Paul has more than 20 years of experience in telecommunications and technology law and policy. Before founding the Vernonburg Group, Paul was the Senior Director of the Airband Initiative with Microsoft. Paul is also a fierce advocate for universal broadband coverage.
Drew Clark: I'm Drew Clark and I'm here with Paul Garnett. We are at Ask Me Anything. The Broadband grants communities Ask Me Anything series, very excited to host Paul Garnett, who brings an incredible career in the broadband space to talk about the digital divide and other topics. Obviously, we're very, very focused on the infrastructure investment and jobs act at Broadband.money, we've been doing these Ask Me Anythings for eight months, nine months now, and we've had everyone from Vince Surve to... Well, the brain fails when you need to... We've had officials from the wireless space, from the fiber space, Shirley Bloomfield of NTCA, Gary Bolton of Fiber Broadband Association, many... Darren Farnan, the Chief Operating Officer of United Fiber and many, many others, and we're very excited to bring someone of the caliber of Paul to this conversation. Welcome, Paul, thanks for being with us here today.
Paul Garnett: Yeah, Drew thank you. Thanks a lot for having me. I'm really impressed with what you're doing with your Broadband breakfast, and Ask Me Anythings and what's happening with Broadband.money, and I think it's an incredible amount of energy you're helping to tap into across the country on broadband issues, so that's really great to be here. And it's also amazing to be sort of you know, in the same sentence as someone like Vince Surve or Shirley or some these other incredible people in this industry. So thank you so much for having me.
Drew: Well, totally our pleasure and the Broadband.money community, obviously is relatively new, but it's been formed specifically to take advantage of all of the questions, complexities, connections that need to happen to take advantage of the Infrastructure Investment and Jobs Act as well as other federal and state broadband programs, but IIJA in some respects, is the big Kahuna, $65 billion, $42.5 billion of which is for the Broadband equity access and deployment program, which is really just kicking into those early, early gears and so, so we certainly wanna to talk about that. But Paul, tell us just a little bit about yourself, your background. You're an attorney like me, but you've gotten the Broadband bug, just tell us a little bit about it in kind of a broad strokes of your career and what led you to be doing what you're doing at this very moment.
Paul: Yeah, so I have about three decades of experience in the telecom and technology sectors. I'm a telecom attorney by training, so I'm a lawyer like you. But over the course of my career, I've done some other things. And you know I think of my career at Serve is in three chapters, Chapter 1, in Washington DC, Chapter 2 was spent at Microsoft and now to chapter 3 with the consulting firm I launched two years ago. And over the course of all of that experience, I really got very interested in Broadband policy and digital divide and universal service and that whole set of issues, and thinking about what it would take from a policy perspective or a technology perspective, or a business model perspective for us to solve for big and burly issues around, lack of ubiquitous, affordable, high quality broadband connectivity, not only in the US, but around the world, and so that's kind of what I've decided to devote my chapter 3 to.
Drew: Well, the thread line, and we published a short article about you, thank you for speaking with our reporter Tera Whipple on that, and she talked in the article based on your words, about your thoughts of the Telecom Act and some of the work you did with other trade groups, before moving over to Microsoft. Just give us another quick sense of the difference. And this is one of the questions on the page, give us a sense of what it's like working for a Telecom or broadband industry trade group like CTIA for which you worked for several years, and working for a technology company like Microsoft, which is not strictly speaking, to a service provider, but obviously is very invested in the broadband ecosystem, so like what are the kind of animating priorities of a big wireless group or a big tech company like Microsoft?
Paul: Yeah, so I'd say the course of my career, I've been lucky enough to sort of be around for a lot of the big trends that have happened in the industry, and from the privatization of government-owned Telcos to the emergence of local competition in the Telecom Act, to the rise of wireless, and then the rise of app stores and smartphones and then the cloud. So obviously, at CTIA, I was working largely on behalf of the mobile operators in the US and representing them in front of the Federal Communications Commission and in the States and on Capitol Hill, and that was very much kind of a Washington DC kind of a job. And for the mobile operators, the kinds of issues that we worked on were sort of existential to the success or failure of the companies who are members of that organization, and so that was... You know one of those things where connectivity was central to them and to their success and all the issues around them, like Universal Service or Intercarrier Compensation or Spectrum Policy, or what have you.
Paul: Going to Microsoft, Microsoft was a technology company and not a Telco, not a broadband provider, although obviously, they're now getting deeper deeper into that with cloud and data centers and all the infrastructure, they now leverage to reach customers, but they were not... Didn't really think of themselves as a Telco back then certainly, and were in the midst of a transition from essentially software in boxes to software from the cloud. So I was lucky to be there during that period of time, and I think over that period of time, Microsoft has become much more aware as a company of the importance of connectivity to its success, as Satya Nadella or the CEO of Microsoft said in a book that he wrote shortly after he became CEO, if there's no internet access, there's no cloud access. So for a company like Microsoft, although they're not a broadband service provider, and ultimately, they're gonna look to partner with broadband service providers, they want to see more people connected around the world on, like I said earlier, at a low-cost, affordable, high-speed, reliable broadband connections, no matter where they are in the world, those customers, and when... And if that's the world in which we live, then a company like Microsoft can reach more people with their productivity applications, simple as that.
