Gov. Andrew Cuomo announcing rural broadband initiatives in New York.

When New York Gov. Andrew Cuomo boasted in 2015 that anyone who wanted broadband service in the state would have access to it, he could not have realized that claim would come back to haunt him five years later.

New York’s Broadband for All program claimed to be the “largest and most ambitious state broadband investment in the nation,” with $500 million set aside “to achieve statewide broadband access by 2018,” with “99.9% of New Yorkers” getting access to broadband service.

In 2020, that goal remains elusive, with over 80,000 New Yorkers relegated to heavily data-capped satellite internet access and potentially tens of thousands more left behind by erroneous broadband availability maps that could leave many with no access at all. Now it appears the federal government will not be coming to the rescue, potentially stranding some rural residents as a permanent, unconnected underclass.

The Republican-majority at the Federal Communications Commission has decided to take the Democratic governor at his word and exclude additional rural broadband funding for New York State. The FCC’s recently approved Rural Digital Opportunity Fund (RDOF) is the most ambitious rural broadband funding initiative to date, with a budget of $20.4 billion. As it stands, not a penny of those funds will ever be paid to support additional broadband projects in the Empire State.

“Back in 2016, the governor of New York represented to this agency that allocating the full $170 million in Connect America Fund II support to the state broadband program would allow full broadband buildout throughout the Empire State, when combined with the state’s own funding,” said FCC Commissioner Michael O’Rielly.

That $170 million was originally designated for Verizon to spend in upstate and western New York in areas without high-speed broadband. When Verizon declined to accept the funding, the rules for the program required the money to be made available for other qualified projects in other states, or left forfeit, unspent. An appeal from New York’s Senate delegation to FCC Chairman Ajit Pai to award that $170 million to New York’s Broadband for All program was successful, allowing other phone, cable, and wireless providers to construct new rural broadband projects around the state. That decision was met with criticism, especially by the Wireless Industry Service Providers Association (WISPA), which represents the interests of mostly rural, fixed wireless providers around the country.

O’Rielly

“After robust opportunity for public input, last year the FCC adopted a CAF-II framework that was truly technology-neutral and designed to harness the power of competition to deliver the most broadband to the most Americans, at the lowest overall price,” said Steve Coran, counsel for WISPA, in a statement. “Unfortunately, today’s action appears to deviate from this approach by providing disproportionate support to one state at the expense of others, which will now be competing for even less federal support.”

That criticism was partially echoed by Commissioner O’Rielly, who appreciated the dilemma of rural New Yorkers without access to high speed internet, but felt the FCC was showing favoritism to New York, which he worried was getting a disproportionate share of federal funding.

“These are federal [Universal Service Fund] dollars taken from ratepayers nationwide. They are not New York State funds, and we have the burden of deciding how best to allocate these scarce dollars, as well as the right to demand that they be spent wisely,” O’Rielly said. “At the same time, I am concerned that the funding will not be used as efficiently as possible. It should not be lost on everyone that New York is one of the states that diverts 9-1-1 fees collected to other non-related purposes, as is noted in the Commission’s recent report on the subject. We should have received assurances that New York would cease this disgraceful practice.”

O’Rielly added that offering even more generous funding in New York could lead to overpaying providers to service rural New York communities at the expense of other, cheaper rural broadband projects in other states.

Recently O’Rielly claimed that allowing New York to receive funding under the new RDOF program would almost guarantee dollars would be spent on duplicative, overlapping broadband projects, noting that Gov. Cuomo already considers New York almost entirely served by high speed providers. In fact, he claimed any additional funding sent to New York would be “beyond foolish and incredibly wasteful” and would undermine the rural broadband program’s objective to avoid funding projects in areas already served by an existing provider.

In other words, since Gov. Cuomo has claimed that virtually the entire state is now served with high speed internet access, O’Reilly believes there is no reason to award any further money to the state.

Except the claim that ‘nearly the entire state already has broadband access’ is untrue, and O’Rielly’s arguments against sending any additional money to New York seem more political than rational.

