The Final USF/ICC Reform Lightning Round: Reply Comments—FTTH Council, LARIAT, and LightSquared

Reply comments were due September 6, 201 for the Further Inquiry in the Universal Service-Intercarrier Compensation Transformation Proceeding (AKA USF Reform), where the industry was asked to respond to a variety of questions about several proposed alternative frameworks for USF and ICC, namely The Rural Associations’ RLEC Plan and the price cap carriers’ ABC Plan (which together forge the Consensus Framework), and the Federal-State Joint Board’s plan. This is it, people—the final chance for the industry to throw some hard punches at whomever they are so inclined to oppose, be it the FCC, the RLECs, the price cap ILECs, the Joint Board, or any number of commenters who may have said something irksome in any of the previous comments going back to April 1. Many of the reply comments are fairly short and only attack one or two issues, so I’m switching back to the multiple summaries per post format. Today I will be covering the FTTH Council (who submitted my favorite comments in the previous round), Wyoming WISP LARIAT, and satellite broadband visionary LightSquared. 

Reply Comments of the FTTH Council

The FTTC Council’s members include small, rural and public sector providers who utilize FTTH for broadband. In the previous round of comments, they provided a most excellent discussion about broadband speeds and FTTH investment, which I wrote about here and here. I was a little disappointed that they didn’t add much to this discussion in their reply comments, but they still made some good points and supported the arguments presented by the Rural Broadband Alliance. The only topic the FTTH Council addressed from the Public Notice is the modified broadband speed target of 4Mbps/768kbps; which the Rural Broadband Alliance called a significant step backwards from the National Broadband Plan which was released nearly 2 years ago. The FTTH Council concurs.

On America’s Thirst for Broadband: The FTTH Council argues that 4 Mbps/768 kbps might be acceptable for unserved areas for a very short period of time, but they recommend that the initial speed be targeted at 12/2.5 Mbps—but really, it should be symmetrical and higher. They describe how the rural stakeholders who have commented in this proceeding, such as the Nebraska rural companies, the Rural Broadband Alliance, and NASUCA have all argued that 4/1 and 4/768 is completely inadequate for rural areas, and is “already obsolete and would deprive rural customers of reasonably comparable service” (pg. 3). The FTTH Council talks about some studies that show broadband speed demand will likely be 25/25 Mbps by 2015, including a Cisco study that concludes there will be more networked devices than people in the world by the end of this year, and “by 2015 there will be two networked devices for every person” (pg. 7). A FCC Household Speed Guide recently claimed, “if more than two users/devices were accessing ‘basic functions plus one high-demand application,’ the minimal downstream speed a household needs for adequate performance is ‘6 to 15 Mbps’” (pg. 8). The FTTH Council does not want to see rural Americans suffer with slow broadband, and “Consumers in rural America demand the same connected devices and applications, and require the same broadband speeds to support them, as those in urban areas. It should be the goal of the CAF to meet the broadband connectivity needs of rural consumers” (pg. 9).

My Thoughts: The FTTH Council is right. I’ve talked about how I think the fundamental flaw of the National Broadband Plan and one of the many fundamental flaws of the FCC’s USF/ICC NPRM is the 4/1—and now 4/768—broadband speed target. Why on earth does the FCC want rural Americans to settle for a broadband speed that was inadequate for most high-bandwidth applications 3 years ago? Many CAF recipients won’t start deploying broadband for a year or more, while the urban world continues to benefit from new and awesome broadband applications. 4/768 relegates rural Americans in unserved areas to like 4^th class citizens, and it will do nothing to improve America’s broadband rankings on a global scale. It has long been my believe that rural Americans are the ones who need the highest speed broadband the most, so they can benefit from applications like distance learning and telemedicine and real-time commodities markets. People in cities can walk down the street to meet their basic needs for health, education, entertainment, socialization and income; but people in rural America do not have that luxury—and with 4/768 broadband, they will not have any luxuries anytime soon, or ever. 

Here is a chart that I made last year for my project where I compared the NBP to broadband plans in Japan, South Korea and Sweden, and argued that the 4/1 Mbps target is the Achilles Heel of the NBP:

Click to Enlarge

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Reply Comments of LARIAT

LARIAT is a fixed wireless Internet service provider (WISP) in rural Wyoming. WISPs have been generally very critical of USF reform proposals submitted by RLECs and ILECs, as well as proposals developed by the FCC. LARIAT argues that the FCC needs to also act on special access reform, improving access to licensed and lightly licensed spectrum, reducing barriers for antenna siting, and making access to backhaul more readily available. LARIAT is opposed to proposals in the ABC Plan, and it argues that USF reform should instead “enable the consumer to choose between the widest range of possible providers, and ensure that all comers are able to compete on a level playing field,” instead of granting ILECs a monopoly in unserved areas (pg. 5).

On Rights of First Refusal: I’ve been really interested in the ROFR debate within the broader ABC Plan opposition, and LARIAT provided some interesting comments and one good example about why ROFR should not be adopted. LARIAT argues that the ABC Plan is “cynically crafted to provide incumbent local exchange carriers, who are rarely the most cost-effective option, with a right of first refusal in virtually every area where CAF funding will be the highest” (pg. 3). LARIAT serves the city of Laramie and the surrounding Albany County in Wyoming, and “the population is extremely concentrated in the relatively small area where CenturyLink provides DSL service…the 35% market share threshold of the ABC Plan is so low that it would nonetheless give the ILEC a right of first refusal throughout the very large area served by the Laramie central office. The result: taxpayer money would be wasted as subsidies flowed to the incumbent rather than to more cost-effective providers such as WISPs” (pg. 4). LARIAT shows that the city of Laramie has a population density of around 1,000 people per square mile, but the remainder of the county is around 1 person per square mile. 

On A Separate Fund for Wireless: LARIAT does not agree that there should be separate funds for wireless/satellite and wired broadband, because separate funds would favor technologies “rather than allowing carriers to compete and the market to decide” (pg. 4). LARIAT argues that fixed wireless and mobile wireless broadband are not equal, and “consumers should have the right to opt—preferably via a voucher system in which they select carriers in an active, vibrant market—for a provider whose performance is more suitable for the real time applications that they are, increasingly, using” (pg. 4).

My Thoughts: I appreciated that LARIAT provided an example to show how ROFR will likely be harmful in Albany County, WY. I’ve been on and off the fence about ROFR and I can see how it could both be a benefit and a horrible mess, depending largely on the service area in question. One of the FCC’s goals in USF reform was to increase broadband access specifically in price cap ILEC areas, because these companies have been so slow at deployment in rural areas—in fact, most of the unserved areas lie in price cap ILEC territory. So in this regard, ROFR might be a benefit. However, I don’t really know if it is necessary that a price cap ILEC serve rural unserved areas, since they have shown such little interest in doing so all along. Further, I don’t think it is up to CAF to fund this deployment, since price cap ILECs generate billions of dollars in revenue. I think the 35% threshold should be increased to something like 75%, and I don’t think that CAF support should only go to the ILEC in an unserved rural area. However, from my understanding of the ABC Plan, ILECs would not be eligible for CAF support in rural areas where there is at least one unsupported competitor—so by that logic, CenturyLink would be ineligible for ROFR in the areas of Albany County where LARIAT provides service even if they meet the 35% threshold by way of their service in the city of Laramie. 

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Reply Comments of LightSquared

Although I have often meant to write about the ongoing LightSquared drama of this summer, I’ve not really had an opportunity to study the situation closely. Anyway, LightSquared’ s reply comments primarily revolved around advocating that satellite providers can directly participate in reverse auctions and Tribal lands should be exempted from USF reductions and other proposals that could hinder broadband deploying in these areas. LightSquared discusses how they have 40 MHz of spectrum for broadband and aggressive deployment plans; they have already invested $1b and plan to invest an additional $14b to cover 100% of the US with 4G LTE by 2015. Additionally, LightSquared’ s efforts will “generate $120 Billion in consumer benefits to the U.S. by providing a broadband platform on which retailers, wireline and wireless providers, cable operators, device manufacturers and new entrants can offer new and better service” (pg. 3). LightSquared has also stepped up to help improve broadband in Tribal areas by, for example, donating 1,000 satellite phones with free service until 2020 to hospitals and health clinics in Tribal communities in the Southwest. Overall, “LightSquared’ s unique combination of resources spectrum assets, and its mission of serving areas that have been denied access to adequate broadband services directly addresses two of the Commission’s most important policy objectives: solving the spectrum scarcity issue, and providing broadband service to unserved and underserved areas of the country” (pg. 6-7). 

On Leading Bidder Rights: LightSquared is irritated with proposals that place satellite in the unfavorable position of being a partner to an ILEC in order to receive CAF funding, and not as a frontrunner in reverse auctions. LightSquared supports a ViaSat/WildBlue proposal that insists, “Satellite providers should be able to participate in auctions directly, and there should be no restrictions on the service areas on which they bid;” furthermore, they should be the leading bidders in reverse actions (pg. 8). What happened to this reform effort being about “shared sacrifice?” Anyway, LightSquared thinks that demoting satellite service to “partner status” “in which a necessary precondition to their partnership in the CAF program is an invitation by a wireline or terrestrial wireless carrier” is not technologically neutral (pg. 9). LightSquared reasons, “Given the plight of unserved and underserved areas with respect to broadband services, the last thing the Commission should do is restrict these American’s options with respect to receiving such services. Any such unnecessary restrictions will just further ensure that these citizens are left behind far longer than they need to be” (pg. 10).

