Transcript: Community Broadband Bits Episode 484

This is the transcript for episode 484 of the Community Broadband Bits podcast. On this episode, Christopher Mitchell brings back a longtime favorite guest, Jon Chambers, Partner at Conexon, to talk about what is next for municipal and cooperative broadband efforts given the Infrastructure Investment and Jobs Act. Listen to the podcast here or read the transcript below.

Jon Chambers: There's a lot of things that can't be solved. We can't resolve questions of the point at which life begins. We can't resolve the questions of Mideast peace. We can't resolve climate change issues right now, I wish we could, but this? Man, this is kid stuff. This one can be fixed. Let's fix one thing, and move on to the other more complicated issues in life.

Christopher Mitchell: Welcome to another episode of the Community Broadband Bits podcast. I'm Christopher Mitchell at the Institute for Local Self-Reliance in St. Paul, Minnesota. Today, I'm bringing back Jon Chambers, partner at Conexon. Welcome back.

Jon Chambers: Thanks Chris. Great to be with you again.

Christopher Mitchell: It's great to have you back. I was just looking, I think it's been a year since we talked. I don't know that we went that long for a while without checking in, and last time we talked, it was about what we should be doing with federal broadband dollars. Today, we'll be talking about what's going to be happening with federal broadband dollars. It's pretty much all out there, and now we have a structure to work within. You have some thoughts, some concerns, and I'm looking forward to addressing those and commiserating. But a quick, 30 second reminder, what is Conexon?

Jon Chambers: Thanks. Yeah, I think it's been so long because the last time I was on your podcast, you made a comment about how I was the most frequent visitor on your podcast. And since I don't even like the sound of my own voice, I can't imagine most people would need to hear me that often. So the break was intentional, but I'm glad to be back. Conexon-

Christopher Mitchell: Okay, well then I'll just not remind you of that in the future, because one of the reasons we like having you on is people were interested in what you've got to say.

Jon Chambers: So Conexon, thanks for asking, is a company that was formed by my business partner Randy Clint in order to assist rural electric co-ops in building fiber infrastructure in rural America, in order to bridge the digital divide.

Christopher Mitchell: And have you had any success? You have any metrics of whether you're making a difference out there?

2:21

Jon Chambers: The fundamental change in the landscape, rural broadband, over the last five to 10 years, has not been more money. In fact, it's been about the same money year over year for the last 10 years, as it will be for the next 10 years, even with this new infrastructure bill. It hasn't been even the realization of the importance of broadband. I mean, I know there are those that have just waking up to the necessity of having good Internet access. It hasn't been that. It hasn't been any change in policy. Policy makers haven't gotten any smarter. It's been the entrance into the industry by old wine, new bottles.

Christopher Mitchell: Charter Spectrum. That's what you're talking about. Charter Spectrum's doing rural, now the problems solved.

Jon Chambers: Now you've got rural electric cooperatives entering into the marketplace, doing what they have traditionally done, which is serve their members. And that's been the difference. There's nothing else that has been as impactful as the entrance into rural broadband by rural electric cooperatives.

Christopher Mitchell: And that's where, I mean, you've helped me to have a better sense of which states are going big on this, but I believe you when you say, and you've said in the past, I mean, I think Mississippi and Arkansas are poised to go from some of the states that have the worst connectivity to some of the best. Now the money's out there, and it's up to those states. If they allocate it to the electric co-ops, we're going to see tremendous growth above and beyond what we've already seen, in terms of great growth.

Jon Chambers: Oh, so that touches on the most significant change in the law with the new infrastructure act, which is a shift of the spending, the decision making about the spending, from the federal government to the states. That's now the whole ball game. And you will see in that inconsistencies across the state, although I've always believed that inconsistency with the opportunity for good things happening is better than consistent bad things. And that's really it. And now, there's so much more... It's not Self-Reliance. I wish it were, but it's reliance at a more and more local level. Communities, counties, states, to the extent that states are going to make decisions. This is a real change. I mean, that's what, to me, the infrastructure bill, how does it change things? Not the money. The money has been spent at this level for a decade. It's been the locus of decision making. That's what's shifted.

