GAO Flags Broadband Funding Coordination Concerns

Last month, the Government Accountability Office (GAO) issued a report on the state of federal broadband funding interagency coordination. Not for the first time, it flagged breakdowns in process that could lead to duplication, waste, fraud, and abuse.

Publicly released on April 28, "Broadband Programs: Agencies Need to Further Improve Their Data Quality and Coordination Efforts," identifies two concerns:

1. The FCC's failure to evaluate and document the accuracy of the service availability data underlying its National Broadband Map, which "adds both to the risk that agencies leveraging these data cannot effectively target funding to areas that lack high-speed internet and to users' existing concerns about the data's reliability."
   
   
2. The need for the FCC, NTIA, and the Departments of Agriculture and Treasury to define with sufficient clarity their coordination processes to "better position the agencies to sustain their collaboration, manage fragmented federal broadband efforts, and ensure that the considerable federal broadband funding is spent efficiently and effectively."

Regarding the National Broadband Map, the Report states that:

FCC officials described its processes for data validations, verifications, audits, and enforcement referrals as a new workstream that continues to be informed by fresh rounds of data, citing this as the reason why FCC had not yet formally evaluated or finalized formal operating procedures for these processes. However, without evaluating the effectiveness of its validations, verifications, audits, and referrals processes, FCC cannot know the extent to which these processes are sufficient to ensure the accuracy of the data in the National Broadband Map.

With respect to interagency coordination, the Report identifies three shortcomings: (1) no clear shared definition as to what the "covered data" that the agencies have agreed to share actually entails; (2) delays in the submission of data to be included in the FCC's Broadband Funding Map, a separate map that I described in a May 2023 Perspectives from FSF Scholars; and (3) the fact that "officials … have not established a formal process to de-duplicate their funding prior to making decisions about projects to fund."

To address these concerns, the Report presents 14 recommendations for executive action.

As you may recall, the GAO assessed broadband funding interagency coordination efforts once before, in May 2022. As I noted in a contemporaneous post to the Free State Foundation's blog, "Broadband: National Strategy Needed to Guide Federal Efforts to Reduce Digital Divide" identified "at least 133 funding programs that could support increased broadband access" under the purview of 15 different agencies and warned that "[t]his patchwork of programs could lead to wasteful duplication of funding and effort."

FCC Opens New Inquiry into the State of Broadband Deployment

On September 6, the FCC announced that it was opening its eighteenth inquiry on the state of broadband in the U.S., which is expected to culminate in the next iteration of the Commission’s Section 706 report. Under Section 706(b) of the Telecommunications Act of 1996, the Commission is required to annually determine "whether advanced telecommunications capability is being deployed to all Americans in a reasonable and timely fashion." In other words, for the upcoming report, the Commission is required to assess whether broadband Internet access service – an advanced telecommunications service under the statute – is being timely deployed to all Americans.

Earlier this year, the Commission initiated a proceeding for its forthcoming Communications Marketplace Competition report – a different report that includes an assessment of the broadband market over the previous two years. In public comments filed in June of this year, Free State Foundation scholars wrote: "In 2022 and 2023, overall conditions in the broadband Internet services market were effectively competitive, in many instances even more so than in 2020 and 2021 when this was already the case." FSF's comments cited publicly available data points, including broadband provider quarterly reports and analyst estimates, about fiber deployments, cable broadband network upgrades and footprint expansion, nationwide 5G network upgrades and new deployments, 5G fixed wireless access (FWA) entry in the residential broadband market, cross-platform competition from cable-hybrid wireless providers, and improvements in satellite broadband capabilities to support that conclusion. 

 

The pro-deployment trends from 2022-2023 identified on FSF's comments in the 2024 Communications Marketplace Competition Report proceeding appear to support an affirmative answer to the question that the Commission is addressing in its upcoming Section 706 report. Yet the Commission's just-opened Section 706 proceeding will provide a forum for considering more recent data about availability and deployment progress and enable a more definitive determination about the current state of ongoing broadband deployment. 

