At least one member of the Trump administration isn’t trying to smack local broadband initiatives with a preemption sledgehammer. Agriculture secretary Sonny Perdue spoke to a gathering of representatives of rural electric cooperatives. Those are (usually) small electric systems that are organised as buyer cooperatives – electric customers are the owners. The federal agriculture department has been subsidising them for more than 80 years. Many of those co-ops have branched off into the broadband business, also with subsidies from the agriculture department’s Rural Utilities Service (RUS).
Perdue likes that idea. He said the expansion of broadband infrastructure and service is “rural electrification of the 21st century”…
We are at the beginning, I think, of a seismic shift in technology and when you think just the beginning, you said, well, the Internet’s been around for how many years? Well, only 15 or so. When you think about that – how quickly it comes upon us, how quickly we become dependent on these technological advances. The partnership between rural electric cooperatives and the federal, state and local communities, I believe, can be, must be revolutionary in the change. I think it will be literally transformative around our country as we participate with you, as you participate with local, state and federal authorities to make sure this happens, just like it happened beginning in 1936 with the [rural electrification] act. You got the potential to do the very same thing in the 21st century.
The big question on the table now is what will he do with the $600 million that congress set aside for new broadband grants and loans. Perdue said his department is working on it. He didn’t offer any details, although he encouraged rural cooperatives to offer ideas on how the money should be spent.
Looked at one way, Perdue’s speech is a genuine plus for independent broadband development in the U.S. His good words and encouragement for rural cooperatives are 100% in line with federal agriculture department policy and practice. Which is great if you live in the midwest or south, where rural cooperatives are thick on the ground – RUS broadband programs are custom tailored to serve them.
That’s not so good for California, or many western states, where the utility cooperative model didn’t take hold with the same enthusiasm. There are only three in California – in Riverside, Modoc and Plumas and Sierra counties – and as a result, RUS broadband money tends to go to other states. Perdue is right about the valuable role cooperatives play, where they exist, but he needs to expand his department’s thinking about how to get the same results where they don’t.
The Rural Utilities Service (RUS) is part of his domain – it’s an agency within the federal agriculture department that, among other things, gives out loans and some grants to pay for broadband service upgrades and expansion in rural areas. California misses out on the most of that money, but it’s an important source of money for rural broadband projects in other states. For its latest round of broadband loans, RUS raised its minimum broadband service standard to 25 Mbps download and 3 Mbps upload speeds. If a community doesn’t have Internet access available at that level, then RUS considers it “unserved”.
There are a couple of potential explanations for why RUS is bucking the trend. The simplest is that the agriculture department’s wheels grind slowly and nobody at headquarters was paying much attention yet to technical changes already in the works for a relatively obscure program – Perdue has been on the job less than four months.
If those expectations have become reality, then Perdue likely isn’t worrying so much about pleasing big telephone and cable companies, or their amen corner on Trump’s policy team. His focus will be on making it easier for his friends and his natural ag industry constituency to tap federal subsidies. That might not be the most noble of motives for becoming a rural broadband champion, but it’s certainly a reliable one.
The minimum acceptable broadband speed in rural areas is now 25 Mbps download and 3 Mbps upload. At least according to the federal agriculture department.
The Rural Utilities Service (RUS) offers loans to broadband providers – cooperatives and small telephone companies frequently tap the program – for service upgrades in areas that meet the agency’s requirements. One of those requirements deals with the speed and availability of existing service – if a provider is expanding into new territory, then at least 15% of the homes in that area must be “unserved”, as defined by RUS.
For the purposes of this [notice of funding availability], the agency is revising the definition of ‘‘Broadband Service’’, such that for applications submitted under this window, existing Broadband Service, the rate used to determine if an area is eligible for funding, shall mean the minimum rate- of-data transmission of twenty-five megabits downstream and three megabits upstream for both mobile and fixed service.
The new RUS rules also require any infrastructure that’s funded by its loans be capable of delivering service at those speeds…
With respect to the ‘‘Broadband Lending Speed’’, the rate at which applicants must propose to offer new broadband service is a minimum bandwidth of twenty-five megabits downstream and three megabits upstream for both mobile and fixed service to the customer.
