• Humans are needed for digital inclusion to be successful.  Technology is not going to solve the digital divide without people involved to “guide” or “navigate” those who need help managing technology and the internet.

• 5-Step ladder to digital inclusion:

• • Affordable connectivity

• • Appropriate digital devices

• • Digital skills

• • Technical support

• • Applications
• Difficult to measure and evaluate digital equity completion and success so goals are typically shown as broader outcomes.  It would be labor intensive to get the details especially when community partners are involved.

• It has become common for ISPs to claim they are making upgrades that would bring faster speeds prior to BEAD fund awards. NTIS is recommending to states that they have policy for ISP to sign a binding contract with the state that defines when the upgrades would be completed and guarantee the faster speeds (maybe no more than 12 months)

• ISPs are allowed to declare marketing speeds instead of actual speeds. This allows them to declare a speed capacity of higher speeds but deliver something slower.  This turns the responsibility on a community to somehow prove that actual speeds are slower than the claim (for challenge).  Policy should be changed from marketing speeds to actual speeds for reporting purposes.

• FCC adopted change to its pole attachment rules in December 2023:
  • Rules do not apply to everyone.
  • DOES apply to poles owned by investor-owned utilities and telephone companies but NOT those owned by cooperatives and municipalities
  • Only effective in 27 states that follow FC pole jurisdiction.
  • MISSOURI is not one of the 27 states as we have our own authority.
  • Our state has the option to adopt or ignore these revised rules.
  • Changes to the FCC rules include.
    • Created a Rapid Response Process to expedite pole attachment disputes.
    • If FCC jurisdiction, the disputes are handled by FCC, and they are taking too long. This rule change requires FCC to expedite this process.
    • Make the pole attachment process more transparent. Pole owners have 10 business days to provide report in information about the poles condition to a potential applicant.
    • Most contested piece is that FCC modified the conditions under which a pole attacher has to pay for the full cost of replacing a pole when there is not enough room to add fiber.
      • Old rule – when pole replaced for the benefit of new attacher, the new attacher picks up full cost.
      • New rule – defines term “red-flagged” poles to define poles already out of safety compliance or that are already scheduled for upgrade or replacement. In these cases, the new pole attacher would not be responsible for cost of replacing these red-flagged poles but instead the cost would be pro-rated.

• Community Anchor Institutions (CAI) must have access to symmetrical gigabit speeds, or they are eligible for the BEAD process

• Suggestions to be prepared for the challenge process:
  • Use location specific evidence.
  • Register early in the challenge portal, test it out.
  • Submit challenges early – don’t wait until the last minute.
  • Include dates on type P challenges – evidence of planned build with date expected deployment (must be before June 30, 2024)
  • Provide speed data for Community Anchor Institutions

• 51 organizations, most from the Midwest, are questioning FCC national broadband maps for BEAD eligibility. They have identified 5 key findings:
  • Over reported service availability (specifically fixed wireless network capabilities and reach). Also reporting companies that are making name changes to avoid challenges.
  • Challenge process inadequacies – suggests updating challenge code categories and permitting challengers an opportunity to rebut provider responses
  • Need for independent verification requests – outside verification and additional justification for retroactive map adjustments
  • Enforcement against bad actors – against providers that submit consistently inaccurate data.
  • Technical and access information gaps – hard to verify broadband service due to lack of publicly available information about provider networks.

• One rule of BEAD is that broadband needs to be offered to every unserved location, not 98% or 99% – but all of them. Some opinion is even if there was a 100% grant to reach locations, these remote pockets will always lose money since revenues will never cover the cost of maintenance. ISP’s are not going to be interested.  Even wireless providers will not reach every home without a lot of extra effort and cost.

• The average broadband monthly gigabyte usage in the US was:
  • 2018 – 270.2
  • 2019 – 344.0
  • 2020 – 482.6
  • 2021 – 536.3
  • 2022 – 586.7
  • 2023 – 641.0
  • 9% annual increase of gigabytes – this a large!
  • There was also a huge shift to homes subscribing to faster speeds.

• Survey of Internet Costs (US News and World Report) – of respondents, 1 in 3 (39%) said:
  • They have had to cut personal expenses in order to pay their monthly internet bill.
  • They are settling for speeds that are often sluggish and inadequate.
  • 85% go online every day.
  • 8% had no home broadband access.
  • 20% had one or no other choice of ISP.
  • 61% say inflation is making it difficult to pay monthly broadband bills.
  • 28% are unhappy with the speed they get for the price they pay.
    
• Article titled “Pigeons an Be Faster than the Internet” (Washington Post) – using pigeons to communicate has a long history, back to ancient Greece where they were used to spread the word of the winners of the Olympic games. Racing pigeons have been clocked at 40 MPH with a range of up to 400 miles. The article compared where pigeons could be faster, specifically in “rural” America where slow upload speeds are common. Summary – pigeons carrying a thumb drive are far faster for sending small data files across town

• 2023 had slow down of fiber network buildouts
  • High interest rates when borrowing money (2 times the rate from last year)
  • New home start ups down affecting proposed fiber expansion needs.
  • Inflation – cost at least 20% more to build a fiber network by end of 2023 than a few years earlier.

• Upload speed usage and demand is growing faster than download speed.
  • Increased zoom and other video calls
  • 30% of homes have someone who works from home.
  • Use of more security cameras
  • Using cloud software needs a constant upload path.

• ACP will not be available forever.  States need to begin discussions of a backup plan to make broadband affordable once ACP is no longer funded federally.

• RDOF, phase one, awarded $9.2. Of this amount $2.8 has gone into default
  
• The idea of whether the RDOF areas will be 100% served when those networks are built is doubtful. The RDOF rules did NOT mandate 100% coverage.  People skipped by RDOF will remain unserved after BEAD. 

• Humans are needed for digital inclusion to be successful.  Technology is not going to solve the digital divide without people involved to “guide” or “navigate” those who need help managing technology and the internet.

• 5-Step ladder to digital inclusion:

• • Affordable connectivity

• • Appropriate digital devices

• • Digital skills

• • Technical support

• • Applications
• Difficult to measure and evaluate digital equity completion and success so goals are typically shown as broader outcomes.  It would be labor intensive to get the details especially when community partners are involved.

• FCC considering new broadband definition to 100/20 but they believe that an upload speed of 20 Mbps will not be enough for the future.  If they increase the speed definition, many areas and users would now not meet the definition of broadband that was funded in previous programs.  FCC has also talked of increasing speed to symmetrical 100/100.

• • FCC has held back on 100/100 but many providers cannot provide the 100 Mbps upload.

• • The changes in technology will dictate this in the future.

• The last time FCC set a standard speed was in 2015 with speed set at 25/3 Mbps

• • Bandwidth consumption continues to increase steadily.

• • 27% of private sector establishments have some or all employees teleworking.

• • More devices connect to home networks.

• • More teleworking and telehealth.
• FCC has discussed if they should adopt a universal service goal to help address affordability.  The USF is 26 years old and with changes from the original intent, they are looking nationally at a major rehaul of the program.

• It is likely that states will try to award all BEAD grants in 2024 (although it is questionable whether it is even feasible for states to meet the 1-year NTIA requirement) but will unlikely have any BEAD construction completed in 2024.

• RDOF winners are required to have 40% of the RDOF construction completed by the end of 2024.  If providers have not met this requirement, they will be in default, but it will probably be too late for BEAD funding.

• In-kind contributions for BEAD grants will be one of the ways to lower the cost of grant and increase use of non-cash benefits.  

• • In-kind matches can be provided by the grant applicant or by 3rd party, perhaps through local government.

• • BEAD allows the following costs that might be considered as an in-kind match (can be changed by the states):

• • • Employee or volunteer services

• • • Equipment

• • • Supplies

• • • Indirect costs

• • • Computer hardware and software

• • • Use of facilities

• • • Access to rights-of-way

• • • Pole attachments

• • • Conduits

• • • Easements

• • • Access to other types of infrastructure

• BEAD Program – even with the requirements established by NTIA for the BEAD grant program, there will be 50 different state programs and they can vary considerably.  For example:

• • Georgia

• • • Will only accept grants in first round that offers to build fiber.  The second round will be open it up to other technologies.

