March was a big month for lobbyists visiting the Federal Communications Commission, which opened the doors to wireless special interest groups for “ex parte” meetings with agency staffers that, in turn, brief the three Republicans and two Democrats that serve as FCC commissioners.

Last month’s ex parte filings reveal strong evidence of a coordinated, well-financed campaign by America’s wireless operators and cable companies to get the FCC to ease off regulations governing forthcoming 5G networks, particularly with respect to where tens of thousands of “small cell” antennas will be installed to deliver the service.

Four industry trade groups and companies are part of the concerted campaign to scale back third party control over where 5G infrastructure will end up. Some want to strip local governments of their power to oversee where 5G infrastructure will be placed, while others seek the elimination of laws and regulations that give everyone from historical societies to Native American tribes a say where next generation wireless infrastructure will go. The one point all four interests agree on — favoring pro-industry policies that give wireless companies the power to flood local communities with wireless infrastructure applications that come with automatic approval unless denied for “good cause” within a short window of time, regardless of how overwhelmed local governments are by the blizzard of paperwork.

Here are the big players:

The Competitive Carriers Association (CCA)

The CCA is primarily comprised of rural, independent, and smaller wireless companies. In short, a large percentage of wireless companies not named AT&T or Verizon Wireless are members of CCA. The CCA’s chief goal is to protect the interests of their members, who lack the finances and political pull of the top two wireless companies in the U.S. CCA lobbyists met ex parte with the FCC multiple times, submitting seven filings about their March meetings.

CCA’s top priority is to get rid of what they consider burdensome regulations about where members can place cell towers and antennas. They also want a big reduction in costly environmental, tribal, and historic reviews that are often required as part of a wireless buildout application. CCA lobbyists argue that multiple interests have their hands on CCA member applications, and fees can become “exorbitant” even before some basic reviews are completed. The CCA claims there have been standoffs between competing interests creating delays and confusion.

Costs are a relevant factor for most CCA members, which operate regional or local wireless networks often in rural areas. Getting a return on capital investment in rural wireless infrastructure can be challenging, and CCA claims unnecessary costs are curtailing additional rural expansion.

NCTA – The Internet & Television Association

The large cable industry lobbyist managed to submit eight ex parte filings with the FCC in March alone, making the NCTA one of the most prolific frequent visitors to the FCC’s headquarters in Washington.

The NCTA was there to discuss the Citizens Broadband Radio Service (CBRS) band, which is of particular interest to cable companies like Charter Communications, which wants to get into the wireless business on its own terms. Cable lobbyists, under the pretext of trying to avoid harmful interference, want to secure a large percentage of the CBRS band for their licensed use, at the expense of unlicensed consumers and their wireless industry competitors.

The cable industry wants CBRS spectrum to be wide, spacious, and contiguous for its cable industry members, which should open the door to faster speeds. The lobbyists want to make life difficult for unlicensed use of the band, potentially requiring cumbersome use regulations or costly equipment to verify a lack of interference to licensed users. They also want their traffic protected from other licensed users’ interference.

CTIA – The Wireless Association

The wireless industry’s largest lobbying group made multiple visits to the FCC in March and filed 10 ex parte communications looking for a dramatic reduction in local zoning and placement laws for the next generation of small cells and 5G networks.

The CTIA has been arguing with tribal interests recently. Tribes want the right to review cell tower placement and the environmental impacts of new equipment and construction. The CTIA wants a sped-up process for reviewing cell tower and site applications with a strict 30-day time limit, preferably with automatic approval for any unconsidered applications after the clock runs out. Although not explicitly stated, there have been grumblings in the past that tribal interests are inserting themselves into the review process in hopes of collecting application and review fees as a new revenue source. Wireless companies frequently question whether tribal review is even appropriate for some applications.

Sprint has had frequent run-ins with tribal interests demanding several thousand dollars for each application’s review under the National Historic Preservation Act (NHPA), which is supposed to protect heritage and historical sites.