The FCC’s broadband availability map shows significant portions of New York in yellow, which designates no provider delivering the FCC’s minimum of 25/3 Mbps broadband service.

First, the FCC’s own flawed broadband availability maps, criticized for over counting the number of Americans with access to broadband, still shows large sections of upstate and western New York unserved by any suitable provider. Parts of western New York between Buffalo and Rochester, significant portions of the Finger Lakes, Southern Tier, and North Country are all still without access. An even larger portion of upstate New York has either no access or very slow access through DSL. The number of residents without service is significant. The FCC uses census blocks to measure broadband availability, but this methodology is flawed because if even one home within that block has broadband while dozens of others do not, the FCC still counts every home as served. This has angered many New Yorkers stuck without service while a local cable or phone company offers high-speed internet access to neighbors just up the road. Many of these rural residents are not even designated to receive satellite service, Broadband for All’s last catchall option for areas where no wired provider bid to provide service.

Second, long-standing rules in broadband funding programs already deny funding to areas where another suitable provider already offers service. So it would be impossible for RDOF to award “wasted” funding to projects where service already exists.

While Gov. Cuomo’s boastful claims about broadband availability opened the door for discriminatory rules against the state, the FCC itself wrote the rules, and it appears the goal was one part payback for securing earlier broadband funding over the objections of Commission O’Reilly, and one part sticking it to a state that has given the Trump Administration plenty of heartburn since the president took office.

No service.

Despite New York Gov. Andrew Cuomo’s $500 million, 2015 Broadband for All initiative which guaranteed broadband service for anyone  that wanted home internet access, five years later rural broadband gaps continue to plague the state.

A bill that would set aside funds to complete a feasibility study to launch a state owned broadband provider of last resort was quietly vetoed by Cuomo at the end of 2019. Assembly member Aileen Gunther (D-Monticello) sponsored the bill after hearing scores of complaints about terrible or non-existent internet access from constituents in her district, which covers the parts of the rural Catskills region north of the Pennsylvania border.

Gunther complained that despite the governor’s broadband initiative, private phone and cable companies were still ignoring rural customers, leaving them with slow DSL service or no internet access at all. Gunther’s bill was a first step in potentially allowing the state to step in and provide service to New Yorkers unable to get broadband from any private provider.

New York has spent over $500 million on its Broadband for All program and made Charter Spectrum an integral part of its broadband expansion plans in return for approval of its 2016 acquisition of Time Warner Cable. But a growing number of the governor’s critics claim the program has failed to deliver on its mandate, stranding thousands of New Yorkers without internet service and tens of thousands more with just one option — unpopular satellite internet access.

Gunther

Gunther was upset to learn that New York was prepared to hand over more than a half billion dollars to large private telecom companies including Frontier Communications and Verizon while not being willing to spend a penny to fund projects to reach New Yorkers for-profit companies could not be dragged kicking and screaming to service.

“We’re all spending millions and millions of dollars on privately owned internet service providers,” said Gunther. “In return for promises, a lot of our communities do not have access to the internet, or if they do have access to the internet, it’s slow and these companies are not, I think, fulfilling the promises made.”

The rural broadband problem is not resolved in the Finger Lakes or Southern Tier regions of New York either. This week, Yates County announced it was joining an effort by Schuyler, Steuben, and Tioga counties, and the Southern Tier Network, to complete a broadband feasibility study to improve internet access in the four counties. Fujitsu Broadband will manage the study and hopes to have results by June. The study will target the pervasive problem of inadequate broadband service in the region, which includes crucial tourist, winery, and agricultural businesses vital to New York’s rural economy.

Gov. Andrew Cuomo announcing rural broadband initiatives in New York in 2015.

Gov. Cuomo has called such initiatives “well-intentioned” but was non committal about contributing more state funds to construct new networks or underwrite further expansion of existing ones. New York is about to begin its annual hard-fought budget negotiations in hopes of completing the state budget by April. Finding funding for such projects will probably require a powerful political advocate able to wrestle funding for further broadband improvements.

