Monday, April 8, 2024
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US broadband customer growth stalls
We need a permanent solution for universal broadband access
Speaker Johnson Should Heed the Theological Case for Broadband
Digital Divide


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New customer sign-ups in the US broadband industry slowed down dramatically in the first quarter of this year, according to a pair of analyst groups. But they're not sure why it happened. "It remains fairly clear that macro/competitive pressures are high, subscriber growth should remain negative for most, and ACP will be disruptive," wrote the financial analysts with KeyBanc Capital Markets in a note to investors Wednesday, pointing to the expected end of the US government's Affordable Connectivity Program (ACP). The financial analysts at New Street Research agreed. "Our preliminary forecast for 1Q24 has [customer] adds well below the prior year and the pre-pandemic period," they wrote in their own note to investors Thursday. "Is this a dip, following a few years of faster than normal growth? Is this excess growth enabled by ACP evaporating?" wondered the New Street analysts. "Essentially, is this a temporary slowdown, the new normal, or will growth slow further?" the New Street analysts continued. "We don't know the answer to this yet, though we believe the market has years of growth above the pace of household formation ahead. Broadband penetration is currently at 87%, and we forecast it getting to over 90% eventually."

We all have eclipse on the brain, so I thought it’d be fun to look at some eclipse broadband stats. In the path of totality, 8% of locations are either unserved or underserved according to the NTIA definition of reliable broadband. That’s just over 1 million locations out of 11.9 million locations in the path of totality in total. If the path of totality were a state, it would be ranked 19th in terms of access to broadband. It’s also interesting to think about the competition situation in the path of totality. Only 9% of the path has access to 3 or more wired (cable or fiber) broadband options. 36% has access to 2 options. 42% only has one options. And 12% has access to zero options (this is higher than the 8% above because the NTIA definition includes other technologies such as DSL and fixed wireless).

In August 2020, during the heart of the covid-19 pandemic when many schools were closed, social media and news outlets were awash with a picture of two grade school students sitting outside of a Taco Bell, attempting to do their schoolwork. That one picture changed millions of minds about the necessity for everyone in the US, regardless of economic status or geographic location, to have an affordable broadband Internet connection. It would not be hyperbole to say that this one photo was one of the motivating factors behind Congress including $14.2 billion for the Affordable Connectivity Program (ACP) in the 2021 Bipartisan Infrastructure Law. Unfortunately, unless Congress acts very quickly, low-income Americans may again be forced to sit outside of fast-food restaurants to get internet access. In spite of widespread popularity, the ACP will run out of money by the end of April. The intense but so far unsuccessful effort over the past year by a wide swath of stakeholders to secure funding for the ACP is clear evidence of why the congressional appropriations process is ill-suited for funding important telecommunications priorities, like universal access to affordable broadband. Fortunately, there is a better alternative—the FCC's Universal Service Fund (USF) spends approximately $8 billion dollars every year to help close the digital divide. The USF must be reenvisioned to address today’s needs, including ensuring that there is a permanent funding mechanism for the ACP’s subsidy for low-income households. We are facing another “kids doing school work in front of a Taco Bell so they can use the Wi-Fi” moment, where over 23 million US households are in danger of losing affordable connectivity. The FCC has an opportunity and the power to save the program it stood up and nurtured. It should do so with urgency.
[Gigi Sohn is one of the nation’s leading public advocates for open, affordable, and democratic communications networks. Greg Guice has over two decades of experience working on federal efforts to close the digital divide in rural and tribal communities and for low-income families across the country.]