5:18

Christopher Mitchell: So let's dive into it. I want to note that you were a proponent two years ago of a reverse auction to do a lot of this. And since then, I think a lot of us have come to a conclusion it is better for the states to be doing it. We're going to talk about some of the challenges the states will face in there. But as we talk about the infrastructure bill, how do you want to dive into this? What should we talk about first, the infrastructure bill has passed, we're two weeks past the signing. How does it look from your point of view?

Jon Chambers: Yeah. By the way, I'm still a proponent of reverse auctions, but like any program, any design, you've got to implement it correctly. Things are not self...

Christopher Mitchell: Foolproof, I think is the word. They're not foolproof.

Jon Chambers: You got to pay a little bit of attention. Even if you're driving an automated car, you should still keep your hands on the wheel. So yeah, we're two weeks into the signing, or whenever it was, two and a half weeks since the president signed the bill, but the bill is the same bill that passed the Senate months ago. So we've known what has been in this bill for a while. And two weeks in, three weeks in, we already know some things. One of the things we know is they've already missed the deadlines. So yeah, it's not a good start.

Christopher Mitchell: For people who aren't familiar, the deadlines you're talking about is that NTIA has some deadlines in which it has to develop some rules. And those are premised on some timelines that the Federal Communications Commission, that they will not meet, and they're cognizant already that they will not meet, in terms of having a map ready.

Jon Chambers: The process in some of this is a little bit fuzzy, but the process, that at least the intention is that NTIA has six months to set out program guidelines, and then there will be applications for the funding by each state. The states are the applicants. And so these program guidelines are going to be developed by NTIA. NTIA has to wait on the allocation, that is, how much funding would go to each state. It has to wait under the provisions of this statute. Has to wait for the FCC to develop maps, new maps, that show unserved areas, unserved locations, households, in the country, because the allocation for each state is the percentage of your unserved housing units, let's call it. The percentage of your housing units that are unserved in your state as a percentage of the total in the nation.

8:14

Jon Chambers: And that's how you come up with the allocation. So under the statute, NTIA has to wait on the FCC. The FCC has to do it according, again, under the statute, according to the Data Act, the Data Act, which is an acronym for make the maps. And the FCC has recently revealed, to those who weren't paying attention, that it won't have maps in the next six months. So NTIA could come up with its guidelines in the next six months, but there won't be an allocation. So anybody that is expecting to have guidelines, have the states do their work in preparation, apply for money, you won't know the allocation. That is to say, you won't know how much money you should be preparing for until the FCC completes its maps, and the FCC has already made it clear that its maps won't be ready in the next six months. That's what I meant by missing. It's not really what the deadlines say, but it's the expectation in the bill that the train is going, and the first stop is the maps.

Christopher Mitchell: Let me challenge you to answer this question in brief. It's a little bit of an alley, and it is how does RDOF play into this? When the FCC releases these maps, if a household is unserved and is supposed to get money under RDOF that the FCC has not approved yet, do you have any idea how the FCC would treat that household? Is it unserved or not unserved?

Jon Chambers: There's a lack of clarity in a lot of what the FCC is going to do. I'd say the answer to your question is if it's unserved, according to the self-reported data, it will still be unserved.

10:01

Christopher Mitchell: Okay.

Jon Chambers: So that's another, the FCC's new maps are still going to rely on 477 data, self-reported data by the telecom carriers as to whether they claim to provide a certain speed of service.

Christopher Mitchell: The difference is that they're going to have the polygons in this case, right? That's the new thing.

Jon Chambers: The new thing is, this is a little weedy and I apologize for it, but this is a new approach that is untested. And the only place that I know anybody tried it, which is Georgia, and I know Georgia is really proud of the maps. If you squint your eyes and don't look too carefully, it looks all right. But if you ask any particular questions, it reveals how problematic this new approach is. The new approach will be no better than the old approach. In fact, in some case it will be far worse. But the new approach is to say, "We're going to ask now, under the 477 regime, all of the providers, Internet service providers, submit to the FCC every six months the geographic areas where they provide service, the technology they're using, and the speed that they can and deliver.