Even after spending $500 million, New York’s rural broadband problem has not been resolved. That offers insight into the merits of other state broadband programs, which often limit annual broadband expansion funding to under $30 million annually.

Those still without service are likely in high-cost service areas, where each customer could cost over $20,000 to reach. New York’s Broadband for All program relied on a reverse auction that required private companies to bid to service each unserved address. No wireline provider bid on any high-cost service areas, leaving Hughes Satellite as a subsidized satellite provider of last resort. But inadequate broadband mapping left scores of rural New Yorkers behind without even the option of subsidized satellite internet access.

More than 121,000 homes and businesses in 17 states will receive subsidized satellite internet service from Viasat, after the Federal Communications Commission awarded $87.1 million to connect customers at those locations at a cost of just over $715 per customer.

The money is part of the ongoing Connect America Fund (CAF) program, designed to subsidize the costs of delivering internet access in high-cost, typically rural areas. The current iteration of the program is dispensing funding over 10 years to 45 states. Viasat won the funding through an auction procedure that makes it easy for satellite providers to win funding because of low infrastructure costs to service rural areas that lack a wired internet service provider.

An additional $2.1 million was awarded to some other providers:

• Fixed wireless provider LTD Broadband, which relies on 1,500 wireless internet tower sites covering over 40,000 square miles of Iowa, Minnesota, Nebraska and South Dakota.
• Horry Telephone Cooperative, which serves rural customers in Horry County, S.C.
• Bruce Telephone Company, which won funding for parts of Wisconsin to deliver gigabit internet service.
• JCWIFI, which provides fixed wireless internet within a 3,000 square mile service area covering parts of Illinois, Iowa and Wisconsin.

In addition to the upper Midwest and South Carolina, the biggest states expected to benefit from the latest awards are (northern) California and Wyoming.

At least $2 billion in subsidy funds became available after larger providers — AT&T, CenturyLink and Verizon turned down funding because the companies had no interest in building out their networks in rural service areas.

Sen. Joe Manchin (D-W.V.) wants every West Virginian to test their internet speed and send his office the results to ferret out deceptive service maps and uncover more information about the state’s ongoing broadband problems.

“We’re urging everyone to do these speed tests,” Manchin told residents in Lewis County last Sunday. “We need to know, and people need to be involved in West Virginia, if they ever want to have broadband, high-speed internet and cell service. This is what we’re fighting for.”

Manchin is on a mission to debunk FCC Chairman Ajit Pai’s claims that rural broadband has grown under Pai’s leadership. Manchin believes the FCC’s broadband coverage maps are wildly inaccurate, advertised speeds are not met, and many rural residents in the state are left without internet access.

The senator intends to send the speed test results to Pai’s office, and he wants consumers to use the FCC’s own free speed test app (for Android and iOS) to “cover [Pai]” with piles of speed test results shining a light on the problem.

“There’s an FCC app that you can download on your phone,” Wes Kungel, legislative director for Manchin’s office told WVNews. “If you download that, you can hit a little button and it will tell you your speeds. If you email or mail that to our office, we will put it in a letter and send it personally to Chairmen Pai.”

Sen. Manchin

The ongoing problem with faulty broadband service maps have allowed a select group of telecom companies (many responsible for the data used by those maps) to receive federal funding to expand their own broadband businesses while preventing others from getting funding claiming the new providers would receive government funding to overlap their existing service areas.

“This is really where it all started,” he said. “[People] contacted us a few years back and basically they weren’t getting the coverage. They could not get coverage because [the FCC] said the maps showed that there was already coverage here. So we came out and did the speed tests.”

Manchin argues that West Virginia is among the most broadband-challenged states and inaccurate maps will result in the state not getting its fair share of the estimated $20 billion the FCC plans to distribute in rural America to improve broadband service.

“There’s no state that needs it more than rural West Virginia,” Manchin added. “A ‘urban’ community is 50,000 (people) or more. We don’t have one city in West Virginia with 50,000 so we have nothing to compare it to. We are all rural and we’re going to have to fight for every dollar that we can to get connected.”

West Virginians can submit their speed test results to Sen. Manchin’s office by following this link.

