spreadsheet here, and play with the numbers yourself. But if you assume 15 households per rural census block – a figure consistent with a defined (albeit small) rural community – a census designated place – the subsidies would range from $2,167 to $52 per household (ignoring the company that bid a $1 total subsidy for 149 census blocks – there’s obviously more to that story). Even at 3 homes per census block – truly the tules – the per household subsidy tops out at $10,833.

Since many of the proposals at the top end of that particular range are only proposing to serve a handful of census blocks, it’s a good bet that household density is higher. Given that a rural fiber-to-the-home project will likely require a subsidy north of $2,000 per household, there are probably few of those proposed. Many of the proposals were submitted by cable and telephone companies (including cooperatives), so there might be some FTTH in the mix, and almost certainly some kind of fiber/copper upgrades.

But projects with low per household subsidies at any density assumption, or those that propose to cover hundreds or even thousands of census blocks at 6 or 7 figure project totals, likely involve wireless technology (although it’s possible some just didn’t ask for a high subsidy percentage – that’s the problem with working with a limited data set). So with the caveat that this is a total wild ass guess, I’d venture that at least three-quarters of the proposals are wireless, and most of the balance include a healthy proportion of pre-existing copper.

On the other hand, 19 – nearly half – of the proposals claim to be capable of delivering 100 Mbps down and 25 Mbps up. So at least some of those involve wireless technology. That’s a difficult standard for fixed wireless service – let alone mobile – to meet, to say the least. But these project are supposed to be experiments, so maybe there is some innovative technology in the mix. Let’s hope so anyway: it would be disappointing if WISPs followed an all too-familiar playbook and substituted hype for science.

There’s still interest in rural broadband experiments, but no way to judge feasibility yet

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If you don’t ask, you don’t get.

Hundreds of companies, communities and miscellaneous organisations, representing just a touch shy of a thousand projects, told the FCC last March that they wanted to take part in its rural broadband experiment program. When it came time to actually submit a bid – it’s effectively an auction process – only 181 applications were received by the 7 November 2014 deadline.

The FCC hasn’t released a list of the bidders. It’s only said that the process…

…has attracted almost 600 project bids from 181 applicants, representing nearly $885 million worth of projects.

In total, the 181 applicants proposed to serve over 76,000 census blocks in all 50 states and Puerto Rico.

Bidders included a diverse group of entities, including competitive providers, electric utilities, wireless internet service providers, and others.

Without knowing which census blocks are involved, it’s hard to come up with an accurate coverage number, but a very rough guestimate is that something like 3% to 5% of the rural U.S. population might be affected. There are about 11.2 million census blocks in the country, about a fifth of which are rural. 76,000 is about 3.4% of that, but factor out uninhabited census blocks and the figure pushes closer to 5%.

To take it one step further, if you assume 50 to 100 people per rural census block (another egregiously round guestimate), then maybe something half to three-quarters of a million people are affected. Maybe fewer: rural blocks can be tiny in terms of population. That’s a (very) rough indicator of interest, though, not an estimate of the number of rural people who will be seeing broadband service upgrades in the near future. The number of projects funded in this experimental round will be more like a dozen, which drops the assumed coverage by an order of magnitude.

It’ll be interesting to see who actually applied and what they’re proposing to do. A large proportion of those applicants are likely to be no hopers who figured they had nothing to lose by asking. The projects to look for are the ones that either involve truly innovative technology or business models, or are backed by companies with the scale to truly go large in rural areas if the experiment produces a positive result.

FCC rural broadband experiments become 10% more cost effective in California

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Any Californian ISP that gets funding from the FCC to build out and operate an experimental rural broadband system can also get money from the California Advanced Services Fund. The California Public Utilities Commission yesterday approved a blanket 10% match of any federal funds an ISP might win via the FCC’s program.

The hope is that the extra CASF subsidy will buy down the cost of pursuing those rural broadband experiments in California, making them more cost effective in the eyes of the FCC and giving them a competitive edge against proposals from other states.

The FCC has set aside a total of $100 million for the program. The CPUC estimates California’s fair share of that to be $10 million, which means the hit to CASF would be something like $1 million. Not a huge amount, relatively: there’s about $160 million left CASF. It could be less or it could be more, since the FCC doesn’t have a particular geographic formula for handing out its money.

Based on past experience with federal broadband programs focused on rural areas, California would normally do well to score as much as 10%. Midwestern and southern states have proven more adept over the years at defining the rural subsidy game and then playing it. This spiff from CASF, though, might make a big difference.

The CASF contribution is preauthorised, which means any Californian applicants can simply include the money in the budget they submit to the FCC and, per yesterday’s resolution, “explicitly reduce their federal contribution request up to ten percent”. There’s still some paperwork to be done for the CPUC’s benefit but, compared to normal CASF grant and loan applications, it’s hardly any all.

CPUC considers making rural broadband experiments 10% sweeter

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Proposals for FCC-funded rural broadband experiments in California will get an extra, and automatic, 10% subsidy, if the California Public Utilities Commission approves new draft rules released earlier this week.

As currently written, the resolution

Pre-authorizes CASF monies for any California projects that the FCC selects and provides for such projects to be subject to the FCC Rural Broadband Experiments rules, not the CASF program rules. California applicants interested in participating in these Experiments must file with the FCC by October 13, 2014. The funds would be provided as ten percent match per project, which the California Public Utilities Commission…will contribute if the FCC allocates funds to California for the Experiments. If no federal funds are directed towards California, then this Resolution would not apply.

Under this plan, any FCC applicant can simply assume that the CASF match will be there, and write it into the business plan. That’s significant because the FCC plans to pick the winners based on cost-effectiveness. The more Californian money in a proposal, the lower the need for federal funds and the greater the cost effectiveness, from the FCC’s perspective.

The CPUC wants California to get at least $10 million of the $100 million that the FCC has earmarked for the rural broadband experiments. That’s a share based roughly on California’s population as a percentage of the U.S. as a whole.

The FCC program isn’t a free-for-all. Only certified telephone companies – with a certificate of public convenience and necessity and a designation as an eligible telecommunications carrier – can get the money.

The CPUC is taking comments on the draft resolution until 26 August 2014.