Skip to main content

America's Broadband Treasure: Can It Be Properly Funded?

broadband, lights
(Image credit: Tim Robberts/Getty Images)

Right now, in the case of a particular executive department of the U.S. Federal government, that agency has made a first-ever fact-missing determination that damns one of the industries tasked for decades with delivering reliable broadband to nearly 10 million – mostly rural – Americans, in every state and jurisdiction. More importantly, by what will soon be multiple tens of millions, that agency-level decision damns that industry's constituents, and their constituents' clients, in the form of everyday broadband consumers. Now, that story – and its impact – needs telling. Clearly, it needs fresh support. And it needs significant change. By way of presentation below of the problem, its impact, facts, a couple of comparisons, and a resolution, a clearly better way is urged.

The NTIA Conundrum

The National Telecommunications and Information Administration (NTIA) is a part of the U.S. Department of Commerce. The NTIA is tasked with improving the understanding and distribution of broadband, information, and telecommunications services to Americans. 

The NTIA is different from the FCC, in that the latter is conceived of as an "independent" administrative body. The FCC is controlled and administered by its five commissioners, two of which are typically chosen by the party out of power. In today's context, that means two FCC commissioners and the chair are Democratic appointees, the other two commissioners are appointed by the Republicans. Today and since the start of the Biden Administration, the fifth commissioner is an open and unfilled seat. Conversely, the NTIA is directly controlled by The White House and its appointed secretary is part of the President's cabinet. Thus, the NTIA is, therefore, far less "independent" from politics and lobbying, than is the FCC.   

Somewhat unsurprisingly then, the more easily influenced NTIA was tasked, unilaterally, with the responsibility of assisting the proper distribution of billions of broadband dollars, as authorized by Congress' 2021 Infrastructure Investment and Jobs Act (IIJA) (See, Broadband Equity Access and Deployment Program).

After some gathering of information and viewpoints as to how to best distribute the all-important broadband funds, the NTIA appears to have unilaterally acceded to the demands of a couple of core lobbyists: one being a part of the broadband distribution industry; plus another set of the industry's vendors. Those, respectively, were the wired providers, and specifically, the fiber providers, and their constituent fiber users.

The Real Problem

Strangely, the U.S. fixed wireless broadband companies who rely entirely on unlicensed spectrum to serve residences and businesses were, essentially, intentionally excluded. This is because the NTIA stated incorrectly that broadband networks relying entirely on unlicensed spectrum were not "reliable," and thus should not be funded. Moreover, by not funding fixed wireless access provided via entirely unlicensed spectrum, the NTIA instead also determined that other funded broadband distribution forms – like cable, fiber, and telco – shall receive NTIA funds and thus an unfair competitive advantage. 

Specifically, the language of the NTIA's principal guidelines on the distribution of the IIJA Broadband Equity Access and Development (BEAD) funds, stated that if a provider used only unlicensed spectrum to deliver broadband to end users, then that delivery was, in turn, not reliable. At the same time, the NTIA guidelines mandated that those same Federal infrastructure funds could be used to overbuild – or build in the same geographical footprint as – the existing providers. That's correct: a local competitor could use Federal funds to wipe out another existing competitor's local business. 

This, in turn, either weakens or eliminates the growth of fixed wireless providers, and it strangely restricts the tools they can use. All of the broadband grants are scheduled to focus on either wired services only, or those grants will focus on a fraction of the real-world wireless industry, yet in the form of broadband distributed via only licensed (or exclusive) spectrum. Just one or the other. 

The true problem with the latter is that most of licensed spectrum is derived from FCC auctions, which are expensive. If something is unduly costly, it is mostly inaccessible to small and medium sized broadband operators. 

The additional expenses from the NTIA's new requirements are then typically passed on to the consumer; or likely worse, they cause the consumer to have delays in getting service, or perhaps not getting service at all. That is one of this issue's key bottom lines.

More specifically noteworthy here, are two points: 1) unlicensed spectrum's use in delivering broadband – especially to un- and underserved areas – has been and is proven to be quite reliable, by those that know, i.e., the FCC*; and 2) deploying licensed spectrum is often either very prohibitively impractical and expensive, or totally unavailable. Or worse, licensed spectrum is simply not the right choice for many geographic areas (See, Unlicensed Wireless System Offers High Reliability).