Gov. Newsom

California’s efforts to address the state’s ongoing rural broadband problems made little headway in 2019, as Democratic Gov. Gavin Newsom in the past week vetoed (or allowed to expire) the only two broadband measures surviving the treacherous journey through the California legislature.

Assembly Bill 1212 would have made rural broadband a priority for Caltrans — California’s Department of Transportation and the Department of Water Resources, including broadband on recommended lists of projects for funding consideration by two of the state’s largest pension investment funds: the California Public Employees Retirement System and the California State Teachers Retirement System. Current state law only allows pension boards to invest in in-state infrastructure projects that meet certain fiduciary responsibilities. By expanding investment projects to include telecommunications, funding from two major pension funds might have been unlocked and made available to future rural internet projects.

Assembly Bill 417, also known as the Agriculture and Rural Prosperity Act, included several measures targeting rural farming. Two passages in the bill would have included broadband expansion as a new priority for the California Department of Food and Agriculture (DFA):

Due to the central role of agriculture in rural California, it is necessary to achieve a detailed understanding of the economic value that agriculture brings to rural communities and to identify opportunities to improve agricultural productivity, including by increasing broadband access, advancing agricultural innovation, technology, and education, and supporting a well-trained, productive rural workforce, to benefit rural communities.

[…] Making recommendations to the secretary on actions to further the development of rural agricultural economies, including, but not limited to, increasing broadband access, providing technical, resource, and regulatory compliance assistance, advancing agricultural innovation and technology, establishing programs for education and workforce development, and evaluating recreation and tourism opportunities.

Several other proposed measures, including AB 1409 which would have created a fund for providing wireless hotspots for students and Wi-Fi service on school buses was killed last spring behind closed doors in the California Assembly’s Appropriations Committee. The annual attempt by AT&T and other telecom companies to write their own laws to deregulate themselves (this time AB 1366), was suddenly pulled from committee consideration by its author back in September.

That the two mild measures made it through the legislature to the governor’s desk was not surprising considering the sheer number of minor bills that pile up on Newsom’s desk. But for both to suffer quiet deaths through veto or expiration despite almost no public opposition speaks to the power of Sacramento insider politics.

Newsom’s explanation for killing AB 1212 was hardly compelling, as he explained he felt the measure was “unnecessary” because “existing law already encourages public retirement systems to invest in state infrastructure.” But that explanation ignores decades of state government bureaucracy, where agencies zealously guard their funding and protect their own existing project priorities to the hilt. AB 417 would have expanded the mission of the DFA, something the governor argued should only be done in the state budget and only within the specific context of the broader mission of the department, whatever that means. The head of the DFA was likely thrilled anyway.

Telecom consultant Steve Blum notes Caltrans and other state agencies were unlikely to ever consider rural broadband a funding priority, unless it was intended for their own use. Blum also believes the most likely suspects responsible for convincing the governor to kill both bills were the heads of the departments themselves.

“The simplest explanation for Newsom’s vetoes is that Caltrans, DWR and/or DFA staff asked him to do it, because those are jobs they don’t want to do,” Blum wrote on his blog. “That sort of opposition was why a Caltrans dig once policy bill was watered down in 2016.”

Blum believes the state’s largest phone companies will benefit the most from the outcome of the 2019 legislative session.

“Newsom’s vetoes bolster AT&T’s and Frontier’s rural monopoly business model, which redlines poorer and less densely populated communities and leaves them with low speed DSL service, if they’re lucky enough to get anything at all,” he wrote.

The loss of AB 1212 and 417 won’t change much for Californians waiting for rural broadband. Neither measure would have led to any immediate improvement in internet access in the less populated areas of the state. But the measures would have set a foundation to bring two more state agencies into the fight to tackle rural broadband issues.

Ultimately, just as in other states, a large amount of money will have to be found to wire those still without internet access. Governments and regulators can either make rural internet expansion a contingency of future merger deals or other business-government transactions or find suitable funding to subsidize the cost of internet expansion by for-profit companies, rural co-ops, or local governments willing to tackle the problem on the local level.