General

Broadband Bytes, November Issue 2

This edition includes the impact of the changing political landscape: FCC, DoC, NTIA and BEAD. Starlink. Mergers, Funding, and the latest BEAD Progress Dashboard.1. 11-17-2024 President-elect Donald Trump has named Brendan Carr, the senior Republican on the Federal Communications Commission (FCC), as the regulator’s new chairman. A veteran of the FCC and telecom regulatory policy, Carr earlier served as the agency’s general counsel. Carr had been unanimously confirmed by the Senate three times and was nominated by both Trump and President Joe Biden to the FCC. A critical element that a Carr-led FCC could alter is the $42.5 billion BEAD program. Carr has aligned with Elon Musk, dissenting from the FCC decision to reject Starlink’s Rural Digital Opportunity Fund (RDOF) application. The BEAD program has focused on building fiber-based broadband networks rather than alternative technologies like low-earth orbit (LEO) satellites and fixed wireless. Read more.2. NTIA leader strikes an optimistic note about BEAD’s future. Evan Feinman, a director with the National Telecommunications and Information Administration (NTIA), this week addressed the “elephant in the room,” specifically what the new Trump administration will mean for the BEAD program. Feinman said his group at NTIA is “focused on getting the job done.” And he downplayed the change in the political regime. Feinman pointed out that BEAD “was always a 10-year program” with the likelihood of political changes. And there were always going to be significant personnel turnovers over the course of a decade. He also noted that state broadband leadership, which is doling out the money, is “relatively stable” and much of the BEAD program guidelines are written in the Infrastructure Investment and Jobs Act statutes. But what about Musk’s satellite broadband service Starlink and other alternative technologies versus the current government preference for fiber? (Note: Feinman is a civil servant, and not a political appointee, meaning that he and others in similar roles do not routinely tender their resignations with the beginning of a new presidential administration.) Read more.3. Trump Picks Howard Lutnick for Commerce Secretary. President-elect Donald Trump announced Tuesday he wanted billionaire executive Howard Lutnick, CEO of Cantor Fitzgerald to head the Commerce Department. The Department of Commerce houses the National Telecommunications and Information Administration (NTIA), the agency responsible for managing the $42.5 billion BEAD broadband expansion program. Read more.4. Is satellite broadband good enough to deliver internet for all? Satellite broadband faces inherent bandwidth constraints, particularly in more urban markets. But it’s cheaper than building fiber in many rural areas, and satellite users can still do “basic” online tasks like web browsing and even video streaming. Data shows Starlink could be a viable alternative to cable and DSL-based services. Cheaper but at what cost? Read more.5. FTC Click-to-Cancel Rules to Take Effect Jan. 14, 2025. New federal rules designed to make it easier to cancel broadband service are set to take effect Jan. 14, 2025, though compliance will not be required until May 14, 2025. The rules have been challenged in court by a trade group for broadband Internet Service Providers. The rules are designed to allow consumers to cancel service with a single mouse click. The rules target negative option contracts that continue periodic charges unless the customer has canceled. Read more.6. BEAD News: All Initial Proposals Approved. The NTIA’s approval of Texas’ Initial Proposal for the BEAD Program means that all 56 states, territories and the District of Columbia have gotten the preliminary go-ahead on their projects. The BEAD final proposals are due a year after the initial proposals, which all were submitted to the NTIA by December 27, 2023. The final proposals will report the outcome of the provider selection process and detail how the plan will ensure universal broadband coverage. Once approved, the states can begin work on their projects. Read more.7. Omni Fiber and Lit Fiber Merge. Omni Fiber and Lit Fiber, two fiber-based service providers in the midwest that are majority-owned by Oak Hill Capital, have merged. Lit Fiber serves Medina County, Ohio. It is expanding into surrounding communities and building a network in Brownsville, Texas. Oak Hill, which also owns Lit Fiber, announced the formation of Omni Fiber in July 2022. The company said that it planned to bring fiber service to small and mid-sized markets in the Midwest. Initial projects were to be in Ohio, Michigan, and Pennsylvania. Read more.FUNDING AWARDS8. 11-13-2024  State of NY announced over $140 million in awards from the ConnectALL Municipal Infrastructure Grant Program. The program will build over 1,200 miles of publicly owned fiber optic cables and wireless connection points throughout Central New York, the Finger Lakes, Mohawk Valley, North Country, Mid-Hudson and Western New York regions. Read more. A complete list of the awards is below:Orleans County (Finger Lakes) – $11 million  |  Partner: RTO WirelessBroadband for Schoharie County (Mohawk Valley) – $30 million  |  Partner: MIDTELCentral NY Regional Planning & Development Board (Central NY) – $26 Million   |  Partner: Empire AccessFranklin County (North Country) – $13.1 Million  |  Partner: Airosmith Development and Layer EightSullivan County (Mid-Hudson) – $29.9 Million  |  Partner: ArchTop Fiber and Hudson Valley WirelessCity of Jamestown / EntryPoint Networks Inc.– $29.9 Million  | Partner: EntryPoint and Quanta Telecom9. First BEAD Funding Announced: Here are the Louisiana Awardees. Connect LA  Louisiana 10. Connect Illinois Broadband Grant Awardees (2023-2024 Awardees pages 4-7).11. Florida Broadband Opportunity Grant Program Awardees February 2024. Read more.12. BEAD Progress Dashboard as of November 19, 2024. Read more.    Broadband Bytes is a regular feature by David Levine of UCL Swift. David is a graduate of Northern Illinois University, a certified BICSI RCDD,and a 35-year industry veteran in fiber and copper solutions.He currently works as a Business Development Manager for UCL Swift.