Thus, to make clear, overlooking lobbying to the contrary by the main U.S. fixed wireless association, which is the Wireless Internet Service Providers Association (WISPA), the NTIA decided in its decision dated May 13, 2022, to exempt primarily unlicensed spectrum providers from the receipt of IIJA Funds. And that means several tools in the solution kit that solves the Digital Divide are instantly removed. To emphasize, the action unfairly favors specific market providers without proper due process and rationale. The losers – thousands of  U.S. WISPs and hybrid fiber wireless operators, who use mostly unlicensed spectrum – are simply locked out. They are locked out without ample evidence, proof, and decision-making. That is wrong.

*Fixed Wireless Access (FWA), whether using licensed or unlicensed spectrum or in combination, is "reliable" broadband. The FCC, other federal agencies, and states and their subdivisions have long recognized it as a reliable and effective technology for their various broadband support programs. Numerous federal, state, and municipal projects, among others, depend in some measure on unlicensed FWA to realize their specific broadband-related goals.

The marketplace, too, recognizes the reliability of unlicensed FWA. Millions of Americans get their service from 2,800 WISPs, the majority of which use unlicensed FWA to deliver internet access to their customers. Banks, private equity, and other lending establishments have loaned FWA providers billions of dollars to grow their businesses. A $10 billion+ FWA hardware, software and services industry has emerged as a result. That is because WISP customers like and depend on unlicensed FWA to stay connected (See, "Lift-off" report, accessible for free by going to the home page of The Carmel Group, at
www.carmelgroup.com). 

The Impact of The NTIA Decision

The NTIA's recent decision might remind many, clearly, of the cable industry's initial response during the early 1990s, to the deployment of Direct Broadcast Satellite (DBS) pay TV, by operators such as U.S. Satellite Broadcasting (USSB), DirecTV, Dish, AlphaStar and PrimeStar. DBS opponents derisively – and incorrectly -- labeled "DBS" as an acronym for "Don't Be Stupid." Another of those specific inaccuracies was that DBS rivals claimed that rain interference was so severe that it made the DBS service either significantly unusable or inferior. That was soon shown to be false, and wrong to the point that these days no one hears much about "rain fade," at all.

Today, by comparison, the antiquated and truly inferior Digital Subscriber Line (DSL) technology of the telephone industry has been deemed "reliable and future proof," by the NTIA**. This is an embarrassment. It ignores facts and assumes others that are not true. The allowance of DSL in place of proven wireless technologies is absurd.

Further, The Federal Register, vol. 85, No. 118, page 36785, shows the unlicensed bands that were determined authorized to be used to bid in the RDOF program.  Reliability is determined here by implication – the FCC would not allow such bands to be used if they were not reliable (See, 2020-13216.pdf (govinfo.gov).

The point: new technologies regularly face incorrect claims, assumptions, and determinations. It is up to those on the right side of truth to say "that‘s not true." Otherwise, consumers and policymakers make improper decisions based upon improper information. 

The majority of fixed wireless operators in the U.S. distribute broadband mostly using only unlicensed spectrum. And that works. And it especially works for the intended audience, which today includes a couple of scores of millions of rural Americans who otherwise do not receive even the FCC minimum of 25 Megabits per second (Mbps) download and 3/Mbps upload delivery capability.

**In its January 2022 Request for Comments, NTIA made no indication that it might exclude broadband networks using entirely unlicensed spectrum to serve last mile locations.

Fact: Unlicensed Spectrum Is "Reliable," Affordable, and Works

WISPA's National Spectrum Adviser, Richard Bernhardt, Esq., recently penned a very credible description of the facts supporting unlicensed fixed wireless. I strongly recommend reading it. (See, WISPs – Technically, Operationally Competent Purveyors of Reliable Broadband (opens in new tab);
Unlicensed Spectrum Does Provide Reliable Internet Access). 

His core messages were that fixed wireless spectrum use:  

-Already works, and has been providing reliable broadband service to millions of customers for decades;

-Generates vital jobs and drives sorely needed economic growth, mostly in rural and suburban America; 

-Via thousands of providers, it delivers a responsive and consistent local presence, with enviable customer service and affordability; and 

-Those operators' services meet the needs of their clients with speed, regularity, and minimal latency; plus

-They operate with very little customer loss (or churn).