 

Expect Free State Foundation scholars to have more to say this year about the state broadband deployment to all Americans. FSF's public comments from December 2023 that were filed in the Commission's previous Section 706 report proceeding can be found on FSF's website.

Congress Shouldn't Have to Mandate Another Broadband Plan

Ted Hearn's Policyband reports that the House-passed bill reauthorizing the National Telecommunications and Information Administration (NTIA) contained a provision requiring the Biden administration to prepare – yet another! – national broadband plan.

 

According to Policyband – by the way, a site with much useful information if you haven’t checked it out – the Proper Leadership to Align Networks (PLAN) for Broadband Act, sponsored by Reps. Tim Walberg (R-Mich.) and Annie Kuster (D-N.H.), is a response to the 2022 Government Accountability Office report that detailed the current balkanized condition of the federal approach to funding broadband projects. The PLAN Act would give NTIA one year – after consulting with the FCC, the Agriculture Department, the Treasury Department and several more – to submit to Congress a plan to “support better management of federal broadband programs to deliver on the goal of providing high-speed, affordable broadband internet access service to all individuals in the United States.” The GAO report determined that “U.S. broadband efforts are not guided by a national strategy” and that “federal broadband efforts are fragmented and overlapping, with more than 100 programs administered by 15 agencies,” risking overbuilding as well as wasteful duplication.

Well, it shouldn’t take a law of Congress to get the government to develop a national strategy with a primary aim of eliminating the duplication inherent in separate 100 broadband funding programs administered by 15 separate agencies. Here at the Free State Foundation, we’ve been recommending that this be done for well over a year! It should just take a commitment to effective and efficient government.

 

We understand that there is a pronounced bureaucratic imperative that tilts towards wasteful overlap and duplication – but it’s past time to end it with respect to federal funding of broadband projects.

Ookla Reports Rising Fixed and Mobile Broadband Speeds in Early 2023

On April 17, Ookla released its Market Report for the United States for the first quarter of 2023. According to Ookla, during the first quarter of the year, Charter Communications' Spectrum was ranked highest among fixed broadband services with download speeds of 234.8 Mbps. Comcast was a close second for fixed providers with speeds of 232.85 Mbps. For mobile providers, T-Mobile ranked first with download speeds of 165.22 Mbps, and Verizon Wireless was second at 74.5 Mbps. Oookla's Market Report provides additional breakdowns for both fixed and mobile services for consistency and latency and performance in supporting video services. The report also includes rankings for fixed broadband by region and for major cities as well as separate ranking among mobile providers for 5G performance and availability.

Coinciding with the release of its U.S. Market Report for Q1 2023, Ookla also released updated findings for March 2023. Ookla found that median upload/download speeds in the U.S. for last month were 197.84/23.02 Mbps for fixed broadband services, and 81.26/9.44 Mbps for mobile broadband services.

The Ookla report's speed findings for early 2023 are an indicator of continuing improvements in broadband service capabilities and network deployment in the United States. The report's findings also are a reflection of the federal light-touch regulatory framework for broadband Internet access services, which encourages private market investment and innovation. Future improvements in broadband access are best achievable by maintaining the pro-free market approach embodied in the FCC's 2017 Restoring Internet Freedom Order. Additionally, Congress and the Commission take further steps to build on the progress being made in this space. My January 2023 Perspectives from FSF Scholars, "The 2022 Communications Marketplace Report: Timely FCC Action Could Accelerate Next-Gen Broadband Deployment," identified three such steps: (1) prioritize the lower 3 GHz band and other spectrum bands for repurposing for commercial services; (2) adopt fee caps and "shot clocks" on deployments of wireline facilities in state and local rights-of-way; and (3) ensure equitable access to broadband by prohibiting intentional discrimination, and not by imposing disparate impact liability. 

Waiting for Updated FCC Broadband Maps

Tens of billions in government subsidies await updated FCC broadband service availability maps that indicate with accuracy and precision those locations that currently lack access to a high-speed Internet connection.