Dec 31, 2024

General

Broadband Bytes, December Issue 1

This edition includes more on the impact of the changing political landscape: BEAD, USF, Rip and Replace, M&A forecast looks strong. States start accepting BEAD Applications despite political rumblings.1. Donald Trump’s selection of Brendan Carr for FCC Commissioner could lead to BEAD changes. Carr said the commission will have to have an important discussion about the future of the BEAD program. Carr posted on “X” that “…the $42 billion program for expanding Internet infrastructure (was led) into a thicket of red tape and saddled with progressive policy goals that have nothing to do with quickly connecting Americans…There will be an important discussion about the program’s future, given that the lion’s share of the money has not been spent.” Carr also shared some “starting thoughts” in his post. “DEI requirements? Afuera!” Carr wrote. “Climate change agenda? Afeura! Price controls? Afeura! Technology bias? Afeura!” (Afuera translates to “out”.) Read more.2. Senator Ted Cruz, who will likely become Chairman of the Senate Commerce Committee, questions much of the Infrastructure Investment law, including BEAD. Senator Ted Cruz (R-TX) seems to question many things about the Infrastructure Investment and Jobs Act (IIJA), which Congress passed in 2021 with bipartisan support. Last week, Cruz sent two letters to Alan Davidson, who oversees the NTIA. Cruz warned that Congress will review the BEAD program early next year and he alluded to possible changes including getting rid of the preference for fiber; the requirement for an affordable option for low-income recipients; worker-protection guardrails; and climate change assessments. Cruz didn’t vote for the Bipartisan Infrastructure Bill, but it is current law. Any changes will have to be through votes in Congress. Texas recently became the final state of the 56 states and territories to have their BEAD funding approved. Texas received $3.313 billion in BEAD funding, more than any other state. Read more here and here.3. Supreme Court to Consider Universal Service Fund: Panelists Say It is a Good Time to Redesign. The FCC’s Universal Service Fund (USF) continues to be a highly important program for rural homes and businesses in need of broadband connectivity. But its future is in doubt for both financial and legal reasons. The Supreme Court announced on November 22, that it will hear and decide whether the Universal Service Fund is constitutional. The U.S. Court of Appeals for the Fifth Circuit in New Orleans in July ruled against the entire USF program, saying that its contribution system amounts to an illegal tax. USF collects fees from interstate and international telecommunications carriers, who in turn recoup their cost from consumers. Two other circuit courts of appeals have ruled in the other direction. Participants at the US Telecom Broadband Investment Forum last week were ready for the government and industry to begin considering decisions needed to keep USF going. Some redesign ideas to increase revenue are to require internet providers and “big tech” companies (Amazon, Meta, Alphabet, etc.) to contribute. Another possible USF redesign could see Congress directly appropriating the billions needed annually to sustain the program. Read more. 4. FCC Chair Sounds Alarm on Rip-and-Replace Program. FCC Chairwoman Jessica Rosenworcel wrote an open letter to U.S. Representative Steny Hoyer last week urging action to provide more funding for the rip-and-replace program and warning of the dangers if no action is taken. Rosenworcel—who announced that she will leave the FCC in January when the Trump administration takes power—sounded the alarm for the rip-and-replace program. According to Rosenworcel’s letter, the program, officially known as the Secure and Trusted Communications Networks Reimbursement Program, is billions of dollars short in funding. “This program to replace insecure equipment in the networks of 126 carriers faces a $3.08 billion shortfall,” wrote Rosenworcel, “putting both our national security and the connectivity of rural consumers who depend on these networks at risk.” Read more.5. Broadband M&A Set to Grow with a Stronger Market