Like numerous U.S. counties, large segments of Kandiyohi County, Minnesota (pop. 44,000) lack access to affordable Internet service at modern speeds. So like many underserved communities, the county—situated about ninety miles west of Minneapolis—is looking to take advantage of a once-in-a-lifetime collision of funding opportunities to help finance a massive fiber broadband expansion across numerous county townships. 

A recent survey by the county unsurprisingly reveals that residents are greatly annoyed by the lack of affordable Internet access options, with 64 percent of locals saying they’re dissatisfied with the Internet service provided by regional monopolies.

Ten Projects on Tap

Hoping to address the shortcoming, Kandiyohi County and the City of Willmar Economic Development Commission have been working on ten different projects to shore up Internet access around the county. 

Some of the proposed projects involve partnerships with national monopoly providers like Charter Communications, but others will involve the county and a local cooperative doing the heavy lifting. The county had hoped to fund the projects with a combination of subscriber fees, American Rescue Plan funds, NTIA grants, and upcoming Minnesota state grants.

The first major project closest to being “shovel ready” is a $10 million fiber-to-the-home (FTTH) project in partnership with the Federated Telephone Cooperative of Morris. Federated is expected to finance twenty-five percent of the overall project, with new subscribers expected to pay about $1,250 per household to connect to the gigabit-capable network. 

Written by Christine Parker and Ry Marcattilo-McCracken

A recent report by BroadbandNow made the rounds in February, with the authors concluding that the average price for broadband access across all major speed tiers for Americans has fallen, by an average of 31 percent or nearly $34/month, since 2016. At a glance, this is great news – perhaps affordable Internet access for all is within reach?

Readers following up to check out the report itself would be well justified in coming to the same conclusion, with BroadbandNow writing in the first paragraph that “we’ve found that prices have decreased across all major download speeds (25Mbps up to 1Gbps+) and technologies (cable, fiber, DSL and fixed wireless).” Immediate news coverage reinforced the report’s points.

But you don’t have to follow broadband policy closely to get the sense that something a little off is going on here. It feels like every day there’s a story like this one about Cable One, with a provider increasing speeds as it improves its network infrastructure and then raising rates while removing the slowest tier options. Charter and Comcast, for their part, do this nearly every year whether pairing it with speed increases or not. Is broadband access getting cheaper, or more expensive? What’s going on here?

The reality is that this report from BroadbandNow, unfortunately, poorly frames the national broadband marketplace. At best, it muddies the waters with a lack of clarity about the relationship between broadband access speed tiers and relative pricing. At worst, it leaves the average reader with the incorrect assumption that broadband prices must be falling, and gives the monopoly cable and telephone companies ammunition to push for millions more in taxpayer dollars while building as little new infrastructure as possible.

Even as high-speed Internet access is widely considered a basic utility akin to electricity and clean water, there are still 17 states with preemption laws that either ban publicly-owned broadband networks or have barriers that make it all but impossible for municipalities to compete with monopoly Internet Service Providers. This, despite the major incumbents having received billions in taxpayer subsidies over the years and having failed to deliver universally reliable and affordable connectivity.

However, as it has become increasingly clear that the private market alone is not going to solve America’s connectivity crisis, last year two states (Arkansas and Washington) rolled back their preemption laws that were protecting monopoly incumbent providers from competition, allowing local and regional governmental entities to build the telecommunications infrastructure their residents need.

Now, one Nebraska lawmaker has recently filed a bill that, if passed, would significantly remove his state’s current barriers to municipal broadband. Nebraska State Sen. Justin Wayne of Omaha filed LB916 last week with the state legislature’s Transportation and Telecommunications Committee.

As it stands now, according to the Coalition for Local Internet Choice (CLIC), Nebraska “generally prohibits agencies or political subdivisions of the state, other than public power utilities, from providing wholesale or retail broadband, Internet, telecommunications or cable service. Public power utilities are permanently prohibited from providing such services on a retail basis, and they can sell or lease dark fiber on a wholesale basis only under severely limited conditions. For example, a public power utility cannot sell or lease dark fiber at rates lower than the rates incumbents are charging in the market in question.” 