In Houston, Sprint deployed small cells around the NRG Stadium, but found itself paying fees to at least a dozen Indian Tribal Nations as part of the NHPA. The NHPA opens the door to a lot of Native Americans interests because of how the law is written. Any Tribal Nation can express an interest in a project, even when it is to be placed on public or private property that is not considered to be tribal land. In Houston, Sprint found itself paying $6,850 per small cell site, not including processing fees, which raised the cost to $7,535 per antenna location. Those fees only covered tribal reviews, not the cost of installation or equipment. Some tribes offered better deals than others. The Tonkawa Tribe has 611 remaining members, mostly in Oklahoma. But they sought and got $200 in review fees for the 23 small cell sites deployed around the stadium. The Kiowa Indian Tribe of Oklahoma, not Texas, charged $1,500 for the 23 applications it reviewed.

Sprint complains it has paid millions in such fees over the last 13 years and no tribe to date has ever asked to meet with Sprint or suggest one of its towers or cell sites would intrude on historic or tribal property.

“Tribal Nations are continuing to demand higher fees and designate larger and larger areas of interest,” says Sprint. “At present, there are no constraints on the amount of fees a Tribal Nation may require or the geographic areas for which it can require payment for review. The tribal historic review process remains in place even in situations—such as utility rights-of-way—where the Commission has exempted state historic review.”

The CTIA wants major changes to the NHPA and other regulations regarding cell tower and antenna placement before the stampede of 5G construction begins.

Verizon

Verizon has been extremely busy visiting with the FCC during the month of March, filing 10 ex parte communications, also complaining about the tribal reviews of wireless infrastructure.

Verizon argues it wants to expand wireless service, not effectively subsidize Native American tribes.

“The draft order’s provisions to streamline tribal reviews for larger wireless broadband facilities will likewise speed broadband deployment and eliminate costs, thus freeing up resources that can, in turn, be used to deploy more facilities,” Verizon argued in one filing.

Verizon has also been carefully protecting its most recent very high frequency spectrum buyouts. It wants the FCC to force existing satellite services to share the 29.1-29.25 GHz band for 5G wireless internet. Verizon has a huge 150 MHz swath of spectrum in this band, allowing for potentially extremely high-speed wireless service, even in somewhat marginal reception areas.

“Verizon assured the commission that even when sharing with other services, we would be able to make use of the 150 MHz of spectrum in this block to provide high-speed broadband service to American consumers,” said one filing.

Bad results for Frontier DSL in Nevada. (Source: Elko Residential Broadband Survey)

Only six Frontier Communications customers surveyed in Elko, Nev. gave the phone company an “A” for its DSL service, while 42% flunked Frontier for what they considered unacceptable internet service.

The Elko Broadband Action Team has surveyed residential and business customers about broadband performance and found widespread dissatisfaction with Frontier Communications over slow connections and service interruptions.

“I’m pretty disappointed in them,” said Elko councilman John Patrick Rice.

Businesses and residential customers were in close agreement with each other rating Frontier’s service, with nearly 87% complaining they endure buffering delays or slowdowns, especially when watching streaming video. When browsing web pages, nearly three-quarters of surveyed customers still found service lacking.

Among the complaints (Res)-Residential (Bus)-Business:

• Service interruptions: 74.43% (Res)/79.69% (Bus)
• Too slow/not receiving advertised speed: 72.16% (Res)/65.75% (Bus)
• Price: 63.64% (Res)/37.5% (Bus)
• Customer Service: 38.07% (Res)/45.31% (Bus)

The Nevada Attorney General’s Bureau of Consumer Protection received a steady stream of complaints about Frontier’s DSL service in the state over the past year.

Answering the survey question, “would you be interested in faster download and upload speeds at prices that are somewhat comparable to what you are paying now?” 97.87 percent of residential respondents said yes.