Jon Chambers: So instead of identifying that by census blocks, which has been the standard way for, I don't know, a decade, longer, as long as I know, the folks submitting, that is, Internet service providers, will submit shape files. The shape files being a geographic format that shows where, so polygons, that shows where you have service. And then the FCC will put together all the shape files. So an amalgam of overlapping, overlaying shape files that will then reveal blank spots in the nation's maps. It's those blank spots that will be the unserved areas. That is, where is nobody claiming to provide service, according to self-reported shape files, rather than self-reported census blocks? What that's meant to solve is the old problem of when you're asked, "Do you provide service according to census block?" And you say, "Oh, I have service available in that census block."

12:25

Jon Chambers: It's not, "Do you have service in every single place in the census block? Half the places, one place, anywhere in the census block?" It contaminates, effectively, the whole census block. It's meant to solve that problem, and if it solves that problem, good. It won't, but if it were to solve that problem, I guess that's an achievement. By that description, you should understand, then, that what you need, and this gets to the delay, what you need in order to say, "All right, I've got these blank spaces now." Imagine a map that's mostly covered across the country, but you have polygons of blank spaces. You have the negative of your photograph. And those polygons are the unserved polygons. Now those polygons are not standard geographic units. They're not census blocks, or block groups, or tracks.

Christopher Mitchell: Right. Some of them might be cemeteries and some of them might be apartment buildings. And what you're about to say, I think, is we won't know which is which, absent some other dataset we can use with them.

Jon Chambers: You need, then, the missing ingredient. And by missing, I mean it's not a big available anywhere. And so what a surprise that the FCC is now caught up in litigation. You need to know service level address, or housing unit address, or apartment address. You need to know what those things are, and you need to know where they are with enough specificity that it allows you to place them in those blank polygons. Once you know that, so those addresses. Once you have all of those addresses, then okay, you can do your calculation. Your calculation being, they can send that information to NTIA, NTIA can do the really simple calculation. I mean, this isn't even algebra. It's barely arithmetic, right? It's division. It's not even long division. It's a really simple calculation. And guess what? You don't need a sophisticated map to do that calculation, because it's all ratios.

Jon Chambers: And the ratio of using existing 477 data and using new enhanced shape file, never been used 477 data-

Christopher Mitchell: Rounding it-

14:40

Jon Chambers: The ratios will be more or less the same. If they're off, if they're different, by say a percent or two, it's not necessarily so that the new approach will be more accurate with respect to the ratio, because it relies on datasets that have never been submitted, verified by the FCC before. And I'll give you one little example of what happened in the original data the FCC ever collected for the very first national broadband map. The first dataset the FCC received, it threw out. Now, people learn over time, but sometimes they don't learn. And the idea that we'll go through this now litigated process... So what's under litigation is the FCC needed to go out and get this dataset.

Jon Chambers: They needed to go out and get the data fabric that is what are we going to use in order to determine the polygonal shapes that give you the blank spots, where we'll then use something, whether it's housing units, apartments, whether it's businesses, gas stations, I don't know, international airports. Whether they'll use that depends on the contract that they entered into with a company called CostQuest, which has been doing FCC modeling for the past decade. And it's a good company, a reputable company, and they awarded this $45 million award to CostQuest. And then they faced a company that didn't win the award contested the award.

Christopher Mitchell: I thought it was multiple companies working together to contest the award, but I don't want to get lost in that.

Jon Chambers: Oh, maybe. Yeah. I don't have the detail, all the detail isn't public. But there's a challenge now, a contest, which now has to be resolved. And the work can go on, but it could also be delayed.

Christopher Mitchell: Right, well that's where... So let me ask you the question, and then let's get out of mapping to get back to what states can do about all this, which is, does the FCC have wiggle room under the statute? Or are they pinned by the statute? Or can they just do whatever they want, and no one really cares because statute is regularly flouted by agencies when they miss deadlines?

Jon Chambers: If it were me, I would, if I were back at the FCC, I'd say, "Look, let's have a plan B. Let's come up with the piece that will hold everything up." That is, let's come up with the unserved by state and unserved by nation, so that the calculations can be made by NTIA. And let's do that, and if we can't do the other, and somebody thinks that what we've done in plan B is inconsistent with the act, then let's get Congress to amend it. Because the last thing Congress should want to do is delay things over a protest, a protest that is natural part of the federal procurement process.

