California Legislators have turned on their constituents living in rural areas who want to participate in the 21st century online economy. What began as a move in the right direction - allocating substantial resources to funding high-speed Internet infrastructure - has become another opportunity to protect big incumbents. It’s twice as nice for Frontier and AT&T, because they will be paid big bucks to meet a low Internet access bar.

Discretionary Fund

Democrat Eduardo Garcia, the main author on Assembly Bill 1665, represents the Coachella Valley, a rural area in the southern area of the state near Palm Springs. Democrat Jim Wood coauthored with eight others. Wood represents coastal areas in the northern part of the state, which was passed during the eleventh hour of the 2017 legislative session. Wood’s district and region has obtained several grants from the California Advanced Services Fund (CASF) that have helped to improve local connectivity. 

The CASF is much like CAF; both programs are funded through a surcharge on revenue collected by telecommunications carriers from subscribers. Since 2007, when California authorized the CASF, the legislature has amended the rules and requirements several times. Early on, CASF awards went primarily to smaller, local companies because large corporations such as AT&T and Frontier did not pursue the grants. Now that those behemoths have their eyes on CASF grants, they’ve found a way to push out the companies who need the funds and have shown that they want to provide better services to rural Californians.

AB 1665 allocates $300 million to Internet infrastructure investment and an additional $30 million to adoption and related local programs. Policy experts have criticized the legislation on several fronts. Consultant Steve Blum told CVIndependent:

The incumbents (large corporate ISPs) including AT&T, Frontier and the California Cable and Telecommunications Association jumped in and said, ‘We want the bill to be X, Y and Z.’ … Assemblymember Eduardo Garcia took it and started adding language that reflected the desires of these cable and telephone company incumbents.

Another addition to our Community Networks Initiative resources! This fact sheet details the most important aspects of the Connect America Fund (CAF) Auction. What is it? What should it do? Who does it affect? And how can you make a difference?

The Federal Communications Commission (FCC) manages the CAF program, which provides billions of dollars in subsidies to Internet service providers for areas where the cost of building networks is prohibitive. Some large providers decided not to accept some of the subsidies during Phase I - about $198 million annually for 10 years. Now, the FCC plans to host an auction so that providers can submit competing proposals on how best to serve these often rural, high-cost areas. (Check out the map of preliminary areas on the FCC website.)

Before the FCC can hold an auction though, the commission needs advice on how best to conduct it and what criteria they should consider. Jon Chambers, former head of the FCC's Office of Strategic Planning and Policy Analysis, outlined his concerns about the current proposed rules in his article, The Risk of Fraudulent Bidding in the FCC Connect America Fund Auction. Listen to his analysis on Episode 268 of the Community Broadband Bits Podcast.

The first round of public comments has passed, but reply comments are due October 18th, 2017. Read the fact sheet and then submit your own comments at FCC.Gov/ecfs/filings for "Proceedings" Docket 17-182 and Docket 10-90.

This is the transcript for episode 268 of the Community Broadband Bits Podcast. Jon Chambers of Conexon once again joins the show. This time Jon dives into the details of the Connect America Fund program and discusses the upcoming Connect America Fund auction. Listen to this episode here.

Jon Chambers: Rural Americans, have the same aspirations, the same needs, the same uses of the Internet as everyone else. It shouldn't surprise anyone when I say, rural Arkansans, rural Missourians subscribe to gigabit services too. It does surprise people. It surprises people at the FCC, it surprises policy makers. Doesn't surprise people who live and work and spend their lives in rural America.

Lisa Gonzalez: This is episode 268 of The Community Broadband Bits Podcast from The Institute For Local Self-Reliance, I'm Lisa Gonzalez. As the question of how best to bring high quality Internet access to rural America becomes more pressing, rural cooperatives are rapidly taking a leading role. This week's guest, Jon Chambers, works with electric cooperatives that decide they want to offer high speed connectivity. Jon spent time working for the FCC and has a special understanding of how the agency approaches review and funding for telecommunications. In this conversation, he and Christopher talk about the Connect America Fund. Learn more about Jon's firm, visit their website at conexon.us. Now, here's Christopher and Jon Chambers from Conexon.

Christopher Mitchell: Welcome to another edition of The Community Broadband Bits Podcast. I'm Chris Mitchell at The Institute For Local Self-Reliance. Today, I'm once again with Jon Chambers, a partner at Conexon. Welcome back to the show Jon.

Jon Chambers: Thank you Chris. Thanks for inviting me.

Christopher Mitchell: You've been on the show multiple times recently, talking about how rural electric cooperatives can basically solve this problem for all of rural America. Do you want to briefly remind us what Conexon is?

It’s been about two years since the people of Lincoln County, Wisconsin, learned that Frontier Communications received federal funding to expand Internet access in their region. Now, they’re wondering why Frontier has still not started construction of promised infrastructure.

A Long Road To Nowhere

The community has been seeking ways to improve local connectivity for years. Back in 2013, they held a series of local listening sessions and workshops with officials from the University of Wisconsin-Extension Center for Community Technology Solutions. The goals of the workshops were to educate community members about the importance of connectivity and to learn more about the availability of Internet access at the local level. The meetings addressed both residential and business needs. 

In the summer of 2015, county officials announced that they had been working on an initiative to find a way to improve connectivity throughout Lincoln County. By engaging members of the public in town hall forums they had learned that the general consensus was:

“For the most part, people are disappointed with their current service.”

“Generally speaking, their current Internet service is not fast enough and there just isn’t enough capacity to do what they want to do.”