What would Jesus do about extending the Affordable Connectivity Program (ACP)? That may be the most important telecommunications policy question answered in 2024. Measured by a direct effect on the largest number of Americans, the ACP, which subsidizes broadband for nearly 23 million households, is the most important telecommunications policy whose fate is being debated as its funding soon runs out. There are strong economic and political cases for supporting the legislation. But none of those arguments may matter. The political reality is this. ACP extension legislation already has 216 co-sponsors, including 21 Republicans. If the House were to vote on that legislation, it would pass. The question is, will Mike Johnson, the speaker of the House of Representatives, allow a vote? He has not offered his view on the specifics but has implied that the economic and political data are largely irrelevant to him, as the source of his views on any issue can all be found in the Bible. So what does the Bible say about broadband? Not much, but it does repeatedly instruct us to assist with basic necessities so that all can live among us in dignity, health and prosperity. These are the moral sentiments Congress cited in creating the ACP. Again, I can make the economic and political arguments for the ACP. If, however, the person with the sole power to enable or kill an ACP extension insists that the decision be made on biblical principles rather than economics, the answer remains the same; the speaker should allow a vote on the ACP extension bill.
[Blair Levin, a Non-Resident Fellow at the Brookings Institute Metropolitan Policy Project, led the team that wrote the 2010 National Broadband Plan.]

California can keep enforcing its state net neutrality law after the Federal Communications Commission (FCC) implements its own rules. The FCC could preempt future state laws if they go far beyond the national standard but said that states can "experiment" with different regulations for interconnection payments and zero-rating. The FCC scheduled an April 25 vote on Chairwoman Jessica Rosenworcel's proposal to restore net neutrality rules similar to the ones introduced during the Obama era and repealed under former President Trump. The FCC released the text of the pending order, which could still be changed but isn't likely to get any major overhaul. State-level enforcement of net neutrality rules can benefit consumers, the FCC said. The order said that "state enforcement generally supports our regulatory efforts by dedicating additional resources to monitoring and enforcement, especially at the local level, and thereby ensuring greater compliance with our requirements."

Ahead of the confirmation from the Federal Communications Commission (FCC) that the agency plans to vote to restore network neutrality on April 25, a top policy analyst weighed in to say that he doesn't expect a return of the rules to alter the way that broadband service providers operate. Like its 2015 predecessor, this version of the rules will again attempt to reclassify broadband as a more heavily-regulated "Title II" communications service classification. The new rules also include a ban on blocking, throttling and unreasonable paid prioritization. "Like its predecessors, this policy debate will generate significant headlines and commentary, [but] is unlikely to generate significant changes in how the ISPs operate, nor material changes in their revenues, margins, or opportunities," New Street Research policy analyst Blair Levin explained in a research note. Still, Levin's view that the new rules will not amount to major changes at broadband service providers did not stop cable industry organizations from railing against the coming vote and calling on the FCC to turn back.
Wisconsin Public Service Commission Announces Application Period for Digital Connectivity and Navigators Program

The Public Service Commission of Wisconsin (PSC) is now accepting grant applications for the Digital Connectivity and Navigators Program. This program aims to improve internet connectivity in the state by providing access to devices, technology, and digital navigators. Under the American Rescue Plan Act (ARPA), the US Department of the Treasury awarded Wisconsin $33 million through the Capital Projects Fund (CPF) to administer this program. The Digital Connectivity and Navigators Program promotes digital connectivity by deploying devices such as computers, laptops, and tablets for eligible households to access. The program also promotes digital connectivity through the installation of Wi-Fi equipment in eligible multidwelling unit, which includes apartment buildings, condominiums, and mobile home parks. Both approaches will include the provision of digital navigation services to ensure Wisconsinites can make full use of the internet for work, education, health monitoring, and other essential activities. A digital navigator is a trusted guide who assists others with internet adoption and digital device use.

Breezeline has begun to activate fiber internet in previously unserved areas of King William County, Virginia. The 132-mile fiber expansion will make fiber available to over 1,500 homes and businesses by August 2025. The initiative will enable homes and businesses in King William County to access Fiber-to-the-Home (FTTH) technology with Gigabit-speed internet for the very first time. The technology provides a powerful online experience for users with exceptional download and upload speeds, which is ideal for video conferencing, distance learning, telemedicine, and gaming. The fiber initiative is being funded by Breezeline and a subsidy from the Federal Communication Commission’s Rural Digital Opportunity Fund (RDOF), which supports broadband deployment in unserved and underserved rural communities across the country.