The question is, when will those maps be completed?

At a Senate Appropriations Committee hearing last week, Department of Commerce Secretary Gina Raimondo testified that the FCC will release those maps this summer – "probably."

Not so fast, an FCC spokesperson later clarified, describing the project as "complicated" and noting that "there is a protest pending before the Government Accountability Office" that has delayed progress, at least temporarily.

The Broadband Deployment Accuracy and Technological Availability (DATA) Act, passed by Congress in March 2020, directs the FCC to produce revised broadband maps – and to rely upon those maps "when making any new award of funding with respect to the deployment of broadband internet access service intended for use by residential and mobile customers."

Consequently, two substantial FCC subsidy programs are on hold until those maps are finalized: (1) Phase II of the Rural Digital Opportunity Fund (RDOF), which will disburse as much as $11.2 billion on top of the $9.2 billion already awarded in Phase I, and (2) the $9 billion 5G for Rural America Fund.

In addition, and as Free State Foundation President Randolph J. May and I emphasized in comments we submitted last Friday to NTIA regarding implementation of the $42.45 billion Broadband Equity, Access, and Deployment (BEAD) Program, the Infrastructure Investment and Jobs Act requires NTIA and the states to rely exclusively on those maps in determining which areas are "unserved" – and, secondarily, "underserved" – and therefore eligible for grants.

Accordingly, the FCC is under intense pressure to complete the Digital Opportunity Data Collection (DODC) – now referred to as the "Broadband Data Collection" – that Mr. May and I summarized in a November 2020 Perspectives from FSF Scholars.

In a March 2021 blog post, then-Acting Chairwoman Jessica Rosenworcel provided an overview of actions the agency had taken to do just that, one of which was "to issue a Request for Information to jump start the contracting process for the creation of the Broadband Serviceable Location Fabric, a common dataset of all locations in the United States where fixed broadband internet access service can be installed."

On November 9, 2021, the FCC awarded that $44.9 million contract to CostQuest Associates. However, a losing bidder, LightBox Parent, LP, filed a bid protest with the Government Accountability Office (GAO) on November 19, 2021. By law, the GAO has up to 100 days – that is, until February 28, 2022 – to issue a decision. Until it does, progress on the Broadband Serviceable Location Fabric has been paused.

In a December 8, 2021, letter to Representative Victoria Spartz (R – IN), Commissioner Rosenworcel described this temporary impasse, stated that "[t]he FCC is committed to implementing its new Broadband Data Collection process as fast as possible," and described the ways in which it "has made significant progress."

However, Chairwoman Rosenworcel did not provide a date certain for when the maps would be completed.

New BroadbandNow Report Further Demonstrates Affordability of Broadband

A report released on August 18, 2021, by BroadbandNow provides additional proof that the number of U.S. consumers with access to affordable broadband service is both vast and growing rapidly.

In "Evidence of Falling Broadband Prices Grows Despite Overall Spike in Inflation," a recent Perspectives from FSF Scholars, I compared USTelecom broadband pricing information to Consumer Price Index (CPI) data released by the U.S. Bureau of Labor Statistics.

The former revealed that, between 2020 and 2021, the cost of connectivity fell across the board: entry level tier prices dropped by 9.1 percent, the most popular tier prices by 7.5 percent, and the highest speed tier prices by 2.3 percent.

By contrast, and over the same time period, the latter demonstrated that the cost of other in-demand consumer goods – various food items, electricity, fuel oil, and gasoline – increased by an average of over 7 percent.

Free State Foundation President Randolph May and I highlighted similar data in May 2021's "Biden Broadband Plan: Claims That Broadband Is 'Too Expensive' Are Unfounded," a direct response to unsupported assertions contained in the American Jobs Plan Fact Sheet released by the White House at the end of March.

BroadbandNow's "The State of Broadband in America, Q2 2021," provides still more evidence that competitive marketplace forces are driving down prices at an impressive pace.