On Tribal Exemptions: LightSquared provides some interesting comments on the Tribal broadband challenge, and a slightly different perspective than the Tribal carriers who have commented in this proceeding, since LightSquared is not by definition a Tribal carrier. LightSquared is also one of the only non-Tribal and non-RLEC carriers I have seen who actually seems really excited about providing broadband in Tribal communities. LightSquared argues that Tribal communities should be exempt from caps on USF support, for “The Commission has recognized that service to Tribal lands entails unique challenges that justify exemption from the USF rules that apply to other rural areas” (pg. 15). LightSquared describes a White House Native American Business Leaders Roundtable session where it was said that “Native American communities are grossly underserved in terms of banking services, capital development and broadband services, and that these deficiencies contribute to severe levels of unemployment and underemployment” (pg. 16). LightSquared is prepared to address these problems, and “has the incentive and ability to provide services that can empower a wide variety of innovative providers of services and applications, from healthcare to law enforcement, to Tribally-owned telecommunications and data service providers” (pg. 17). LightSquared can provide wholesale service and backhaul to Tribal communities that want to provide their own broadband, which I think is something important to consider. 

My Thoughts: I don’t agree with LightSquared’s position on reverse auctions, but this is nothing new. However, I thought they provided an interesting perspective on Tribal broadband. Last week I expressed that Tribal carriers might not be the most efficient providers of broadband service if they are trying to implement FTTH to low density populations with 50% unemployment, charging rates twice as much as the national average, and only seeing a 20% adoption rate. I suggested that fixed and mobile wireless would be better solutions for Tribal lands. I think LightSquared fits into this equation as a wholesale or backhaul provider, where the Tribal communities can still have their own Tribally-run communications providers. LightSquared points out that out of over 300 recognized Tribes, there are only 8 true Tribal carriers. Perhaps if Tribal communities had more opportunities to access affordable wholesale and backhaul services then we would see more true Tribal carriers and a higher broadband adoption rate—something that is not very likely if Tribal carriers have no choice but to charge over $50/month for 1.5Mbps DSL. As far as Tribal carriers being exempted from USF rules, I still think there needs to be a greater focus on broadband adoption before large investments are made with or without USF.  

I suggest that Tribal communities look at some examples of mobile banking, healthcare, education and e-commerce in African and Latin American countries. There has been a considerable amount of innovation and development in these areas internationally, in countries where it is less likely that each home has a landline broadband connection. I’ve always been interested in how developing countries have essentially leapfrogged both landline telephony and broadband, and I think Tribal areas could follow this model here in the US, especially since landline telephone penetration rates are so low in these areas as well. I might write more about this later, since I’ve been hoping to address both international rural broadband topics and Tribal topics lately. 

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That’s it for today!

Cassandra Heyne

ruraltelecommentary@gmail.com

The Final USF/ICC Reform Lightning Round: Comments by Gila River Telecommunications, Inc.

Comments were due August 24, 2011 for the Further Inquiry in the Universal Service-Intercarrier Compensation Transformation Proceeding (AKA USF Reform), where the industry was asked to respond to a variety of questions about several proposed alternative frameworks for USF and ICC, namely The Rural Associations’ RLEC Plan and the price cap carriers’ ABC Plan (which together forge the Consensus Framework), and the Federal-State Joint Board’s plan. In an effort to cover a broad range of stakeholders in a really short period of time, today I want to bring your attention to a rather depressing selection of comments by Gila River Telecommunications Inc. (GRTI). Tribal carriers face some absolutely daunting challenges in deploying broadband on tribal lands, and the proposed USF/ICC reforms have the potential to further devastate broadband progress in these economically, geographically and demographically challenged areas. 

Comments of Gila River Telecommunications (GRTI)

GRTI does not support the Joint Board plan, ABC Plan or RLEC Plan (referred to as “The Three Reform Plans”), but they do not offer much by way of evidence or arguments against these plans aside from claiming that tribal carriers would likely lose millions of dollars if any of these plans are adopted. According to GRTI, “The loss of revenues would cripple GRTI financially and would likely have a detrimental effect on telecommunications services and on broadband service in the Gila River Indian Community” (pg. iii). Furthermore, “any decrease in revenue would likely halt any progress” in increasing Tribal community broadband adoption rates or decreasing end-user prices. 

On the Unique Tribal Challenges: GRTI explains that only about 70% of households on tribal lands have basic telephone service, and the broadband adoption rate is absolutely dismal (like 10% dismal). GRTI actually has a fairly high adoption rate of around 20%. In addition to the adoption challenge, GRTI faces very high costs to deploy infrastructure, and the GRTI community has a high rate of unemployment and poverty. According to GRTI, “Costs of deploying fiber-to-the-home have been as high as $12,000 for a single residence. These costs leave little, if any, margin for profit. As a result, GRTI has been forced to deploy fiber-to-the-home in small increments” (pg. 5) Furthermore, GRTI cannot charge less than $52.90 per month for 1.5 Mbps DSL, over $20 more than the national average, and “few residents are able to afford this service” (pg. 5).

On Recognizing and Promoting Tribal Sovereignty: GRTI encourages the FCC to adopt USF/ICC reforms that uphold tribal sovereignty. GRTI’s recommendations include rules that reflect the following: “(1) any carrier seeking to provide communications services on tribal lands must receive approval from the appropriate tribal entity; (2) tribal governments should have the option to establish, monitor and enforce public interest obligations and deployment requirements; and (3) actions by states to reform state universal service systems and Intercarrier compensation mechanisms should have no bearing on the disbursement of federal funds to provide service on tribal lands” (pg. 11). Upholding such principles of tribal sovereignty in USF reform will allow Tribes to choose which carrier best serves their communities and allow them to have more control over service quality, costs and deployment schedules. 

On Adopting a Tribal Carve-Out: GRTI encourages the FCC to adopt a “Tribal Carve-Out” similar to General Communications Inc.’s proposal. The Tribal Carve-Out “should include the following characteristics: (1) a floor on the minimum amount of USF support; (2) cost recovery for middle mile costs; and (3) an exclusion for tribal lands from any cap on high-cost support” (pg. 14). GRTI thinks that a carve-out will “ensure that ILECs serving tribal lands would have a reliable flow of revenue to further broadband deployment and sustain local service…prevent net losses in revenue due to decreased ICC revenues…[and] ensure that GRTI realizes fair and expected returns on its investments” (pg. 15-16). In addition to the carve-out, GRTI thinks tribal carriers should be excluded from any caps on CAF support, “for the same reason a cap would not be appropriate in the context of high-cost USF support to tribal lands” (pg. 18).

My Thoughts: While I am deeply sympathetic to the trials and tribulations of Tribal carriers, I feel a need to be harshly critical on some of their proposals. First, I think there needs to be a demonstrated increase in adoption rates before the FCC “carves out” special treatment for these carriers. I don’t think a 20% adoption rate necessitates investments of $12,000 per household. I would rather see special funding programs going towards increasing adoption rates and digital literacy than going towards infrastructure investments that will never be recovered. I calculated that it would cost $1.2m to deploy FTTH to 100 households, based on GRTI’s $12k figure. If only 20 of these household subscribe, GRTI is only recovering about $12,500 per year at the $53 monthly rate, barely enough to cover the cost of deployment to one household. When you include regular operating expenses, there is literally no business case for deploying FTTH to these households—and I do not say that very often, as I am an avid FTTH supporter. Last week I wrote about the fundamental rural broadband conundrum: do you provide the service first and then reap the rewards from increased economic activity in the community, or do you wait for new businesses and education opportunities and improved health care to come to the community and then increase broadband capability? In the case of these tribal communities, I’m not sure if deploying FTTH first is the right answer, when 50% of the population is unemployed and 50% are below the poverty line.

However… broadband has the opportunity to facilitate jobs, education and health care for tribal communities, so it probably isn’t a good idea to hold off on deployment either. So, I would propose that Tribal communities take a hard look at wireless broadband, either fixed or mobile, preferably utilizing unlicensed spectrum. It would cost considerably less, and the benefits would be just as powerful as if the community had FTTH. It probably would not take 20 customers an entire year to cover the costs of deploying wireless to one customer. Wireless broadband would be a much more affordable solution for the members of the community, especially compared to the astronomical $53/month for 1.5 Mbps DSL. If the cost of broadband decreased to $20-30, more people could subscribe, and more people might be willing to try it out for a couple of months and boost their digital literacy skills in the process. Once the tribal carrier increased adoption and helped the community realize the benefits of broadband, it might be able to make a better business case for investing in FTTH. 

I hate that there are areas in this country where broadband only reaches 10-20% of the homes, but in these areas, I’m not sure if it is specifically the responsibility of the Universal Service Fund to fix what appears to largely be a demographic problem. I do however think that tribal carriers could benefit from a short-term separate fund, but a significant portion of the funding should go towards programs that increase adoption and digital literacy. Aside from this, I don’t especially think that tribal carriers should follow different USF rules than regular RLECs—there are also RLECs who provide service in tribal communities but are not specifically “tribal carriers,” so their interests need to be recognized as well, and there should be incentives for more companies—RLECs, ILECs, wireless, etc. to invest in tribal areas, which could be prevented by restricting special treatment only to tribal carriers. 

What other funding opportunities are available to tribal carriers through small business loans, special tribal business financing programs, and schools, libraries and health care broadband funding opportunities? I hope that there are ample funding opportunities outside of USF for these carriers, because there is clearly a need for extra, extra support in these communities. I definitely don’t think the tribal carriers should receive less USF support than they do currently, but I’m not sure if USF is the solution to the vast challenges these carriers face. 