For streamers like Paramount, Disney, Netflix, and Peacock, it’s not enough that you watch TV on the platform—they want to own what you do on your phone, too. Paramount announced today that it would launch a new “mobile shopping experience” during this weekend’s CMT Music Awards red carpet. Partnering with a company called Shopsense AI, Paramount says viewers will be able to browse and purchase items inspired by what’s happening on their TV. Streaming platforms have approached shopping in a few different ways. On Peacock, subscribers get ads for items related to what they’re watching, like the kitchen utensils being used on a cooking show. They then scan a QR code from their TV and can buy the items on their phone. In January, Disney announced it would test sending ads for products to viewers while they watched through emails or push notifications to their phone. Disney said the personalized notices would let audiences shop “without disrupting their viewing experience.” TV isn’t the only place where shopping is poised to play an even bigger role. Social media platforms like TikTok and Pinterest have added more and more e-commerce features in recent years for the same reason: they want to keep you in the walled garden, from discovering a product to hitting the “order” button.

Some smaller US telecommunications providers are toying with the notion of shutting down their copper networks, following years of pioneering efforts by bigger network operators like AT&T and Verizon. According to the financial analysts at New Street Research, Frontier and TDS Telecom are eyeing the savings they might be able to derive from shuttering legacy network technology. To be clear, virtually all of the US market's telco operators are shifting from copper to fiber for their new network buildouts and upgrades. Indeed, the Fiber Broadband Association and RVA Market Research and Consulting estimate that fiber lines now pass nearly 78 million US homes, up 13% from a year ago. What's unclear though is whether every single decommissioned copper location will be serviced by fiber. In 2015, the Federal Communications Commission outlined rules for carriers that intend to turn off copper networks and replace them with fiber. The agency noted that operators should feel free to make the switch as long as they keep providing services to customers.

Leading AI companies have a favorite phrase when it comes to describing where they get the data to train their models: They say it's "publicly available" on the internet. "Publicly available" can sound like the company has permission to use the information—but, in many ways, it's more like the legal equivalent of "finders, keepers." "That phrase confuses people," said developer Ed Newton-Rex. "It's probably designed to confuse people." Newton-Rex spent years building AI audio systems before resigning from Stability AI, citing concerns about generative systems built with copyrighted material. The term, perhaps by design, sounds like "public domain"—which refers to information that is no longer subject to copyright protection or otherwise made freely available. As for what constitutes "publicly available" content, OpenAI says, "We only use publicly available information that is freely and openly available on the internet—for example, we do not use information that is password protected or behind paywalls."

Zayo Group unveiled a slew of upgrades to its fiber infrastructure, including the acquisition of a new long-haul dark fiber route connecting Washington, DC and Atlanta. Zayo acquired the route through a secretive "technology partnership," but Chaz Kramer, Zayo's VP of product management, said the name of the company and price tag for the acquisition “aren’t being disclosed." In things that are being disclosed, the company announced that it built a dark fiber route connecting Columbus, Ohio to Pittsburgh, Pennsylvania. Additionally, Zayo added four routes to its 400G network, including Indianapolis to Columbus; Cut Bank, Montana to Calgary; New Orleans to Ponchatoula in Louisiana; and Grand Rapids to Lansing in Michigan. In parallel, Zayo is fortifying its IP network by adding 27 new IP points of presence (PoPs) and 400G peering locations across North America. This expansion includes the introduction of 16 new IP PoPs in California, Colorado, Maryland, New Jersey, Ohio and Ontario. The company has 11 new 400G IP peering locations set for rollout in 2024 across cities like Toronto, Seattle, Phoenix, Dallas and Chicago.
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 Zoe Walker (zwalker AT benton DOT org) — we welcome your comments.
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