Tuesday, March 21, 2023
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Half of ACP-Eligible Households Still Unaware of the Program
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How Will States Determine Unserved Areas for BEAD?
Why community digital equity discussions should be in person
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How should we handle areas currently covered by FCC high cost programs in the context of the BEAD funding?

The Alternative Connect America Model (A-CAM) program is a monthly subsidy from the Federal Communications Commission’s Universal Service Fund (USF) that covers about 1.27 million Broadband Serviceable Locations. A-CAM's funding comes from a surcharge on phone bills. But the “contribution base” — the number of phone lines — is shrinking. That means to generate the same amount of money, the percentage of the total phone bill needs to go up. That’s been happening quarter-over-quarter for years. A contentious FCC proceeding mostly showed that there are two sides, and they’re far apart: a vague “tax Big Tech ad revenue” camp and a “expand the base by adding a small surcharge to all broadband plans” camp. If neither of those seems like a fun solution, one way to kick the can down the road is to shrink the amount of money committed to Universal Service Fund programs.

States are making plans for awarding funding in the Broadband Equity Access and Deployment (BEAD) program. The issue is particularly complex because concerns have arisen about how soon the Federal Communication Commission's National Broadband Map will be accurate enough to be used for that purpose. BEAD Program Director Evan Feinman advised states that they could do their own challenge process for the FCC Broadband Map. One state that plans to rely, in large part, on the FCC map is Idaho. Ramón S. Hobdey-Sánchez, broadband program manager for the Idaho commerce department, said “our plan is to have the underlying foundation of that map be the FCC data and we will layer other data on top of that.” Maine is an example of a state that did its own broadband map. As Andrew Butcher, president of Maine Connectivity Authority, explained, the state created an intelligence platform that aggregates data from multiple data sets. Butcher sees that map playing a key role in determining unserved areas. The state did, however, file 130,000 availability challenges in time for the January 13 filing date encouraged by the NTIA. The FCC is still in the process of adjudicating those challenges but has accepted a high percentage of the ones that have been addressed so far, according to Butcher.

The digital equity task force needs help creating a map of digital inclusion assets in Indiana. Specifically, the task force is looking to map any organization or institution that offers digital inclusion programs or resources. These resources can include things such as public or free Wi-Fi, computers for public use, hotspot lending programs, device lending programs, device giveaway program, digital skills training programs, meeting space, or similar program opportunities. The information collected through this asset map will help inform Indiana’s first-ever digital equity plan. This information is essential to developing a complete and thorough digital equity plan.

Iowa’s Department of Management (DOM) is kicking off a series of 50-plus town hall-style meetings to learn directly from residents what broadband and digital services they need. The in-person meetings, which DOM announced on March 6, started on March 14 and will run through late May. They will cover four topic areas: accessibility, affordability, digital devices, and digital skills. One reason the meetings are not available virtually is to emphasize local, in-person participation, said Matt Behrens, the state’s chief information officer. “We want to be out in the communities, we want to visit with people and we don’t want to make any assumptions that they’ll have the technology or the connectivity in order to participate virtually.” Those who attend will have a chance to break into groups to discuss the four topic areas. Although Behrens said there is no target number of attendees, the more the better. “The more folks that we have attend, the more robust the discussion will be, the more ideas that we’ll get,” he said.

Two things are clear in an internet satisfaction report commissioned by Amdocs and conducted by researchers at Dynata: Broadband generally is working well and many see it as a necessity. The survey found that 89% of respondents said they have reliable access and that the number of homes with more than nine connected devices has almost doubled since 2021. Only 13% of homes with annual incomes of less than $50,000 per year (low-income) have more than nine connected devices. Forty-one percent of households with incomes of more than $150,000 have more than nine. The survey found that almost half—49%–of consumers said that they are happy with their home Internet, while occasionally having issues. Forty percent said they never have an issue and 11% said they struggle with connectivity. More than two-thirds (68%) of respondents report having Internet that doesn’t affect their job, school or career opportunities, while 32% report problems. These issues include connections that are too slow for tasks such as video calls, too many people using the connection at once, or service interruptions. Amdocs and Dynata found that 84% of respondents consider Internet access a necessity, though only 79% of Gen-Zers share that opinion. Sixty-one percent reported that they felt it is important to close the digital divide before the 2024 election: Twenty-six felt it is extremely important to do so, 35% felt it is somewhat important, 26% were unsure, 9% felt it is not important and 4% felt it is “very unimportant.” There was no unanimity on who should be responsible for closing the gap.