Specifically, the report finds that, as of the second quarter of this year, 87 percent of Americans were able to subscribe to "low-priced" high-speed Internet access service – that is, offerings priced at $60 per month or less – providing speeds that meet the FCC's definition of "broadband": 25 megabits per second (Mbps) downstream and 3 Mbps upstream.

Impressive in isolation, that figure reflects incredible and rapid progress: an increase of 10 percentage points from just three months prior (Q1 2021) and, amazingly, over 35 percentage points since Q1 2020.

The report also notes that the percentage of Americans with access to "low-priced" offerings at even faster speeds – 100 Mbps downstream and 25 Mbps upstream – grew by 11 percent over that same brief period of time.

Republican Senators' $568B Infrastructure Proposal Includes $65B for Broadband

A group of five Republican Senators has released a $568 billion infrastructure framework in response the $2 trillion American Jobs Plan announced by President Biden.

Those lawmakers are Roger Wicker (MS), Ranking Member of the Commerce, Science, and Transportation Committee; Shelley Moore Capito (WV), Ranking Member of the Environment and Public Works Committee; Pat Toomey (PA), Ranking Member of the Banking, Housing, and Urban Affairs Committee; Mike Crapo (ID), Ranking Member of the Finance Committee; and John Barrasso (WY), Ranking Member of the Energy and Natural Resources Committee.

The Biden Plan, one aspect of which I discussed in a recent post to the FSF Blog, would make $100 billion available for broadband-related projects and would "prioritize[] support for broadband networks owned, operated by, or affiliated with local governments, non-profits, and co-operatives."

The Republican counter-proposal, by contrast, would allocate $65 billion out of the $81 billion generated by the recent C-band auction for new spending by the FCC and NTIA.

Be on the lookout in the coming days and weeks for additional commentary from Free State Foundation scholars on broadband spending proposals.

"Future Proofing" Subsidized Broadband Would Inflate Consumer Prices

The Biden Administration's American Jobs Plan (the Plan) would allocate a substantial amount of taxpayer money – $100 billion – to address broadband accessibility and affordability. The limited details we know at this point, however, suggest strongly that the overly ambitious Plan could lead to waste and, contrary to its stated goal, higher, not lower, prices.

There is much to critique about the Plan, but for now I want to limit my focus on the inescapable tension that exists between two of its primary priorities. The Fact Sheet released by the White House makes the following interrelated assertions:

• "The President's plan prioritizes building 'future proof' broadband infrastructure …."
• "Americans pay too much for the internet – much more than people in many other countries – and the President is committed to working with Congress to find a solution to reduce internet prices for all Americans, …."

Simply put, you can't have it both ways. The notion of "future proofing" suggests building "gold-plated" infrastructure that delivers more than what consumers need – and costs more than what they want to spend. And price regulation, the process hinted at in the second quote above and by which the government would dictate how much providers may charge, based upon its best educated guess as to what actual costs and an acceptable rate of return might be, wouldn't eliminate that problem – it simply would incorporate those additional costs into the calculation.

At this point, we cannot know with any certainty what the White House means when it says it wants to "'future proof' broadband infrastructure." However, press reports emphasize that the Accessible, Affordable Internet for All Act would appropriate $80 billion for infrastructure delivering gigabit speeds both upstream and downstream and the Leading Infrastructure for Tomorrow’s America (LIFT America) Act "would raise the FCC's current threshold definition of served areas from 25 Mbps download and 3 Mbps upload minimum to 25/25 symmetrical speed for low-tier service and 100/100 Mbps symmetrical for mid-tier service."

As Former FCC Commissioner Michael O'Rielly stated during recent testimony to the House Energy and Commerce Committee, "the push for symmetrical speeds at exorbitant levels, such as 100/100 megabits per second (Mbps), makes little sense" and "[a] 100-megabit upload speed does not reflect reality for now or any time soon."