Frontier representatives responded to the survey results at a March 27 Elko City Council meeting.

“Frontier did recognize it could improve upstream and downstream flow and educated the council and the public on some of the issues,” Elko assistant city manager Scott Wilkinson said.

CenturyLink is ready to capitulate in its competitive war with the cable industry, conceding its residential broadband business is a money loser that will no longer get broad-based upgrades and investment under the management of incoming CEO Jeff Storey, who will refocus CenturyLink on its larger business/enterprise customers.

The independent phone company has sent strong signals it is going to focus only on residential customers that are cheapest and easiest to reach, promising to fund broadband urban and suburban upgrades only where costs are low and the chances of a significant return is high. In rural areas, CenturyLink will depend heavily on capital made available by the FCC’s Connect America Fund when choosing areas worthy of upgrades.

“We’ll focus more on return on investment, which includes rural capital from the CAF II program,” said Sunit Patel, CFO of CenturyLink.

Patel, along with CenturyLink’s incoming CEO, originally worked for Level 3 Communications, a business and enterprise internet company acquired by CenturyLink in 2016. Now top Level 3 executives, at the behest of Wall Street and shareholders, are gradually taking over the top management positions of CenturyLink, pushing out current CEO Glen Post III with an early retirement this spring. With Post leaving, there is clear evidence CenturyLink is embarking on a transformation away from low return residential phone and broadband service and towards the kind of high profit business and enterprise connectivity Level 3 has provided for years.

Wall Street increasingly sees CenturyLink’s residential business as costing the company a lot of money for network upgrades that simply don’t deliver shareholder expectations of return on that investment, especially as the cable industry continues to aggressively deploy faster speed service to its customers.

In the fourth quarter of 2017, CenturyLink lost another 105,000 broadband subscribers, bringing internet subscriber numbers down to around 5.7 million nationwide. That represents a 4.8% reduction year over year, despite repeated promises of upgrades to stem those customer losses.

Last November, Post blamed those losses on customers served by CenturyLink’s legacy copper/DSL service areas where speeds and performance are lowest.

Soon to be CenturyLink Ex-CEO and President Glen F. Post

“We saw a much higher than expected loss of customers at the 20 Mbps and below speeds in a lot of the markets where we have that,” Post said during a late fall earnings call, according to a Seeking Alpha earnings transcript. “We had a much higher loss there. I think a couple of reasons, first of all, you see cable rolling out more with more aggressive offers, higher speeds and just the demand for bandwidth in those markets.”

Last fall, Post emphasized his broad-based residential and commercial broadband upgrade transformation plan to stop those losses. Post committed CenturyLink would provide 90% of homes with at least 40 Mbps, 70% of homes and businesses with 100 Mbps and over 20% with 1 Gbps or higher no later than 2020.

That was before activist shareholders and Wall Street joined forces to successfully push CenturyLink’s board to replace Post with business-oriented Level 3 CEO Jeff Storey. CenturyLink stock had been down by about one-third of its value over the last nine months, which only aggravated investors to push harder for dramatic management changes at the phone company. Activists argued CenturyLink shouldn’t be devoting much attention to its legacy businesses. In their eyes, only “strategic/success” businesses are worthy of investment, and those include commercial and enterprise broadband, metro ethernet, and cloud/backup services. The revenue eating “legacy” businesses, namely residential landline and DSL service, represent a drain on profits and threaten the company’s shareholder dividend. About two-thirds of CenturyLink customers are commercial enterprises.

(Blue) CenturyLink (Orange) Level 3

On March 6, 2018 the company announced Post’s retirement effective the day of its annual shareholder meeting in May. Post had originally planned to leave at the end of 2018, but some shareholders were unwilling to wait that long.

Strategic changes in CenturyLink’s future were previewed at the Morgan Stanley Technology, Media & Telecom conference earlier this month, where Patel outlined the company’s new vision.

“On the consumer side, the focus will be on enabling higher broadband speeds,” Patel said, but added a caution. “We won’t be spending capital on 5-20 Mbps connections, but rather on 100 Mbps and higher speeds. In urban areas we want to make sure we’re spending the capital where the returns make sense so focusing on multi-dwelling units make more sense in urban areas.”

Since the company is now going to target upgrades only in areas that “make more sense,” Post’s goal of better broadband for all by 2020 seem doomed

Another key piece of evidence is the retirement of CenturyLink executive Duane Ring, who announced he is leaving after 34 years despite a recent promotion. Ring, who led CenturyLink’s 12-state midwest region, was also behind much of CenturyLink’s residential broadband enhancement effort, including the 2005 launch of Prism TV — CenturyLink’s cable-TV alternative, as well as deploying gigabit speed services in several midwestern states. In 2016, he oversaw the deployment of 500 Mbps service for multi-dwelling units in 44 Platteville, Wisc. buildings that included nearly 800 apartments.

Broadband industry analyst Dave Burstein already sees the writing on the wall.

“Their fiber and G.fast plans, modest already, have been cut,” he noted. “They simply aren’t competitive with cable, which by 2020 will have a gigabit to 90% [of customers]. I look at the network and say if they don’t cut the dividend, trouble is near. Depreciation was $3 billion more than capex the last three years. Dividends were higher than income.”

As cable broadband speeds increase and customers defect from CenturyLink, few may choose to come back, making investments in broadband upgrades even more questionable.

“The rumor is they will virtually abandon much of the wireline network,” Burstein noted. “They will temporarily draw cash out to upgrade where they have better prospects,” referring to areas Patel identified as worthy targets for upgrades.

Gov. Wolf

Pennsylvania Gov. Tom Wolf wants broadband service to be available to every Pennsylvania resident by the year 2022, but will offer only a token amount of state funding to private bidders in the upcoming FCC Connect America Fund Phase II Auction.

“I want to ensure every Pennsylvania household and business has access to modern day high-speed internet,” Wolf said. “Equal access to the internet, regardless of location or income, must be provided if Pennsylvania is to remain competitive, if we want to offer every child the best education, if we want to live in a state where we all can access modern day healthcare options, if we want a state where our farms and other businesses thrive, and the jobs of tomorrow are created.”

Wolf will create the Pennsylvania Office of Broadband Initiatives, which will develop and execute a forthcoming state plan to get service to every corner of the state over the next four years. The governor will also set aside up to $35 million for his new Pennsylvania Broadband Investment Incentive Program, which is supposed to convince incumbent phone and cable companies to extend service into adjacent rural areas that lack service today.

According to State Rep. Pam Snyder (D-Greene/Fayette/Washington), about 800,000 Pennsylvanians currently lack broadband access. About two-thirds are in rural areas while the rest are in underserved urban areas served by providers that don’t meet the FCC’s definition of broadband service. About 20% of rural Pennsylvania residents are stuck with DSL as their only option, compared to 3% in urban areas. Broadband service is defined under Pennsylvania law as at least 1.544 Mbps download speed and 128 kilobits per second upload speed. The FCC’s national standard is 25/3 Mbps.

Areas where at least 25Mbps broadband is available in Pennsylvania (Blue – Cable, Brown – Fiber) (Map courtesy of Pennsylvania Department of Community Economic Development)

To achieve 100% coverage, providers would have to upgrade their networks and extend them to places that are currently unserved, as well as upgrade older broadband technology incapable of achieving 25 Mbps, the minimum federally defined speed qualifying as broadband.

Two years ago, Verizon turned down federal subsidies to expand rural broadband in the northeast, including $140 million earmarked for Pennsylvania and nearly $170 million for New York. New York won back money originally offered to Verizon, Pennsylvania did not and its share was forfeit. What made the difference?

“New York had a half a billion dollars they brought to the table,” said Pennsylvania Public Utility Commission spokesman Nils Hagen-Frederiksen last November. Pennsylvania offers up to $35 million.

