Fiber Day on the Hill

On April 11, 2024, FBA will host our second annual “Fiber Day on the Hill” in Washington, DC. Last year, this event brought over 200 bipartisan attendees from Congress and the Administration and was an incredible, interactive educational opportunity to learn about fiber broadband. This year’s Fiber Day on the Hill will bring exciting new demos, while maintaining a focus on the fundamentals of fiber and the opportunity to learn to splice fiber as part of the event. Fiber Day on the Hill provides an opportunity for participants to see demo stations presented by FBA members that explain what fiber is and how it improves U.S. households, communities, and the economy. We hope you will participate in this event. Please reach out to FBA to learn more about this opportunity.

Quarterly Overview

Broadband Equity, Access, and Development (BEAD) Grants 

On December 15, 2023, Louisiana became the first state to receive approval for its Broadband Equity, Access, and Deployment (BEAD) program proposal and this quarter brought additional approvals of proposals. With much anticipation, FBA is working to help our members navigate grant criteria and continues to advocate for ongoing BEAD priorities.

The National Telecommunications and Information Administration’s (NTIA) BEAD timeline predicts that most funding distribution will start by late 2024 into early 2025. As a reminder, NTIA has a great BEAD proposal tracker on the Internet for All website: www.internetforall.gov.

Letter of Credit Requirement

An important issue that FBA advocated for on behalf of our membership was the irrevocable standby Letter of Credit (LOC) requirement for subgrantees receiving support under BEAD.

FBA supports assuring that all parties have the financial capabilities to complete projects, yet the initial proposal reached beyond what we believed necessary to achieve that goal. NTIA responded to stakeholder input by issuing a programmatic waiver on November 1, 2023, that will ensure more midsize and small providers, which have long supported underserved communities, have a fair opportunity to participate in the historic BEAD program and connect Americans to high-speed fiber broadband. The waiver modifies the LOC requirement for subgrantees of all Eligible Entities in the following ways: Allow Credit Unions to Issue LOCs; Allow Use of Performance Bonds; Allow Eligible Entities to Reduce the Obligation Upon Completion of Milestones; and Allow for an Alternative Initial LOC or Performance Bond Percentage.

Uniform Guidance

NTIA released a policy notice on December 26, 2023, providing “tailoring” on the application of the Uniform Guidance in the BEAD program. The Uniform Guidance is the federal government’s framework for grants management, providing rules and requirements for federal grant programs. NTIA guidance addresses program income; fixed amount subgrants, enables service providers to make network upgrades without prior approval; and establishes a ten-year Federal Interest period for broadband infrastructure projects after the network is constructed.

Availability of Advanced Telecommunications Capability to all Americans

FBA submitted comments on December 1, 2023, to the Federal Communications Commission’s (FCC) Section 706 Notice of Inquiry (“NOI”) “concerning the ‘availability of advanced telecommunications capability to all Americans.’” The FCC is required to conduct this inquiry on an annual basis to evaluate the state of broadband across the country and consider many characteristics of broadband deployment, including affordability, adoption, availability, and equitable access when determining whether broadband is being deployed in a reasonable and timely fashion. FBA encourages the FCC to create a long-term gigabit symmetric, low latency benchmark in tandem with other federal agencies.

Open Internet Regulation

The FCC has proposed classifying broadband internet access services as a telecommunications service and imposing common carrier and “open internet” regulations on broadband service providers. FBA believes this is both unwarranted and will undermine broadband investment, particularly in fiber infrastructure and service innovation. In December, FBA filed comments in opposition to this proposal. Congress, not the FCC, should address this issue.

Affordable Connectivity Program (ACP)

In early January, Chairwoman Rosenworcel and the FCC communicated wind-down guidance for the ACP to industry and households subscribed to the program. With over 20 million households subscribed to this program, FBA encourages Congress to appropriate funding to continue this program, which has been integral in keeping Americans connected to the internet and allows them to participate in all aspects of the economy and society. We appreciate the bipartisan, bicameral leadership on this issue and support the legislation introduced in early January that would allocate $7 billion in additional funding for the ACP. The legislation was introduced by Senators Peter Welch (D-VT) and J.D. Vance (R-OH) and Representatives Yvette Clarke (D-NY) and Brian Fitzpatrick (R-PA) and we appreciate their leadership. This is an issue that impacts every congressional district and while Congress looks for long-term reforms, the ACP should continue to be funded. 