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If anyone has any good information on Tribal broadband adoption, deployment and investment challenges, please feel free to share it with me, as I would like to learn more about this issue. 

Only 2 more days until reply comments are due! Where did the time go? 

Cassandra Heyne

ruraltelecommentary@gmail.com

Illinois Broadband Study: What Comes First, Broadband Access or Socio-Economic Benefits?

With my vacation and my post-vacation week of rest unfortunately over, it is time to get back to the real world… It seems I didn’t miss all that much over the past few weeks, but that will all change tomorrow when the final comments on USF Reform are due! Anyway, I’ve tried to keep up with the news during this notoriously slow month but I haven’t found a whole lot worth writing about. Anyway, a fellow blogger/WISP provider over at Wireless Cowboys informed me about this study, Scoping Broadband Access in Illinois conducted by the Partnership for a Connected Illinois, which I did find rather interesting. However, I came to a much different conclusion than he did from the information in this report. He concluded that RLECs backed by USF have failed to deliver broadband in rural areas of Illinois while WISPs (without USF) have succeeded; I found no information to support this claim just from the statistics and maps provided in the report. Without spending a couple of days playing around with the Illinois state broadband mapping system, the only thing I can really conclude from this report is that broadband access and socio-economic benefits in rural areas go hand- in-hand, but one must exist in order for the other to succeed. It is basically the old “what came first, the chicken or the egg” situation.  

I was reluctant to take this report seriously when I saw that it was conducted by Connected Illinois. I’ve lost faith in the Connected Nation mapping efforts after following the painful saga that some Iowa providers have experienced over the last 18 months just trying to get the simplest data updated in a timely (and correct) manner. I’ve completely dismissed the National Broadband Map as an accurate depiction of anything except wasteful government spending. I’ve read a few other studies that contradict statewide and national mapping efforts, and I honestly don’t think relying on providers to submit data on broadband speeds and availability is reliable. When that happens, you get entire states served with 3-6 Mbps by Verizon Wireless, when we all know fully well that this is not true. I also read some interesting comments in the USF proceeding submitted by Tribal carriers which describe their plight in sharing accurate broadband availability and speed information with mapping services. Basically, the provider-input methodology for mapping is not only a burden on small companies, but it opens the door for exaggerations and misunderstanding instructions and all kinds of inaccuracies. The geographic units are not always appropriately aligned with ISPs’ service boundaries, and in some cases if one house in a census block is served then the entire block is considered served. I could go on all day about my problems with the National and State broadband maps, but it won’t actually fix the problems. Unfortunately I don’t have a better solution for accurate mapping, other than relying on 3^rd party speed tests and user-provided data, but I don’t trust consumers to provide accurate information either, especially when so many consumers can’t even say if they have DSL or cable Internet. 

Anyway, I was reasonably satisfied with Connected Illinois’ methodology in this report—they used a 3-step verification process for the data, relying on the National Broadband Map and FCC data, Gadberry Company data (“user-sourced through a variety of methods”), and provider input, where the providers were “encouraged to submit comments, corrections and improvements.” The authors also noted honorably that “there may be errors in this information,” and there were occasional discrepancies between the measurements and the carrier input speeds. Furthermore, the authors made clear that “the public’s understanding and expectations of broadband capabilities continues to evolve,” which I think is a very important point. The purpose of this report was to create a snapshot of broadband speeds and availability in Illinois, and then rank the counties in the state. This can serve as a benchmark to track changes and progress: “Simply put, these early scores will serve as a baseline in assessing how broadband deployments change over time. [The Partnership for a Connected Illinois] aims to target how geographic broadband coverage changes over time and how these changes impact households, CAIs, and businesses across the state.” 

The authors broke up broadband speeds into tiers, and I found the corresponding data to the speed tiers to be particularly interesting as an indicator that the definition of broadband is not 4 Mbps. Consider these statistics and corresponding map from the report:

• 0% of the state has access to 100 Mbps – 1 Gbps (although I suspect this will change in the near future)
• 65% of households in 8% of the state’s land have access to 50-100 Mbps
• 29% of households in 26% of the state’s land have access to 10-50 Mbps
• 2% of households in 10% of the state’s land have access to 6-10 Mbps
• 3% of households in 28% of the state’s land have access to 3-6 Mbps
• A very small percentage (less than 1%) only have access to 3 Mbps or less; but
• 1% of households in 19% of the state’s land have no broadband, or dial-up only

This data does not reflect subscription rates, nor does it include wireless or satellite “broadband,” but overall I felt like it does portray a fairly reasonable snapshot of the state’s broadband availability. Illinois, however, is not like most rural states—there is a major city in Illinois which contains most of the population and most of the fast broadband. So, although it is a real accomplishment that 65% of the state’s households have access to 50-100 Mbps; this is the 65% that live in high-density, urban and higher-income areas. This report makes note of this as well, and describes, “this baseline demonstrates that the most significant investment in broadband occurs in areas where population is most dense. Thus, the challenge for Illinois is to ensure that the investment in broadband becomes a priority throughout the entire State so that all citizens receive the benefits of broadband” (pg. 17). 

I think this conclusion contradicts the National Broadband Plan’s recommendation of 4/1 Mbps for rural areas and 100 Mbps for urban areas, and it proves that there is indeed a serious rural-urban divide for broadband. I actually hope that this study will be cited in arguments against imposing different broadband speeds for urban and rural areas. The authors developed a ranking system for each county in Illinois, and it comes as no surprise that the most rural counties in the southern portion of the state fare much worse than the greater Chicago metro area. The top 10 counties, primarily in the Chicago area, see population densities from 70 to over 5000 people per square mile; whereas the bottom 10 counties have population densities ranging from 10-65 people per square mile (which is hardly rural by some standards):

The report notes that “counties associated with larger populations, higher incomes, and greater numbers of businesses attract and get more broadband services. Likewise, smaller rural counties, with lower household income and less businesses do not attract as many broadband services.” The report lacks a breakdown of how many and which type of providers serve each county and the adoption rates (which is why I am skeptical of the Wireless Cowboys blog post concluding that only WISPs serve 1/3 of the state, therefore RLECs and USF has failed), but JSI Capital Advisor’s data from the 2011 Phone Lines book identifies 44 ILEC broadband providers ranging in size from AT&T with over 1.3m lines down to Bergen Telephone Company with 31 broadband lines.  

Overall, I agreed with the authors that “It is most important to ask the question, does better broadband access drive…socio-economic factors or is it the better broadband access an effect of the socio-economic factors?”  Should a rural broadband provider invest millions of dollars into building 50 Mbps FTTH in a county with low population, no business growth, and an aging demographic with the hopes that it will revitalize the community, or does the broadband provider wait for the local economy to turn around on its own before making such an investment? I fear that the second option—waiting for local market forces to turn around—could result in death to both the community and the RLEC serving the community. Last week, President Obama visited several rural communities in Wisconsin, Iowa and Illinois, and he pledged to bring new jobs and economic growth to rural America—broadband plays a big role in this goal, obviously. The rural communities that are stuck in this limbo of slow/negative economic growth and no broadband access definitely need our attention right now, and hopefully the reformed USF will help address both the urban-rural and rural-rural broadband divides without creating even more challenges for rural broadband providers and consumers. Unfortunately, not many companies look at such areas as profitable markets for FTTH based on the idea that maybe one day in the future a large manufacturing plant or a Google server center or a new green energy corporation will establish itself in the area. However, new businesses will definitely look elsewhere if there is no chance of high-speed, high-capacity broadband. Thus describes the great rural broadband challenge—do you build first and then bring benefits to the community, or wait for a significant market demand? Like I said above, if you pick Option 2 you are likely to be waiting yourself into bankruptcy. Then again, if USF is reformed such that there are fewer opportunities for investment recovery and private capital, you might be in bankruptcy anyway even if you take a leap of faith on state-of-the-art rural broadband infrastructure. 

Look for comment summaries on the USF Framework Public Notice both here and over at The ILEC Advisor starting in a few days!

Cassandra Heyne

ruraltelecommentary@gmail.com

Connecting the Dots between Smart Grid and Broadband Deployment Challenges

This morning I attended a smart grid briefing breakfast at the United States Telecom Association (USTelecom), "Promoting Investment & Innovating in Smart Grid." I've stepped away from smart grid issues for the last couple of months, since my class ended, in order to focus almost exclusively on USF Reform. However, I haven't abandoned my interest in the smart gird, so I was happy for the opportunity to attend another event featuring smart grid power players here in DC. The panelists at this event covered a wide variety of popular smart grid debate topics, from consumer perception to investment challenges to recent government initiatives. Throughout the conference, I continually drew connections between the telecom realm and the utility realm in deploying what are widely considered two of the greatest infrastructure challenges of our time: modernizing the utility grid and modernizing the telecom network. If you have read some of my previous posts on the smart grid, then you will know that I firmly believe that the telecom and electric utility industries are rapidly converging, and I also firmly believe that there are endless opportunities for telecom providers of all shapes and sizes to seize to help facilitate smart grid deployment. However, there are a lot of regulatory uncertainties in both industries, and there are many daunting challenges that both industries must overcome to not only converge, but to achieve their stand-alone goals of ubiquitous broadband and smart grid. It is also becoming clear to me that the smart grid will never achieve its full potential without cooperation from the telecom industry, and if the telecom industry does not play nice with the utility industry then there will be duplicate broadband networks where the utility provider becomes a competitor to the telecom provider—and who wants that to happen? Not me.