Bill to Let Local Communities Decide on Broadband

Dickson, Tennessee (pop. 15,500) was the third municipal electric system to take power from the Tennessee Valley Authority after its creation in 1933, but the utility actually predates the regional electric generation system by almost 30 years. Today, it’s entering a new phase of life, parlaying its 117-year history of bringing affordable electric service into an $80 million fiber-to-the-home (FTTH) build that will see every household in its footprint (37,000 meters) get future-proof Internet access within the next four years.

A Cooperative in Municipal Clothing

Established in 1905, the very first Dickson Electric System (DES) customers received their power from a single 150-horsepower external combustion steam engine. DES upgraded its capacity in 1923, switching to two 150-horsepower oil-burning engines. A little more than a decade later, the TVA was established and DES took service, joining the maturing regional electric system and bringing its 650 customers and 50 miles of line into what would eventually be a group of more than 150 local power utilities almost a century later.

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Today, Dickson Electric territory covers almost 800 square miles across Dickson, Hickman, Cheatham, Williamson, Humphreys, Houston, and Montgomery Counties (with the bulk of its customers in the first three), across about 2,600 miles of distribution line to 37,000 locations.

In November, the Institute for Local Self-Reliance published a report examining the transparency practices of Internet Service Providers (ISPs). Shopping for Broadband: Failed Federal Policy Creates Murky Marketplace [pdf] identified locally-controlled broadband networks as the most transparent around key service details.

Large ISPs, however, were found to be more likely to make information like upload speed and pricing difficult or impossible for potential customers to find. 

After the report’s original publication, a WISP advocate suggested that our fixed wireless sample may not appropriately represent the industry and requested that we review and re-issue our analysis with an alternative list of ISPs that have been more aggressive in pursuing federal funding and spectrum opportunities. These WISPs greatly outperformed our original sample, which was selected based on those claiming the largest population coverage.

New Set of WISPs Shows Better Transparency 

While many of the original WISPs failed to disclose basic pricing and service information, only two of the second set offered less than excellent information in all categories. The second set had less poor quality information and slightly more missing information than our set of cooperatively-run networks. Municipal networks remained the most transparent. 

Though many of the fixed wireless providers originally studied do seem to claim the greatest number of potential customers, we agree with some reviewers that they are not actually among the largest fixed wireless ISPs with the most subscribers. The new list of WISPs, which is included alongside the original one on the Broadband Transparency Rule Compliance Scorecard, may be a more accurate representation of providers’ transparency practices in this industry. 

With all due respect to Federal Communications Commissioner Brendan Carr, his reaction to the Rescue Plan Act's State & Local Fiscal Recovery Fund (SLFRF) spending rules is way off base. As I wrote last week, the rules for broadband infrastructure spending are a good model for pushing down decision-making to the local level where people actually have the information to make informed decisions. (Doug Dawson recently also responded to Commissioner Carr’s statement, offering a response with some overlap of the points below.) 

The Final Rule from the Treasury Department gives broad discretion to local and state governments that choose to spend some of the SLFRF (SLurF-uRF) funds on broadband infrastructure. The earlier draft of rules made it more complicated for networks built to address urban affordability challenges.

However, in coming out against the rules, FCC Commissioner Carr is giving voice to the anger of the big cable and telephone monopolies that cities can, after collecting evidence of need, make broadband investments even in areas where those companies may be selling services already. Commissioner Carr may also be frustrated that he has been reduced to chirping from the sidelines on this issue because the previous FCC, under his party’s leadership, so badly bungled broadband subsidies in the Rural Digital Opportunity Fund (RDOF) that Congress decide NTIA should administer these funds and have the state distribute them. 

Nonetheless, the issues that Commissioner Carr raised are common talking points inside the Beltway and we feel that they need to be addressed. 

Background Note

The failure of the FCC to assemble an accurate data collection is many years in the making. No single presidential administration can take the full blame for it, but each of them could have corrected it. 

President Biden’s FCC is not yet fully assembled because of delays in appointment and in Senate confirmation, but it would not be reasonable to lay blame on the current FCC for the failures discussed below. That said, it is not clear that we are on a course for having better maps and data that will resolve these problems anytime soon.