Rather than merely accepting his message at large, I of course looked at other objective recent points of view as to the "reliability" of unlicensed fixed wireless. Mr. Bernhardt's depiction of the actual technical capability and reliability behind decades of unlicensed broadband distribution is backed up by these additional experts and reports:

Another recent example: just look at the Navajo Nation, centered in Arizona at the confluence for the "4 Corners" that include Arizona, New Mexico, Colorado, and Utah, where we can make this comparison (See, NTIA unleashes $1B in IIJA funding for Tribal broadband): Ten fiber installs at $40K and a wait of 3 years, or 90 fixed wireless installs at roughly the same capital outlay, and a wait of just a few months, at most. This would be the likely choice (See, page 19, graphic 8, Liftoff: Comparative Economics of U.S. Internet Access Solutions).

All of these make one wonder what the NTIA was thinking when its executive leaders decided that unlicensed spectrum is "unreliable" now and in the future. The simple truth is, unlicensed spectrum in the U.S. today is not only NOT unreliable. Conversely, in every state, it typically serves scores of markets, plus an estimated 8.5 million U.S. broadband subscribers (See, reference and link to "Liftoff" report, above). That's a lot of broadband.

Reliable Metaphors

The NTIA funding builds tomorrow's broadband highways. Yet, metaphorically, before they even start, the NTIA is explaining to the states and smaller jurisdictions that every highway can only be an ultra-expensive one, made only of concrete. Indeed, that highway has to cost 8 to 9 times as much as reliable alternatives. And it has to be three lanes in each direction. And the cars that drive on it have to all travel at speeds of greater than 200 mph. With those parameters as its base, realistically, most places will never get roads, or, at minimum, most construction will be intolerably delayed. As such, the very purpose of the infrastructure program is thwarted. 

The NTIA seems to have completely forgotten or intentionally overlooked the fact that not every road needs to be built in the form of a four-lane 200-mph freeway, in order to transport commerce, people, products and services. Concurrently, the NTIA has excluded slower, yet entirely capable vehicles, and far less expensive and easy-to-deploy alternatives. The result is thus skewed for only certain "favored" projects. And do those funded alternatives work for just about everyone in a rural audience, with unserved areas, or places where there is little or no competition? 

They don't.

Resolution

Simply, the NTIA needs to go back and obtain more information. It needs to reopen its Notice of Funding Opportunity (NOFO) process.  

Noteworthy in this regard is that no apparent public input was provided as a basis for the NTIA's damning declarations. The NTIA needs to unplug for 30 metaphorical seconds, and plug the process back in. After all, the word "information" is a core part of its very title. And "information" connotes truthful description, which the current NTIA definition of "reliable" clearly is not.

Specifically, the NTIA must in its NOFO reexamine and be more realistic about how it reviews and defines projects and applicants. Additionally, NTIA should provide principles and guidance for the individual states. These would be ones that give the greatest necessary latitude needed to get the job done effectively. Then, press the reset button. 

For emphasis, NTIA has violated its tacit duty of properly distributing truthful data and determinations, by missing this foundational fact and message: unlicensed spectrum is reliable, as is fiber and other delivery modes. Give applicants and projects the funding they need, and let each industry vertical deliver the products and services that fit the objective. 

When the government itself unilaterally determines what technologies are reliable, or futureproof, or effective, it makes the wrong determinations, and it discourages new ideas. It also knee-caps small and medium sized businesses, thousands of which have struggled for decades to provide and invest billions into services in locales where nobody would go. Furthermore, without allowing the commercial marketplace to do so, NTIA effectively tries to choose its own "winners," based upon politics, not facts. This is not the role of the Federal government…no matter which administration.  

The NTIA must not seek only its own self-ordained "perfect" solution. Rather, it should stimulate industry to provide excellent service everywhere. Compromise, and equity – the hallmark of healthy politics – works here, too.

Summary

The current administration learned earlier this month the importance of compromise and of accepting lesser victories as actual real victories. This was seen in the bi-partisan, successful legislation to assist taxing, health, infrastructure, and climate change initiatives. In the case of the NTIA, the agency needs to remember and repeat that effective lesson. Work with the FCC, and come up with a compromise solution, where lots more Americans can be served, well. 