17:53

Jon Chambers: And anybody that's gone through federal procurement knows that you never want to go through federal procurement ever again in your life. Because it's layers and layers of rules that have been built up over time, to protect the federal procurement process from... So man, it's a bad process. So if I were the FCC, I'd be preparing the alternative in case things don't work out. And my alternative would be pretty simple. Again, it's just ratios. So come up with a way... I don't need to lay it all out now.

Christopher Mitchell: Yeah, worst case scenario, some state gets $10 million more, some state gets $10 million less. Losing six months is a bigger deal than $10 million.

Jon Chambers: Oh, absolutely. And the worst case scenario, let's say one state gets a little bit more or a little bit less, Congress could always make it up with a future appropriation if they thought that the state that got less, it was disadvantaged by the... You're more disadvantaged by the delay than you are by the change in calculation. And all I'm talking about is if you say the ratio of unserved census blocks, right? You could do that today. We have a map up today. We have a publicly available map up today that shows unserved census plots. We've done a calculation as to what the ratio would be, and therefore, what the actual allocation would be state by state. We've provided that information.

Christopher Mitchell: Because we don't think the maps are off by a factor of three in Georgia and 20 in Wyoming, right?? They're more or less off by a similar factor. So the ratio works, even though we don't have accurate data. And I agree with that 100%.

Jon Chambers: Yeah. I think that's exactly right. And again, I'm not suggesting, "Hey, chuck out Data Act approach to mapping and don't try it." I'm not suggesting that at all. I'm suggesting that the maps are hugely important, but the calculation is not the maps. The calculation is just numerically, you could work out a formula that gives you a close enough. And again, my guess is you're within a percent, or a couple of percent almost however you do the calculation. So just do that to prepare. Just do that just in the contingency that you can't resolve the challenge in time.

20:22

Christopher Mitchell: Okay. So you're a state. Rather than obsessing over things you can't control, what should the states be doing right now?

Jon Chambers: Yeah. The states will need to begin to design programs, so that when they submit their application to NTIA, they can get that approved, and they can move forward and receive the funding. I think in a way, if you're waiting for NTIA to tell you what the program design should be, I think you're making a mistake as a state. I think, let me see if I can say this in a polite way. Nah, why should I do that?

Christopher Mitchell: That's why we have you here, Jon.

Jon Chambers: There's a lot of allocation, federal allocation formulas, used to provide states with funding. This isn't a new approach, that is, the approach of, "Here's the funding." How highway trust fund has allocation formulas, and Congress fights about that every time there's a new highway trust fund authorized. Airports have the same thing. So this is now an allocation for broadband, and the formula is not an issue. I mean, there will be some fights over the formula, the formula which involves not just the pure, what's unserved in your state compared to unserved across the nation, but this other high cost booster. The 10% of money that would go to high cost areas. So there's going to be some fight about what high cost means, what the high cost areas are. And I guess those states that are high cost, which are to say, largely the western states, largely the states, not just mountainous, like Colorado, that is terrain costly, but less densely populated states are higher cost because the cost we're really talking about is the cost to pass a household.

22:37

Christopher Mitchell: Right. For instance, you have states in which you're mostly dealing with rock. You're not able to just, in Minnesota, we have vast rural stretches, but you can just plow fiber into soft earth. In Maine, you're on granite, and in the Rockies, you're stuck with very hard rock all over the place. It's very difficult to get in. So there's factors like that.

Jon Chambers: And high cost, it's high cost in Nebraska, and Wyoming, and Idaho because of the low population density. So if what you're building is, say, fiber infrastructure, you need to account for the low population density. So there's two elements. I mean, when we produced this map, and made it... or this graph, and made it public from time to time, there's really two elements that drive most of the cost per household. One of course is density, and the other is how much you can build overhead, and how much you have to build underground. Underground is always more expensive. And then the attribute that you mentioned, if you're in the Mississippi Delta or something, and you can plow, if you can plow, yeah, you can plow for a couple of bucks a foot, labor. If you're building, if you're going through rock, maybe it's $15, $20 a foot. So hugely, the differences are really significant. And then there's this aspect in the allocation formula that has high cost money.