And as Joan Marsh, AT&T Executive President of Federal Regulatory Relations, explained in a March 26, 2021, blog post, while 5G networks "easily" can deliver 100 Mbps downloads, "wireless networks are not built to deliver symmetrical speeds" and "adopting a symmetrical standard could result in overbuilding existing services today, including existing asymmetrical services that are currently meeting modern connectivity needs."

The private sector has spent nearly $2 trillion to provide broadband wherever it is economically feasible: that is, where – despite substantial uncertainty – there is at least a reasonable expectation of a return on that investment. Providers rely upon a range of technologies to connect homes: fiber to the home (FTTH), DOCSIS® cable modem service over hybrid fiber-coaxial (HFC) networks, Digital Subscriber Line (DSL) offerings over twisted-copper pairs, 4G/LTE and 5G mobile broadband, fixed wireless operating in both licensed and unlicensed spectrum, and satellite. In some instances, the chosen modality is suited best to the specific geographic and population characteristics of the area to be served. In others, enterprising businesses are rolling the dice – and taking the risk – on a competitive alternative.

The FCC's current definition of "broadband" – 25/3 Mbps – is sufficiently broad to encompass this wide range of network technologies. It also responds to the throughput needs of consumers, fosters intermodal competition, and maximizes the number of eligible bidders in reverse auctions for receipt of government subsidies, such as the $20.4 billion Rural Digital Opportunity Fund and the $9 billion 5G Fund for Rural America – two existing programs whose impact on closing remaining digital divides is not yet known, as Commissioner Brendan Carr emphasized in a recent op-ed.

In sum, the threshold established by the expert agency unleashes the most efficient investment and innovation mechanism – competitive forces – to drive down prices, expand access, and provide the speeds that consumers demand.

By contrast, in the name of "future proofing," the Plan would ratchet up the definition of "broadband" in a way that would increase inappropriately the costs of connecting unserved areas, incentivize providers able to meet that definition to replace existing facilities with "gold-plated" infrastructure rather than focus on expanding the reach of their networks, and render many viable distribution technologies ineligible to receive government subsidies simply due to their inability to deliver upstream speeds far exceeding the needs of consumers both today and in the foreseeable future.

The resulting wasteful overinvestment and suppression of competition would drive prices up, not down. And the specter of price regulation is no panacea. To the contrary, it would incorporate those additional costs into the government-established price – while at the same time serving to disincentivize investment and innovation.

Charter Announces Ambitious Project to Deploy Broadband to Over One Million Unserved Locations

Yesterday Charter Communications announced a new multiyear, multibillion-dollar initiative to deliver gigabit broadband speeds to over a million customer locations in rural and other areas presently unserved.

Charter will invest $5 billion in this infrastructure expansion project, including $1.2 billion that it won in the Rural Digital Opportunity Fund (RDOF) Phase I reverse auction. This large-scale effort, which will extend Charter's fiber optic network in 24 states, is in addition to existing, privately funded buildout plans.

The project is expected to generate 2,000 new jobs and expand Charter's network mileage coverage by 15 percent.

In announcing the initiative, Tom Rutledge, Chairman and CEO of Charter Communications, explained that "[t]he pandemic has further highlighted the need for broadband availability and adoption and Charter is committed to furthering its efforts as part of the comprehensive solution needed to address these challenges."

One potentially significant external factor that could impact the timing of this project: utility pole permitting and "make-ready" processes.

Free State Foundation President Randolph May and Director of Policy Studies and Senior Fellow Seth Cooper submitted comments to the FCC in September 2020 in support of a Petition filed by NCTA – The Internet & Television Association seeking an expedited declaratory ruling regarding pole replacements and pole attachments.

Specifically, they argued that the Commission should:

• Prohibit utility pole owners in unserved areas from requiring broadband providers to bear the entire costs of new replacement poles;
• Place pole attachment disputes on its accelerated docket to expedite their resolution; and
• Clarify that it has authority to order pole owners involved in disputes involving unlawful delays and denials to complete pole replacements within specific timeframes.