Fiber Broadband Association Public Policy Leadership

FBA’s Public Policy Committee is led by co-chairs Chris Champion, Vice President, Government Affairs, C Spire; and Jordan Gross, Manager of Federal Government Affairs, Corning. Ariane Schaffer, Government & Public Policy, Google Fiber, is the FBA Board Liaison. If your company is interested in joining the public policy committee, please email mmitrovich@fiberbroadband.org to join.

Notter spoke with the Fiber Broadband Association at a recent Fiber For Breakfast to discuss the market opportunity for rural broadband operators.

“The view is that everyone has broadband and it’s good, but the reality is that’s not true,” Notter said. “Everyone knows someone who lives in a more rural community that doesn’t have access to broadband.”

According to a study published in January 2021, there is a recognizable population shift out of urban cities and into rural communities. The study utilized mail forwarding requests to determine the population shift. Notter explained that there are 2.5 million mail forward request submissions requested every month. Looking at urban zip codes, the move-out requests noted in the study were up by 17% year over year and the move-in requests to urban zones was up only 7%–that’s a large exodus. When looking at where those mail forwarding requests were being changed to, those populations are not going into the suburbs, Notter explained. Instead, they’re going into exurbs (areas outside of the denser suburban areas) and rural areas.

“You see this COVID-induced shift towards home ownership and out of urban centers into areas that are lower cost,” Notter said.

In December 2020, the FCC published its census broadband connection data identifying 105 million homes in the US that are served with broadband internet.

“However, the FCC’s definition of broadband is very generous,” Notter cautioned.

He said he believes there are at least 23 million American homes that are flat unserved–not receiving any connection. “My estimates indicate that number goes up to at least 30 to 35 million homes with adding in those that are underserved.”

From an investor’s perspective, Notter said there is always concern with a lax in demand. One day, or for a long stretch of days, a product or service is hot on the investor market only for demand to fall and for that market to falter.

“That’s a view I don’t subscribe to for broadband,” Notter explained. “Demand for broadband will be lasting. COVID really shined a light on how necessary broadband is for rural development and the demand for broadband will likely continue to accelerate.”

On the other side of a high demand is concerns about supply.

“In an ordinary environment I’d say I’m not too concerned about [supply constraints], but this is not an ordinary environment at all and there are supply issues everywhere,” Notter admitted. “I’ve got this sort of hope that a lot of the vendors have gone a bit overboard in terms of being cautious on their supplies and when time plays out, hopefully the shortages won’t be as bad as they were perceived.”

Notter explained that looking back two or three years ago, he felt there was something of a capital spending truce going on between the industry’s larger public companies.

“However, now the competitive environment is really heating up and folks are realizing that this is an attractive market and there is a real ROI–even in investing in the rural markets,” he said.

The ongoing and future planned funding for rural broadband development helps aid in that competitive market. For example, the RDOF auction last year and the planned phase 2 auction that will invest another $11 billion in funding over another 10-year period in the coming years. Notter also mentioned the American Rescue Plan of 2021 that was recently passed and signed into law that identified $350 billion that could funnel into various rural broadband costs.

“There’s lots more opportunity for funding that we’re excited about. We know the democrats have these intentions that are very significant in terms of big dollar values for broadband.” Notter explained, noting the recently introduced Accessible, Affordable Internet For All Act.

“There’s significant new funding coming into the space that can really drive broadband forward,” Notter concluded. “I’m a big fan of this rural broadband theme and I like what’s going on. There’s a big need in the space. There’s a lot of government dollars coming in and it’s a big picture that we like.”

KP_IMAGE_PLACEHOLDER

Thompson said he thinks of the broadband spectrum like a water hose. In order to deliver the mass of water, or high-speed broadband, that meets current consumer demands, you need to have a very large hose. Thompson explained that low-band wireless services simply do not have enough spectrum to get gigabit speeds. In the mid-band, most are unlicensed and it’s incredibly difficult to deliver reliable broadband when not licensed. That leaves high-band and mmW as the only wireless options left.