There is already some evidence of this phenomenon emerging in rural areas, as an electric cooperative in Missouri recently announced its intent to deploy FTTH to meet dual smart grid and broadband deployment goals. Ralls County Electric Cooperative received a $19.1m grant and matching loan from the Rural Utilities Service (RUS), and plans to complete the FTTH network, which will cover 4,500 homes and 300 businesses with 1,200 miles of fiber, by May 2013. Overall, I am very excited to see another example of a rural cooperative serving the double role of utility and broadband provider, but I also hope that more rural telecom cooperatives will follow in the footsteps of NineStar Connect in Indiana. Electric cooperatives entering the broadband market are a competitive threat for rural telecom cooperatives/companies, but not necessarily—there are opportunities to consolidate infrastructure and achieve broadband and smart grid deployment goals without one stepping on the toes of the other.

The panel at the USTelecom conference included Jeffrey Dygert (AT&T), Betty Ann Kane (Washington DC Public Service Commission), Mike Oldak (Utilities Telecommunications Council), Larry Plumb (Verizon), and Nick Sinai (White House Office of Science and Technology Policy). The panel was moderated by Robert Mayer from USTelecom. The session kicked off with a short presentation on a recent survey by Black & Veatch. The survey respondents included executives, managers, supervisory personnel, technical and support staff from many types of utility companies (integrated, generation only, etc.). The most interesting finding to me was that even the utility industry is having a hard time defining what the "smart grid" actually means. If the utility industry doesn't believe that the smart grid is well defined or understood, how on earth will consumers define and understand it? Do any of my telecom readers see a connection here with the challenges of defining "broadband?" Practically every corner of the telecom industry has a different definition—from 1.5 Mbps to 100 Mbps, technology-specific, technology-excluding, and so on—the only consensus on the definition of broadband is that there is no consensus on the definition of broadband. When you consider the role of the consumer in defining terms like "broadband" and "smart grid," precise definitions get even more incoherent and divided. Other interesting findings in the Black & Veatch survey included: utilities have a negative impression of the business case for the smart grid, and utilities widely believe that state regulators are not on the same page in terms of expectations and visions for the smart grid (30.6% of respondents reported that they perceive their visions/expectations and the visions/expectations of state regulators as "miles apart"). Doesn't this sound like the telecom industry too? Rural telecom providers and state utility boards are definitely not always on the same page in terms of broadband investment, deployment and adoption goals. I would bet that like the utility respondents, only about 0.5% of rural telecom industry players would report that they are "extremely in sync on vision and all critical issues" with their state regulators too.

The other corresponding challenge shared by the broadband and smart grid realms is return on investment. The Black & Veatch survey reported that only 9% of all utility respondents are "very confident" that they will be able to recover smart grid investments effectively and quickly. I would bet a similar percentage of rural telecom providers feels very confident that they will be able to recover major broadband infrastructure investments at a pace fast enough to justify the cost. With regulatory uncertainty over USF Reform, rural telecom providers who are very confident they will recover broadband investments quickly are undoubtedly becoming an endangered species. If sources of private investment are scared away as a result of the regulatory uncertainty over USF, how will any rural telecom provider justify the business case to invest in broadband in extremely high-cost areas? This is the fundamental challenge the rural telecom industry faces right now, and I find it really interesting that the utility industry is also uncertain about the return on investment for smart grid projects.

Take a look at the following chart, illustrating impediments to smart grid implementation (1 being lowest, 5 being highest impediment). How many of these impediments are shared by the rural telecom industry regarding broadband deployment? *Click image to enlarge.

I count at least 6 shared impediments to achieving smart grid and rural broadband ubiquity: the business case does not justify the investment; customer's lack of interest and knowledge (but to a lesser extent with broadband); it takes too large of an upfront investment; funding uncertainty after stimulus funds (or private investment, for telecom) are gone; commitment to manage, operate and upgrade is daunting; regulators will oppose/delay; and regulators will provide inadequate returns on investment. My question is: how can telecom and utility providers collaborate to overcome or at least mitigate some of these impediments, so that the smart grid and broadband goals can be achieved?

The panelists at the USTelecom conference discussed the challenge of regulatory uncertainty over cost recovery for utility providers, noting that some utility providers have been slow to invest in smart grid upgrades because of this challenge. If the government wants all Americans to have access to broadband and smart grid benefits, then something must be done about these cost recovery uncertainties—on the telecom side, the FCCs proposed USF reforms are certainly not helping. I think there is a lot more customer resistance to smart grid technologies than broadband, but we know that broadband adoption in the US is not a shining example of public policy. I thought about the differences and similarities between smart grid and broadband acceptance and adoption as the panelists described efforts to get consumers on board with the smart grid. I discussed this issue in my review of the UTC Smart Grid Policy Summit back in April, where panelists at that conference described how for the first time in the history of electricity, consumers are being asked to actively participate in the relationship between consumer and utility, rather than just writing a check each month in exchange for continuous service. Larry Plumb noted that when the telecom industry modernized 25-30 years ago, consumers were not involved in the process—telecom providers upgraded to digital switches and consumers were none the wiser, and their telephone habits did not have to change. With the smart grid, utilities are trying to get consumers to completely change their electricity consumption behavior, but unfortunately "most will never care," as Plumb said in the discussion this morning.

I will continue to look for ways in which telecom providers and electric utilities can collaborate on smart grid and broadband deployment goals, but at this point a high level of convergence between the two industries seems very far away. If neither electric utilities nor telecom providers can be assured that investments in smart grid and broadband infrastructure are worth the cost and headache, these critical infrastructure goals will not be achieved anytime soon.

The Black & Veatch survey, "Managing the Transition in the Electric Utility Industry," is available here—I recommend taking a look at it, there are some interesting findings.

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You may have noticed that Rural TeleCommentary got a new look—I want to thank Doug Pals and his marketing team at Re:Sourceful Communications for the awesome new logo!

I may be taking a short hiatus from USF Reform issues on this blog, but I am still analyzing reply comments, ex parte filings and other USF news for the JSI Capital Advisor's Blog, so be sure to check that site to get your USF fix.

Later this week, I will be returning to everyone's favorite topic—the AT&T-T-Mobile merger! I haven't written anything on the merger in the last month, because frankly, nothing has happened except a lot of complaining and the president of GLAAD resigned because he filed a letter in support of the merger which was written by AT&T, who donates money to the organization. I'm trying to come up with a fresh take on the topic—one that hasn't been beaten to death by every single telecom media channel.

Cassandra Heyne

ruraltelecommentary@gmail.com

USF Reform Reply Comments Face-Off: Rural Telecom Advocates Tackle Financial Risks, Reverse Auctions, Broadband Speeds and More!

Reply Comments on USF Reform were due Monday, May 23, concluding the comment-and-reply cycle for this proceeding. Today I am summarizing reply comments submitted by a variety of rural telecom advocates with different roles in the industry: John Staurulakis, Inc., the Fiber-to-the-Home Council (whose comments I usually find meaningful), Rural Telecommunications Group, Inc., and GVNW Consulting, Inc. I picked these comments specifically to represent viewpoints from several different sectors of the rural telecom industry: finance, business, technology, wireless and FTTH. As with my previous round of USF comment reviews, I will analyze the NTCA/NECA/OPASTCO/WTC reply comments in a separate, stand-alone article. I will also analyze reply comments from price cap carriers sometime this week.

These reply comment summaries are in regards to the following FCC proceedings (the USF Reform and Connect America Fund NPRM): WC DN 10-90, GN DN 09-51, WC DN 07-135, WC DN 05-337, CC DN 01-92, CC DN 96-45, WC DN 03-109.


 
John Staurulakis, Inc.

John Staurulakis, Inc. (JSI) is a regulatory, finance and business consulting firm which represents over 200 independent and rural ILECs. JSI conducts cost studies and submits data for NECA and tariff filings, among other services. In these reply comments, JSI argues against several proposals by the FCC, the Joint Board and AT&T.

On USF Reform Principles: JSI recommends three fundamental principles to guide USF Reform:

1. The FCC should be wary of imposing caps on the level of support as this action may have negative consequences in the future, and "it is evident that there is a great need for federal support in encouraging private investment in rural areas of the nation" (pg. 4).
   
2. Only ETC-designated providers should receive USF support, as mandatory ETC designation "provides necessary and reasonable oversight for the use of federal universal service support" (pg. 4).
   
3. COLRs require universal service support, even in competitive areas.
   

On the Joint Board's Recommendations: JSI disagrees with several of the Joint Board's USF proposals, including the Joint Board's stand-alone cost approach, the $100 per-line support limit, the 12% return on equity recommendation, and the $2 state participation incentive. JSI argues that the $100 per line per month limit, which the Joint Board based on the cost of providing satellite service in rural areas, is arbitrary and even below the FCC's recommended $250 per month. $100 per line per month "will also relegate rural areas of the nation to second-class broadband speeds as satellite service will be unable to increase speeds at the same frequency as wireline networks can using scalable technology" (pg. 6). The Joint Board's 12% return on equity proposal is insufficient for non-competitive rural areas, and "will not be enough to persuade investors to invest in rural areas of the nation" (pg. 7). JSI adds that changing the rate of return should be considered in a separate proceeding. Finally, JSI argues that the $2 state participation incentive could be construed as a penalty for states that do not have a USF mechanism.

On AT&T's Comments: JSI believes that AT&T does not provide enough evidence that bill-and-keep is an appropriate solution for ICC reform, and that "users of networks should pay for their use" (pg. 8). JSI also addresses AT&T's support for reverse auctions, and JSI argues that the FCC should perhaps consider testing reverse auctions in a non-rural area first; in order to make proper assessments about how reverse auctions will work in rural areas.