The U.S. senate confirmed former Georgia governor Sonny Perdue as agriculture secretary this week. He has spent his life in the southern farming industry, as a boy growing up on a farm, as a veterinarian, as governor and as a commodities trader. Even his fan boys, like those at National Hog Farmer, concede that he is “known for not pushing big agendas”.
What he is known for is dodgy dealings that benefit himself and his fellow good old boys (and, in fairness, girls) at taxpayer’s expense, according to Politico.com…
Perdue, tapped by Trump to run USDA in January, has a long history of ethics controversies, notably when he signed a law giving himself a tax break, and when he was found to have violated Georgia law by funding his campaign accounts with contributions from his private enterprises…
“That good-old boy system is definitely embedded and definitely entrenched here,” said Sara Henderson, the public policy director for Common Cause Georgia, a nonpartisan government watchdog group. “And I think former Gov. Perdue is going to bring that to the federal government…"
Perdue faced 13 complaints to the state ethics commission during his years as governor, two of which resulted in findings that he broke state ethics laws. In 2002, Perdue was caught funneling illegal amounts of money from his private businesses into his campaign account and, in 2005, Perdue was forced to pay a $1,900 fine for improper campaign contributions and failing to correctly report the use of his private plane for a campaign event, records show.
I had signed up for a USDA webinar on the new round of the Community Connect broadband grant program yesterday (which sets an even lower, 4 Mbps download standard). An hour before it began, I received a “friendly note” from one of the coordinators telling me 1. the webinar uses Microsoft’s LiveMeeting platform, 2. it won’t run on a Mac, and 3. I could expect no help from USDA.
Since the only computer operating systems I use are Mac and Linux, the “note” did not strike me as particularly “friendly”.
The USDA is simply incapable of dealing with technological change. It’s not unique in that regard – federal agencies have a tremendous problem maintaining IT infrastructure, as the continuing stream of major security breaches and iPhone fumbling demonstrate. But ag tech is booming in California, and will change food production forever. If the USDA can’t keep up, its particular clients in the midwest and south will fall even further behind California and the rest of the world.
That’s the general problem. The specific problem is that the USDA unit entrusted with developing telecommunications infrastructure lives in the past, isolated from the technological pressure that’s driving the ever increasing demand for bandwidth in rural communities.
Minimum speeds for guaranteed broadband infrastructure loans from the federal agriculture department have been raised. The Rural Utilities Service (RUS) opened another round of loans earlier this month, and upped the benchmark speed for both area eligibility and funded infrastructure from 4 Mbps download/1 Mbps upload to 10 Mbps down/1 Mbps up, for wireline and fixed and mobile wireless projects.
That brings the RUS minimum speeds in line with other federal broadband subsidy programs, particularly the Connect America Fund program run by the Federal Communications Commission, which will be giving more than half a billion dollars to incumbent telephone companies in California alone.
On the whole, the RUS loan program is also tilted toward incumbents – the nature of the beast is that it’s a lot easier for an existing business to borrow money than a start up. That’s true whether you’re applying to a bank or a subsidised rural loan guarantee program. Like all RUS programs, it’s also designed to serve rural areas that fit midwestern and southern conditions: small counties with small farms and small populations.
California is different. Our state has large agricultural operations, and workers who commute to the fields from towns that federal agencies consider too large to help. Standards are also different here – the minimum set by the California Public Utilities Commission is 6 Mbps down and 1.5 Mbps up. Slower download speeds, but higher on the upload side, which is more critical for businesses than for consumer applications. But federal rules are moving in the right direction, and make the case, if not the requirement for even better speeds…
With the development of new applications and the need for greater bandwidth, [RUS] strongly suggests that applicants applying for funding under this program consider system designs that will allow for 25 megabits downstream and 3 megabits upstream. Building to these requirements will ensure that facilities that are constructed today will also be able to handle the needs of the future.
It’s the direction that California should be heading towards too.
California has been shut out of federal broadband grants for infrastructure projects in rural areas for the past several years. I was asked why don’t California’s wineries and farms throw lobbying dollars at the problem?