Eighty-five percent of RDOF funding was won by bidders in the Gigabit Tier.  While it is assumed that these networks would be built with high-capacity fiber, WISPs proposing fiber and fixed wireless prompted Thompson and his team to develop a white paper looking into the plausibility of FWA delivering adequate broadband speeds across rural America.

“The intent of the white paper was not to bash one technology against another,” Thompson stressed, noting VPS’s involvement in wireless deployments. “The intent of the white paper was to determine if wireless can effectively meet that gigabit tier.”

Because as Thompson put it, the average speed is only going to go up from here.

“Within the next five years or so, the average download speed is going to be 1G. And by 2030, even the upstream is going to be approaching 1G,” he said.

According to data compiled by the FCC, both upload and download speeds are increasing by at least 35% annually.

“I used to show a graphic in my presentations during the early 2000’s that showed we would need 1MB speeds by 2008. At the time, I would have people coming up to me saying, ‘Why in the world would anyone ever need a MB?’ But that was before we had a lot of the tools we use today that require higher broadband speeds,” Larry Thompson, Founder and CEO of Vantage Point Solutions (VPS), said during a recent Fiber for Breakfast webinar.

Streaming platforms, video conferencing applications, countless IoT devices and more continue to drive the need for high-speed broadband. While many Americans’ networks have adapted to this increased demand, we are no strangers to the fact that rural America was left in the past.

Within the white paper, VPS outlines the various needs to expand broadband access across rural America. First and foremost, it’s the realization that successful rural applications will need wide coverage. To explain this concept, Thompson pulled a map from rural Colorado identifying locations where broadband service is needed and laid out distances between each point. Looking at the map, it is apparent that FWA would not provide coverage at the last mile due to the simple fact that these residences are too far apart for the towers to reach them.

“Most rural customers are not close enough distance-wise that it would be plausible to install towers to deliver millimeter wave (mmW),” Thompson stated.

With mmW, higher frequencies are not able to penetrate over longer distances, which stands against the mission of delivering reliable high-speed broadband to our rural communities, Thompson explained.

“There could be possible pockets of a dozen customers in a little housing development where mmW gigabit internet would be a viable solution,” he stated. “I am not saying there’s no possibility that any place could do it. But I am saying there’s probably 95% where this (mmW) would not work.”

His findings are based on last mile solutions. He does note that there are middle-mile instances like crossing a water body where mmW might work well, just not when delivering on the last mile.

“My focus is whether wireless is a practical solution in these RDOF areas,” he said. “If (the FCC) had an auction for UDOF–for urban, not rural–my findings would have likely been very different.”

In the paper, Thompson explains that it’s not about what can you get 1G through, it’s whether that 1G is actually reliable.

That’s why Thompson and VPS put together the following suggestions for the FCC when considering mmW RDOF designs:

• Design shouldn’t exceed distance capabilities
• Wireless links should have Line of Sight
• Serving tower/sector must have adequate capacity
  • Reasonable oversubscription
  • Customer loading (70%)
• Each antenna site should have adequate backhaul capacity
• For mesh networks, consider RF backhaul congestion and subscription rates

To read the full white paper, you can access it on the FCC website or via this link: https://www.vantagepnt.com/2021/02/12/vps-whitepaper-evaluating-the-capabilities-of-fixed-wireless-technology-to-deliver-gigabit-performance-in-rural-markets/

KP_IMAGE_PLACEHOLDER

As part of this effort, more than $158 million will be invested in Kentucky, which includes an expected private investment of at least $100 million by Charter and more than $58 million in support won by Charter in the FCC’s Rural Digital Opportunity (RDOF) auction which includes Bourbon, Clark, Fayette, Lewis, Lincoln, Madison, Mercer, Montgomery, Nicholas, Owen, Powell, Robertson and Washington counties.

The FCC estimates that through this project alone, Charter will connect nearly 40% of the total RDOF locations won in Kentucky with quality, high-speed broadband. The project will be one of the largest rural broadband expansion projects in the Commonwealth’s history.

Charter was awarded RDOF funding in nearly one-third of the counties in the Commonwealth, which includes nine counties previously unserved by Charter. In addition, 23 of the 37 counties where Charter received support are designated rural by the federal government, meaning the entire area of the county is considered rural.