My Thoughts: I was surprised to see disagreement with the Joint Board's proposals, but after some thought, JSI's arguments against the Joint Board make sense. I personally like the Joint Board's proposal simply because it is so much better than the FCC's NPRM, but I suppose it is not perfect either. The $100 per month per line limitation does seem pretty arbitrary in retrospect. Regarding reverse auctions, I don't want to see them implemented anywhere, but if they are, I agree with JSI that they should be tested in a non-rural area first. Reverse auctions are such dangerous and uncharted waters, and pilot programs are necessary to ensure that things do not go awry with really ugly consequences for rural Americans.

Fiber-to-the-Home Council

The Fiber-to-the-Home Council (FTTH Council) promotes FTTH deployment to the public and government, and represents over 200 members from across the telecom industry, including rural telecom providers. The FTTH Council provided incredibly insightful and interesting reply comments, primarily focused on broadband speeds, FTTH investment and deployment in rural areas, and maintaining the High Cost Fund.

On Broadband Speeds and "Next-Generation Access" Demands: The FTTH Council has strong, forward-looking opinions about the growing demand for broadband speeds, and they argue that 25Mbps symmetrical broadband is an appropriate target for 2015. The FTTH Council provides a lot of interesting data to support this argument, primarily from a 2009 study for the National Broadband Plan proceeding by CMSG Adventis. Examples include speed requirements for "Next-Generation Access" (NGA) broadband, including 64-256 Mbps for Advanced HD Video, 32 Mbps for 3D/HD Video, at least 256 Mbps for Advanced 3D/HD Video, and 10 Mbps-1Gbps for "massive downloads and uploads" (pg. 8). The FTTH Council adds that high-usage consumers already need 30Mbps, and will easily need 100Mbps within 7 years in order to meet demands for "'over the top' video content, multi-player online gaming, multi-device households, social networking and video conferencing, [which] will put pressure on both downstream and upstream bandwidths" (pg. 9-10, referencing a Motorola study). They also add that broadband-enabled distance learning and telemedicine will require significant bandwidth, as will small businesses. The FTTH Council provided some especially interesting comments about future broadband-enabled applications, arguing that we do not even know what types of life-changing "killer apps" may come as a result of setting a high bar for broadband speeds nationwide. The FTTH Council points to wildly successful applications like Napster, Apple iTunes, YouTube, Skype, Google Maps and Netflix streaming video, arguing that YouTube's success was "clearly due in part to consumer broadband connections having sufficient bandwidth to upload and download videos in a reasonably short time" (pg. 10). Finally, The FTTH Council referenced the infamous 1977 quote from Digital Equipment Corporation CEO Ken Olsen, "No one will ever want a computer in their home," to illustrate the danger of projecting limitations on the power of innovation and consumer demands (pg. 11)

On FTTH Costs and Benefits for Rural America: The FTTH Council discussed the cost of providing FTTH to all Americans: it would cost $70 billion to pass 80% of US households with FTTH, and an additional $94 billion to reach the last 20%. However, these astronomical amounts do not tell the whole story—the cost to deploy FTTH has declined by 50% in the past decade, "owning to equipment and cabling innovation, experience in constructing and operating networks, and overall economies of deployment" (pg. 14). It is safe to assume that FTTH deployment costs will continue to decline; additionally, the total-life cost of FTTH actually provides a savings of $100-250 per subscriber over other common technologies due to the significantly greater performance capabilities of FTTH—basically, rural companies that deploy FTTH will not need to make nearly as many ongoing infrastructure investments to keep pace with demand. The FTTH Council breaks down the cost of providing FTTH to the last 20%, where it would be relatively inexpensive ($13 billion and $16 billion respectively) to pass the 80-85^th and 85-90^th percentiles. However, the bulk of the cost would be the final 5%, at $44 billion (pg. 19-20).

On the High Cost Fund and Rural Broadband Investment: The FTTH Council argues that the High Cost Fund has been very successful for encouraging investment in rural broadband due to the low risk for lenders. If the FCC reduces or eliminates the High Cost Fund, there will be "considerable risk by removing the recurring, stable and substantial subsidy stream that has assuaged investors historically. To accommodate this risk, investors will demand a higher premium or higher interest rate on debt or loans. Other investors will back away from lending to the riskier venture" (pg. 24). The FTTH Council discusses the concept of the "hurdle rate," which is basically the minimum return on investment required to make a project worthwhile (with low risk). The FTTH Council is concerned that eliminating the High Cost Fund could cause hurdle rates to double due to increased costs of borrowing money. The FTTH Council describes high cost support as akin to payments with "credible backing," such as lottery payouts and structured settlements, whereas a fixed support model is akin to riskier startup ventures (pg. 25-26). The FTTH Council provides the following solution/suggestion to the FCC: "instead of seeking to shift the USF to a completely new paradigm, the Commission can best achieve its universal broadband objective by seeking to preserve and build upon the success of the High Cost Fund and meld the aim of this fund with the CAF's new objectives to reach unserved areas" (pg. 31).

My Thoughts: The FTTH Council's comments were excellent and possibly the most aligned with my personal philosophies about broadband speeds and network investment out of any of the comments I have read so far. All along, I have been arguing that the FCC needs to stop trying to impose backwards-looking limitations on broadband speeds. I completely realize that it is too expensive to provide 100Mbps broadband to 100% of Americans using USF, but the NBP and the NPRM do not go far enough to ensure reasonably comparable broadband service for rural Americans, which the FTTH Council definitely understands. The 1977 quote about how nobody will ever want computers really made me think about what could be the financial loss of imposing speed limits on rural broadband. I've heard many times about how the slow development of the wireless industry shut out billions of dollars in revenue and caused untold damage to innovation, but has anyone thought about the damage that could be done to the economy and the future of innovation if high-performance broadband speeds are not supported in accordance with consumer demands—and if rural Americans are subjected to second class broadband? Anyway, this topic gets me really riled up… I really liked the FTTH Council's discussion of the hurdle rate, and they provided some great examples of the investment challenge ahead if the High Cost fund is reduced or eliminated. I highly recommend reading these comments and the studies referenced in the FTTH Council's examples. To me, the thought of combining a 4/1 Mbps speed limit with a reduced or eliminated High Cost fund equals the death of broadband in rural areas, primarily because no investor will want to fund projects that are outdated before they are deployed, not likely to satisfy customers, and will not produce sufficient revenue returns.

Rural Telecommunications Group, Inc.

The Rural Telecommunications Group (RTG) is a trade association and rural wireless advocate, representing members who serve less than 100,000 customers with wireless technology. I thought the following statement powerfully describes RTG's position on USF Reform: "RTG members are extremely concerned that the radical changes proposed in the USF NPRM will have detrimental effects on the continued availability of wireless service in rural areas, which will harm employment in rural areas and slow the economic recovery process. RTG's members collectively employ thousands of people in rural areas and support the ongoing business operations of numerous industries that employ thousands of people across rural America. These rural Americans will be impacted negatively if wireless services are taken away or allowed to atrophy as the rest of the country continues to receive even more advanced services" (pg. 3).

On CETC Support and §214(e) and §254: RTG argues that sections 214 and 254 of the Communications Act will be violated if CETC support is eliminated. §254(e) "limits the class of entities that may receive universal service support to eligible telecommunications carriers," and §214(e) "requires eligible telecommunications carriers to be 'telecommunications' carriers and 'common carriers'" (pg. 6). Furthermore, the FCC cannot forebear from these principles, and phasing down CETC support faster than phasing down ETC support also violates competitive neutrality principles.

On the Importance of Supporting Rural Wireless: RTG provided some excellent examples and discussion about the importance of mobile broadband for rural economies, the national economy, and public safety. According to RTG, by eliminating CETC support, the FCC "will be abandoning rural consumers and businesses that increasingly rely on mobile broadband," and "the harm that will befall public safety in rural America if CETCs are denied ongoing support will be immeasurable" (pg. 8-9). RTG recommends a long transition period of greater than 10 years, and adds that ongoing support is necessary for rural mobile broadband networks.

On Waivers and Exceptions to CETC Phase-out: RTG argues that waivers and exceptions should be allowed in any CAF distribution mechanism. RTG discusses the dynamics of rural wireless, where Tier I carriers typically only provide service along highways and in population clusters, and "they have not committed to covering the entire surrounding rural areas which are typically high cost areas"—which rural wireless carriers have historically served with strong ties and commitments to their rural communities (pg. 11). RTG also argues that CETC phase-out waivers and exceptions should be available for companies that serve Tribal lands, and the FCC should not impose an expiration date on waivers.

On Reverse Auctions and Bidding Credits: RTG's comments echo the majority of rural carrier and association comments regarding reverse auctions: they are dangerous and may result in low quality service for rural Americans. RTG also describes the anticompetitive dangers of reverse auctions, and emphasizes that Tier I carriers do not need USF support—Verizon and Sprint have even surrendered high cost funds, so it would be contrary to the public interest to reward subsidies to these carriers in reverse auctions. RTG goes as far as arguing that Tier I carriers should not be allowed to participate in reverse auctions, especially since they will have an incentive to use below-cost bidding (see my recent article on the failure of reverse auctions in other countries for more examples of this danger). If reverse auctions are adopted, RTG supports including a public benefit component. Additionally, for a provider to receive support, the provider must meet certain criteria, including: the carrier must be an ETC, the carrier must have sufficient access to spectrum, the carrier must have sufficient financial resources and technical capability, and the carrier ideally should be Tier II, III or IV (pg. 17). RTG supports the use of bidding credits "for carriers that meet certain public interest objectives associated with delivering mobile broadband to unserved markets" (pg. 18). Bidding credits could help give especially small rural carriers an advantage if the carrier will provide public benefits like new jobs, and "these bidding credits will spur rural economic development among those eager to serve the rural area and who have a history or nexus to the rural area and are naturally invested in serving their rural communities" (pg. 18).