Gov. Wolf’s new initiatives may be part of an effort to give the state’s rural broadband program more credibility in Washington, especially as up to $2 billion in new federal funding becomes available for broadband expansion across the country.

A separate effort now underway at Penn State involves an 11-month study of broadband access in rural Pennsylvania, in part to determine exactly how bad rural broadband service is in the state.

“Very slow and constantly having to reset it,” Sharon Czarniak of Turbotville told WNEP-TV in Scranton. “We get it through Verizon because it’s not available any other way in our area because it’s too rural.”

If service in the town of Turbotville is challenging, outside of town it is impossible.

“Surrounding areas all outside of Turbotville in the mountainous areas, there is no service for internet,” Missy Magargle said.

George Sudol told the TV station his internet service is weather-dependent.

“Storms, a little bit of rain or anything, will knock us right offline. Besides being slow, we have problems just getting online a lot of times,” Sudol said.

Unfortunately for the residents of Turbotville, and other rural communities across Pennsylvania, $35 million won’t go very far providing broadband improvements. But it is a start.

WNEP-TV in Scranton reports on faster internet for rural Pennsylvania. (2:37)

A bipartisan group of senators from some of America’s most rural and broadband-challenged states blasted the mapping skills of the Federal Communications Commission in a hearing Tuesday.

The senators were upset because the FCC’s Universal Service Fund will pay subsidies to extend wireless connectivity only in areas deemed to have inadequate or non-existent coverage. The FCC’s latest wireless coverage map is the determining factor whether communities get subsidies to expand service or not, and many in attendance at the Communications, Technology, Innovation, and the Internet subcommittee hearing quickly called it worthless.

Sen. Jerry Moran (R-Kan.) said the map’s “value is nil,” quickly followed by the Subcommittee chair Sen. Roger Wicker (R-Miss.) who added, “we might as well say it, Mr. Moran, that map is utterly worthless of giving us good information.”

“The simple answer is: it’s garbage in, garbage out,” said Steve Berry, CEO of the Competitive Carriers Association, which counts several small, rural cell phone companies as members.

This FCC map shows (in blue) areas identified as eligible to receive wireless subsidies to expand service where little or none exists today. (click map to expand)

The latest version of the map was heralded by the FCC as a significant improvement over the 2012 map used during the first round of funding. But critics like Berry claimed the map still relies entirely on carrier-provided data, much of it based on network capacity, and there is an incentive for existing wireless carriers to overestimate coverage because it assures funds won’t be given to potential competitors to strengthen their cellular networks.

The FCC claimed it gave carriers new benchmarks to meet in its latest map, including a request to only identify an area as covered if it achieves 80% certainty of coverage at 4G LTE speeds of 5 Mbps or more. To identify underserved zones, the FCC asked carriers not to identify areas that passed the first test as served if cell towers in that zone exceeded 30% of capacity. But Berry noted the FCC did not include a signal strength component, which means a carrier could report a significant area as getting adequate coverage based on the capacity of their network in a strong reception zone, even if customers nearby reported ‘no bars’ of signal strength or coverage that dropped completely once indoors.

Sen. Wicker

Senators from Kansas, New Hampshire and Mississippi were astonished to see maps that claimed virtually 100% of all three states were fully covered with mobile broadband service. The senators rejected that assertion.

Sen. Maggie Hassan (D-N.H.) has devoted a section on her website to collecting reports from New Hampshire residents getting poor cell phone reception, and she has been a frequent critic of the FCC’s coverage maps which she has repeatedly called inaccurate.

In northern Mississippi, wireless coverage is so poor the Mississippi Public Service Commission launched an initiative to collect real-world data about reception through its “Zap the Gap” initiative. But the FCC’s latest map suggests the problem is solved in the most signal-challenged areas in the northern part of the state, with the exception of small pockets in the Holly Springs National Forest, the Enid Lake area, areas east of Coffeeville, parts of Belmont, and areas east of Smithville.

The four major national wireless carriers suggest there is no problem with wireless coverage in Mississippi either. AT&T claims to reach 98% of the state, Verizon Wireless 96.43%, T-Mobile 66.36%, and Sprint 30.92%. Regional carrier C Spire claims 4G LTE coverage that falls somewhere between T-Mobile and AT&T in reach.

Sen. Jon Tester (D-Mont.) told the subcommittee in his state, the FCC’s maps have little resemblance to reality, showing 4G LTE speeds in areas where no cellular reception exists at all.

“The FCC is wrong, they screwed up, we’re getting screwed because they screwed up, so how do we fix it?” Tester asked. “There has got to be a way to get the FCC’s attention on this issue. We’ve got to do better, folks, it’s not working.”

Mississippi’s program to report cellular coverage gaps.

Independent cell phone companies that specialize in serving areas the larger carriers ignore are hamstrung by the FCC and its maps, according to Mike Romano, senior vice president for policy for NTCA – The Rural Broadband Association — a trade group and lobbyist for smaller rural providers. Romano told the subcommittee if any cellular company reports coverage to even one household in a census block (which can cover a large geographic area in rural states), that entire block is ineligible for Connect America Fund subsidies.

The FCC, rural carriers complain, is relying on small wireless companies to serve as the map’s fact checkers and forces them to start a costly challenge procedure if they want to present evidence showing the map is wrong. Such proceedings are expensive and time-consuming, they argue. Even if successfully challenged, that does not win the companies a subsidy. It only opens the door to a competitive bidding process where challengers could face competing bids from larger companies that made no effort to challenge the map data.

A group of senators signed a joint letter to FCC Chairman Ajit Pai complaining about the accuracy issues surrounding the FCC’s wireless map:

Dear Chairman Pai:

We write this letter to express our serious concerns that the map released by the Federal Communications Commission last week showing presumptive eligible areas for Mobility Fund Phase II (MF II) support may not be an accurate depiction of areas in need of universal service support.  We understand that the map was developed based on a preliminary assessment from a one-time data collection effort that will be verified through a challenge process. However, we are concerned that the map misrepresents the existence of 4G LTE services in many areas.  As a result, the Commission’s proposed challenge process may not be robust enough to adequately address the shortcomings in the Commission’s assessment of geographic areas in need of support for this proceeding.

MF II is intended to provide $4.53 billion in support over 10 years to preserve and expand mobile coverage to rural areas. These resources will be made available to provide 4G LTE service where it is not economically viable today to deploy services through private sector means alone.  Having consistently traveled throughout rural areas in our states, it appears that there are significant gaps in mobile coverage beyond what is represented by the map’s initial presentation of “eligible areas.” To accurately target support to communities truly in need of broadband service, it is critical we collect standardized and accurate data.

For too long, millions of rural Americans have been living without consistent and reliable mobile broadband service.  Identifying rural areas as not eligible for support will exacerbate the digital divide, denying fundamental economic opportunities to these rural communities.  We strongly urge the Commission to accurately and consistently identify areas that do not have unsubsidized 4G LTE service and provide Congress with an update on final eligible areas before auctioning $4.53 billion of MF II support.

In addition to Senator Roger Wicker (R-Miss.), the letter was signed by Maggie Hassan (D-N.H.), Jerry Moran (R-Kan.), Angus King (I-Maine), Cory Gardner (R-Colo.), Amy Klobuchar (D-Minn.), Pat Roberts (R-Kan.), Roy Blunt (R-Mo.), Gary Peters (D-Mich.) and Thom Tillis (R-N.C.).

The Senate Commerce, Science and Transportation Subcommittee held a hearing on broadband infrastructure needs. The FCC’s wireless broadband coverage map was a main issue in contention. (Note, the hearing begins at the 30:00 mark.) (2:05:00)