Ask Me Anything! with James Stegeman, President and CEO of CostQuest Associates

Scott Woods:  We're live. Thank you Ben. I know that I'm the awkward silence and pause. It's giving people an opportunity to join and, uh, we are recording. So good afternoon everyone, and thank you for joining us on our next Ask Me Anything series. I am Scott Woods, president of Public-Private partnerships at Ready.net and Broadband.money.

Scott:  Uh, and we are here with James Stegman, the president, founder, and CEO of CostQuest. But before we jump into our latest a m with James, Would like to take this [00:01:00] opportunity to wish all of the mothers the Happy Mother's Day on this Mother's Day holiday weekend, and this AMA Mother's Day event, uh, uh, event of the AMA series.

Scott:  So all the moms out there, thank you very much and we hope you enjoy the weekend. But let's go ahead and get started. Uh, as you recall, if you are a member of the broadband.io community, you know that last week we had, uh, at the Broadband Communities Conference in the Woodlands, we did a panel in which I had the pleasure of moderating and facilitating a panel.

Scott:  And our guest was James Stegman. So he is here doing an ama uh, ask me anything. Uh, and let's, without further ado, jump into it. James, good afternoon and welcome to, uh, ask Me Anything series here@thebroadband.io community. 

James Stegeman: Thank you, Scott, and thanks for having me on. I, I had forgotten about Mother's Day, or I would've had my mom join the, uh, call today, so [00:02:00] 

Scott:  absolutely.

Scott:  We'll give it a shout out to mom. Uh, for those of you who don't know, James's from Ohio. I'm from Michigan. We had this, uh, budding Ohio and Michigan rivalry from, from football, uh, that we've been able to enjoy. Uh, but really enjoyed our time at the Broadband Community Summit, uh, last week in the Woodlands.

Scott:  Uh, it was great panel. James, uh, conveyed and shared a lot of information and so we're gonna jump right into it right now. Uh, we have members who are joining. Please feel free to put your questions here as well as check out the background. That Drew Clark, the editor and publisher of Broadband Breakfast did on James.

Scott:  We have a link up there as well. But James, I wanna open it up with you, uh, particularly as we talked about last week in the Woodlands, you know, to clear up and address, uh, where the fabric is, cos quest's role in development of the fabric. And what are the next sort of upcoming steps that we can expect as N T I A is poised now [00:03:00] to make the, uh, initial bead allocation announcements on or before, uh, June 30th using the FCC fabric data as the basis, uh, for those decisions.

Scott:  So James, can you update us on, uh, where that process is and, and CostQuest's role in, in the development 

James: of that? Yeah, no, sure can. And, and thanks for that question. So, conquest as all of you on the, on the, uh, webinar today, uh, hopefully understand is that we were awarded the fccs National Broadband Fabric in November of 2021.

James: Uh, that award was protested and the protest was settled in, on or about March 1st, 2022. So the work on the fabric for the FCC started in earnest in March of 2022 with the first delivery of that fabric due to the fcc. In June, we had 120 days to deliver to the FCC per the contract, that first version, and that's what we provided to the FCC end of June.

James: That was then [00:04:00] provided out to the ISPs. So version one of the FCC F Fabric is, uh, was provided to the ISPs on July 1st. The ISPs had two months from which to ingest that. Come up with their process. From that process, submit their coverage information to the fcc. So the first point to make there before I go on, is we provide the points that the FCC shows on the maps.

James: We do not provide the coverage information that show on the maps. Our effort is to provide that fabric to the FCC so that they have the points available within the BBC platform and that the ISPs can ingest that and then return back to the fcc. Here are the points that we provide service to. Here's the technology at that point, here's the speed provided at that.

James: That point, they then provide that back to the fcc for the FCC to ingest clean, normalize, and then present on that broadband [00:05:00] map that we've all seen. Um, that first broadband map came out in November, uh, of 2022. Um, I think many people were, uh, were quite pleased with just the, the initial version of the map was quite good.

James: Uh, the fabric, you know, had issues and we can discuss those. The coverage had issues and we can discuss those. But overall, the attempt to add more granularity to the nation's understanding of where broadband is, uh, was greatly expanded by that broadband data collection effort and the fccs effort to turn up that map.

James: So we went from, you know, for those that were involved, the fccs 4 77 process collected broadband coverage at the block level census block. There's probably about seven and a half to 8 million census blocks in US that they reported coverage on, and that's the level of granularity that we had up until November of 2022.

James: We now have coverage information available [00:06:00] on 113 million points. In the country all the way down to your house, to your business so that you understand who provides coverage to you. And so that the government has a better understanding of if there are broadband issues such as unserved, where are those broadband unserved locations so that we can apply money and funding appropriately.

James: So that, that's the first version and, and just kind of our role as that first version went up to the fcc. The FCC opened the fabric or Yeah, the fabric challenge process. In that fabric challenge process, um, those parties that had early access to the fabric being the ISPs states tribal entities could file challenges to that first version to say, these are locations we believe you missed, or these are locations that you've identified as BSLs and are not BSLs, so that that challenge window is open.

James: It was closed on or around [00:07:00] November 15th. The FCC adjudicated or judged the quality of those challenges. And then at the end of that challenge process passed to us, their challenge, uh, acceptances, which was I think around 178,000 accepted challenges that were passed to us. And basically those are ads. If they're the BSL that we missed, basically what we do is we now add that to the fabric.

James: So on the next version of the fabric the FCC gets, they have that. So with those challenges in hand, we started the effort, uh, to update to version two. As we were doing version two, we took some of the learnings that came out of version one, some of the complaints and issues that were raised. Uh, for example, in Alaska, um, what we discovered that there was entire communities missing.