My Thoughts: I was particularly impressed with RTG's realistic and rational comments about reverse auctions. I really, really support RTG's proposal to keep Tier I carriers out of the auctions (if reverse auctions are adopted, which I still hope they will not be). Honestly, nothing good will come from allowing Tier I carriers to participate in reverse auctions. If they wanted to serve extremely rural areas, they could do it with their own money—it's that simple. RTG also made some good points about contributions, arguing that the current contributions base "is not only unsustainable, but also outdated" (pg. 22). I couldn't agree more, and I find it more and more ridiculous every day that the FCC is trying to make voice telephone consumers pay for broadband network subsides, but not broadband consumers, when the number of voice telephone consumers is rapidly shrinking. This FCC simply defies logic sometimes.

GVNW Consulting, Inc.

GVNW is a management consulting firm providing regulatory consulting, advocacy and strategic planning for rural telecom providers. GVNW basically supports the Rural Associations' RLEC Plan, and they provided many insightful responses—both positive and negative—to a wide range of comments. GVNW agrees with Senator Daniel K. Inouye (D-Hawaii), who submitted a letter to the FCC emphasizing that USF reform is not a "one size fits all" solution; and GVNW also supports comments from the Telecommunications Association of Maine, which insist that USF Reform should "first, do no harm." Unfortunately, many of the FCC's proposals ensure considerable harms for rural telecom providers and consumers.

On Public Policy Criteria for USF: GVNW presents four public policy fundamentals for USF Reform: (1) compliance with federal law; (2) incentives to transition to broadband without harming some rural consumers for the benefit of other rural consumers; (3) recognition of the importance of voice service; and, (4) reasonably comparable rates for rural consumers. GVNW believes that the RLEC Plan generally complies with these principles. GVNW provided some entertaining, slightly sarcastic, and hard-hitting comments to the FCC regarding the first principle (compliance with federal law): "We respectfully remind the Commission that federal law with respect to universal service has not changed since the Telecommunications Act of 1996;" and "Absent Congressional action changing the law, the Commission must adopt rules that meet all legal requirements as opposed to the desire of former staffers that drafted the National Broadband Plan" (pg. 13, 14). I appreciated the lighthearted humor, despite the fact that it is very troubling that the NPRM is contrary to the very rules that govern the agency who drafted it…

On Special Tribal Broadband Issues: GVNW addressed the special challenges that Tribal areas face, citing comments by the Native Telecom Coalition for Broadband: "A 'hundred years' of geographic isolation on Tribal lands and related income disparity are real barriers prohibiting Native Americans from experiencing quality of life enhancements and economic opportunities…through advanced communications technology" (pg. 19-20). GVNW noted that the Native Telecom Coalition for Broadband believes the FCC should create a separate Native Broadband Fund, and the National Tribal Telecommunications Association argues that Tribal areas should not be included in reverse auction for fear of "catastrophic results for small businesses" (pg. 20).

On Acknowledging Past Performance and Track Records: GVNW made some interesting observations about the level of commitment to serve rural areas by both price cap and rural carriers. While large price cap carriers "have virtually ignored an obligation to invest in their most rural service areas," RLECs have a much better track record of deploying rural broadband despite having considerably fewer resources at their disposal. GVNW suggests that the FCC should enforce rural build-out commitments as well as verify rural broadband deployment by USF recipients. GVNW warns, "it would be prudent for the Commission to very carefully approach the rural-rural divide issue and not issue blank checks" to price cap carriers (pg. 28).

My Thoughts: I liked how GVNW responded to a wide range of comments with both positive and negative critique—of the reply comments I have read so far, I have actually been disappointed with the lack of replies to other comments in the proceeding. I was also interested in GVNW's brief discussion of Tribal lands, and I am inspired to read more comments specifically addressing the challenges that Tribal areas face in broadband deployment and USF Reform. GVNW also made some great remarks about ICC Reform, and referred to a very applicable and appropriate Yogi Berra comment from the NARUC comments: "This is déjà vu of déjà vu of déjà vu all over again" (pg. 21).

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I would have liked to include some additional comments, but I think these four give a pretty good representation of rural provider concerns (beyond just RLECs anyway). I considered adding the Joint Comments by the satellite providers (WildBlue, etc.), but I really just don't believe that satellite broadband is a viable alternative so I am not going to pay them much attention. The FTTH Council reply comments truly impressed me and provided me with a lot of food for thought.

Next up: price cap carriers/associations! Sure to be an exciting reading and writing experience.

Cassandra Heyne

ruraltelecommentary@gmail.com

 

 

Smart Grid Synergies for Rural Electric Co-ops and Telecom Providers

Two months ago, I first wrote about my growing interest in opportunities for rural telecom providers to serve electric utilities with communications networks for the Smart Grid. I was particularly interested in analyzing the overlays between rural electric cooperatives and rural telecom providers; because it seems to make perfect sense that these two entities collaborate in some way to achieve two of the most critical infrastructure goals for the 21^st century: broadband deployment in rural areas and modernizing the electric grid. I had a perfect opportunity to explore this opportunity in a project for my Energy Communications Networks class, and I am happy to report my research to my readers.

In my project, Smart Grid Synergies for Rural Electric Cooperatives and Rural Telecommunications Providers, I first looked at reasons why rural telecom providers and rural electric cooperatives would even consider merging or collaborating on smart grid projects—after all, this idea would have been extremely radical and unacceptable just a few years ago. I found that there is quite a bit of support for rural telco/utility collaboration by rural cooperative associations such as NTCA, NRECA and NRTC. NTCA reported that "For the smart grid to blossom, rural electric and broadband providers need a fresh start and a new, creative approach to mutually constructing and maintaining this foundational partnership…rural electric providers and rural telcos are ideal partners in smart grid ventures" (Ward, NTCA, 2010). For some background information, there are 260 rural telephone cooperatives and 930 rural electric cooperatives, but when you consider all of the small and family owned rural telecom companies, the numbers are pretty even. Both entities provide service to approximately 70% of the US geography, but only about 10% of the population—rural utility and telecom providers serve on average 10,000 or fewer customers and 10 or fewer customers per square mile. The both provide service to some of the most economically challenged rural areas in the country and to some of the most rural and hard-to-reach customers in the country. Broadband and electricity are the lifeblood for rural Americans, and rural telecom and utility providers have gone to tremendous efforts to ensure that their rural customers have state-of-the-art networks. In fact, rural telecom companies have been some of the most successful telecommunications providers in deploying broadband to rural areas, and rural utility cooperatives have also been tremendously successful in deploying smart grid technologies in rural areas. Finally, rural utility/telecom collaboration is consistent with several major U.S. government initiatives to bring broadband and the smart grid to all Americans. A collaborative effort by a rural utility and a rural telecom provider would help achieve goals of the American Recovery and Reinvestment Act of 2009 and the National Broadband Plan of 2010. Congress, the FCC and the Department of Energy are all pushing the convergence of telecom and electricity networks, and there is really no better place to make these breakthroughs than in rural areas.

For the next section in my project, I looked at a company that is a real trailblazer in rural utility + telecom collaboration: NineStar Connect in Indiana. At the beginning of 2011, Hancock Telecom and Central Indiana Power merged to become one of the first combined rural electric and telecom providers in the country. In this arrangement, the utility division uses the telecom division's FTTH network for smart grid applications like Advanced Meter Infrastructure (AMI) and Demand Response (DR), which will help consumers monitor and control their own energy consumption based on peak demand times and pricing. The companies will be able to leverage each other's business operations, such as billing, customer service, and call centers, to reduce operational expenses. As an added bonus, the telecom division gains access to the utility's right-of-ways and pole attachments. The benefits and synergies do not stop here—the telecom division will now be able to become a CLEC in communities that were previously only served by the utility provider, creating a significant sustainable competitive advantage. Furthermore, the threat of the utility provider becoming a direct competitor to the telecom provider is completely eliminated. NineStar Connect is using a Tantalus fiber-based technology platform, and the CEO of Tantalus (Eric Murry) seems to be really excited about the benefits and synergies from this merger: "It's natural for telecoms and utilities to work together…It's a logical next step that will accelerate smart grid roll out, avoids the costs and complexity of building and maintaining two separate communications networks, and consolidates billing, customer service, and many other business functions under one roof" (Tantalus, 2010). All eyes are on NineStar Connect right now as the company has truly formed a new breed of cooperative—I am hopeful that they realize great synergies and success from the merger and become a model for other rural telecom and utility providers to follow in their footsteps.

Next, I looked at ideal business and technology arrangements for rural utility and telecom collaboration. Unfortunately, this is such a new idea, so there aren't any prominent models at this time. From my own observation, I concluded that FTTH is the best type of technology to facilitate an effective collaboration because the capacity is virtually unlimited so it can easily support the data load from smart meters (which is very small) as well as the data load from broadband customers—with room for the loads to grow. However, FTTH has not been deployed completely in many areas, and there may be no broadband connections at all to some extremely remote areas. In these situations, wireless technology can effectively be used to fill in the gaps until fiber is deployed. Prior to making any agreements, the utility provider must conduct a Strategic Communications Plan, whereby they analyze their communications needs one-by-one for each component of their grid. It may be the case that a utility will want to maintain a private network for SCADA or substation automation, but would be completely willing to work with a commercial telecom provider for AMI and other smart grid applications closer to the customer. Finally, many business operations can be consolidated to achieve maximum synergies—call centers, service crews, even warehouses and office supplies.

Finally, and probably most importantly, I analyzed the challenges that utilities and telecom providers must overcome to collaborate on rural broadband and smart grid projects. The challenges are significant and will likely not be overcome easily or soon. The main challenges include:

• Regulatory uncertainty for rural telecom providers: I don't feel a need to go into detail here; we know how significant these challenges are! For more information, feel free to read my USF Reform NPRM comment summaries from the rural telecom industry.
  
• State laws: the laws in Indiana prevented utilities and telecom providers from merging; luckily the state recognized the benefits and opportunities of the NineStar Connect merger and changed the laws to allow the merger.
  
• Mismatched geography: Not all rural electric and telecom service territories align perfectly. In many cases, the utility may need to provide electricity to an extremely remote area where no telecom customer even exists—such as an irrigation control center in the middle of a 20,000 acre ranch. These are the situations where wireless becomes a great fill-in-the-gaps communications technology.
  
• Ensuring network reliability, security and priority for the utility: commercial telecom networks are not built for utility communication, and utilities will not tolerate many of the network weaknesses found in commercial networks. The FCC released a NOI last month inquiring about these issues, so hopefully we will see some telecom providers responding that their networks are suitable for smart grid communications.
  
• Utilities' age-old mistrust of telecom providers: utilities have simply mistrusted telecom providers for so long, that it will be hard to overcome this barrier to effective collaboration. However, I believe that rural communities are the ideal testbed to break this barrier because of the unique qualities of rural businesses, communities and relationships between these two entities. They both have and strive to achieve the goal of providing excellent, state-of-the-art services to rural communities that are often not considered profitable by larger companies.
  
• Utility regulation: utilities have an incentive to invest in their own networks and infrastructure as a result of their regulatory rate structure. They are not able to recover investments if they utilize commercial networks. In the National Broadband Plan, the FCC recommended that states take steps to reduce regulatory impediments for using commercial networks.

In conclusion, there are significant challenges for both utilities and telecom providers to overcome in order to effectively collaborate. However, if these challenges are reduced—or if companies follow the lead of NineStar Connect and just "go for it," there are great opportunities for business and technology synergies. Not only will the companies achieve many benefits, but customers will as well. I think there are some amazing opportunities here if rural utilities and telecom providers are willing to make the effort, initiate dialogue with each other, and strive to overcome the challenges to collaboration. I am really hoping that more rural utility and telecom providers start looking at these opportunities. There are several interesting direct analogies between rural electric cooperatives and rural telecom providers, and the two entities can successfully leverage their similarities to overcome their differences and reach an effective, profitable solution.


I would like to credit Jesse Ward from the National Telecommunications Cooperative Association and Joan Engebretson from Connected Planet for their articles and research on this topic—articles that largely inspired me to do this project. Just last week, the day after I finished my paper, Connected Planet released this article providing an update on how NineStar Connect is progressing since the merger.

If you are interested in reading my full report, I would be happy to e-mail it to you if requested.

Cassandra Heyne

ruraltelecommentary@gmail.com

FCC's Second USF Workshop Tackles Broadband Technologies, Phase 1 CAF and the Dreaded Reverse Auctions

On April 27, 2011, the FCC conducted the second workshop on Universal Service Fund reform, focusing on broadband technologies and capabilities; the implications of different broadband technologies for achieving USF objectives; and finally--the controversial and all-around bad idea of reverse auctions for Phase 1 Connect America Fund (billed as "technology-neutral competitive bidding"). Like the first workshop on ICC reform, this gathering of experts from across the industry was high-tension and low- consensus; but also like the previous workshop, it was very interesting to hear from a wide range of stakeholders about these critical issues. FCC Chairman Genachowski opened the workshop with a familiar message about USF reform--the same message he has been repeating since the NPRM was released: USF is broken, it was designed for a 20th century voice telephony network, it is insufficient for the 21st century broadband era, and reforming the broken USF system is vital for the economy and industry. Genachowski added that of the many promising broadband technologies that exist today, all will play an important role in the goal of achieving universal broadband in America. Sharon Gillett, Chief of the Wireline Competition Bureau commented that if the different broadband technologies were children, she would "love them all equally...But they are not all the same...Each has a unique developmental path." I was actually pretty excited to hear from the diverse broadband technology stakeholders about the capabilities, costs and limitations of different broadband technologies--I enjoy (and understand) engineering topics a lot more when they are put into policy perspectives and debates. However, I was most excited/anxious to hear the panel on Phase 1 CAF and reverse auctions. Without further delay, here is my commentary on the topics discussed in the three panels.

Panel #1: Broadband Technology Capabilities Today and in the Future
Panelists: Steve Rosenberg (Moderator), Ralph Brown (CableLabs), Ken Ko (ADTRAN), Paul Mankiewich (Juniper Networks- Mobility), Mark Dankberg (Viasat, Inc.), Matt Larsen (Vistabeam), Jim Stegeman (CostQuest)
This panel kicked off with each participant describing the broadband technologies and capabilities of their respective companies--including fixed wireless, fiber, DSL, cable, mobile wireless and satellite. The panelists discussed their companys' various speed and capacity accomplishments as well as the challenges to deploy these technologies in accordance with the USF Reform NPRM and the National Broadband Plan. I believe there is plenty of room in the market for each technology, and each has specific advantages and merits--except perhaps for satellite broadband. I was not convinced by the Viasat participant's argument that satellite broadband is a competitive player in the overall broadband market. I see satellite broadband as a last resort solution, for people who really have no other viable choice. I would imagine that some of the other panelists are trying to find ways to make sure that rural customers do not have to be forced to deal with the slow speeds and high costs of satellite. I have it on good authority that some former satellite customers in rural Iowa were beyond thrilled when a certain Iowa RLEC began offering FTTH in their areas. These customers had been paying upwards of $700 per month for extremely slow and unreliable satellite service, so even an "expensive" FTTH connection was a dream come true, particularly for the high bandwidth users. Anyway, the panelists were asked to discuss issues related to capacity, such as meeting demand for essential applications and whether downlink/uplink symmetry will be an important characteristic in the near future. There was a near consensus that video is definitely the essential application of the moment, and Matt Larsen from Vistabeam (a rural fixed wireless service provider in western Nebraska and eastern Wyoming) commented that his network capacity was maxed out on Christmas day last year when everyone was playing with their new gadgets and downloading video. Clearly, ensuring ample capacity at all times is not only a necessity, it is at times becoming a luxury as well. I know many RLECs are extremely concerned about the substantial and growing chunk of capacity that Netflix downloads take from the network on a daily basis. The other point that I found particularly interesting was about the growing demand for cloud computing services, and how this demand will impact the demand for greater (and more symmetrical) uplink speeds from both business and residential consumers. The panelist from CableLabs added that although it is very difficult to make accurate predictions about how traffic and capacity demands will evolve in the future, it is important to build networks that are very flexible and engineered for future growth. My concern is that if USF support is only going to initially be targeted to networks with 4/1 Mbps, the networks will not be engineered for growth nor will they be forward-looking, which will result in swift obsolescence and high costs down the road. Keeping with the 4/1 Mbps topic, the panel was asked about customers who choose to adopt low speeds, and how that might change in the future. I thought the Viasat panelist had an interesting answer. He said that consumers use different algorithms to determine which service to pick--some want the fastest broadband regardless of cost, some want the cheapest broadband regardless of speed, some care about the overall value, and some care about bundled service offerings. I think a very important point, one that was actually made in AT&T's comments, is that the FCC should take a "holistic" approach, rather than focusing on the "definition of broadband in a vacuum." In other words, the 4/1 Mbps broadband definition is completely meaningless to some consumers but very meaningful to others--the true definition of broadband is actually in the eye of the beholder. The panelists mostly agreed that 4/1 Mbps is a good, but modest, starting point. The panelist from Juniper Networks argued that if the target is too big, it will simply take too long to achieve; and 4/1 is very conservative, but there are vast areas to cover with an impending need to be fast with deployment. The panelist from Vistabeam argued that the FCC should not over-subsidize providers to deploy higher speeds than 4/1, because broadband is a necessity and not a luxury--in this particular situation it is more important to be fiscally prudent than try to achieve the end-game goal of FTTH for everyone.  Personally, my favorite argument was from the economist on the panel (Jim Stegeman from CostQuest)--he said that FTTH is surprisingly cheap to deploy and it has basically unlimited bandwidth, which makes FTTH the most economically attractive option. I completely agree with this panelist and wished more people would understand that FTTH is not actually that expensive--it is just stigmatized as expensive, and the ultimate payoffs in capacity are well worth the investment. Interestingly, the panelist from the satellite provider actually commented that 4/1 Mbps should not be a "sentence" for rural people, rather the broadband speed definition should present an exciting "opportunity" in rural areas--I completely agree that 4/1 Mbps essentially sentences people in rural unserved areas to be second class citizens in the broadband world.  The final point that I felt was especially interesting, by Ken Ko of ADTRAN, was about the duality of the broadband ecosystem: on one hand, customers need mobility but mobility always has limitations; so customers also need a fixed broadband connection. Fixed and mobile broadband will continue to be compliments, not substitutes, therefore the FCC should encourage deployment and adoption of both fixed and mobile broadband. I definitely think that each of the technologies--except satellite for the most part--have unique merits and fit different market niches, and there is a role for each technology in achieving the goals of the National Broadband Plan. However, the FCC should pay attention to the point that customers need access to both fixed and mobile broadband networks. And, rural people are not second class citizens--I just had to throw that in once again.