Drew: So, that's great, but let's drill in a little bit more, Paul.
Drew: So like, you in particular led Airband, an initiative at Microsoft that still exists. In fact, just yesterday, there was a blog post released, and I just posted a question about this by Vickie Robinson, who I think is the head of the program now, is that right, Paul?
Paul: Yeah. Yeah, absolutely.
Drew: So she's taken your place there in the head of the Airband program. So, what is Airband? Just give us the simple version for what it is, so we can kinda understand the context, because it has been a significant project, program, name, whatever, but we wanna understand like, what lessons you learned from it too, but first of all, just what is Airband?
Paul: Yeah, so Airband is a strategic initiative of Microsoft that is focused on helping to solve the global digital divide. And Microsoft, as I said it earlier, is not a broadband service provider themselves, so the way that they approach a challenge like that is, is through partnership. So they're looking to partner with broadband service providers, hardware companies, component manufacturers, not for profits, really anybody who's in the space to help open up new markets and enable more people to be able to get online in a way that works for them. And Microsoft is a global company, although I think still more than half of its revenues come from the US, it is a global company, they have a presence everywhere. So there definitely is... There's definitely a lot of work being done in the US on Airband, but it's more than just about the US. There's a lot of projects that are in, and for example emerging markets. And in fact, the genesis of the Airband Initiative is work that Microsoft did in... Beginning in Africa, deploying networks with internet service providers there. So it's very, a partner-driven approach, very, go local with local partners, with localized solutions, and bring to those relationships the assets that Microsoft has, like its cloud and cloud services, and the applications it can enable and produce and... And help enable the broadband providers to do what they do well, which is to provide broadband services.
Drew: Okay. So Airband is the use of some tools that have been built by Microsoft or not. Are these... Is it all open source?
Paul: Some of that actually is open source. But one of the things that Microsoft did as sort of the beginning of its sort of public announcement of the Airband Initiative five years ago was, they did offer royalty-free access to a suite of IP, so 60 or 70 patents that Microsoft had been awarded in the spectrum sharing space, so sort of next generation fixed wireless technologies. So there is an aspect of that to the Airband Initiative. There also is a commitment with the partners to reach more people, so expanding access to broadband and putting some numerical goals behind that. And then there was, sort of more of a philanthropic piece of it, which is, in addition to bringing people access to broadband, obviously we need to figure out how to get them to adopt and use it, so, leveraging a lot of good programming out of Microsoft Philanthropies on digital skilling, and both basic digital skilling as well as more advanced workforce development kind of digital skilling.
Drew: So let's talk just a little bit more on the emerging markets okay. And I know you spent a lot of time on airlines traveling across the world for many years, Paul. In particular, Kenya was a spot... Just give us some sense of the... Some flavor of what it's like to get and to help people in these third-world developing countries, so to speak, probably a better word than third-world. What are the kind of problems and obstacles, and what were the solutions that Airband helped bring to them?
Paul: So in fact, I'm actually heading to Kenya tomorrow [chuckle] to go and see the company that was involved in our first project in Africa. At the time, as I mentioned, we were doing some work in Microsoft research on some new wireless technologies, in particular, something called, TV White Spaces, but just generally on sort of the next generation of fixed wireless technologies, which we surmise would be particularly useful in low population density, price-sensitive populations like in emerging markets, places that have challenges from a topographical perspective, and places that are far from fiber networks. So places where you're gonna need to use a mix of point-to-point and point-to-multipoint fixed wireless technologies to reach those customers, or in extreme locations, use things like satellite connectivity. And then, the other thing is off-grid, so these are areas that don't have access to electricity, so think of like... In the US, Navajo Nation is an area in the southwest that has a lot of households that don't have electricity. In sub-Saharan Africa, there are 600 million people who don't have electricity where they live. So you can't deliver people internet connectivity without also dealing with the electricity challenge that they face. And we see the same thing in places like Central America and South Asia.
Paul: So there we really deployed the first example of use of TV White spaces alongside other fixed wireless technologies to bring solar powered internet access to unserved rural communities in the Mount Kenya region of Kenya in particular a town called Nanyuki, in Laikipia county, Kenya. And it was a good pilot and we connected schools and health care clinics and community centers, and the Red Cross, and a bunch of small shops where the shopkeepers could sell bandwidth to their customers. And so that was sort of the flame, they sort of the... The match... The light to the flame. Sort of the first place we did something that was actually a proper deployment with an internet service provider we helped to create, and then we started to sort of marching across Africa and doing projects in other countries, and then eventually that led us back to the US.
Drew: Well, thanks, and that does kind of... In other words just not... Microsoft's not going out there being an ISP like Google Fiber or anything like that, it's just, it's more about stoking the ecosystem first in emerging markets than in the United States rural communities. We may talk a minute or two more about that, we like to encourage questions, and we've got one just a few minutes ago from Dan Lubar and it's right on this topic, he says a Simple curiosity question, please talk for a minute about US spectrum policy as far as the use of TV White Spaces here, and how Airband has been navigating the US market for the same as compared to the work you did, and just describe in your for Africa program, any reaction to that.