James: Um, in, in digging into that, what we identified as that the footprint data that I can talk about was missing for portions of Alaska. [00:08:00] Um, we also had some issues in Guam. We had issues in some tribal lands, in large parcel areas in that the motto was misidentifying the parcel as a single building location parcel where it was a full town and we should have identified more locations.

James: So we took those issues and basically that's what we need. We need feedback into our process of where we're failing so that we can identify why we're failing, then to improve the next version. And that's what we do between each release. So with version two, we took the learnings from version one. We one updated all of our vendor information.

James: So we work with parcel information, we work with, uh, building footprint information, which is dig digitized boundaries of all the buildings in the country. We work with tax assessor data, we work with roads, and we put all that through our processes that we've built over the last four years to identify what we believe the broadband service of a location to be.

James: Um, and in updating all that information, updating [00:09:00] our logic, going through concerted efforts to address the missing villages in Alaska to address the large parcel issues. Version two came out in version two. We added 1 million, a bit over 1 million new broadband serviceable locations, of which 170, I think it was 178,000, came from the F E C challenge process.

James: But more importantly, 860,000 came through our internal efforts to improve the fabric, but also just the natural growth in locations that occurs all the time. New construction is occurring continuously, and that will always add locations to the fabric. So that second version of the fabric went out on January 1st, or no, January 3rd to all the ISPs for the broadband two data collection effort.

James: The ISPs received that data, returned it back to the FCC by March 1st. The FCC is in process of creating that second broadband map [00:10:00] should be out relatively shortly. We expect it maybe in the next week or so, uh, as to what the next version of the map looks like so that you know, there's some expectation that there will be additional learnings.

James: On the coverage side, we've incorporated the additional learnings that we had on the fabric side. The FCC on the other side received, you know, I, as I understand, over 4 million challenges on the coverage side. So we'll see how that all evolves into the broadband data collection map. Two, the important thing about the second map is that second map, the B D C version two, along with our second version of the fabric, is what will be used by N T I A in their efforts to distribute the 42 billion and in their efforts to run and manage the program.

James: And I'll talk about that in a second. We are, um, Now working on our third version of the fabric, which will be delivered to the ISPs on or about July 1st of this year [00:11:00] for that third version, which will come out likely in November. You know, it's a six month schedule for all this, the map, uh, the, the fabric, and then the maps that follow.

James: Um, it's likely that that third version will have an important role in the actual state programs as the states. Then once they get their funding, will develop the programs, have their own individual map challenge, and then come up with the locations that they want to go after with their broadband funds that they received.

James: So that's kind of the timing on the data. We did make improvements again, in version three. We picked some issues that were identified. We brought in new sources to help try and refine some of the issues that have been noted. What, but what we believe is this is a very high quality fabric product that we've delivered.

James: It was something that didn't exist in the past. There was no broadband serviceable data set that we could go out and grab three or four years ago. When we started this, it was an effort that we [00:12:00] undertook at the behest of some clients, uh, and industry trade associations to say, can you actually develop this?

James: Uh, and, and we're happy to say, yeah, we can. Um, and in that accuracy, when we look at the data that we create and provide to the FCC and to the ISPs and to the broadband community, we provide, as I said, about 114 million points. Depends on the re release you're looking at. When we look at the pars or the data, and we run our test on that, On parcels where we've, I identified buildings, we are 99.3 to 99.4% accurate in identifying that there's a BSL on that parcel.

James: So 99% plus success or quality rate on identifying the BSLs on the parcel. Once we get onto the parcel, we have a 98.8% accuracy in picking the right building on parcel. Is it the garage? Is it the the barn? Is it the home? [00:13:00] So overall, the quality is high, but still on, on the building selection at 98.8% or 99%.

James: When we're talking a hundred million locations, that's more than a million potential errors that we have in the data set. So while we believe the quality is high, you know, our goal is to continually improve this product to continually reduce that error rate. Not that we'll ever achieve perfection, but that we will get as close to perfection as possible in the timeframe that we have.

James: So hopefully that's a quick run through. On the FCC fabric side, on the NT I A side, uh, we have been retained by N C I A, uh, to provide the fabric to them to provide our insights on that fabric to them. N C I A will be providing that fabric out to all the states to run their programs. Uh, it'll be provided out to sub-grantees who want to bid in those programs.

James: And we are also providing NT a r cost information. So for, if you're unaware, we are the firm that [00:14:00] runs, uh, ran the cost models for the fcc, for the Connect America Fund, for the RDO auction, for the cap two auction. We're using that same or consistent platform to that to help N t I understand the cost of fiber deployment across the US so that they can come up with the proper or the allocation of the 42 billion in the bead program.

James: Um, and I think that's a quick run through Scott. 

Scott:  Yep. That is Now, I purposefully wanted you, James, to, to, to run through all that. It's a lot of information. I took a couple of notes down, uh, but I wanted just to follow up, just so the second version of, of the fabric map, which is due to come out any day now, again, will be the version that N T I A, uh, basis, this initial bead, uh, allocation decision.

Scott:  That's correct. Right? That's your understanding. This version that's coming out, N T I A will use that to justify, uh, and make its, uh, funding decisions, [00:15:00] initial allocation decisions by June 30th. That's my understanding. Yes. And then I wanna clear up something else. You also said, now this third version that's coming out, uh, based on your understanding, is the version that the states will use to govern their cha challenge process or challenge processes and then ultimately govern their programs.

Scott:  They will become, 

James: go ahead. Yeah, lemme clarify. I think the third version will be what they use in the, the, um, developing their program. It's all in timing, since that won't be out until November. It's likely that the N C I challenge effort that the states will run, will be based on version two, but then all that will roll into a version that they'll then use for the ins in the, the development and roll out other programs.

James: Okay, thank you. 

Scott:  And then you are, as from Coquet standpoint, you are just collecting the b S BSL data points. You are not, uh, doing anything with the I S P provided data other than just reflecting [00:16:00] the data that comes in. So I want to, is that correct? Correct. 