Panel #2: Implications of Technology Capabilities for Achieving Universal Service Policy Objectives
Panelists: Carol Mattey (Moderator), Mark Cooper (Consumer Federation of America), Andrew Newell (Viaero Wireless), Dave Bickett (Park Region Mutual Telephone/Otter Tail Telecom/Valley Telephone), Phil Jones (Washington Utilities and Transportation Commission), David Russell (Calix), Christopher McLean (Rural Utilities Service)
This panel revolved around the perpetual debate of wireless vs. wireline, and which one is better to meet the goal of deploying broadband to the country's unserved areas. The moderator insisted the panelist operate under the premise that the new USF ecosystem will have finite (capped at 2010 levels) resources and should be distributed in a technology neutral manner. A lot of people, myself included, have difficulty with the proposal that USF be capped at 2010 levels--from an economic standpoint it is an outlandish request. Would you tell your employees that they could not receive a raise for 10 years and expect them to stay at your company? Is there any other industry that operates under the assumption that costs will not increase in 10 years, and if they do--thats just too bad? Anyway, the panelists were not allowed to digress about the size of the fund, which totally killed some of the potential controversy that would have ensued in this discussion. The panel was asked to weigh in on how higher broadband speeds will be achieved without actually increasing the size of the fund, and Dave Bickett (the panelist from an RLEC and rural CLEC in rural Minnesota) responded that consumers are constantly expecting and requiring higher speeds, so it is important that the restricted USF does not hinder the ability of networks to grow in order to meet these demands. Two panelists (Andrew Newell of Viaero Wireless and Mark Cooper, who I may not always agree with but have seen at conferences before and I really enjoy hearing his arguments--he is a very engaging and passionate speaker) were insistent that wireless is the best solution, as it makes the most economic sense and it is "infinitely more valuable" to consumers. Next, the panel was asked to discuss the opportunity for synergies between wireless and wireline--afterall, you cannot even have wireless service without a wireline backbone! It is so unfortunate how few people realize this.... Anyway, Dave Bickett explained that his rural customers have a specific need for both mobile and fixed broadband, but fixed broadband is really the necessary and valuable service. David Russell of Calix added that Verizon does not even allow wireline carriers to serve LTE towers unless they have a fiber connection, which I found to be really interesting. He also added that many people will not buy homes unless there is an adequate broadband connection--and wireless does not count. Later in the discussion, Dave Bickett argued that fiber is actually cheaper to deploy in extremely rural, long loop areas than copper. He added that his company deploys fixed wireless in order to help push fiber further out and offer customers a quality interim broadband technology until fiber is fully deployed--I happen to think this is a really smart strategy, where a small rural carrier can leverage fixed wireless on a temporary basis in order to serve more/new customers until FTTH is fully deployed. Bickett also discussed the broadband adoption challenges that his provider faces--he admitted there is only about a 45% adoption in his service areas. He is striving to overcome the adoption challenge by educating his communities about the value of broadband, and he has developed a creative solution with the city to market the town as a broadband-ready area perfect for telework. He has even invited representatives from Microsoft and Blue Cross to talk to members of this community, which has been hit particularly hard by the recession. As a result, the community is seeing new jobs and the provider is gaining customers and helping to increase broadband adoption. It is definitely important for rural providers to address the adoption issue--it is an unfortunate fact that broadband adoption is typically 10% lower in rural areas for a variety of reasons. By increasing adoption, the provider increases revenue, and then has a greater chance of securing loans from RUS and lenders like CoBank, and can therefore continue deploying and upgrading high bandwidth networks. Many USF issues are very circular when you look at the big picture. In the final comments of the discussion, the RUS panelist added that RUS tries to make the best possible long term investments, which facilitate "graceful upgrades" when consumer demands change in the future and funding recipients must upgrade or face competitive annihilation. Finally, Mark Cooper compared the challenge at hand to the rural electrification challenge from the 1930s. He pointed to the success of the cooperative business model in rural areas in delivering electricity to nearly 70% of the country's landmass, and how this monumental challenge was addressed with a really pragmatic solution. Overall, I enjoyed this panel and leaned some interesting facts and anecdotes about both fiber and wireless. I agree with some of the panelists that both fiber and wireless are the critical technologies to meet the goal of deploying broadband to unserved rural areas, and I agree that these two services are highly complimentary both from a consumer perspective and from a provider perspective. I really wished there was more cooperation between service providers with different technologies, especially in rural areas. The challenges will not be overcome with constant infighting and bickering about which technology is better.

Panel #3: Phase 1 of the Connect America Fund--Targeting Support for Unserved Areas Through Technology-Neutral Competitive Bidding
Panelists: Joseph Cavender (Moderator), Grant Spellmeyer (US Cellular), Jason Hendricks (RT Communications), Maggie McCready (Verizon), Ross Lieberman (American Cable Association), Jose Jimenez (Cox Communications), Greg Rosston (Stanford Institute for Economic Policy Research)
The final panel of the day was all about making competitive bidding--AKA reverse auctions--work under the goals of CAF. This was arguably the most controversial panel of the day, with some of the most heated and exciting debates as the panelists were either fiercely anti-reverse auctions or fiercely pro-reverse auctions. As someone who is fiercely anti-reverse auction, I was interested in hearing how "my side" responded to the reverse auction proposal. I hoped they had plenty of ammunition in the form of well thought-out arguments and legalese, and I was ultimately very happy with the panelist from US Cellular and the panelist from RT Communications, an RLEC in Wyoming and Montana. Grant Spellmeyer from US Cellular argued that a single winner reverse auction is contradictory to the 1996 Act, and since USF sits in Title II, the FCC needs to limit eligibility to only Title II carriers. If an auction determines a single winner only, significant government oversight will be required. Taking the pro-reverse auction perspective, the panelist from Verizon argued that reverse auctions are very effective and produce very efficient outcomes. My question is this: how do you know? Reverse auctions have not been used in the US to deliver broadband to unserved areas, and reverse auctions have failed spectacularly in other countries where they have been applied in a similar manner as the FCC proposes. I honestly believe that Verizon supports reverse auctions because Verizon knows they will win most of the auctions. When your perspective is from the apex of the auction kingdom, you will agree with anything that will further your reign over the industry. Jason Hendricks from RT Communications added that reverse auctions will threaten existing investments, reduce the ability for rural carriers to pay back loans, and rely on the broadband map which is unreasonably inaccurate and will at best always be out of date. He argued that reverse auctions should start off as a pilot program in price cap areas. The panel addressed the scale of the bidding area, which has also been a contentions component of reverse auctions. Not surprisingly, there was very little consensus about the ideal size of a bidding block. It was even suggested that auction participants can bid on blocks or tracks that are not even located in the same state--such as a few census blocks in Texas and a few census blocks in Washington and a few in North Carolina--all in the same bid. Clearly, this idea proposes some significant challenges for RLECs and could effectively push an RLEC out of the game unless the blocks are contiguous and relevant to their current market. RLECs are also concerned about "cherry picking," where the larger carriers can single out specific census blocks that might be the easiest or cheapest to serve--which would artificially drive down the bidding price without actually addressing the real problem of serving high cost unserved areas. The panelist from US Cellular was especially concerned that a single winner would essentially become a government selected monopoly provider, and this would significantly harm future competition. Additionally, how would the FCC ensure that the winner actually follows through with providing service to the most costly and difficult unserved areas? This brings up an interesting debate about unserved areas and how the USF reforms will play out in the near future--how do you address currently unserved areas that will be served in the next year (areas where a service provider is already planning deployment, which is NOT included on the broadband map as it should be)? Will a single auction mechanism satisfy funding needs for soon-to-be-served areas and areas that probably won't get service for many years? The panelist from Verizon argued that focusing heavily on the provider who gets the money is not meeting the actual objective of USF--to provide service in unserved areas. She asked: Who cares which provider wins the auction so long as broadband is deployed quickly and efficiently? Well, small companies care if Verizon suddenly takes all of the USF money available for broadband but continues to ignore the deeply rural areas. I imagine their customers care as well. Clearly, it will be challenging for the FCC to determine the appropriate conditions for the auction winners--I did not pay particularly close attention to this topic when I was reading comments, but auction conditions will obviously play a significant role in who ultimately participates in the auctions. The FCC must take caution to not impose conditions that actually end up shaping the outcome to favor one class of carriers or one type of technology--this would be extremely contradictory to the goals of USF. The conditions, the bidding area size, and the definition of unserved areas for the purpose of bidding must all be crafted carefully and based on input from all potential participants. Overall, I am not even slightly more convinced that reverse auctions are a good idea and I am even more concerned about how they will effect RLECs if they become the standard for distributing USF funds for broadband.

"Who says talking about universal service isn't fun?" I didn't catch who said that--I think it was the moderator--but at least I was laughing by the end of the workshop.

I learned a lot from this workshop and I am really grateful to the FCC for putting these summits together and making sure the public is able to watch them--I hope that the public is actually taking advantage of these resources to learn about the issues in the telecommunications industry. I'm really looking forward to the next workshop which takes place in my (near) home city of Omaha, Nebraska. I'm actually in Omaha now, I guess I was a couple weeks early with my visit.

After my final exams are finished next week, I will be taking a closer look at the Rural Association Plan, and I will start my International Telecom Policy Spotlight by focusing on--you guessed it--the failure of reverse auctions in other countries.

Cassandra Heyne
ruraltelecommentary@gmail.com

To read my review of the previous FCC Workshop on intercarrier compensation, click here.
To read my summaries of the USF Reform comments, click here for the RLEC perspective and here for the price cap perspective.