and Bundle Opportunities. Merger and acquisition activity in the broadband service sector is poised to pick up due to lower interest rates, moderating labor and equipment costs and national wireless operators’ insatiable appetite for growth. According to a new report from CoBank’s Knowledge Exchange, buyers in the broadband space have expanded beyond cable companies and traditional telecom or pure-play fiber operators. National wireless operators have been actively buying fiber companies for growth and to complement their smartphone service with the new “killer bundle,” a smartphone plan bundled with home internet. “We see M&A interest from wireless operators such as T-Mobile and Verizon as the main catalyst fueling deal activity over the next couple years,” said Jeff Johnston, lead digital infrastructure economist with CoBank. “Wireless networks have less operating leverage compared to fiber networks, so increasing their fiber exposure makes good business sense. And beyond the subscriber bundle benefits, fiber has much better margins than the capital-intensive wireless industry.” Read more.6. Ramping up the BEAD Workforce: 5 Things States, ISPs and Construction Firms Can Be Doing Now. NTIA encourages grantees to act now to ensure workers are on board and trained so that BEAD deployment remains on track. Every state and territory’s BEAD Initial Proposal includes a workforce readiness plan. And so far, more than 25% intend to allocate over $300 million in BEAD funding to support broadband workforce development initiatives. NTIA encourages State Broadband Offices (SBOs)—especially those with remaining BEAD funds after deployment obligations are met—to consider supporting workforce initiatives. To that end, NTIA has outlined a series of steps that SBOs can consider implementing now to get ahead of a potential broadband construction labor shortage. Read more.FUNDING AWARDS1. Yet BEAD still marches on: Georgia and Missouri Accept BEAD Applications: Georgia has begun accepting applications in the BEAD broadband funding program and Missouri plans to do so beginning on 12/5/24. Both states were allotted relatively large amounts of funding for the program. Missouri has $1.3 billion to award and Georgia has $1.7 billion. Georgia’s applications are due by January 15. Missouri’s applications are due February 20. Applicants for both states must qualify to receive funding. In Missouri, the deadline to apply to prequalify is February 5. Read more.2. Washington Accepts BEAD Applications. Washington is the latest state to begin accepting applications in the BEAD broadband funding program. The state has $1.2 billion to award. Applications are due January 31, 2025.  Rules for the BEAD program call for deploying fiber broadband except when cost-prohibitive. Read more.3. Pennsylvania Accepting BEAD Applications. The state of Pennsylvania has begun accepting applications for the BEAD broadband funding program. The state has more than $1.1 billion in BEAD funding to award to cover some of the costs of deployments to unserved and underserved areas of the state. Eligible parties have until January 21 to apply. The state plans to do a second funding round later next year. Read more.4. And other sources of funding still march on: North Carolina Set to Award Millions in Rural Broadband Funding. The state of North Carolina has begun accepting applications for millions of dollars in broadband funding to cover some of the costs of deploying fiber to unserved and underserved rural areas of the state. Funding will come through the Completing Access to Broadband (CAB) Program, which is administered by the North Carolina Department of Information Technology (NCDIT) Division of Broadband and Equity. Applicants must commit to providing matching funds totaling at least 30% of project costs. More than 40 providers are eligible to apply. Read more.5. Internet for All Funding by State/Territory. Read more.    Broadband Bytes is a regular feature by David Levine of UCL Swift. David is a graduate of Northern Illinois University, a certified BICSI RCDD,and a 35-year industry veteran in fiber and copper solutions.He currently works as a Business Development Manager for UCL Swift.

Dec 31, 2024