Ultimately, there are many instances when the most expensive and most difficult-to-access solutions are simply the wrong ones. In a dream world, they work. Yet, in the real world, they do not. That is true in every community. Just ask any mayor or city council representative how they come to decision-after-decision in their respective locales. In the case of much of rural America, that is certainly the case. 

For this NTIA funding decision, one broadband pipe, fiber, is one of those expensive and frequently impractical solutions. Its real-world use is limited. As noted above, in addition to its costs, fiber is subject to outage from underground digging, and damages from storms when fiber is hung above-ground on communications lines. Fiber's bottom line: in many cases, it is just not practical for deployment when other options – like fixed wireless using unlicensed spectrum -- are available. This is especially true in low density, high-cost areas. By requiring something very costly, it means broadband solutions will be slower to deploy, or often will never be deployed at all. If that's the only choice, then that community is either lesser served, or not served at all. Conversely, the mission of unlicensed internet service providers (ISPs) is to serve the underserved, serve the unserved, and provide a good solution for all clients. ISPs have a motto: don't make clients wait. 

And to drive -- pun intended -- the above metaphor just a tiny bit further: what the NTIA did is like GM lobbying the DOT to only subsidize the building and distribution of 200-mph electric powered Chevy Corvettes, and convincing the agency to accept the rationale that figures, "We can only move forward with something that is really fast, really expensive, favoring particular parts of the vehicle industry. We can thus all only drive really costly and fast Corvettes, only on high-speed freeways. Plus, in the interim, we can't wait by using other types of roads and by using slower, and non-electric cars!" Such a determination and decision today -- by any governing body -- would be almost laughable. 

Unlicensed spectrum used by thousands of fixed wireless operators is simply a means to a broadband end. Unlicensed spectrum works the same way as licensed, but each have their own constraints (See, "Liftoff" Report, page 8, Figure 2). Applying the metaphor above, fixed wireless operators are the actual vehicles. Spectrum is the type of road they travel using. And unlicensed spectrum is but one of several very effective and affordable types of road. Those small-to-mid-sized U.S. operators are the bulk of the U.S.'s unlicensed providers, and their extremely value laden and efficient spectrum is what they use to deliver something that works well today. Unlicensed spectrum is readily available, its interference can be mitigated, and its quality signal can be readily managed. The technology is constantly improving. In short, for emphasis: today's equipment using unlicensed spectrum is very reliable

An old adage has it, "perfection is the enemy of good." Right now, America needs, and needs badly, significant, and timely "good" broadband distribution, so that everyone has access. It does not need a "perfect" distribution method, perhaps lasting into the decades or scores of decades, yet limited by reality. And America does not need a "perfect," where far, far fewer subscribers will ever be served (at many times the cost).

In conclusion, the current statements, and principles in the NTIA's IIJA BEAD NOFO are not proper. And they make no sense. The current Administration and NTIA can do better. The NTIA decision harms the very objectives of the Congressional legislation to fairly and reasonably develop broadband for, and deliver broadband to, everyone! 

It's time for a reset. A real reset.

Post-Script

For nearly a quarter of a century, advocating on behalf of the nation's telecom trade groups has been a core concern for The Carmel Group, especially if that support involves a truthful, positive, and compelling story (always best, in that order). For five decades, we have done that for consumers of first, broadcast, then cable, telco, fiber, cellular, and satellite.

(See, New Carmel Group Study Shows Competition Exclusive to Satellite Radio Market; Carmel Group: XM/Sirius Merger Would Result in Less Choice, Less Diversity, Higher Prices; ACA: The American Cable Association’s Amazing Bandwidth; and see, scores of copies of The Carmel Group's DBS Investor and Phillip's Publishing's Satellite News, upon request).

Jimmy Schaeffler is chairman and CSO of The Carmel Group, a west-coast-based consultancy founded in 1995. He can be reached at jimmy@carmelgroup.com. He has not been compensated in any fashion for these views. They are independent and his alone. Further information about The Carmel Group can be accessed at www.carmelgroup.com.

Jimmy Schaeffler (AKA “Shamus Schaeffler”) is chairman and CSO of The Carmel Group, a west coast-based consultancy founded in 1995. He can be reached at jimmy@carmelgroup.com.