Jon Chambers: So if you're a state that's high cost state, you should pay a little bit of attention to that. But what I was going to say is the more important thing to me is for the states to emphasize to NTIA that what is useful to them are tools that they could use in order to implement their plans. And the tools I'm talking about specifically are maps, of course, are cost models. That is to calculate, it's important to know how much it should cost to build something if you're designing a program. And then just other things like program design, what programs work better. Back to what I was talking about earlier, it's important in designing a program to know how you're going to implement it, and if you're a state with an average broadband office of a couple of people, and those people are maybe new because the old people thought they could make more money by leaving, and making money applying for funding than reviewing the applications, you should take into account your program design, that allows you to review applications.

25:32

Jon Chambers: Or have a funding mechanism that doesn't depend heavily on a lot of engineers, a lot of reviewers, a lot of consultants helping you. So what NTIA, it seems to me, could really help the states with, and therefore what the states should be asking for now, over the next six months, is assistance. Assistance in implementing the plans that they come up with. What I fear will happen instead is that NTIA, because developing tools is not the sexiest part of people's jobs usually. I mean, I have a whole mapping team, and I assume they think it's sexy, but usually, no. Cost modeling or, again, design of what's a way I can set up an application portal that allows me to... It's like... So the federal government does run lots and lots of funding programs, and they could start to make the resources that they've developed, our US has a portal. The various federal agencies have portals for intaking applications.

Jon Chambers: You can do things that would help states. That's what I think NTIA should focus on, but instead I fear what they'll focus on are policy issues. And by that, I mean they've just been given a lot of money, and NTIA usually doesn't have this much money for broadband. They've been the poor stepchild to the FCC when it comes to funding over the last 20 years, looking longingly at all the money that the FCC spends. And now by some quirk in the last year, NTIA got the money and the FCC didn't. Aside from the Emergency Broadband Benefits Plan, which has now been converted to the Affordable Connectivity Plan. So NTIA is likely, given its history, and given things it's done in other programs, and given what it's said, it's likely to set out the program design. That is, when a state applies for its funding, it will have to meet certain criteria that NTIA sets out. It'll probably have policy, instead of, here's how to help you spend the money. And the policy will likely include net neutrality guidelines. It will likely include labor wage standards.

28:07

Jon Chambers: So old Davis Bacon style prevailing wage standards. It will likely have some kind of open access preference. It will likely have something... I don't know, you get the idea. There's all kinds of policy issues that have been argued about for a long, long time. And my advice to the states, in talking to NTIA through their governors, through others, through their advocacy, is say, "Hey, the idea here was to let the state solve the broadband problem. So let us solve the broadband problem. Don't lard up our programs with your clever policy ideas. We may agree with some of your ideas, we may disagree with some of your ideas, but just help us spend the money in the most efficient way possible so we can get broadband to unserved areas. Because for the past decade, the federal government has spent over 100 billion dollars. And we have approximately the same number of unserved by broadband households today, as we did in 2011. So stop with the policy, help us with tools, allow us to efficiently build, and have your policy arguments somewhere else."

Christopher Mitchell: So I hear some frustration in there, probably, I'm going to guess, maybe from the fact that Reconnect has a number of these things in it now, and it's still a bear to navigate. And I feel like maybe you're thinking, "If you're going to put time into a federal problem, maybe you should figure out how to make these things easier to comply with, rather than adding in these extra things you..." But it strikes me that the tools you want to build require 100 times more staff time than someone that says, "We should have them require, we should have them abide by net neutrality." Yeah, let's say have them abide... To me, that seems like a meeting, as opposed to building up a... It doesn't really sap a lot of time for NTIA to say, "Let's require net neutrality." I mean, it seems like there's a false equivalence here that you're putting into those, the amount of time it takes to do those two things.

30:18

Jon Chambers: Well, if you say like, yeah, it's really easy to do one, because policy goes-

Christopher Mitchell: Well, I might be wrong. I mean, I might be wrong about that.

Jon Chambers: No, no. I mean, opinions are easy, right? That's all policy is, opinions. That's easy. Tools, if you ask me to code something, I would turn to somebody who works for me and ask them to do it. Yeah. And so here's where I'm really going with this. I don't think the states, or the public at large, or the FCC, or I don't think we should wait for NTIA or the states or anybody to do that. I think there should be a separate movement. And you, in your position that this is, I've always understood. Core to what you all believe at the Institute for Local Self-Reliance. We ought to do things to help ourselves. I would rather see the public interest groups, others, come together and create open source tools for the states to use. I don't think NTIA will do it.

