All across the country, municipal networks, cooperatives, and cities have been putting in extra effort to make sure that Americans have the fast, affordable, reliable Internet access they need to conduct their lives in the midst of the COVID-19 pandemic. 

AT&T has decided to take another route. A USA Today report last week revealed that the company has stopped making connections to users subscribing to its ADSL Internet as of October 1st. Anyone calling the company to set up new service is being told that no new accounts are being accepted. 

The decision comes right as the National Digital Inclusion Alliance has released a report detailing that only 28% of AT&T’s territory can get fiber from the company. AT&T has deliberately focused investment in more urban areas of higher income. From the report:

The analysis of AT&T’s network reveals that the company is prioritizing network upgrades to wealthier areas, and leaving lower income communities with outdated technologies. Across the country, the median income for households with fiber available is 34 percent higher than in areas with DSL only — $60,969 compared to $45,500. 

The Deep South Hit Hardest

As of today, it looks like the most conservative number of those affected by the decision will be about 80,000 households that have no other option. Our analysis using the Federal Communication Commission’s (FCC) Form 477 data shows that the Deep South will be hit the hardest (see table at the bottom of the page). 

Collectively it means more than 207,000 Americans who, if disconnected, will have no option for Internet aside from their mobile devices or satellite service. The number of Americans affected by the decision but which have additional wireline options is higher: roughly 2.2 million American households nationwide subscribe to the service (see map, below).  

The federal government is about to spend more than $120 million on subsidies that, rather than improving rural connectivity, will make tens of thousands of families worse off.

These funds are part of a 2018 federal program intended to expand rural broadband access called the Connect America Fund phase II (CAF II) reverse auction. The program, in which Internet access providers competed for subsidies, will distribute nearly $1.5 billion over the next 10 years to connect unserved rural residents. But in some communities, the auction may do more to widen the digital divide than diminish it.

While some winning bidders committed to building out high-speed fiber optic networks, satellite company Viasat will rake in more than $120 million in subsidies to continue providing inadequate geostationary satellite connectivity to rural households that are clamoring for something better. Not only does satellite Internet access offer slower speeds, greater latency, and less reliability for a higher cost compared to other technologies, but Viasat’s subsidies are making those areas ineligible for future broadband funds, deterring other providers from building truly high-quality networks. Instead of bridging the digital divide, the process will relegate certain communities to satellite Internet access while others receive ultra-fast fiber and do nothing more than deepen the fissure.

Mo’ Money . . .

The Connect America Fund (CAF) is a multi-phase subsidy program that supports improved connectivity in rural, high-cost areas as part of the Federal Communications Commission's (FCC’s) Universal Service Fund. The most recent phase of the program, the CAF phase II reverse auction, auctioned off regions to providers using a complicated formula that prioritized bids for low subsidy amounts and high-quality service.

Previous rounds of CAF mainly subsidized the large incumbents, such as AT&T and CenturyLink, but for the reverse auction, the FCC opened participation to other entities, including non-traditional providers like electric cooperatives. Eligible areas included rural locations where the incumbents had previously refused subsidies (and the accompanying commitment to expand Internet access).

Lobbyists from the cable and telecom industry succeeded in using the legislature to firm up their rural Massachusetts monopolies this session. Communities that rely on state funds for local publicly owned broadband infrastructure projects now face restrictions on the reach of their high-speed networks.

A Long Trip Through the Legislature

Governor Charlie Baker’s economic development bill includes a provision designating funding for the Massachusetts Broadband Institute (MBI) and the Executive Office of Housing & Economic Development for broadband deployment. The agencies distribute the funds to various communities where residents and businesses plan to improve their local connectivity. Approximately 20 towns have decided to invest in publicly owned Internet infrastructure, including Alford, Otis, and Mount Washington, to name a few. Others are taking offers from Comcast and Charter, which will build out networks to more premises with state funding. 

Many of the rural communities who are going with the publicly owned option want to connect households and establishments within the town proper, but also what they describe as “edge” properties — those beyond town limits but have no other choice for broadband. Edge properties in western Massachusetts typically don’t have access to anything better than expensive and unreliable satellite or dial-up. Often, there are only a few “edge” properties in each community, but neighbors don’t want to leave anyone behind. 