Paul: Well, I can always count on Dan Lubar, to ask a good question, so thanks for that, Dan. I could probably spend a week talking about answering that question, so let me see if I can be as succinct and precise as possible, so, yeah. So TV White Space is an area that, again, that was filled with almost a germ of the workout that started at Microsoft, and I was working with some Microsoft researchers to help, to commercialize those technologies. And we felt, and I continue to believe that by leveraging these low... Below one gigahertz frequencies and leveraging the propagation characteristics of them, you know they could be particularly useful for wireless internet service providers to deploy connectivity in particular in low population density, hard to reach, "Non line of site locations". And of course, the US was the first country in the world to adopt TV White Space Regulations, the regulations themselves weren't great, but it was a good start. And of course, now we're probably a dozen or so other countries around the world who've adopted White Space Regulations. I think there's a few lessons to be learned from that experience, I think overall, one of the big challenges that we face, and it's kind of a good segue into this conversation around broadband access and underserved communities, is most technologies...
Paul: Well, I actually wouldn't say most, I think all technologies, at least all technologies that are standards-based, or whether that comes out of things like the 3GPP set of standards for mobile or the WiFi standards, they're almost always going to be... The standards are designed for high population density, high average revenue per unit, per user per month populations, and we've seen that with 5G, 5G is now sort of being adapted to rural environments, but the core that was meant to deal with delivering super high band with low latency technologies to urban markets. And so I think TV White Spaces was one of those things that we tried to successfully standardize and create some excitement around an ecosystem for it, but it was frankly too disruptive to that mindset because the reality is hardware companies like to sell a lot of boxes, and if there are a fewer boxes to deploy over a particular geographic area, that's not necessarily good for them, so and they don't do things against self-interest. So I think one of the things that TV white space has suffered from was, it was too disruptive for a lot of different companies that are in the telecom industry, put it that way.
Paul: It still exists, I mean, there's definitely still companies creating good technology for it, and it definitely it should be part of the tool kit of all the different other types of technologies that one could use to bring internet access, whether that's broadband or some kind of an Airband IoT applications. But it definitely has not become what it could have become because of those types of issues and more.
Drew: Well, we definitely wanna get to the digital divide and all of its particularities, particularly in the United States, but there's a great question here from Jace Wilson, he asks, "How is your thinking on Airband evolved since you left, since you left Microsoft and started The Vernonburg Group, regarding technology, and what do you recommend to your clients when they have a question of, Hey, what type of technology should I use, whether it's rural areas or hard to reach areas, what's changed since then from your perspective, Paul?"
Paul: Yeah, and I think overall, there's a sort of... Time doesn't stand still, and this is an industry that moves fast. It's hard to predict the future. Great engineers are really great at solving big challenges. Tell them something they can't do it, and they'll figure it out. And so, again, back on the TV White Spaces thing, other technologies have come along that also can help to address some of the challenges that TV White Spaces was designed to address. So I think, overall, with the Airband Initiative, we definitely took a toolkit approach. And I know that they continue to do that, so if it's not... And oftentimes people associate TV White Spaces with the Microsoft Airband Initiative, but that was really only one piece of the puzzle or one tool in the toolkit. So we and our partners always took a toolkit approach to any problem and look at where the customers are, where the population density is, where's the fiber, and design a network that is optimized for that environment. So certainly fiber has a huge role to play, different types of fixed wireless technologies have a role to play, and even satellite.
Paul: I think the thing that has changed since I left Microsoft almost two years ago, is there definitely is an increased emphasis on fiber deployments. I think policy-makers definitely have become excited about what fiber can do, and there definitely is a bias there for fiber deployments where they're feasible. And I think the other thing that we've seen progress forward are improvements in other technologies, including wireless. And I've definitely seen sort of the maturity of that ecosystem more broadly for fixed wireless solutions, whether those are 5G solutions or other kinds of fixed wireless solutions that are terrestrial, they're getting better and they're more scalable and they're cheaper. And then there's all this exciting stuff that is happening in space [chuckle] with Elon Musk and SpaceX and Starlink, and what Amazon is doing with Kuiper and OneWeb and other low Earth orbit satellite companies launching their constellations and beginning to do piloting and getting ready to deploy services, as well as things that are happening in the geostationary space. There's just... There's so much exciting... There's so many exciting things that are happening in our industry from a technology perspective, and it's better now than it's been in probably a couple of decades.
Drew: Alright. Let's move into talking about IIJA, the Infrastructure Investment and Jobs Act. And take a minute to tell us what, The Vernonburg Group's does? Could you just give us the elevator pitch here for what's the basic role that you are playing and want to play with regard to your clients in the broadband space, Paul?
Paul: Yeah. Well, I don't wanna turn this into an infomercial, that's not too much my style. But as I said earlier, when I left Microsoft, I decided I really wanted to continue to devote myself to the issue of digital divide and helping to close that... The global broadband gap. And so I set up a consulting firm that was in some ways very similar to the team that we created at Microsoft to do Airband, so a nice multi-disciplinary team that can help clients address certain aspects of closing the digital divide. So whether that's something on policy and regulation, something programmatic, project-related, something technical, something financial, we're there to help advise companies address those issues. So more concretely, broadband plans is something certainly we can help with and have worked on, feasibility studies, access to financing, whether that's public money or private money. So those types of issues.
Drew: Alright. So what is the digital divide? And is it different in the United States from out of the United States?
Paul: So... Okay, so just more broadly, the digital divide manifests itself in two ways. There is the divide between those who can access the Internet and those who cannot, so that's what I would call the availability gap or the availability digital divide. And then there's the gap between those who subscribe to Internet access services and those who do not subscribe to them, and that's the now so-called adoption gap. And those are the sort of two big fundamental challenges that we face, and those are the two areas that broadband program administrators and others can help to solve through their programming and through what service providers do to provide services in communities. So we wanna make sure that everyone can access the Internet over a high-speed connection if they wanna do that, and we wanna make sure that there's nothing getting in the way of consumers being able to adopt or subscribe or utilize these services.
Drew: So when I've had the...
Paul: Man, I'm sorry. Man, I... Sorry, I forgot the second half of your question, which is the US versus abroad. And I think fundamentally those two issues are the same, whether you're in Kenya or you're in Kansas. The numbers, the metrics behind it are gonna be different because of where we are from an economic and social development perspective, might be a little different than it would be in an emerging market. And even within emerging markets, there are huge differences, like Sub-Saharan Africa might look different than Latin America or even within a place like Kenya, you see huge differences between Nairobi and Nanyuki, which is a smaller town. So our goal... Today, for example, Jessica Rosenworcel, the Chairwoman of the FCC, announced that she was gonna propose to increase the broadband definition in the US, which I think is really long overdue, from 25/3 to 100/20. I think that makes absolute sense in the US, and we probably should build some kind of... Accelerate into that over time. But in an emerging market, the number might be more like two down and one up right now, and maybe we increase it to 10/1 in those markets. So they're just not necessarily as far along as we are. We do want them to catch up obviously, but we also need to be realistic about what can be delivered in those markets and what sort of makes for a baseline of service we want everyone to have.
Drew: Well, thank you for mentioning Chairwoman Rosenworcel's statement today, that she wants to move from 25/3 to 100/20, and we blogged about this as well on broadband.money. I wanted to call back to your report on this, though, in which... The report on the efforts... I guess, let me just pull up the exact title of it. Toward Effective Administration of State and Local Fixed Broadband Programs, and you came out with this four months ago, I think, and you've updated it after the Notice of Funding Availability... Opportunity came out. But my specific question to you, Paul, is you said in the report, "This report explains why a goal of making affordable so-called symmetrical 100/100 megabit per second fixed broadband, where upload speed equals download speeds, available to all households is not justified based on current and foreseeable consumption patterns." Could you just elaborate a little bit on that, Paul? Particularly given your endorsement of the move up to 100/20, why do you have such negative words on, "not justified"?
Paul: So my overall view on policy-making is that it needs to be data-driven, and the data needs to drive decision-making, we need to look at what is the data telling us, and let them inform us. I think one thing we need to remember about broadband definitions is they're a floor, not a ceiling. So when the Federal Communications Commission develops a broadband definition and then updates it, what they're saying is the floor for what everyone should have now has risen, and so enough people now are getting X, 80% of the population now has access to X, and therefore the remaining 20% should have access to it. So if you look at something like 120 and what is available across the US, it is something like 90% of Americans, 80 to 90% of Americans have access to broad... Internet connections that can deliver speeds of at least 100 down and 20 up, and therefore...
Drew: Or at least that the providers say can deliver. The speed tests don't show that they are delivering that, but the providers say they can deliver 100/20.
Paul: Right. So we see that they're telling the FCC with the broadband data that that's available to a vast majority of Americans, and therefore, the rest of US households should have access to the same level of connectivity. And the way the FCC has also done broadband definitions in the past is like looking at, "Okay, what do people buy? And what do they get?" And if you look... And I'm actually pleased. I'm pleased that Chairwoman Rosenworcel and the FCC are sticking with an asymmetrical baseline for broadband of 100 down and 20 up and are potentially looking even further ahead to a time when it's a gigabit down and 500 up... 500 megabits per second up. If you look at the way in which broadband is sold, but I think almost more importantly, the way broadband is... Or data is consumed over broadband connections, broadband... Data is consumed in an asymmetrical fashion for the most part, especially by residential consumers and small businesses, and we can find use cases where that's not the case like... I was talking to someone the other day about video camera monitoring and that's all upstream like, "Yeah, okay, that's fine," but that's not, that... And that's a use case that certainly should be enabled in networks and probably would be with 120 connection, but that's not... That shouldn't be the basis for a baseline definition.
Paul: So if you look at the way the data actually is consumed, basically about 14 times as much data goes down and goes up. So people are pulling 14 times more data from the internet than they're sending through the internet, and that asymmetry actually went up during the COVID-19 pandemic. So I don't think that was surprising in a way because we're all on Zoom now, we're working from home more, and utilizing applications that we'll do more on the upstream and are latency-sensitive and all that, but at the same time, we're also watching way more Hulu and Netflix and the other things that we ever have. So it's sort of like the downstream is almost offset, the increase in what we're consuming has offset what we're sending to the internet. So I think in terms of coming up with a baseline... And we can debate, is it 120, is it 250, is it 500? But the point, overall point we were trying to make in our report was that regardless of what that ultimately is, it did make sense for it to be... To have the flexibility in it that it can be asymmetrical because that's the way people actually are consuming data today, and then we don't see that changing any time in the near future.
Drew: Well, it's important for you to make this point, Paul. We've talked to other people who are just kind of zealots on symmetrical broadband, and if we just kind of isolate 25/3, 100/20 and something else that's higher, you're endorsing Rosenworcel's attempt to move from 25/3, which is the definition of underserved in IIJA 2, 100/20, which is the definition of underserved...
Paul: Yeah, I agree with her.
Drew: Underserved, underserved. Yeah.
Paul: Yeah, and I think that's... I think that makes sense. And it is... There is a basis for it in the data, that's the important thing.
Paul: So if the data shows us that the vast majority of Americans now have access to 120 and they're consuming in an asymmetrical fashion. And a 100/20, by the way, does a lot of things that we need, you can stream multiple 4K videos and games and be on Zoom and it's okay, you don't have to...
Drew: But still, I wanna press this one more in tia, which is, and Jace Wilson makes this point that 100/20 will be useless for most homes by 2030. High-end user bandwidth already pushes hard on those values today, while app service demand continues to increase exponentially. Isn't it the case, Paul, that if we're gonna spend lots of money through the Infrastructure Investment and Jobs Act to upgrade America's broadband networks, shouldn't we be doing it with the technology that is at least in the eyes of its boosters, that is future-proof? What are your reactions to that? That 100/20 is gonna quickly be inadequate.
Paul: Well... Again, it's 10... Eight years from now, so 2030. Who's good at predicting 10 years from now what the world is gonna look like on technology. My experience having worked for a tech company is that tech gets invented far earlier than it ever gets mass consumed in the market. So I think a lot of times, those kind of predictions always take longer than we think they will. But yeah, maybe the number will go up in five years from now, we'll come back. It's been roughly, I think, eight years since the last definition was increased now, we're eight years later in doing it and increasing it. The number will go up. We know that. And that's the policy maker's job to sort of create that baseline of what we want everyone to have. The fact that some people can get a gigabit connection or even the multi-gigabit action doesn't necessarily mean from a policy perspective that everybody needs to have that now. But all I'm saying is that we can debate the number. It can go up over time. But all I'm saying is what we're seeing in the data shows us that a symmetrical definition is not supportive. And we're not seeing that changing anytime in the near future. Now the numbers all might go up, maybe but...
Drew: Good to see you stick to your guns, Paul.
Drew: Alright, so let's go to this report that you put together that I referenced. It's specifically on the state administration of broadband programs. I've had a chance to dig into it. Just could you give us the high-level summary? What were you trying to accomplish in the report when it came out in April, and how you update it with the NOFO, and what would be the kind of brief encapsulation of its thesis for those state broadband officers that I gather it was very, very much focused on?
Paul: I think overall, we're just trying to be helpful. And this is an unbelievable moment. This is an unprecedented moment. You hear this over and over again. Everyone uses that word unprecedented to describe the moment we're in right now from a broadband policy and funding perspective. Unprecedented dollars, whether it's money from the IIJA or the CARES Act or the Consolidated Appropriations Act, or ARPA, huge amounts of money being made available for broadband availability and adoption programs. And also a real major shift of responsibility for all of this from exclusively from the federal level, namely the FCC, USDA with RUS and NTIA, down to the states and counties, in some cases even municipal and local governments. So they're all being given... They're being given more responsibility, and they're being given responsibility for a lot of money. And I think one thing that I've observed in my career is, 30 years doing this, the more I do this, the more I realize how little I know. So I feel like I don't know enough, and I can't imagine how an administrator in a Town Hall or a City Hall or a county administrator who may have been really nothing more than a consumer of broadband in their life, is now given responsibility for setting up a program, and providing funding to broadband providers, and setting aside funding for adoption programs and the like.
Paul: So I think really what we were trying to do is be helpful to state, county, municipal and other government administrators of broadband programs, and helping them understand the space, understand what the data says. Again, the data can be kind of scary at times, there's a lot of it. It's just sort of what's the terminology about. Helping them understand all of that. Helping them understand what are the best practices that are out there, what are some rules of the road for development of policy and programming. And then helping them understand the specific programs that are out there and what they can do, what they can and cannot do with them. And then providing a blueprint, as it were, for the steps they would need to take and the kinds of things they need to be thinking about as they develop their programs. I don't think the paper... The papers are long. We did two papers. One was just sort of meant to be the kind of a 101-level handbook. And then there's a 201-level report. There probably could be like a senior seminar. I don't know, there's probably even more detail we could have included in there. But we didn't wanna overwhelm people. So that's kind of the idea behind those reports.
Drew: Well, yeah, and we have links to that on this event page. You've got nine points. One thing I wanna pull out is, how has it been received by state officials? What are your, kind of, again, early observations? The deadline for states to indicate that they want to participate in the BIP program is Monday, three days from now. And all 50 states, all six territories and the district Columbia have said they will. They've met that deadline. But what are you expecting at this stage from the broadband offices and the process as it kicks off, Paul?
Paul: Well, they need to... The first thing is they need to start to think about their five-year broadband plans or broadband action plans, or digital equity plans, or whatever you wanna call them. Starting to develop those. In particular, the grantees are gonna need to prepare and deliver to NTIA a plan, but also counties and cities also. Some of them been doing it already in various forms, but either they're gonna need to amend what they've already done, or create something new. The other key short-term issue is the allocation of dollars across the 50 states and the territories. And those are based on a combination of FCC's new broadband data collection, so the new broadband mapping program that the FCC has launched and is the challenge process. So, states need to start to get ready for all of that to the extent that they want to... That they think that they're gonna need to challenge the broadband data collection that'll be... That'll come from data that's... That network operators submit to the FCC.
Drew: Well, let's take a minute to talk about...
Paul: Those are like... Those are the sort of... To me, those are like the... 'Cause they've submitted their letters now, they're gonna get their planning dollars, the first thing is, "Let's get going on these five-year plans," and then even probably even more immediately think about the whole broadband data issue.
Drew: Right. Well, and let's talk a minute or two about data. Obviously, we focused on it, we had Lai-Yi Ohlsen and Dustin Loup of Measurement Lab and the Broadband Mapping Coalition talk. We dug deep into this last month. Microsoft's Airband just came out yesterday with a digital equity dashboard and posted about it. As I think I mentioned earlier, Broadband Money, broadband.money has maps available of every state, and we've actually... Just in the process of preparing more that's going to be released shortly. Could you just speak a minute about the data that's out there right now, okay? Is it good, what is it good for, what is it not good at, and what you're looking for to still get from this FCC process, Paul?
Paul: So... And I work a lot outside the US as well, so I think, so kind of a broad perspective on broadband data, and obviously... Again, we're totally... The way we think as an organization, the way I think, is, "Start with the data." We want policy to be data-driven. That good policy-making has in its roots, its basis, good data. Overall, the best data comes from network operators. I know people don't like to hear that, but it's just the truth. And of course the data has to get better. The FCC has been at this for a long time. When I was at the FCC back in the early 2000s, I spent a lot of time with the Industry Analysis Division there. The sophistication of data collected back then pales in comparison even to what is being collected... What has been collected in the latest versions of the FCC 477. So we've come a long way, but definitely the data needs to get better. And I think there are two major problems with the 477 data. One is this sort of level of granularity and this whole issue of if there's one person in a census block who could get... Who could sign up for service, then the whole census block counts.
Paul: That's particularly damaging in rural areas, where you have large geography. So you could have someone in one corner of a census block that can have access to broadband, and then everyone else in the census block does not. So that's... So, we need to get more granularity. And the broadband data collection does that by enabling down to the household level mapping through shapefiles. The other issue is... And this is something we talked about when I was at Microsoft, but the way in which the question was asked, it was asking the broadband provider, "Do you or could you provide broadband in a census block at the different levels?" That, "Could you?" [chuckle] has a lot of subjectivity to it. Some broadband providers will be very conservative in how they answer that question, others will not be. So I think we ended up with very... A wide array of answers to that part of the question. Some... I think especially on the wireless side, some wireless-based ISPs would say, "Well, look, if someone calls me up and ask me for service, I'll just put a radio on the tower, and I'll serve them." That doesn't mean that you could do it in a moment's notice or in a typical interval, service interval, or... So there's definitely... Or I could eventually get to you if you call me up.
Paul: So there've been issues like that. And Microsoft does... Did... Does a nice job of talking about one specific location in eastern Washington called Ferry County, and I think they've mentioned it again in their... In the blog yesterday. Where the FCC's 477 data shows that essentially everyone there has access to broadband, when in fact, nobody does, or almost nobody. So that's a stark example. And then I think the third area is just complexity. And especially for smaller operators, smaller network operators, just the complexity of the whole thing, and submitting data on Excel spreadsheets with hundreds and thousands of rows with geo-coordinate association to different census blocks. And I think it's... Sometimes it's someone junior level in the company that's not even their full-time job, they do this thing twice a year, and they may not do the best job and with the highest level of integrity, to be honest with you. And so they end up submitting something that's kind of a bit of a guess and not at that level of precision that it should provide. And hopefully, by going to the broadband data collection, the FCC will help to address that by creating a mechanism for submission of data that's much simpler.
Drew: Yeah. I wanna move in these last 14, 15 minutes, go... We have left to talk about sort of funding, the money, how it's gonna roll out, almost maybe a little bit about the public-private mix, right? So for example, in your report that I was referencing earlier, you have a great, interesting statistic saying that, over the years from... I think it was... I got it in another online place here... And from 2009 to 2017 so that eight-year period, private investment in broadband was 795 billion. Okay, so almost 800 trillion and basically only 47 billion, around 50 billion. So like a fraction, 16th, 17th of it on public. Okay, so that was that period from '09 to '17. Now, how do you expect those numbers to change if we did a new period from 2020 to 2030, how much is gonna get invested as a result of public funds and how much private funds, and what is this gonna do to the industry, in your view, Paul?
Paul: Yeah, so that's like... What is that? 6% or something, six or 7% of the total amount is coming from...
Drew: Yeah, exactly.
Paul: From the things like the FCC's high cost programs or other programs, RUS and others over that period, and then almost 800 billion from the private sector. I guess the first thing that sort of to mention is 790 billion, is a lot of money. And we look at what Congress has appropriated for broadband through the infrastructure bill and through the other piece of legislation, add that all up, the amount that actually will be spent on broadband it's not gonna be anything close to that amount of money. So I think overall, in most places, the vast majority of funding for network deployments and upgrades will continue to come from the private sector, but in the areas that are the subject of this conversation, the un-served and underserved areas, fortunately, a significant amount of money has now become available to help bring broadband access to those areas. And so that ratio obviously is gonna be much higher on the public sector side than it is on the private sector side.
Paul: I don't know what the exact numbers are, NTIA and USDA require private sector match now, it depends on the program 25%, 30% at least, and the more the better. And I think that'll vary by project and location. But yeah, absolutely. The public sector is gonna play a much bigger role in cash plus in time toward product deployments and toward operating networks once they're open and running and providing services, but I think in areas that are areas that don't need subsidization like in urban areas and suburban areas, it will continue to be primarily private money that helps to run those networks. And it should be.
Drew: Scott Woods, the Vice President of Community Engagement and Strategic Partnerships for Ready asks, where do you see our industry at the end of the IIJA program in five years or 10 years, and will the consumer end user demand for increased speed and performance continue on its exponential growth?
Paul: Yeah, so absolutely. Consumer demand will increase. I actually think the bigger thing that's happening is the amount of data that people consume is definitely going up, and you're seeing this in broadband plans that network operators make available. I mean, think about... I have a funny little story, so my own house, I've got four kids who are college age roughly, my wife, me, both working at home, and then our mother-in-law moved in, who's an older person, and who is consuming the most amount of data in our house?
Paul: My mother-in-law, [chuckle] you know why? Because she streams video for 12 hours a day, and so the amount of data that the American family is consuming and is gonna consume is gonna continue to rise, that doesn't necessarily mean that the speed of the connection has to rise in exactly the same proportion to the amount of data they consume but there is a ton of data that people are consuming because of things like streaming video and so-called Cutting the Cord from cable and using less broadcast. And then what was the other part of your question? Sorry.
Drew: Where are we gonna be as a result of this, how is the industry gonna change, for example, let me just...
Paul: I think that we're gonna see... I think we're gonna continue to see a lot of consolidation. Right now, we have 3000 broadband providers in the US, roughly, so we have 3000 companies who submit 477 forms of the FCC so is roughly about maybe 2800 or something now, but we're gonna continue to see a lot of consolidation happening, especially in the small carrier category, and that needs to happen, and there's a lot of sort of efficiency gains that can be derived from that, so that will definitely happen in the industry, there will definitely be more of a focus on fiber, we're already seeing that a lot of companies that traditionally have been doing things other than end-to-end fiber are getting more into end-to-end fiber business, and that's a good thing overall, and hopefully, we'll see more people with access to broadband than today, and hopefully we can close this digital divide.
Paul: I think what will happen is... My hope is that fund administrators will be very prudent with the money they're given, and we'll figure out a way to stretch those dollars as far as they can, and I hope they'll take the toolkit approach and they'll deploy fiber where it needs to go and where it's "Feasible to use" use NTIAs and treasuries words. And that in places that are really low population density, harder to reach areas, they will turn to various trust, real fixed wireless technologies. And really, really rural remote places they'll go to satellite. And my hope is that there's a lot of money that's left over, even after all of that, to address the adoption gap, which I think is the thing that is gonna be the most difficult thing to address, and will be around even when we bring broadband to everybody. There still will be 20% or more of households that don't sign up, and we've gotta figure out a way to address that, and that's gonna be a long-term challenge.
Drew: I think it's really admirable, the pragmatism and then the data-driven approach that you're bringing to this and Vernonburg Group is bringing to this. We still have about a six, half-dozen questions here. And we got about six minutes, so I'm gonna try to do these rapid fire here. One that brings together the consolidation, the fiber points, is this one from Michael Flynn, and he asks, "What are some of the challenges you see for WISPs, Wireless Internet Service Providers, moving to a full fiber plant to take advantage of BIP programs?"
Paul: Access to financing. Next question. [chuckle] That's it, that's the biggest challenge. And I think, especially with the match, right, so 30% or more match. So in order for those small ISPs to be able to compete, they're gonna have to raise some significant capital. They may have to have to modify their level of aggressiveness in terms of the size of projects they can take on. And they're gonna to raise some private capital, much more capital than they've had to raise in the past. There's definitely a role to be provided there for financiers.