Jon Chambers: I think the states should ask NTIA to do it, but just like I don't think you should wait on federal money or you should wait on somebody else to help you. If you can come together as a community, and in this case, the community is those who are without. I think there are enough people who know how to code and map, and have familiarity with program design. And I'm a strong believer in open source tools. So my main criticism of the FCC maps is not so much what I was saying before, the approach, or the lack of anticipation of challenges, it's that it's secret right now. The process is secret. The information is proprietary. Now under the Data Act, it's supposed to become available public someday, but I would rather that they take an open source type of process, and make that available to us all, public us, at an early stage.

32:33

Jon Chambers: But I also don't think we should wait for it. I think we, as a public, should start to develop these tools that could be used by states, and have it be anybody who wants to lend a hand. This is the only business idea, policy idea, approach I've ever had in my life, which is an old stone soup approach. If you're going to come together as a community, and each in the community contributes what it can to help the community as a whole, let's do that. Let's stop waiting around for somebody else to come save us. And I think there are enough people of skill and goodwill to do just that. To develop the tools so that the states that would like to avail themselves of better approaches could do that. I think we should still ask NTIA, but I don't think we ought to wait on NTIA. I think we should ask the FCC. Again, the FCC is filled with really smart, skilled people, but they don't hold all the wisdom.

Christopher Mitchell: And what you're talking about, because you keep saying tools. I feel like there's a bunch of people out there who have these skills. Some of them are already trying to build maps and datasets with those skills.

Jon Chambers: Absolutely.

Christopher Mitchell: We talked about before, in a previous show, about a need to have this open source fabric in which we know where the addresses are. And there's some assumptions about what is a reasonable cost to provide service to this person, or to build a network that serves this group of people? Is that what you're talking about?

Jon Chambers: Absolutely. Absolutely. I talk to local communities all of the time. County officials, parish officials, community organizations. They hire consultants, they pay money for consultants. And I'm not trying to take away money from other people who develop these tools and sell them. I'm just saying that there are folks who can't necessarily afford the tools, and there ought to be an open source approach. I know you're associated with a group, Humanity Connector, Connect Humanity, sorry, I get the name backwards. And they've got, to my way of thinking, they've got the same ethos, the same, "This is what we're about. Let's help people develop the skills, the tools, so that they can help themselves be connected." That, to me, is a better use of our time. It doesn't replace the advocacy, but it's a better use of our time while we're waiting. Because the worst thing we could do is just wait and then be disappointed at the end of it all.

35:17

Christopher Mitchell: Especially. I mean, I just have to say, I have significant questions about the direction that Secretary Raimondo would take this, given her connections to Cox. I am not at all convinced that Alan Davidson, as NTIA chief, will be super enthusiastic about doing anything that is not supported by 80% of his stakeholders. And so I don't want to run either one of those people down, not knowing them myself, but I also think that there's reason to believe that NTIA will not come out and surprise us with the kinds of tools that you're talking about, or a outside the box approach to this.

Jon Chambers: I worked at one point for Cox, and Comcast, and TCI, and Charter, and Sprint, and telephone companies, and cable companies all over the world. I don't have any, right. You work in the role that you've been at. You should be devoted to whatever role you're in now.

Christopher Mitchell: Oh, I agree. But not everyone is as independently minded as you are. So, and especially when you don't know a field, you rely on those that you've trusted in the past to help you understand what's good and what's bad.

Jon Chambers: My main point to all of this is the $42.45 billion that goes to the states, the couple of billion more that's going to go to other programs, NTIA, NRUS. It is more than enough money. It's probably twice as much money as is necessary to build fiber networks to every single unserved home in the country. It's enough money. We have spent, as a nation, far more than that in the last 10 years. More than $100 billion in the last 10 years, and didn't achieve broadband. But we have this money now, and maybe we have the experience of what didn't go right in the last 10 years, maybe. And we have an opportunity now to get it right this time. Hope springs eternal.