On May 30th, New Hampshire Governor Chris Sununu signed SB 170, a bill local community leaders had watched for more than a year. The measure will allow municipalities to bond for publicly owned Internet network infrastructure. Advocates, local elected officials, and citizens have been seeking the authority for years. SB 170 may raise some questions as it's implemented, but the bill is significant because it symbolizes this state's decision to expand local authority for broadband investment, rather than limit the power of local communities.

Read the final version of SB 170 here.

A Better Measurement

As we reported more than a year ago, SB 170 sought to make changes in existing law by allowing local communities to bond for Internet infrastructure. The bill sat in committee until last November, when it was amended and picked up again. The final version of SB 170 allows communities to bond for projects that will connect premises that don’t have access to broadband as defined by the FCC — 25 Mbps download and 3 Mbps upload.

Most residents and businesses in Oconee County, South Carolina, used dial-up connections when county officials applied for stimulus funding in 2010; there were still people in the county with no Internet access at all. A few had DSL connections, but even county facilities struggled with antiquated infrastructure. After an AT&T attack upended their plan to offer retail services, they pressed on and improved connectivity in the rural community. Powerful incumbent forces and a bad state law, however, eventually led this community to choose privatization.

Ripe For Stimulus

We spoke with Kim Wilbanks, who served as Project Manager for Oconee FOCUS, the 240-mile fiber optic publicly owned network. She worked with a small team of people that applied for funding through the American Recovery and Reinvestment Act (ARRA) to obtain funds for the project. Wilbanks and former FOCUS Director Mike Powell were instrumental in establishing the infrastructure. The Wilbanks family used dial-up Internet access until 2010 when AT&T finally installed DSL on her street on the edge of town in the mostly rural county.

The mountains and hills across the county’s 674 square miles create a terrain that is speckled with man-made lakes. Fishing, water skiing, and sailing are popular and the lakes and waterfalls contribute to the region’s hydroelectric energy. Approximately 75,000 people live in Oconee County scattered within many of the small rural communities. The largest city’s population is only about 8,000.

On September 22nd, Fillmore County and local telecommunications cooperative representatives participated in a groundbreaking event to mark the start of building a Fiber-to-the-Home (FTTH) network in the rural town of Lanesboro, Minnesota.

Fiber To The Unserved

Lanesboro is located in Fillmore County about 50 minutes southeast of Rochester. The small rural town covers 1.3 square miles with a population of 755. Forty-one percent of households in Fillmore County are “unserved” as defined by both the Minnesota Office of Broadband Development and the FCC, which defines “broadband” as 25 megabits per second (Mbps) download and 3 Mbps upload. Fillmore County residents and businesses are one small group of a large segment of rural America without access to high-quality connectivity. The FCC reported in 2016 that 39 percent of rural residents don’t have access to broadband, but actual numbers are much higher because incumbent reported mapping tends to overstate the reality. 

Fortunately, rural cooperatives are picking up the slack where national incumbent ISPs are failing to deploy high-quality Internet infrastructure. Local telecommunications cooperative, AcenTek, will build the FTTH infrastructure. The network will connect 431 unserved households, 42 unserved businesses, and one community anchor institution (CAI) in the rural Lanesboro area, including Whalan, Carrolton Township, and Holt Township. The FTTH project is expected to reach speeds of 1 gigabit upload and download.

Funding FTTH

People in Otis, Massachusetts, are now seeing utility crews make space for fiber optic cable on poles as they prepare for the community’s publicly owned Internet network. The schedule calls for cable installation in August; the network should start serving residents and businesses this fall.

Working With A Neighbor

Like several other hill towns in western Massachusetts, Otis is working with Westfield Gas + Electric’s WhipCity Fiber, which will handle construction of the network. WhipCity will construct the network in phases, connecting premises as neighborhoods are completed. The project will connect 1,687 premises and will cost approximately $5 million. 

Construction is finally able to commence because in May, the Massachusetts Broadband Institute (MBI) released funding for last mile broadband networks to several towns that advocated for their own solutions. Otis received $1.7 million. Communities like Otis that chose to invest in publicly owned infrastructure are required to contribute to the cost of their network.