James: Correct. To a point we correct. We provide their points to the fcc.

James: The ISPs provide their coverage. The FCC then associates that with the data and they are in charge of the map. We have nothing to do with the broadband data map. We just simply provide the points that come up on the map. All right. 

Scott:  Thank you very much for understanding that, for making that clarification.

Scott:  And I also clarify something else. Uh, you said you are providing insights to N C I A and cost modeling info. What insights are you providing to N T I A based on the contract that you have executed within N T I A? 

James: The insights are, one, just a simple understanding of what the data represents. You know, there is some confusion, um, about locations versus units.

James: Um, as I said, the, the fabric has 114 million BSLs in it, and parties may go, well, there's 140 million housing units in the US and 20 million [00:17:00] businesses. Those numbers don't add up. Well, what it means, the 114 is the actual number of buildings in the model, and that's what is called a location. Mm-hmm. On the NTI side, it is the, the law was written that the allocation is based upon locations.

James: So it is helping all parties understand that locations, what that means and what units mean, so that as you institute programs look at high cost, all that type of stuff, that you have an understanding that a 20 unit apartment building may have a higher cost. And a single family house right next to it, even though they may be on average, the relative same cost per customer delivered.

James: Okay. 

Scott:  All right. Thank you for, for, for clarifying that, James. And, uh, we've got a ton of questions in the community right now. So I want to get to, uh, the, the com, the community questions. Uh, but first I wanna talk about some, let's opportunity to clear up some misconceptions and, and, and mischaracterizations of the map.

Scott:  We talked about this a lot, uh, at the Woodlands [00:18:00] in the broadband community summit, uh, panel. Uh, but again, everyone knows, I don't know if they're clear on this or not, but that the broadband map, right, the, the fabric map was authorized before B so it's never an apples, apples to apples comparison in that that process is already ongoing.

Scott:  It's being retrofit, if you will, to fit B purposes. And as a result of that, there are some significant. Flaws or missing data, primarily with MDUs and, uh, community anchor institutions. Can, can you address that sort of challenge between a process or developing a map from the congressional authorization with the FCC and now trying to retrofit, if you will, for purposes of the bead, um, you know, the specific of unserved underserved anchor institutions, um, and all of that, uh, the, the specific requirements under bead?

James: Yeah, it, it's [00:19:00] a good question because it, what, what, what has happened as there's just been some unrealistic expectations been placed on a process that was written before bead. So the expectation was that this mapping effort would be an iterative process that would improve over time. It's a brand new process of going from seven and a half million points that people recognized in identified map to 114.

James: So big learning effort. And with ISPs, giving that, you know, given two months to get the first version, report it back in and expect perfection on day one, I think was unrealistic. And, you know, that that unrealistic expectation was amplified when Bead came out and said, we're going to distribute the 42 billion based upon the broadband map, which is great.

James: It's just you have to understand that w there is some time needed to correct some of the issues that were identified. So luckily we were able to, they were, [00:20:00] they pushed that bead determination into diversion two, which is, uh, a good improvement over version one on the fabric side. Um, it will incorporate the coverage challenges that came place, uh, from version one.

James: So we know it's good. There will be continued improvement, but there, you know, with bead. They needed to operate on a, a, a, a cut point of information to best drive that map. And I think the version two is a good starting point for that. But again, it's, it's an expectation, um, that's been placed on all parties that that map is perfect.

James: It's not, nor will it ever be, it will be very good and it is good right now. It's just, it's not perfection. So, parties, some parties will take pot shots at the whole process, go and identify the errors. And as I said, we may have a million errors in the data set, but we get 99.3% of the records, right. So we know that [00:21:00] is in place.

James: And it's, you know, if you're after perfection, we'll never get to an allocation. What we have is a very good product to drive the bead process. Now, um, in regards to community anchors and, and MDUs, um, the data is in the model. It's more how parties interpret the information on community anchor institutions.

James: Many of those are identified as those that are not mass market locations. They receive their service via special access, um, uh, ethernet type connections that are dedicated to their building. Those points on coverage are not collected in the FCC process. That's an FCC decision. Um, we just institute s the FCC decides that, and what we are told is we need to identify those community anchors and the high volume business locations so that we could identify which were the mass market locations and which were not.

James: And that's what's been delivered on MDUs. [00:22:00] We have the building identified. We have the number of units estimated in that building. What we don't have is specific information about each and every unit in the building. That is not a record in the data set. The record in the data set is the building itself.

James: And what some parties want, whether it's correct or not, is the ability to understand coverage within the building. And that's just not necessarily available in the current version of the fabric because we are structure based, not unit based. 

Scott:  Thank you. I think you can understand, and I've been one that has been very critical of the process.

Scott:  Um, I don't think the FCC has, uh, been transparent in a lot of the guidance and understanding this. So thank you for joining and clearing some of that up. But again, you know, again, if the, if the goal and purpose of, of the mapping is to identify, uh, or help identify unserved and underserved communities and locations by household level data on a more granular basis, you know, you can [00:23:00] understand the frustration of communities where there are MDUs, right?

Scott:  Primarily metro areas, suburban areas, um, that can be, uh, that data is skewed when you don't go unit by unit or secondary address because every individual unit and family in that unit could be different. No, it could be they are different. Right? And so now you're basing again, these decisions on, on incomplete data, but thank you for, for joining.

Scott:  Clear that up. Let's jump into some questions since we got questions all across the spectrum from your cost modeling through, uh, questions about the, the map. But I wanna jump into, cause we haven't given you an opportunity to talk about the cost modeling aspect of, of your work. And Dan Grossman asked, please to describe, uh, the methodology, uh, uh, behind your cost model.

Scott:  And does it take into account the many complexities of real world broadband construction of networks? So can, can you address your, the cost modeling function, uh, and role of cost quest? 

James: Yes. Uh, lemme give a [00:24:00] little background, just our experience on broadband. So we've been working in the broadband industry since I, I think I told you Scott, uh, since it, it began, you know, it, it, it's, uh, we've been around since 1999 working on network, uh, engineering, uh, network costing, uh, and as broadband has expanded from twisted pair, um, 90, you know, 48 bond modem service to what we have today.

James: We've kind of traversed that path with it. In doing that, we work with a lot of the major broadband companies in the smaller companies as well, uh, on their property tax side. And, and I bring that up only from the, the expectation is for property tax, we have to develop what is the replacement cost new of that network for valuation purposes.

James: So we work closely with their engineers, we look at their cost information, we look at their material price information, so we're able to get access to that information and the knowledge. And then combine that across all clients to really put [00:25:00] together what we believe is a very good fiber to the prem model.

James: That fiber to the prem model is an engineering based model. We start at every customer point. We walk from every customer point up to where we believe that first point of connection is, which is the drop terminal. We walk from that drop terminal back up then to its next point of connection, which is the splitter.

James: We identify all the points in that splitter neighborhood using minimum spanning road tree algorithms to minimize total cost and total deployment footage so that when we're done engineering 114 million points across the country, we've walked a path from every point up to its serving node. So from the detailed knowledge, we have detailed knowledge of every, uh, every point in the network, the customer connection, how long the drop is, how many customers are connected at the drop terminal.

James: How many customers are at the splitter? So as we then apply costing algorithms [00:26:00] to it, we simply are looking up, here's the appropriate size splitter, here's the cost for that splitter, here's the installation, engineering associated with that. So that then that cost is, uh, reflective of what a party would build today.

James: Is it the exact cost? No, it's a good, good, uh, approximation of what that would be for an efficient provider to build out that network. And that's what's provided. Um, hopefully that helps. Yep. 

Scott:  Thank you for that. The next question I'm, uh, questions are coming in Joe, as you can imagine, uh, James, you're fast and heavy.

Scott:  I want to ask the next question from Joseph Alandra, who's the president and c e o of Tribal ready. He said, do you have an explanation or the f The fcc, FCC provided an explanation for the way tribal lands and communities have been misrepresented or overlooked completely in fabric. Uh, and also how is tribal data sovereignty being respected in the [00:27:00] fabric data collection process?

James: Yeah, tribal issues, we're aware of them, uh, and we are making concerted efforts to make sure that we address any issues that are brought to us. And that's the first key important part of this is we need to be made aware of those issues. We just can't have people say, you have tribal issues. We need to know what they are so that we can actually go in, look and determine what we are, either missing, what we've misinterpreted or how to address that.

James: But in version one, as I said earlier, we, we have some issues on large parcels, uh, which, uh, of which tribal communities are, you know, make up a good a portion of that. And what large parcels are, is we simply don't have individual ownership down to the house level. It may be communal ownership of the land.

James: And we have all these buildings on the parcels. What happened in version one is we overestimated the number of large parcels that were just a single unit location or single structure. [00:28:00] So whole community, we looked at it, identified it, a single location parcel. We went in and picked what we thought was the best structure in that collection to say that is the bsl.

James: Once we are alerted to the issue, we went through our code, identified that we're, there's some issues in our code. But also we went through a effort, uh, in which we reviewed about 60,000 square miles of these large parcels. One, to understand what they are, what they represent. Two, to identify how do we, how do we create logic to identify which ones are multi-location parcels, like a town versus a single location parcel, such as an industrial complex, which has, you know, 20 or 30 buildings.

James: So we went through those, identified it. We kept the ones that we re recorded so that we'd have a deterministic list of these are things we know. And then from that deterministic li list, we improved our, our logic so that we're able to go [00:29:00] into large parcels and now more accurately reflect that it's a multi-location parcel.

James: And once that's done, it lights up the buildings in that town. So that, that's part of what we did in version two to help improve it. In version three, we've taken an extra step. Working with one of our outside vendors, um, that look at the situational awareness through the, their AI program of when you look down from a satellite and you see these collections of buildings, you and I could pick it out from the map cuz we see the pool, we see the trees, we see the driveway, we see the patio in the back.

James: That is what the situational awareness is trying to do, is look for the telltale signs of this is the residential structure, this is the barn. So that we're able to use that on these large parcels to better, more accurately identify the actual BSLs on those large parcels. So we understand there's been issues, we've tried to address it, um, and we're waiting for feedback [00:30:00] on this version two to see if parties are still seeing issues.

James: But I would encourage people that see issues to report it to us, report it to the fcc, cuz that's the only way we can address it by knowing what the issues are. 

Scott:  And then the second part of that, do you do, did you discuss if FCC provided any insight? Uh, have you provided any insight with Coquet Associates on how tribal data sovereignty will be respected in the, in that data collection process fabric?

James: Um, we have not had those discussions with the fcc. Uh, on our data collection effort, we're using public, uh, our vendor data sets that have that information in it. Uh, so we're not necessarily going out into tribal data sets and, uh, sources. We're pulling this from what is, is available, uh, through the community, through aerial photos, all that type of stuff.

James: Okay. 

Scott:  Our next question comes from Mike Dunn. He asks, what are the downsides of developing broadband location [00:31:00] fabrics as intellectual property, and is there a way to overcome them? For example, it has been reported that some states were prohibited from using their own providers mapping data to underpin a challenge because of that provider's da desire not to share that data with the FCC and Coquet by association.

Scott:  Does that defeat the purpose of knowing exactly to the granular level where unserved and underserved, uh, locations are? 

James: Uh, it, it does create some obstacles. Uh, there are intellectual property concerns with the data. You know, as we develop the fabric, we have to work with third party vendors who have license agreements with us.

James: We have to adhere to those license agreements as we create our license agreement. So while it would be great to have this as a public resource, open public resource, there are restrictions. If you want a high quality data set, if you wanna sacrifice quality and you wanna sacrifice time, [00:32:00] a public data set could be developed, but.

James: If we were talking about the public data set for bead today, there will be a lot more issues to discuss because of the sacrifice you have to make when you go the public route. You can, you can overcome those with time, but as we talked about earlier, we don't have the luxury of time right now in regards to the state challenge process vendors who undertook those efforts for the states y You know, it's an issue for those vendors.

James: It, it's, it, it was an FCC process that was well known that they would be requiring challenge information to the fabric. Those vendors talk to the states. It should have been known that they would've had to file that with the fcc. The fccs made that challenge information public, the process public. So all parties should be aware.

James: Um, and it, you know, in the end, we're able to use that challenge information to better improve the product that is used for the broadband community. [00:33:00] So, 

Scott:  And Dave Todd asked a similar question, uh, why not open the source code and do you have any plans to open the source code as community participation?

Scott:  Would quiet that noise and add a bill, a bazillion, as he said, useful features. 

James: Yeah, it it in part, you know, a as you think about the open source approach or the open data approach, as I said, it can be done, but it takes time. Um, and it's time that we don't necessarily luxury for or the, or the funds to do that.

James: It's a much more expensive process cuz we're able to leverage data sets that vendors have developed, that they provide at a lower cost than original development of the data source. So we are able to save money there. But the downside is it's got restrictions on use on the upside. The FCC has issued multiple licenses that allow parties to access the information, use the information.

James: And then as far as improving [00:34:00] the data, they've got a process called the challenge in which parties can come in and challenge the information so that it makes it through. But realize, you know, in part what this data set is, is a normalized data set that allows all parties to operate on a standard, which improves just the overall capabilities of everyone to understand what is going on with an open source.

James: Potentially what can happen is there's different paths that occur, different development items, and then you could have communities arguing with each other as that open source becomes multiple pass downstream. This just controls the process, whether people like that or not. It's just the way it was implemented.

Scott:  I'm gonna ask a similar question on the challenge process. And, and we've experienced this with, uh, the state broadband office clients that we work with. I've heard this from other state broadband offices as well, um, that have submitted hundreds of thousands of address challenges, uh, from confirmed data, you know, state run databases like [00:35:00] E 9 1 1, um, that were rejected by the FCC with, with no proven or rationale, um, that of why those challenges were denied.

Scott:  Uh, can you provide any insight on, on, on that of the hundreds and thousands, hundreds of thousands of challenges that were made? Why so small percentage of those, uh, were ultimately accepted by the fcc? Yeah, there, there's 

James: a couple aspects to that. We, we assisted the FCC on some of the challenge process because we have all the geospatial data.

James: So some of these tests are geospatially driven. Um, FCC gave us guidance on how to implement those efforts. And you know, in part one of the key issues was parties would file an address and A B S L and say, this is, this was missing in the fabric. But what happened was the B S L, the location they gave was actually an existing location in the fabric.

James: What was missing potentially was that second address on the building. So let me [00:36:00] talk through that. So a condo unit on common property, a common parcel, five units in one single building, that's one B S L. In the model, in version one, when it was released, we assigned a primary address to that condo. The other four addresses didn't necessarily make it into the secondary address data set.

James: Um, so what parties did is when they compared this to their known address listings, these addresses potentially fell out and they said, you're missing these. We were missing the addresses, we weren't missing the location, so that's why they were rejected because they were falling onto a structure that was already identified.

James: What should have occurred is those challenges should have been filed as an address challenge, not a BSL challenge. But that said, we understood the issue and inversion. Two, those additional four addresses on the condo unit are now part of the fabric [00:37:00] so that parties can see and compare the full address list that's in the fabric to see if anything's missing.

James: So that that's, you know, one part of the issue. The other part of the issue is the FCC does verify that it is a valid address. Um, that validation was going against u US p s data sets, uh, and other sources. And if it didn't match, it may have been rejected. As I understand that's been loosened in round two, uh, so that more of those addresses can come through, but there's always a quality check just to make sure.

James: The address does make some sense. 

Scott:  Okay. I'm gonna switch gears a little bit and talk about N CIA's recent challenge process guidance. And James, we had a ton of questions here, uh, in the community. Everyone, we will not be able to get to all of the questions, uh, but we will please, uh, please bear with us, but we're gonna ask as many as we possibly can.

Scott:  Uh, next question comes from Shannon Williams Mitcham, uh, here at Ready, our director of Outreach and research. Shea, can you [00:38:00] talk about ntia a's recent challenge process guidance and how it relates to your support of the fcc? Will the results of the challenges conducted at the state level have any bearing on service designations in future iterations of the fabric wrap?

James: It's an excellent question. A and I'm not involved in much of the coverage side. I'll give you what I know, but I probably can't answer the, the question fully. Um, in that N T I uh, information, Um, N t I has given the states the capability with the version two information they get and their allocation to challenge, to allow parties to challenge the coverage information.

James: Once that's identified and if it's accepted that that new version of what is unserved is then the basis of what they will be held to as to what they have to build out to under that B program, they're not allowed [00:39:00] to challenge the fabric locations. They're simply allowed to challenge the coverage information.

James: Now, whether that challenge information makes it back to the fcc, I, I can't, uh, answer that. I, I do not know anything about that. Okay. 

Scott:  Let me ask you another question, James. And I know you've been in telecommunications for a, a, a very long time. I won't say how long. Um, but I, I, can you talk about the rationale FCC, of just showing availability data, uh, in the fabric map?

Scott:  As you know, I've, you and I have, I wouldn't say sparred. We've had discussions, you know, I think without the contextual data, particularly price, uh, demographic information, you know, all of the information that will allow us to make better decisions of how internet and internet service and broadband is used at that particular location.

Scott:  Are there any plans to have that information included and reflected in Fabric Map, not just relying on I S P provided availability data? [00:40:00] 

James: Um, I, I, I really can't answer the question. I don't know what additional information they're gonna collect. I do know they are collecting, uh, where federal funds have been deployed to locations.

James: Uh, But in regards to price and other information, um, I can't, I can't give you any answer on that. Don't know. 

Scott:  From, from your experience, is, is basing of, you know, billions of, billions of dollars and not taking into account the price of those services or demographic information such as income education, is, is, shouldn't that be reflected in that, or should that be reflected in, in the allocation, uh, decisions that are, are, are provided to the states?

James: Yeah. In part, the N T I A has that responsibility to incorporate some of that in the, uh, allocation. So in the high cost determination, I remember my bead, um, uh, NOFO language, uh, they have to take into account density, uh, terrain, other information that drive cost [00:41:00] along with poverty. So, I know the FCC is looking at how to incorporate that into the definition of high cost so that some of that can be incorporated in, in, in regards to the other information, I think it's important for states and grant programs to understand that and understand what's going to happen as far as price, what the potential take rate is at various prices, to understand how that deployment will actually impact the broadband adoption that takes place after availability is made.

Scott:  Great. Thank you. Uh, we have another question, uh, from Philip Kerris. Phillip James Kerris, uh, he says, Maryland Governor and the Office of Broadband recently issued its ARPA and C P F award, and the average cost per location pass was just under $10,000 $9,872. How does this figure compare to cost quests, modeling costs per passing?

James: Yeah, our, our [00:42:00] typical cost per passing for the unserved, probably from a upfront capital, you know, there's two aspects to it. Is it the upfront capital or is it the business case that we're talking about? But I'll focus on the upfront capital. You know, typically what we're seeing, uh, when we ran this analysis on the B BDC one was the average, uh, fiber investment needed per unserved location nationwide was probably close to 5,000, a little bit under 5,000.

James: Um, that varies. If you've ever seen the FCC in information, they call it the hockey stick. You know, this, this line, uh, of cost, you know, starts at there. There will be low cost locations, you know, under a thousand dollars that will go well over a million dollars. It's a hockey stick that it escalates probably around the 80 per 80th percentile that it starts to escalate.

James: So it really depends, you know, when Marilyn ran this, you know, which, which part of the cost curve were they in, or which for the customer's auction, which [00:43:00] part of the cost curve were they in, which would then influence that, uh, assessment of what the cost were per location. Well, thank you 

Scott:  for that. Hay Ferrell.

Scott:  As with the NT I a contract, uh, cost Quest will provide the location points and cost model, uh, information. So with your N T I A contract, will Coquet make that information also available, uh, to states and the public. Um, the, 

James: the fabric information will be made available to the states and then to those grantees who are, who want to bid within the state programs, uh, on the cost information.

James: That information will be made available to, uh, N T I A, uh, to federal, uh, broadband granting authorities such as U S D A and Treasury. And then costi information will be made available to states territories who run the broadband programs. Um, beyond that, it is not go, uh, as I understand, not gonna be distributed down below that.[00:44:00] 

James: Great. 

Scott:  Thank you. Uh, just a couple more questions, James, and then we're gonna hit, we're gonna hit lightning round. It's really, uh, a lot of questions coming on in here. Um, Tammy Har asked for, uh, uh, just a question, uh, again, can you please repeat the information regarding the B D C filing? Number two, that data as of December 31st, 2022, is this the version of the BD C data submission that will be utilized, uh, for the N T I A decision, uh, the allocation decision.

Scott:  So can you just go through that again, uh, for Tammy and others who may have joined a little later, uh, that may have missed that in your opening, could you go around and, and say which version of, uh, this upcoming map that's coming out? NT I a will base its initial allocation decisions on. Yes. Can you just, uh, re re reiterate 

James: that again please?

James: So, as I understand N t I will be basing its bead allocation based upon version two of the bdc, so the fccs broadband map and version two of our fabric. Let me walk you through the timing of both of those. [00:45:00] So, version two of our fabric was released to the ISPs on January 3rd, 2023. That version two of the fabric incorporated challenges from version one that made it into, or were adjudicated and accepted, were all rolled into that version two of the fabric release in January.

James: The ISPs then had two months from which they ingested that, and then were reporting back to the fcc. Here are the locations we serve, what technology we provide, what speed is available, what latency, all that was provided to the fcc. The FCC is in the process of scrubbing and adjusting, cleaning, uh, going back and forth with potential ISPs, trying to make sure they got the most accurate information possible and that map will be released.

James: Expectation is sometime in May. So given that we're mid-May, hopefully in the next week or so, but you know, it's, it's expected sometime in May. [00:46:00] Um, that is version two of the FCC map, so it's version two of our fabric that was published in January. And the coverage information that will be published in May together form the information that that N t I will use cuz that forms the information of which of the fabric locations from version two are unserved based upon n t i's definition of unserved.

Scott:  Thank you very much. And Rick Yui asked, since the current fabric is as the end of 2022, as you say, is there any possibility that cos quests would make significant changes to locations in the fabric? And thus the FCC map, uh, between now and the n t i's expected announcement at the end of June if it discovered that a significant number of locations are missing from the fabric map in one or more areas.

Scott:  So again, this is little bit of a targeted question. If, if there is data in one or more areas or [00:47:00] communities that there, uh, is a significant number of locations missing, uh, will you then subject and in enter that information, uh, into the version of the map that N T I A will make, uh, its, uh, initial allocation decision on?

Scott:  Or would you push that to a, a another, uh, later iteration of the fabric 

James: map? Yeah. The, the way the current schedule works is that would be pushed to later iteration. All challenges from the prior version are pushed then into the next version. It's not a live a fabric data set, it is a snapshot in time, because importantly, the providers have to see that information.

James: To then report back to the FCC as that location served or not. So that's why it's kind of scheduled out that way. Um, we don't believe there's any big missing pockets or maybe up, you know, a couple, uh, missing BSLs here and there. But as far as we can tell, based upon our testing, we're not missing big pockets.

James: The biggest issue we typically have is new construction, and it's at what point does that then become an active [00:48:00] bsl. Great. 

Scott:  Thank you very much for that, James. And again, thank you for joining us, uh, on this, uh, version Mother's Day version of the AMA Series. Asked me anything with James Stegman, the founder.

Scott:  President and c e o of Coquet Associate Associates. Uh, next question comes from Peter Rasmussen. If version three of the fabric in November, 2023 will be used for state eligibility locations or to determine those locations, is it correct to assume that the state grant programs thus will not begin until Q1 of 2024 at the earliest?

Scott:  So again, uh, I know you're not speaking for N T I A per se, but, uh, based on the, uh, information and data that you'll provide to N T I A, can you make a a, an assumption of when, uh, the bead state programs will begin? 

James: Um, it, it's just my expectation. It's not necessarily based on anything that parties have publicly announced.

James: It's just, if you think about the schedule, the bead allocation will [00:49:00] occur, uh, at the end of June. Uh, there will be then the state challenge process that has to take place, that will take some time for it to take place. The states will then have their timeframe from which then to submit their plan to N C I A.

James: And the expectation is, on average, we're talking the end of the year. There will be states that may be pushing that up earlier, and they may rely on version two. Mm-hmm. But as those states get later in time, it may be advantageous to rely on the latest version and if it's late in the year, that's third version of the fabric.

James: And the third version of the, the FCC information will be available to help guide the process. 

Scott:  And those plans start to come in from states 180 days from the date that N T I A makes those decisions. So that initial plan, the five year plan also fits into that, that scenario as well. Yeah. Well, James, we got 10 minutes left.

Scott:  I wanna get into a bit of a, of a lightning round [00:50:00] here. Uh, as we talked about, and you, you kind of dropped a bombshell on us, uh, at the Woodlands when you talked about this, this, I'm not gonna call it a secret government file, but the, this Tritus file that, uh, got a chuckle outta everyone at the conference.

Scott:  Can you just shed some light cuz there was some significant follow up and questions about this file. Um, this, uh, this, I'm not gonna call it secret file, but this file of data and information on locations. Can you, can you, uh, touch on that a little bit? Uh, lighten 

James: the question that came up at, uh, at Woodlands was, Uh, it, it was a rural co-op raised the question about, well, what about smart ag?

James: You know, what about the, the chicken house, the silos that may need broadband? Um, the, the sprinkler heads, all that type of stuff. Uh, and what I responded with was, you know, the intent of our effort as directed by the fccs to identify those residential and business structures that require mass market broadband.[00:51:00] 

James: Um, it just wasn't the direction given to us. But as we collect the data, so as we get footprints, I think we get about 180 million footprints in our data set. We're selecting 115 or 114 million. So there's this gap of, of structures that aren't selected. That may be the chicken house, may be the silos, may be the water tower, all those locations, we have those, and we place them in a file that we call just the Detroit file.

James: It's just. It's a file that captures those things that we don't use. It's available. Uh, we have that information, uh, so that if there's other need to understand other types of locations that may need broadband, there's a potential that we have access to that information today. 

Scott:  And let me clarify this, Jackie, James, cause I don't want people to come out of this and think that I've, I've stated that, uh, co Quest has this secret government file on location.

Scott:  This [00:52:00] is not a secret government file that, uh, you and the FCC are keeping on broadband locations across the country. Can you just confirm that please? So I won't get in any trouble for, for conveying that? Yeah, 

James: and you know, it, it, we, a, we named the file, so maybe they're not the best name of the file, but it just a file that we kept as part of the contract.

James: They just wanted to know the structures that we did not use in case they needed to be examined for issues for air corrections or whatnot. So we keep that file, uh, available with each release. Great, 

thank 

Scott:  you. If you could provide, uh, uh, information and link to that, we'll post it to the community and folks can go check that out.

Scott:  James, thank you so much. This is a really good question. A follow up from Dan Grossman. Uh, and we found this as well, he said there are several large discrepancies between the BSLs, the broadband serviceable locations reported by at least seven publicly traded carriers, and the number of homes pass that they reported to their investors.

Scott:  For example, I'm not gonna say the company [00:53:00] name, company a reported 8.3 million BSLs to the bda, but have told investors that they pass 17 million locations. Do you have any insights into those discrepancies and, and, and why that could be a, uh, such a reporting, uh, uh, difference between that information? 

James: Y Yeah, I've had a number of people ask me that question.

James: Um, I don't have a good answer. It, it really, this is an i s P reporting issue, whether they're reporting. Correctly or not? Um, I can't really address the concern, but I, I do understand what they're talking about, that, you know, there are parties that have reported publicly x number of lines served by fiber or coax, but when you look at the b d c information and download it, it, it's not close.

James: And I, I can't, I don't have a good answer for that. 

Scott:  Great. All right. Thank you, James for that honesty. We appreciate that. The next question comes from Jane Coffin. She said, how will the mapping fabric keep up with newly funded projects by [00:54:00] consortia? That includes smaller ISPs, uh, uh, versus the incumbent telco.

Scott:  So keeping on this incumbent telco line of questioning, she says, these smaller ISPs and wisp will not have access to the mapping data under the current process. Uh, so it seems so, um, how, how will the fabric keep up with, as you're making these new iterations every six months, how will, how will you keep up with, um, not only the new projects that are coming out under.

Scott:  Of the various funding, federal funding programs, but also documenting, uh, additional projects as they come online. 

