Latest Federal Effort to Bring Broadband to Rural Areas Already Has Red Flags

Thursday, March 4th, 2021 -- 10:00 AM

(Julie Lund of Wisconsin Energy Cooperative News) -Why is the latest federal effort to bring broadband to rural America already rife with red flags?

According to Julie Lund of Wisconsin Energy Cooperative News, as 2020 wrapped, many people were filled with optimism for the future, looking forward to what 2021 may bring.

That includes many in rural Wisconsin hoping this would be the year they finally get broadband access.  It was looking really good in the Pierce Pepin Cooperative Services area.

Over the past 12 months, co-op leadership surveyed, researched, investigated, campaigned, and explored the feasibility of getting into the broadband expansion game, and ultimately decided to make a pitch for federal funds so they could offer high-speed internet to 5,500 members who currently don’t have the option.

The Federal Communication Commission’s (FCC) $16 billion Rural Digital Opportunity Fund (RDOF) reverse auction, which wrapped in late November, offered the greatest glimmer of hope for many in rural Wisconsin, as local entities, including electric and telephone cooperatives, competed for federal funds to expand broadband to their members.

As the pandemic accelerated the paradigm shift to life online, there was a light at the end of the tunnel. Finally.  The RDOF is the latest in a string of pricey federal programs set up to expand rural broadband. Broken promises and lack of accountability plagued past programs.

According to the FCC, the federal government has committed $22 billion over the past five years alone for rural broadband expansion, and yet 175,000 people living in rural Wisconsin, from areas near Evansville to Rib Lake to Belleville, still have no access at all, and nearly 600,000 don’t have access to the defined speed of 25 Mbps or faster, according to Broadband Now.

The subsidy road to broadband expansion started years ago with investments from the Universal Service Fund (paid for by you, with a 21 percent fee on every landline and cell phone bill), which became the Connect America Fund (CAF) in 2009.

The CAF program largely failed when the FCC limited the grantees to the biggest players, awarding companies including Verizon, CenturyLink, and Frontier large territories to expand broadband for big bucks, but some of them never did, essentially “freezing out” expansion opportunities for local players for years.

In 2010, the American Recovery and Reinvestment Act included $7.2 billion for “complete broadband and wireless internet access,” with the goal of “leading the world in mobile innovation with the fastest and most extensive wireless network of any nation.”

That turned out to be a lofty goal. You can’t be a world leader in the industry when people in Ellsworth and Arcadia still have to drive to Starbucks for WIFI.

The 2020 RDOF auction promised to avoid the pitfalls of CAF and other programs by allowing entities invested in their communities, such as electric and telephone co-ops, to participate.

In the reverse auction, the bidder who offers the highest speed and lowest latency at the lowest bid wins the grant dollars to extend service to each specific census block.

Co-ops are an obvious choice, as they already have existing business service and infrastructure and knowledge of the geographic challenges in their areas.

In addition, co-ops have stability in funding, access to low-interest loans, and a proven success record.  PPCS estimated it would cost about $32 million to expand broadband to all 5,500 unserved members using 100 percent fiber access, which is capable of handling increased speeds as technology rapidly advances.

In the RDOF auction, the FCC set the reserve for the 26 census blocks at $28 million over 10 years. PPCS bid just under 50 percent, at around $14 million, with the commitment to offer gigabit-level (best) speeds, at rates competitive with more populated areas. They lost.

The FCC awarded the territories the co-ops were seeking to LTD Broadband, a relatively new, out-of-state provider, which was the top winner overall in Wisconsin and the nation, taking more than $1.3 billion in grants to serve 530,000 locations in 15 states.

LTD’s plan includes “fixed-wireless,” an option that does not offer the speeds and longevity of fiber, and industry experts say would be problematic in the Wisconsin landscape.  PPCS, meanwhile, is not throwing in the towel.

The co-op is seeking other options to move forward with broadband expansion plans, because even if LTD Broadband follows through with its proposed plan, it could still be years before members are connected.

The RDOF auction winners are only required to provide service to 40 percent of their locations within three years, and 20 percent each year after. PPCS’ goal was to have all 5,500 unserved members up and running within two years.

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