Commissioner Carr’s Criticism 

Community broadband advocates in New York rang in the new year celebrating Gov. Kathy Hochul’s announcement of a proposed $1 billion investment to beef up broadband in the Empire State. If state lawmakers move to enact the initiative, it would be what the Governor’s office describes as “the largest ever investment in New York's 21st century infrastructure.”

During her State of the State speech, Gov. Hochul unveiled the ConnectAll Initiative, which aims to “deliver affordable broadband to millions of New Yorkers and transform the state's digital infrastructure through new investments,” with municipal broadband as a centerpiece of the plan.

In announcing the new initiative – which would be funded with a combination of up to $300 million in state funds, $345 million in federal funds, with the rest to eventually come from the recently passed Infrastructure Investment and Jobs Act – Gov. Hochul said:

The pandemic exposed how without broadband Internet, New Yorkers can be disconnected from school, work, and families. The ConnectALL Initiative will empower local municipalities and state agencies to set up nation-leading broadband infrastructure statewide, ensuring that every New Yorker has access to the Internet when they need it.

Six-Part Strategy

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The plan not only creates a new ConnectALL Office, it directs the office to work in conjunction with other state agencies in overseeing the major components of the effort, following a six-part strategy that includes:

Once a booming center of manufacturing, Allentown, PA (pop. 120,900) is looking to reinvigorate its economy by reinventing itself as a modern 21st century “smart city,” bringing fiber-to-the-home Internet connectivity to every resident in the city.

In October, the city proposed using $7 million of its $57 million in American Rescue Act Funds to aid in the deployment of a citywide FTTH network. City leaders hope the investment will help them reach the goal outlined in its strategic economic development plan to become a smart city by 2030.

The city will work with Iota Communications to conduct a feasibility study they hope will be complete in the coming months. While the possibility of a FTTH network is in the early stages for the city, the proposal signals a serious ambition to bridge the digital divide in the region.

Feeling The Way Forward

Allentown is one of three cities that make up a larger geographic area known as Lehigh Valley, with the other cities being Easton (pop. 27,000) and Bethlehem (pop. 75,500). For a while now, leaders in the valley have been talking about the digital divide and it’s been made clear with the pandemic that it can no longer be put on the backburner.

Pennsylvania lawmakers passed a law 2019 clearing the way for municipalities to have more of a say in how 5G is deployed in their communities. And while many local officials say the new law will help pave the way for Allentown to stay ahead of the curve, some have cautioned that a focus on 5G is a major distraction.

Since 1972, the Fort Pierce Utilities Authority (FPUA) has provided gas, electric, water, and natural gas services to Fort Pierce, Florida and surrounding areas. Now, inspired by efforts in cities like Chattanooga, the utility hopes to leverage that expertise to deliver affordable fiber Internet access to the city’s 45,000 residents as part of a significant expansion of its internal fiber network. 

Building on Its I-Net

Since the early 2000s, FPUA has deployed 110 miles of optical fiber via its FPUAnet Communications division. Initially, the project focused on bringing ultra-fast fiber broadband to large businesses, schools, hospitals, and other community anchor institutions. 

In 2018, the city decided to expand its footprint to boost the local economy and cement Fort Pierce’s future reputation as a smart city of the future. First by upgrading the company’s existing utility systems (connected to 30,000 existing customer energy meters), then by utilizing that access to drive expanded fiber connectivity to smaller business and residential customers alike. 

“We wanted to look at what we can do, and what are the needs in the community,” Jason Mittler, FPUAnet manager told me. “We have other local competition…Comcast, AT&T are competitors in the area. But in the realm of symmetrical speeds, no one really offers it.”

Fort Pierce certainly isn’t alone in that regard. Even the notoriously inflated FCC data indicates that most U.S. communities rarely have access to symmetrical speeds of 100 Megabits per second (Mbps) downstream and faster, and competition at those speeds is largely nonexistent. Addressing this market failure created an obvious business expansion opportunity for FPUANet that would not only bring additional value to its existing utility customers in the form of improved reliability and cost savings, but improve regional connectivity while keeping those dollars local