37:20

Christopher Mitchell: Yeah, let me just... Yeah, no, let me just be clear though. I think the language of being right is actually instructive. Because from the point of view of the cable and telephone companies, we did it right. We gave them most of that money, and they used it, and that was a success from their point of view. So I just want to be clear, not everyone would agree that we didn't succeed. We didn't succeed from a point of view of what you and I would like to do, what the people who are living in those areas wants to do. But I think it's really useful to remember that from the point of view of CenturyLink, AT&T, Frontier, we absolutely succeeded in doing what they want. And they're telling people that it was smart, what we did. Michael Riley's still going around saying we don't need a Cadillac out there. So let's be clear about that.

Jon Chambers: Between you and me, they're isn't a person in the country who would think that you're more cynical than I am, but you're more cynical than I am. I think we can get it right this time, or we can get it right in enough places. Because I think there are new players this time around, but we don't learn. So here's the biggest, let me use one example of something we don't seem to learn. I mean, there's folks working on machine learning, so we can teach machines to teach themselves. Maybe that's right, because people don't seem to learn. The FCC rolled out this Emergency Broadband Benefits Plan, a virtuous plan, give poor people more money. Good. I'm all for that.

Jon Chambers: And I think if you and I spoke back then, while that plan was being designed, or that may be the last time we spoke, I said, I would have said, that there's going to be fraud in that plan. Because when you pour a lot of money, when you just leave money lying around all over the place, don't be surprised when others, other than the virtuous, pick up the money.

Christopher Mitchell: Are attracted to it. Yeah.

Jon Chambers: Don't be surprised. You have this attraction of the money, and the money attracts all sorts of folks. And in this case, it attracts people who are selling phones out of the trunks of cars. That's the history of that FCC program. That is, that's just that program, EBB, was just modeled on the other FCC low income programs.

Christopher Mitchell: Like Find.

39:51

Jon Chambers: And I'm not one who says, "Oh, the fraud shows that..." Because this was the argument about the so-called Obama phone and everything. And I lived through that. This was the argument against that. This was the argument to say, "Oh, people are going to cheat the system." I don't believe people will cheat the system. I believe people are fundamentally honest, but you better design your program so as to avoid the unscrupulous actors out there. Otherwise, all of the honest people, all of the people in need, all of the people of low income who could get advantage of this program are going to be the ones who suffer. And that program design ignored the lessons of the past.

Jon Chambers: And they just once again implemented, not an imperfect design, a design that attracted the worst sorts of abuse. And you're going to keep getting that unless you design these programs correctly. But there's, again, something that I don't trust the government to get these things right. So maybe the best thing we can do on something like that is get some institutions that are the trusted institutions. Have safe harbor institutions that do the vetting, that participate in the way that you know that if you're getting the service through that institution, it's a safe service. Do something different in the design.

Christopher Mitchell: Well, this is my argument. Exactly.

Jon Chambers: That Inspector General's report that was issued a couple of weeks ago, why was anybody surprised at all the fraud?

Christopher Mitchell: Right. Well, so let me, this is where I've absolutely believed government should have a preference for entities that are accountable in ways other than the way private sector companies are accountable. Co-ops, munis, nonprofits less so. Co-ops and munis because there's a governance already built into it that should resist the fraud. That doesn't 100%, you still need audits. You still need inspectors. Fine. But I want to say that I don't think... I would reject the idea that I'm cynical in what I'm saying about that.

Christopher Mitchell: What I'm saying is that we have to understand the role that Comcast and these other companies play in the system. Not because they're evil, but because they're self interested. And the fact that they keep getting the way of setting the agenda is what bothers me. I don't think it's permanent. I think we can find ways around it, but I also feel like we need to confront the fact that when this program is implemented by NTIA, it will have many more fingerprints from the cable companies that have bought the influence than me and you. Maybe me. Maybe you'll have more influence. So that's what I'm trying to get at.

42:30

Christopher Mitchell: And I don't want people to take away from this we can't get things right, because we absolutely can. We do things well. And it's important to do that. So we got just a minute or two left. We've covered a lot. I feel like it's very good advice in terms of, we need to develop these tools. I think we need to steer them toward the electric co-ops, as long as we're talking about unserved. When it comes down to the need within municipal areas, it's less of an issue for you because the electric co-ops aren't there. That's where I see more of a role for the munis, but I absolutely think states should preference the co-ops to get this money. Electric co-ops in particular. And it shouldn't be this... I'm excited that Wisconsin and Iowa have some preferences, but it's 1% of the points. It should be a serious preference. And that's one of the things that states can do. That's one of the things states are encouraged to do when they're developing these point systems. So anyway, what are your last comments as we're running out of time here?