Mr. Cooper posted to the FSF Blog on this topic, as well.

On January 19, 2021, the Wireline Competition Bureau released a Declaratory Ruling that, while declining to weigh in broadly on the issues presented in the Petition filed by NCTA, did narrowly "clarify that it is unreasonable ... for utilities to impose the entire cost of a pole replacement on a requesting attacher when the attacher is not the sole cause of the pole replacement."

Rural Digital Opportunity Fund Phase I Auction Bidding Begins

Bidding commenced today in the first phase of the FCC's 10-year, $20.4 billion Rural Digital Opportunity Fund (RDOF) program. A total of 386 qualified providers are vying for $16 billion in Universal Service Fund (USF) dollars in the Phase I reverse auction, which will allocate subsidies to those bidders committing to construct broadband network infrastructure at the lowest cost. 

Phase I targets those census blocks where fixed voice and Internet access speeds of at least 25/3 Mbps are not offered to even a single location. It also prioritizes facilities that would deliver higher speeds (up to 1 Gbps) through a bid-weighting process.

RDOF Phase I promises to make broadband available to as many as 10 million people currently unserved. As FCC Chairman Ajit Pai emphasized, "[i]t represents a major investment in rural America that will benefit the entire country as we connect consumers who are currently missing out on digital opportunity, from the Pacific Coast to Appalachia and from the Great Plains to the Gulf Coast."

USTelecom Report on Broadband Documents Price Reductions, Speed Increases

USTelecom – The Broadband Association recently released a report comparing 2015 broadband pricing and speeds to those available today. "2020 Broadband Pricing Index: An Analysis of Decreasing Prices and Increasing Value for Broadband Service Over Time," as its name suggests, finds that "Americans are paying less today for broadband services that are significantly more capable than they were five years ago."

A few highlights:

• The price of the most popular broadband service tier is 20.2 percent lower in 2020 than it was in 2015 – and 28.1 percent lower when inflation is taken into account.
• Savings are even greater for the highest-speed tier: 37.7 percent (and 43.9 percent when inflation is considered).
• Speeds, meanwhile, have increased, by 15.7 percent for the most popular offering and 27.7 percent for the highest-speed offering.

All of this is made possible by the $70-80 billion that providers invest annually in broadband infrastructure.

And while these statistics make plain that broadband is far more affordable than in the past, USTelecom at the same time acknowledges that there is more work to be done by government and private stakeholders to remove obstacles to adoption.

As I noted in a previous post, USTelecom is a partner in the "K-12 Bridge to Broadband" initiative, which works with school districts to identify, and connect at discounted rates, the 30 percent of students who lack the connectivity necessary to participate in remote learning during the COVID-19 pandemic.

The full report, authored by Arthur Menko, founder, Telcodata and Business Planning, Inc., is available here.

Four States Added to NTIA's National Broadband Availability Map in July, Bringing Total to 22

NTIA announced on July 23 that two more states, Indiana and Georgia, are participating in the National Broadband Availability Map (NBAM). Along with Wyoming and Washington State, two additions disclosed earlier that month, a total of 22 states are now involved.

Not to be confused with the original National Broadband Map that was decommissioned several years ago, or the FCC's current, but frequently criticized, Fixed Broadband Deployment Map, the NBAM was authorized by Congress in 2018. It utilizes geographic information system (GIS) technology, as well as multiple public (including FCC Form 477) and non-public data sets, to visualize for state and federal policymakers ("partners") those specific areas that currently are unserved. Because the NBAM incorporates proprietary information, it is not available to the general public.

In a July 29 Perspectives from FSF Scholars, "Legislative 'Best Practices' to Expand and Accelerate Broadband Coverage," I discussed, among other topics, the importance of accurate coverage maps for federal subsidy programs targeting unserved areas; efforts by the FCC (the Digital Opportunity Data Collection (DODC)) and Congress (the Broadband DATA Act) to produce modernized, publicly available maps; and the pressing need for funding to make those maps a reality.