MBI chose to release the funds after a drawn out situation in which unserved and underserved communities in the western part of the state first planned to unite as a broadband cooperative, WiredWest. MBI was the administrator of approximately $50 million in federal stimulus and state grant funding but withheld the funds. They felt there were problems with the WiredWest business model, but local towns and municipal network experts did not share those concerns. Instead, MBI planned to dole out the funding to large incumbent providers, which angered many of the local communities that have expressed dissatisfaction with treatment by those very companies over the years. Comcast will still obtain large amounts of the grant money to build out in several of the smaller communities. Those small towns will not be required to contribute, but 100 precent of their premises are not always served and they will not own the infrastructure.

Hey, Minnesota communities, are you looking for funding sources for your broadband project? If yes, and you plan on applying for a Minnesota Border-to-Border Development Grant Program, you should be getting your ducks in a row. The application period is fast approaching - July 3 through September 11.

For the 2017 grant period, the state legislature allocated $20 million to the program to expand broadband service in unserved or underserved areas of Minnesota. As a way to help you sort through the application process, the Minnesota Office of Broadband Development will be hosting several webinars early in the application period.

Dates and times for the webinars are:

Monday, June 26, 
11 a.m. to 1 p.m. (Central Time)

Friday, July 7, 
11 a.m. to 1 p.m.

Monday, July 10, 
11 a.m. to 1 p.m.

Wednesday, July 12, 
11 a.m. to 1 p.m.

Sign up for the webinars and get the details on eligibility, the process, and resources at the Office of Broadband Development website.

Garrett County is the westernmost county in Maryland. High in the Allegheny Mountains of the Appalachian Mountain Range; winters are harsh and forest covers 90 percent of the county. Before the county deployed a fiber-optic network, high-quality connectivity was hard to come by for schools, libraries, and other community anchor institutions. By making the most of every opportunity, Garrett County has improved efficiencies for the many small communities in the region and set the stage to improve connectivity for businesses and residents.

Rural, Remote, Ready For Better Connectivity

The county is more than 650 square miles but there are no large urban centers and over time a number of sparsely populated areas have developed as home to the county's 30,000 people; since 2000, population growth has stagnated. Many of the tiny communities where businesses and residents have clustered are remote and do not have public sewer or water. These places tend to have a high number of low-income people. 

Unemployment rates are volatile in Garrett County, fluctuating with natural resources extraction industries. As the coal and lumber industries have waned, many jobs in Garrett County have disappeared. Garrett County Memorial Hospital and Beitzel industrial construction employ over 300 people and are the county’s largest employers. 

All of these characteristics make Garrett County unattractive to the large Internet Service Providers (ISPs) that want to maximize investment and focus only on densely populated urban areas. Verizon offers DSL and Comcast offers cable in limited areas but many people rely on mobile Internet access and expensive satellite Internet access.

It Started With BTOP Fiber

In 2010, the State of Maryland received over $115 million in grant funding through the Broadband Technologies Opportunities Program (BTOP). With a matching $43 million from state and in-kind contributions, Maryland deployed the One Maryland Broadband Network (OMBN). In August 2013, the middle mile fiber-optic network was complete, stretching 1,324 miles across the state connecting 1,068 CAIs.

As Minnesota's Legislature decides on funding for the state's Border-to-Border Broadband Development Grant Program, local media is calling on state leaders to prioritize local connectivity in the Capitol Chambers. This year, Governor Dayton's office is recommending allocating $100 million to the program.

Blended Is Better

In the past, the Border-to-Border Broadband Development Grant Program has granted funding to areas of only the greatest need, which has resulted in Internet infrastructure deployment in very rural areas. That's great for municipalities, businesses, and residents in those areas who certainly need and deserve better connectivity. Towns where there is some coverage, such as old DSL networks, have typically not qualified. As a result, rural areas of the state are developing "donut holes" of inadequate connectivity. In the long term, this could spell disaster for these towns because businesses have no reason to locate in places where they can't get the Internet access they need for operations. A blended approach will allow investment in both unserved areas and areas where some networks already exist so centers of economic activity can still compete with their neighbors.

Chris provides more information on the blended approach, and on one possible solution for rural communities, in this nicely produced video created by Capitol Almanac: