Very Little In Trump's 'Bold' New Rural Broadband Plan Is Actually New

from the head-fake dept

Last week the Trump administration and the Ajit Pai FCC held a major press conference announcing a "bold" new three-pronged program they claimed would address the nation's longstanding rural broadband issues. During the conference, the President and Pai were flanked by a chorus line of cellular industry employees and ranchers adorned in both tower climbing gear and cowboy hats, apparently in a bid to add a little authenticity to the Village People-esque proceedings:

In his speech, Trump offered his insights on how the "race to 5G" (fifth generation wireless) was an administration priority and a cornerstone of the purportedly new plan:

"We were at 4G, and everybody was saying, “We have to get 4G.” And then they said, before that, “We have to get 3G.” And now we have to get 5G, and 5G is a big deal. And that’s going to be there for a while. And I guess, at some point, we’ll be talking to you about number 6. What do you think? (Laughter.) Do you think that’s true, Ajit?"

According to the administration, part one of the plan involves a new spectrum auction to help drive the deployment of 5G to rural areas. Part two involves clearing away a lot of the "regulatory underbrush" (read: net neutrality, privacy protections, FCC authority over ISPs) the industry has falsely claimed stifled its ability to adequately deploy broadband. And part three is the creation of a "new" $20.4 billion Rural Digital Opportunity Fund it promised would help connect up to four million rural homes and small businesses to high-speed broadband networks over the next decade.

On the surface that all sounds lovely, and the larger technology press was quick to parrot the claims without much skepticism:

"The two proposals reflect the most intensive effort of the Trump era to close the so-called “digital divide” and gain an edge in the global race to build a fully functioning, nationwide 5G network. Proponents say the advances that 5G offers over 4G LTE will enable mobile download speeds of up to 1,000 megabits per second — roughly 100 times faster than the standard — and pave the way for new technologies such as self-driving cars and virtual reality."

You may, however, be shocked to learn the government's real plan is a far cry from what it was portrayed as.

For one, telecom policy experts told me the "new" $20 billion fund isn't actually new. It appears that the FCC is just renaming an existing fund (the Connect America Fund, slated to expire in 2021) and making a few tweaks to it. Of course the FCC hasn't actually announced the specifics behind the changes, though given its fealty to the likes of AT&T and Verizon, you can probably be fairly certain that it involves ensuring that the biggest telecom companies wind up getting a larger chunk of subsidies to help fund their fiber backhaul and 5G deployments.

Granted throwing more money at AT&T and Verizon never really actually fixes much of anything, as the countless billions taxpayers have doled out for half-completed fiber connections pretty routinely shows. These are the same companies that just received billions in Trump tax breaks and countless regulatory favors. They don't need more taxpayer money, but having watched this industry for years I'd wager these two companies' lawyers are the ones driving whatever changes to the program Pai has in store.

Two, the spectrum auctions that Trump and Pai heralded as helping rural America not only weren't new (they'd been planned since the previous FCC), the spectrum being auctioned doesn't actually help rural America in the slightest. Wall Street telecom analyst Craig Moffett noted last week how the millimeter spectrum being auctioned has numerous line-of-sight, range, and wall penetration issues, and will only likely be used in urban markets:

"Aside from unresolved phone battery issues, Moffett told Motherboard that 5G requires “incredibly wide” blocks of spectrum ideally up to 800 MHz wide. The only place blocks of that size reside is in the upper reaches of millimeter wave spectrum. But that spectrum comes with its own issues, Moffett said—namely difficulties with long range signal penetration of building walls, something journalists quickly discovered when testing Verizon’s Chicago 5G launch.

As a result, the technology will be useful for many urban environments, but only via the use of numerous “small cells,” frequently placed on city light poles or building roofs. In more rural and suburban markets carriers will rely on “sub-6” (below 6 GHz) spectrum for cost reasons, providing connectivity that’s going to be a far cry from the speeds promised by carrier marketing.

“Yes, it will be better than 4G eventually, and it will be great for supporting huge numbers of low bandwidth IoT connections,” Moffett said. “But broad-based availability of the kinds of insane speeds people have gotten so excited reading about won’t be available for many, many years, if at all.”

In short, the major "new" funding wasn't new, and the major "new" spectrum auction not only wasn't new, it had nothing to do at all with rural users. Granted Pai also tried to hand off policy moves like killing net neutrality and neutering FCC authority over ISPs as solving the industry's problems, when that's not really true either. Giving entrenched natural monopolies a free pass to behave anti-competitively and jack up captive customer bills doesn't aid rural broadband users, it just doubles down on all the problems that brought us to this point in the first place.

The wireless industry has tried hard to obscure a basic fact: that the same coverage and high prices that plague 4G will plague 5G.

There's still little real incentive to cover rural America because the return on investment isn't there. Subsidies don't work because state and federal lawmakers have become corrupted. And there's still regional geographical monopolies over things like cell tower backhaul that will keep prices high. Meanwhile, as our obsession with merger mania escalates (Sprint, T-Mobile), the incentive to genuinely compete on price drops proportionally. Add in some regulatory capture and the Pai FCC's assault on consumer protections, and it shouldn't take a genius to see that American consumers, especially rural ones, aren't a top priority.

Last week's press conference appears to be entirely focused on trying to trick rural voters into thinking the Pai FCC has their best interests at heart. There's little real evidence to suggest that's actually true, though the majority of the press was happy to dutifully carry forth the claim to those voters all the same.

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Filed Under: 5g, ajit pai, donald trump, fcc, rural broadband, spectrum