The wineries and farms don’t need to. California agriculture is characterised by large corporate holdings (albeit sometimes family controlled). The ag operations themselves can usually get sufficient connectivity, by building their own point to point microwave links and, occasionally, fiber connections.
The people who work on and around the ag operations, though, tend to live in concentrated communities in the 5,000 to 10,000 population range, and sometimes larger. That’s the situation in the Central and Salinas valleys, where they’ve been redlined by cable companies and left to wither by the telcos. USDA looks at that and doesn’t see a problem: the farms have at least 3 Mbps down/1 Mbps up or better, and farm workers who live in cities aren’t their problem.
At least, those communities are perceived as cities and treated accordingly. Even when the population is below the 20,000 mark that USDA usually sets as the threshold for rural status, the bulk of USDA staff – who are located in the south and midwest – see towns of a few dozen, or maybe a few hundred, people as their natural turf. USDA staffing tends to go on a county by county basis, with tiny southern and midwestern counties getting as much, or nearly as much, staff and resources as the huge counties in western states.
When the time comes to evaluate grant applications, the ones that resonate with them are the ones that are targeted to their core client base. It’s an institutional bias that needs to be fixed, but even if it can be – and I doubt it can be – it will be a long time coming. Communities and ISPs in California and elsewhere in the west need to crack the code and figure out how to make broadband infrastructure proposals fit within those existing biases.
The federal agriculture department’s Rural Utilities Service is broken, according to a long and well researched article by Tony Romm in Politico. Given $3 billion in stimulus money by the 2009 American Recovery and Reinvestment Act, RUS approved broadband infrastructure builds that couldn’t or wouldn’t be completed – about half of the 300 or so approved projects are still works in progress, and 42 of those never got started at all. With a drop dead date of 30 September 2015 to finish the work, the agency is on the verge of leaving nearly $300 million unspent, and an unknown, but likely even greater, amount wasted.
RUS can’t tell which residents its stimulus dollars served. In May, the agency reported it has delivered new or improved services to 213,000 households and more than 15,000 businesses. But RUS, as it collected that data from awardees, never asked whether those residents live in unserved, neglected rural towns, or areas that had some broadband access before the Recovery Act….
Either way, it’s a far cry from [agency head Jonathan] Adelstein’s original prediction that RUS funding would benefit more than 7 million people in rural America….
For years, though, RUS quietly and steadily lowered its estimates. Its latest prediction, made in March 2014, is that it will benefit 728,000 homes within five years. In May, however, the agency stopped putting that number in writing.
The minimum acceptable broadband speed is set at 4 Mbps down and 1 Mbps up; any area with less than that is considered unserved by federal standards.
To be eligible, at least 15% of the homes in an area must be unserved.
Applications will be rated and loans approved on a priority basis. The higher the percentage of unserved homes, the higher the rating. No more first come, first served.
RUS will use more information sources when it decides whether an area is served or not, including the National Broadband Map.
Loan applications will be accepted twice a year, instead of just once.
Repayment terms could be eased – but by no means waived – for particularly difficult cases but only “to the extent…necessary to achieve financial feasibility and long-term sustainability of these projects”.
More information about proposed projects will be made public.
There are also several other housekeeping and technical changes to the rules – generally minor unless you’re affected. Then it’s major. If you’re interested, click here.
The new rules serve two purposes, governing loan applications in the current window, which closes the end of next month, and as a straw man for discussion regarding future rounds. Comments are also being accepted, if not taken to heart, until 28 September 2015.
The list contains a big clue as to why California might have been shut out: four of the five projects were awarded to telecommunications cooperatives, a business model that’s commonly used in midwestern and southern states (and Alaska). The U.S. department of agriculture in general, and RUS in particular, goes with what it knows. And it’s most familiar with the tiny counties and family farm economies of the midwest and south.
The fifth grant went to a private wireless Internet service provider, AtLink in Oklahoma. The company seems to understand the system. It website says it received a federal stimulus program grant, via USDA.
It’s easy and, I think, correct to blame bureaucratic shortsightedness and inertia for the lack of love shown California. But that’s not going to change anytime soon. Californian Internet service providers need to learn how to play the game too:
Certainly the game is rigged. Don’t let that stop you; if you don’t bet you can’t win. RAH.