KP_IMAGE_PLACEHOLDER

Ubiquitous Fiber Deployment

A successful and competitive national strategy to secure 5G relies on ubiquitous fiber deployment. No community can be left behind. 5G relies on ubiquitous fiber deployment. Take for example 5G’s three use cases:

• Immersive broadband,
• Mission critical applications such as autonomous vehicles, and
• Massive IoT

All will require gigabit bandwidth and ultra-low latency from very small cell sites that serve 200 to 1,000 feet as 5G requires more spectrum, more bits/Hz and roughly 10 times increase in cell site density. As a result, 5G cell sites will need a massive fiber infrastructure for the front-haul and backhaul of 5G traffic with ultra-low latency.

Fiber is also the only transmission medium that can carry multi-gigabit traffic today and evolve over time to meet the exponential growth in mobile data traffic.

Communities that lack fiber will perpetuate the digital divide. This holds true for both urban and suburban communities across America. Areas without fiber will not see 5G, and the digital divide will be exacerbated rather than alleviated over time.

Actionable Items for NTIA, the FCC, Congress and the Biden Administration

Government broadband subsidies should prioritize fiber and gigabit symmetrical service delivery to provide the needed critical infrastructure for 5G with ubiquitous fiber deployment. This is because we know ubiquitous fiber deployment maximizes 5G performance, provides a secure 5G critical infrastructure, reduces spectrum demand and elevates the rural digital divide.

The government has already put forth incentives for investment and future proofing rural broadband through legislation supporting Gigabit broadband in the 116th Congress, including:

• H.R. 7302/S. 4131 (Clyburn-Klobuchar) allocated $80 billion for rural broadband with preference for symmetrical gigabit networks.
• S. 4113 (Bennet) allocated $30 billion for rural broadband with preference for symmetrical gigabit networks.
• H.R. 7922/S. 4201 (Clyburn-Upton, Portman-Brown) instructed the FCC to accelerate funding for symmetrical gigabit providers.
• S. 2866 (Capito, Hassan) allocated $2.5 billion of private activity bonds for deployment of gigabit capable internet access to residential or commercial business.
• S. 2867 (Hassan, Capito) provided a 10% tax credit for the deployment of gigabit capable internet access to residential or commercial locations.

5G and Fiber are Critical to our Nation’s Global Competitiveness

Once built, fiber infrastructure will support U.S. global competitiveness. Virtually all developed countries are charging ahead to deploy this critical infrastructure, and foreign competitors are treating fiber as a strategic asset by upgrading technology and flooding the market. Currently, China is leading the charge.

The U.S. is making great strides in deploying fiber, even though we have a greater number of sparsely populated areas than other countries. However, there is much more that industry can accomplish, and the government can facilitate to speed deployments.  

Actionable Items for NTIA, the FCC, DoD, Congress and the Biden Administration

There needs to be increased invest in research and development for next generation technology. President Joe Biden has proposed “Innovate in America” which calls for $300 billion in research and development investment over four years in future technologies and industries to support America’s technological lead. As part of that push, there should also be a focus on enhancing industry workforce training and education.

Supply Security is Fundamental to National Security

We must protect our industrial base and ensure safe and secure US networks. Having a strong domestic industry requires policies that not only invest in technology, but also address targeted national policies of competitor countries that undermine market dynamics through unfair subsidies and trade practices.

As we have seen in other industries, China’s excess capacity is undermining health of the optical fiber industry globally. Currently, they have excess capacity of over 300 million fiber kilometers. That’s nearly enough to supply to current global markets combined. This excess capacity is being dumped in numerous countries and regions—including India and Europe—driving down global pricing and undermining profitability, which in turn can ultimately impact investment in research and development.

Actionable Items for Commerce (NTIA and BIS), DOD, and USTR

First, we must ensure a level playing field across the globe. Work with our allies to address unfair subsidies—the root cause of excess capacity.

Second, there should be clear criterion established for trusted suppliers. The Center for Strategic and International Studies published a list of criteria to assess the trustworthiness of telecommunications suppliers. The criteria complement the work of the Prague Proposal.

Fiber Broadband Association represents more than 250 members, including telecommunications, computing, networking, system integration, engineering, and content-provider companies, as well as traditional service providers, utilities, and municipalities.

KP_IMAGE_PLACEHOLDER

KP_IMAGE_PLACEHOLDER

Read more on Calix. 

KP_IMAGE_PLACEHOLDER