Community leaders were also learning that a fair number of home-based businesses were popping up in the county.

If you live in rural America, chances are you know what it’s like to have inadequate Internet access. If you've heard about the Connect America Fund, however, you probably think help is on the way and your problems will soon be over; you'll get the kind of speeds available in large cities, right? Wrong.

Our short video on rural connectivity and CAF explains how big companies are taking federal subsidies to build networks that provide the same old slow DSL service to rural areas. So, what can people in rural communities do? The video describes how local communities are becoming more self-reliant through publicly owned infrastructure and offers some starting points if you're interested in learning more.

More Of The Same? No Way!

The Connect America Fund (CAF) is offering billions of dollars to build out networks in rural areas, but the companies receiving the subsidies are the same ones that already offer terrible connectivity in most rural communities. Are they using those subsidies to invest in high-speed connectivity for rural areas? No. The DSL connections that those companies are deploying for your home or business with CAF funding is already considered obsolete.

Rather than accepting these substandard solutions, an increasing number of communities have decided to act so they can have the same or better quality of connectivity as urban areas. Rural cooperatives and municipal networks are taking charge of their own telecommunications infrastructure needs. Unless you live in one of these communities, you may have never heard about the fast, affordable, reliable connectivity available from a community network or a cooperative. They’re just doing it and not bragging about it.

YOU Make It Happen

How does a community or a cooperative start offering better connectivity? We’ve created this short video that explains the basics and we invite you to share it with others. It all starts with YOU.

Be sure to check out our other videos, too!

Update: Please note, this information is now out of date. It was developed in 2017. 

This is the central hub for ILSR’s research on Internet access around the Appalachian United States. We have compiled federal statistics on broadband availability and federal subsidies for large Internet Service Providers. We've created detailed maps of 150 counties in Kentucky, Southeast Ohio, and northern West Virginia.

We've also created Rural Toolkits for Kentucky, Southeast Ohio, and northern West Virginia. These toolkits offer a big picture look at connectivity on a regional and statewide level.  They also provide action steps for folks to learn more and get involved.

Remember these three key details when reading through this information:

Internet access: if you can get online, check email, and browse the web.

Broadband: the Federal Communications Commission (FCC) currently defines this as speed of 25 Mbps download and 3 Mbps upload. 

Fiber-to-the-Home (FTTH): a high-speed fiber-optic connection directly to the home. This type of technology can support speeds of more than 1,000 Megabit-per-second (Mbps).

Appalachia can get better Internet service, but the big companies aren’t going to do it. Cooperatives and small towns are stepping up and delivering world-class Internet service.

Kentucky

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This information covers the entirety of the state – all 120 counties.

Rural Toolkit: This toolkit provides the basics of how to get started. From what is broadband to the details of federal funding, this toolkit has got you covered. At the back, it includes a statewide fact sheet, which is also available separately.

We haven’t reported on East Central Fiber (ECFiber) in almost a year and, boy, are things hopping in Vermont. The community network has obtained funding to expand in east-central Vermont and have a plan to bring high-quality connectivity to more towns during the next two years. In the mean time, FairPoint Communications is using federal funding to overbuild inferior DSL in many of the areas already served by ECFiber. No, this is not an April Fool's Joke.

First, The Good News: ECFiber Is Growing

We recently touched base with Carole Monroe, Stan Williams, and Irv Thomae from ECFiber in Vermont to get caught up on what's happening with the publicly owned network comprised of 24 member towns. 

The last time we shared an update, they had just announced plans to expand the Fiber-to-the-Home (FTTH) network. The organization of 24 member towns received an infusion of $9 million in revenue bonds, which allowed ECFiber to pay down existing debt and add more fiber miles to the network.

Prior to obtaining the new funding source, ECFiber had always used the crowd funding approach, which limited growth to small and steady deployments. In 2015, the state legislature enacted a state law that created “communications union districts.” A Union District can consist of municipalities that join forces to invest in Internet infrastructure; the new model made it easier for ECFiber to obtain funding for larger deployments.

This February, ECFiber announced that the network would now bring service to parts of Royalton, Strafford, Pittsfield, and Randolph, with more growth on the way:

Jonathan Chambers from Conexon works with rural electric cooperatives as they bring high-quality Internet access to rural America. When he spoke with Christopher for episode 229 of the Community Broadband Bits podcast last November, he had some choice words to say about how the FCC chose to continue to subsidize big telcos for little return.

They Propose "A Huge Mess"

In a recent post on the Conexon blog, Chambers analyzes “The New Trumpfone Program,” and reveals how proposed Connect America Fund (CAF) subsidies, when applied to real world data, creates outrageous financial waste. While providers can receive up to $17,500 per location in CAF funding, when applied to a per subscriber formula, the figure is $100,000:

There are no U.S. communities where satellite or fixed wireless provides broadband to 100% of the homes and small businesses. Not 80% either, which is the FCC assumption. Not 50% or 25% or 15% or 10% or even 5%. The FCC has data on this. Let’s say, for this arithmetic exercise, that a satellite or fixed wireless subscriber achieves a 15% market share of telephone and broadband service in a rural community.

A 15% market share while receiving $17,500 for every location in an area translates into over $100,000 per subscriber. Should there be insufficient competitive pressure in the auction, the $17,500 per location is a realistic outcome, as is the likelihood of $100,000 per subscriber by some technologies.

Reimburse Per Subscriber

Chambers offers a sensible solution to save CAF funds and direct public dollars in the right direction: reimburse providers for actual subscribers, rather than by location.