Drew: David Tate asked the question, he asked at almost every broadband.money event, "Have you read the BITAG latency report on bufferbloat, and what do you think the regulator should do to ensure low working latency and good quality of experience across the internet?"
Paul: Latency is as important as speed. If you deliver a high speed, high latency connection, that's basically as useless as a very low speed, low latency connection. So it's extremely important. I think oftentimes, we talk too much about speeds and we don't talk about latency. It's definitely an important issue, and should be part of any broadband definition and any funding requirement.
Drew: Carlin McCoy asks, "I am still stunned that the states and NTIA have not insisted that the location of all publicly funded fiber be reported. Alan Davidson should insist that state plans include the discovery and public disclosure of where publicly funded fiber is in their states." What do you think of that, Paul?
Paul: It's not a question I've ever fielded. It sounds reasonable to me. I think when government money is used to deploy physical infrastructure, I think there should be some level of transparency there. So, makes sense to me.
Drew: We have a couple of questions about Airband's role and bringing broadband access to precision agriculture. And someone else, I think it was a Garland also noted precision ag will stress asymmetric networks. Any thoughts on precision ag? Were there any airband apps that dealt with agriculture?
Paul: Yeah. I agree. I think that IoT generally, there are so many different types of IoT use cases that are more symmetrical, in fact, in some cases are asymmetrical in the other direction. Like there's so much data on farms, for example, that can be leveraged...
Drew: The clients are downloading a lot of movies, for example.
Paul: They're not downloading movies, but they're sending a lot to... I don't know what the analogy would be, CO2. But anyway, so there's definitely a ton of data on farms and in other kinds of applications. So, I don't disagree with you there. But at the end of the day, the IIJA, ARPA, these other funding mechanisms are about broadband connectivity primarily to homes and also to small businesses. And it's about delivering, again, a basic level to everybody, what is the thing that everybody deserves to have? So I totally agree with you there. Agriculture is an area that we definitely focused on when I was at Microsoft. There was a program called the FarmBeats Initiative at Microsoft that we were involved in. We specifically focused on four industry verticals in airband because we felt like those were sort of common denominators to rural communities. Agriculture, education, health and rural entrepreneurship. So agriculture absolutely is extremely important, and it's important to economic development, it's important to the planet. So, completely agree with you there, and something that I'd certainly care about, and we were focused on a lot when I was at Microsoft. And I know Microsoft has continued to work on that.
Drew: I'm gonna end with two rather big questions, but since we only have three minutes, you can answer as you want. The first is, again from Jacey, points out that you wrote a striking op-ed on the need for affordable connectivity fund, permanent funding. And this was in The Hill. Could you just speak about what can states do to extend this benefit? And then the last question from Riley Haight is, "How do you see this IIJA transforming the build-out of broadband?" We've kind of touched on this a little bit, but what's significant about pushing all these funds through states? What's gonna be different about broadband build-out because of that? So those two last questions for you to take wherever you want to, Paul.
Paul: I think in both cases on adoption and availability, I think there's a lot of room for experimentation at the state level in what has been released from NTIA and Treasury for that matter. So we'll see a lot of interesting experimentation, especially on the adoption side. I think that's great, 'cause we have so much more to learn about what it takes to get people to use internet access when it's available to them, and become sort of power users of the internet and help to improve their lives. On the ACP, I've written two blogs now on this. Well, one op-ed and one blog. Over $14 billion in funding made available for the ACP. I think we're close to 13 million households have now signed up of I think it's 48 million households in total that are eligible. That is a huge success and it should continue. The numbers should go up. We should definitely figure out ways to promote that. But an additional 150,000 households or so new households are signing up every week. That's the good news. The worrisome piece of that is that the money's gonna run out pretty quickly with all the success we're having with it. So $14 billion sounds like a lot, but at the current spending rate, we project that the ACP will run out of funding in the first half of 2024.
Paul: And maybe it's earlier, maybe it's later, but it's gonna run out. And this is an important program. It's a great program and we should figure out ways to extend it. Ultimately, we think that Congress needs to step in and permanently fund the ACP, with appropriation. We don't think that the universal service programs for the FCC, although we're gonna see lifeline link-up, become more like ACP over time, and we have a proceeding now the FCC to look at that. We just don't think the universal system can afford to spend $7 to 10 billion a year on an ACP program, with the current way in which universal service is funded. So, we think ultimately it has to come from Congress. And then in the meantime, because we know how political Congress can be and how long it can take them to make these kind of decisions while we've got states and counties to have an important role to play here. And they have funding, and they have flexibility to use that funding in different ways. So our suggestion was, let's find ways to, if need be, extend the ACP. Maybe use ACP dollars to target specific populations within your communities that have lower rates of adoption or of broadband on device ownership. So we think the short run states and local governments have definitely an important role to play here.
Drew: Well, we've run out of time. We've covered a lot of ground. I'm sure there's much more ground we could cover. We're so thankful you spent this hour with us to give us your thoughts on competition in broadband, on the digital divide, the Infrastructure Investment and Jobs Act, wireless and other technologies. On behalf of Paul Garnett, I'm Drew Clark. We will see you again for another Ask Me Anything in two weeks time.