Cable companies’ wireless offerings are a bigger threat to wireless providers than wireless providers’ broadband offerings are to cable companies, according to a new research note from industry financial analysts at SVB MoffettNathanson. It’s a contrarian view at a time when fixed wireless offerings from T-Mobile and Verizon are stealing cable broadband subscribers and the mobile market is heavily saturated. The researchers base their analysis on several key market realities. One of the most critical is that the wireless industry is roughly twice the size of the broadband industry. Exacerbating this, ISPs have a lot to lose in the broadband market, where they currently have about 29% of the market, with revenues of $26 billion. Meanwhile, cable companies have a lot to gain in the wireless market, where they currently have a 2% share, with revenues of $4 billion. The concept of true convergence plays heavily into the analysts’ research. Convergence means more than simply bundling services together, the analysts said. The research note cites two examples of this type of convergence. One example is fixed wireless networks that use mobile infrastructure, yielding a cost advantage in comparison with offering both services over separate infrastructure. The researchers expressed concerns, however, about whether mobile infrastructure can support both services long-term – a concern that others also have expressed. (MoffettNathanson argues, however, that Verizon and T-Mobile fixed wireless access (FWA) offerings may be able to support service in rural areas for a long time.)

Is the broadband industry reaching maturity? There was still significant growth in broadband over the last few years. In 2019, national broadband subscribers grew by 2.6%. That leaped to 4.5% in the 2020 pandemic year. In 2021, broadband growth slowed to 2.8% but rebounded to 3.3% in 2022. The 2022 growth rate is likely inflated by rural broadband growth, as practically all the overall industry growth for the year came from cellular fixed wireless access (FWA) broadband provided by T-Mobile and Verizon. What would a mature broadband market look like? It would first mean that annual subscriber growth would likely not be greater than the growth of total households. If overall growth permanently slows, all of the wrestling for market share will happen in the markets with both a cable company and a fiber competitor. But there is another possibility. In markets where Verizon FiOS has competed against a cable company for many years, the two sides have reached a duopoly equilibrium, meaning neither Verizon nor the cable company won the competition. In a duopoly market, the two big players are happy to maintain a relatively steady market share – and the equilibrium is fine with both competitors as long as it doesn’t get too badly skewed.

Bluepeak struck a franchise agreement with the City of Norman, Oklahoma, to bring fiber service to nearly 55,000 residents and businesses. The operator is pouring $55 million in capital into the buildout, marking Bluepeak’s largest investment in a single market outside of South Dakota. Asked what made Bluepeak select Norman as its next expansion target, an representative said proximity was a key draw. The city is close to Bluepeak’s other expansion markets in Shawnee and Midwest City (OK), which made going into Norman a “smart investment.” “Our fiber-to-the-home network is built to enhance growth, spur economic development and meet the needs of consumers in Norman well into the future,” said Bluepeak CEO Rich Fish. As for the project’s timeline, Bluepeak said it’s too early to give an estimate on when construction can begin or service availability, and that the operator will know more once it’s planned out its budget. Aside from Oklahoma, Bluepeak currently offers service in southwest Minnesota, North Dakota, South Dakota, and Wyoming. In 2023, it’s aiming to add more than 50,000 new fiber passings.

Every 15 years or so, it seems, the US economy rolls into a ditch — and the tech industry pulls something remarkable out of its labs. Here we are again! Silicon Valley's favorite bank has failed, while its top firms continue to lay off hordes of workers — but, at the same time, industry leaders foresee vast new growth spurred by artificial intelligence (AI). The first great platform leap of modern times — from mainframes and minicomputers to the personal computers we still use now — occurred as Fed Chairman Paul Volcker induced the sickeningly painful recession of 1981-82. Tech's next leap, onto the global internet in the early '90s, happened as the US struggled to restart its business engines after another recession. Tech's optimists are casting ChatGPT, and the new generation of AI it symbolizes, as the industry's latest platform shift. Tech's previous leaps have involved breakthroughs that promised to empower individuals, streamline businesses and summon entire new waves of startups into being.
Benton (www.benton.org) provides the only free, reliable, and non-partisan daily digest that curates and distributes news related to universal broadband, while connecting communications, democracy, and public interest issues. Posted Monday through Friday, this service provides updates on important industry developments, policy issues, and other related news events. While the summaries are factually accurate, their sometimes informal tone may not always represent the tone of the original articles. Headlines are compiled by Kevin Taglang (headlines AT benton DOT org), Grace Tepper (grace AT benton DOT org), and David L. Clay II (dclay AT benton DOT org) — we welcome your comments.
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