Jon Chambers: The same thing. The opportunity that's before us, without all the high flown rhetoric, this is it. This is our chance to get it right in terms of, will we be revisiting the question of rural broadband 10 years from now, or five, or 30? Will we keep revisiting this question or will we get it right? I don't hear a lot of people talking about the need to get electricity out into rural areas. And the electric grids built in rural areas were built without subsidies. There were low interest loans, and that's not the same thing. They were built without grants. They were built...

Jon Chambers: We're now spending tens of billions of dollars. We have already spent tens of billions of dollars. This is all achievable. To me, it's only achievable if you get the direction right. And I still don't think the direction is right. So in a way, the infrastructure bill, it is just a money bill. There's no policy in it. But to the extent they put some policy in it? Man, they got that wrong. Why would you put speeds in statute? That policy is wrong. If you want to build long-term infrastructure, that is, don't revisit this question in 10 years, or 20 years from now, then invest the public's money in long-term infrastructure, period.

45:10

Jon Chambers: If you do that, I've said this before to you, there's a lot of things that can't be solved. We can't resolve questions of the point at which life begins, which is present right now before the Supreme Court. We can't resolve the questions of Mideast peace. We can't resolve climate change issues right now. I wish we could, but this? Man, this is kid stuff. This one can be fixed. Let's fix one thing and move on to the other more complicated issues in life.

Christopher Mitchell: Let's leave people with a kind of a downer, which is, I think one of the reasons that we know that you're right, Jon, is because dictatorships are actually getting this right. Or, near dictatorships. Where they're engaging in this policy and they don't have to worry about upsetting the stakeholders, or the stakeholders are their cronies anyway. They're often building fiber. That's what China's doing. And I think open societies have more of a challenge, because you have to take into effect the votes of people who are wrong. And so there's a bit of a challenge there, but I have faith that we're going to get it right over time. It's going to take longer, and it's going to be more expensive than if you and I were the dictator, but it's the price we pay in some ways, I think.

Jon Chambers: So the opposite point of view, I'll give the more hopeful point of view of that, is I think to the extent, and this appropriation of funding gets this part more right than in the past. The more you can change the locus of decision making to local levels, the closer you'll get to at least allowing people to make their own bad decisions or good decisions.

Christopher Mitchell: Yeah, absolutely.

Jon Chambers: I'd rather people have to live with their own decisions than just complain about the decisions of their leaders.

Christopher Mitchell: Yeah. You see this in West Virginia and Mississippi. There's no way that they want to give money to AT&T or to Frontier. They've learned. So absolutely you're right there.

Jon Chambers: You've got money. Now money will go from the federal to the states. Some of the states will have that money go from the states to more local areas. You could allocate the funding down to a more local level, and people live with their decisions. Again, I've made a lot of mistakes in my life. I live with my decisions, but I'd rather live with my decisions than have to live with somebody else's.

47:41

Christopher Mitchell: Right. It's a good place to leave it, Jon. I really appreciate it. I want to have you back sometime soon. There's tons to talk about. I really appreciate all the work you're doing. Thank you.

Jon Chambers: All right, man. Good to be with you.

Ry Marcattilio-McCracken: We have transcripts for this and other podcasts available at muninetworks.org/broadbandbits. Email us at podcast@muninetworks.org, with your ideas for the show. Follow Chris on Twitter, his handle is @communitynets. Follow muninetworks.org stories on Twitter. The handle is @muninetworks. Subscribe to this and other podcast from ILSR, including Building Local Power, Local Energy Rules, and the Composting for Community podcast. You can access them anywhere you get your podcasts. You can catch the latest important research from all of our initiatives if you subscribe to our monthly newsletter at ILSR.org. While you're there, please take a moment to donate. Your support in any amount keeps us going. Thank you to Arne Huseby for the song Warm Duck Shuffle, licensed through creative commons. This was the Community Broadband Bits podcast. Thanks for listening.

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