James: Yeah, that's probably more of a question for the fcc on the coverage side, how do they collect this information? But as it's my understanding that all broadband providers are supposed to report their coverage and that coverage will roll into the map.

James: So if parties aren't reporting their coverage, then how do we know that it's served? So it, it's more how they need to get that information to the fcc. Okay. 

Scott:  All right, folks, we got just over five minutes left. We're in our lightning round of [00:55:00] questioning, uh, with James Stegman. Uh, another question comes from Phil Makris.

Scott:  He says he understands that cost quests assisted the FCC in determining the reserve price in 2020. Has Coquet seen broadband deployment costs increase since then? And if so, how much he's hearing cost increases from 100 to 300% since the time of, of that time you developed that per location. Uh, past data information.

James: So a, as I mentioned earlier, we work with a lot of broadband providers, uh, access to their cost information, access to the material cost. And you know, over the last two years, as everybody understands inflation has gone up, there have been labor shortages, we've had supply chain issues. So various material items have gone, gone up, various labor costs have gone up.

James: There are labor shortages that then contributed to it rising. Um, have we seen the level of broadband costing double, uh, for a network? We have [00:56:00] not, but we have seen it increase. I just can't tell you, you know, whether it's 5%, 10%, or 20%. We'd have to understand the area that we're looking at to tell you what we're seeing in that area.

Scott:  Hey, Scott, just so you know, you're muted. Oh, sorry about that. Thank you. Next question comes from JD Darby. What is your method? And Fields used to a determine location. Do you use three by three Google goods or government parcel, LA long, et cetera, to confirm addresses and to confirm carrier presence. So if you can just give us insight into, uh, the methods used to, uh, determine that that broadband serviceable 

James: location.

James: Yes. So the location itself, so on the coverage part of that question, we don't do the coverage. That's the ISPs report at the fcc On the actual point itself, um, we do not use Google, uh, Google, uh, plus codes. We do not use H three. We report the locations. So for the fabric location we provide out, we will provide [00:57:00] the H three cell falls in the census block group.

James: So those are more reporting attributes, but in the development of our fabric, we start at the parcel level. Uh, we start with about 160 million parcels across the country. In those parcels, we identify all the building footprints that we can identify in that parcel. And then once we identify that we believe there is a BSL in the parcel, we will go through a scoring effort to try and identify which of the buildings in the parcel we believe is the bsl.

James: And then once we identify the building, we place the latitude longitude, typically on the cent of the building polygon to say this is approximately the point at which broadband point delivery would be made. 

Scott:  Great. Thank you for that. Next question. We're in a lightning round. Three minutes left. Next question comes from Jessica zk.

Scott:  Can providers report new BSLs in between, uh, the, uh, allocated reporting period? So can the provider just submit information to Costcos or the FCC when they come and determine new [00:58:00] BSLs? Yeah. 

James: For, for new BSLs that can be reported, uh, to the FCC through the challenge process, there's seven types of challenges that the FCC allows.

James: I, uh, tell the party to, uh, examine the information the FCC publishes to make sure you file the right type of challenge. But that is available with each release of the fabric. 

Scott:  Great. Two minutes left. James almost finished through the lightning round. They taught us again if it can be fit in right. Does CostQuest or the FCC have an OPEX model or from a disaster management perspective, does that feed into the designs or opex based on the type of disaster, hurricane, tornado, et cetera.

Scott:  He also put in nuclear war. 

James: I'm not sure we account for nuclear war, but on the other conditions, um, when we developed the, the first, the investment associated with an area, we look at the type of plant mix. Um, we're looking at alternatives to that, whether it's fully buried to address some of the environmental [00:59:00] concerns, um, the fire concerns that you may put it underground.

James: So we do examine that. We provide that information out to our clients, be it the F C C N T I, whoever it may be. And then from an operational standpoint, we do have an operational cost model cuz we try and develop what is the 20 year business case for each of those deployments. Uh, we actually take that down to a per customer basis, uh, so that parties can understand the potential business case of this point.

James: But I would encourage those parties that use the information to look at it, recognize that it is a, uh, best approximation or best estimation of what we believe the cost to be. But there are attributes that may not be fully captured, uh, in the cost development that we've done for that particular point.

James: Typically, as you grow out on an average area basis, uh, the numbers are, you typically capture all attributes in the area. It's just at, at a point level with all estimation. Uh, you just need to be a bit more careful. [01:00:00] 

Scott:  Well, James, thank you. I think we're at about 30 seconds left. I will give you the, the, the last word, but before I do James, I want to thank you.

Scott:  Uh, you and your team for making yourself available, not just for the conference, but definitely uh, for today's special AMA of this Mother's Day weekend. Uh, so James, I will give you the fine word and then we will, we will sign off. 

James: Yeah. Thank you Scott. Thanks for having me on today. It's been a privilege to, uh, sit with you today.

James: Uh, to answer the questions. I know there's a lot of interest in the fabric in the broadband data collection effort, and I know it's been heightened with the bead allocation. The biggest thing I'd say is just patience and understand that this is a continual improving process. It's great data right now.

James: There will be some minor issues here and there. But focus on the bigger picture, uh, as to whether in total is it working and I believe it is. 

Scott:  Well, James, thank you so much for, for joining us. Uh, we really do appreciate you taking the time today. Uh, and again, for all the moms out [01:01:00] there, happy Mother's Day. We hope you enjoy, uh, the weekend.

Scott:  If you get a chance, check out the bio that Drew Clark did on James Stegman. You can check him out, uh, at Coquet and Associates and, uh, all about the good work, um, that he's doing and has done, um, in his career. So we're gonna sign off. So on behalf of the Ask Me Anything series, our sincere thanks, James, to you for joining us.

Scott:  Thank you for everyone who joined us in the community today, and please have a great weekend and we will see you next week. Thank you.