• • • Rewards ISP’s who propose to build out an entire county.

• • • Give 50 of 100 points based on amount of grant requested per location (the more matching funds the more points awarded)

• • Illinois

• • • Give 25 of 100 points based on amount of matching funds.  To get the full 25 points ISPs must cover 60% of the cost of the project.

These two states have very different priorities and scoring criteria.  It will be interesting to see what NTIA is going to be willing to approve.

• NTIA has a dashboard that shows the status of states BEAD grant programs – https://www.internetforall.gov/bead-initial-proposal-progress-dashboard

• Change in Line of Credit requirements for BEAD grants.

• • In addition to the line of credit letter (if used), provider must also get a bankruptcy opinion letter stating the LOC will be exempt if the provider files for bankruptcy.  This is outside the norm and may be difficult to obtain.

• • If obtain the 100% performance bond, the bankruptcy opinion will not be required.

• • Still possible that the 100% performance bond may be as expensive as the line of credit (yet to be determined).

• • Must have proof of performance bond at time of application.  This is not a typical operating procedure when it is theoretical that the grant will be awarded.  

• • NTIA allows the LOC of performance bond to be reduced as construction is completed but again, this is not a typical operating procedure and may increase cost due to additional reviews and requirements.

• Different sources talk about the “broadband gaps” of the digital divide and vary from 4 to 7. 

• • Source that showed the 7 gaps identified the following:

• • • Rural areas gap – with all the current federal funding this gap will be reduced (the forecast is that 989-99% of all US locations will have fiber or cable of at least 100/20 Mbps after the BEAD funding)

• • • Affordability gap – there needs to be a sustainable revenue stream.  There now is the ACP program but the future in questionable.  It will be necessary to continue to provide a baseline of support for low-income individuals.

• • • Operating gap – especially for high-cost rural providers.

• • • Adoption gap – this will require on-going training programs.

• • • Institutional gap – this is relating to schools, libraries and rural health facilities (2 of these receive assistance from the universal service fund but this fund is on shaky ground)

• • • Cable/copper gap – this relates to the outcomes of this type (as well as wireless) as opposed to cable/fiber.

• • • Utilization gap – this relates to how we are currently using the network to how we could be using the network to improve our uses and purposes.

• • Source that showed 3 gaps identified the following:

• • • Rural broadband – both availability and affordability

• • • Urban affordability – available but not affordable

• • • Competition gap – most places in US have only 1 ISP that can deliver 100/20 + Mbps.

• The 3rd quarter OpenValut measures the growth of broadband usage in the US.  Recently they released a comparison of monthly gigabytes usage for 3rd quarter 2023 with previous years as follows:

• • 3rd quarter 2019 275.1 monthly gigabytes

• • 3rd quarter 2020 383.8 monthly gigabytes

• • 3rd quarter 2021 433.5 monthly gigabytes

• • 3rd quarter 2022 495.5 monthly gigabytes

• • 3rd quarter 2023 550.2 monthly gigabytes

To put these numbers in perspective, in the 3rd quarter of 2023, the average US household used 54.7 gigabytes of data than one year earlier which is a lot of usage in a month.  With roughly 120 million residential broadband subscribers this equates to over 6.5 billion more gigabytes of data used each month than just a year ago.  That is 11% more usage hitting the internet backbone, just from residential usage.

• ACP will not be available forever.  States need to begin discussions of a backup plan to make broadband affordable once ACP is no longer funded federally.

• CAF Funding

• • $10B spent through 2021.

• • 93% households received only 10/1 Mbps (does not even count as broadband under today’s definition so areas receiving this funding will be eligible for BEAD funding.  Wasted federal dollars or duplicate funding, whatever it is called.  

• • CAF II reverse auction had the requirement of 25/3 Mbps.
• A group of RDOF awardees have filed an emergency petition with FCC for extra funding or other relief options.  To date, FCC has not been receptive to the requests.