At 11/22/2011 11:22 AM, Tom DeReggi wrote: > > The FCC just had to have a date, and was nice enough to not close it > > too early. This also gives WISPs time to do some more construction > > and have it included. > > > >Thats one way to look at it. (And probably the more productive way, >recognizing the timeline to protect opportunity.) > > > The whole-state rule applies to the big ILECs. If they say no, the > > rules for the auction aren't written yet, and may work on a smaller > > basis. I think that's one of the things to discuss in the FNPRM > > Comments, which are due 24 January. > >But why would big ILEC's say, "no" ? >Isn't this process pressuring the ILECs to say "yes". Giving the ILECs a >second chance to get another free ride, now for broadband? >If ILEC took subsidee for Voice in past, why would they not do the same for >Data?
The big ILECs we're talking about (Price Cap Carriers) do not take a lot of subsidies. ATT gets a decent bunch for Mississippi, and a few dribs and drabs come in elsewhere, but they're net payers, not takers. The smaller Price Cap Carriers (Frontier, Windstream, etc.) take relatively more. So it's likely that the biggest ILECs (ATT, VZ) will look at each state and decide on a course of action. They could take the $775/line for any number of lines in Phase 1, and decide which states warrant statewide Phase 2 election. But it will probably be on a very careful financial analysis, based on how much they think they'll get vs. how much it'll cost. Remember, both VZ and ATT are basically disinvesting from wireline, emphasizing their mobile subsidiaries, so a little subsidy money might not move them. The smaller PCCs, I'm guessing, are more likely to sign on, as they're basically subsidy whores to begin with. >Small ILECs might say no, because they might not have the funding or >resources to take on a super large project even with subsidee. >But Big Telco surely has the finances. We can use ATT as an example, who is >advertising to cover all of America in 5 years, anyway. > >Do you think there is any chance that the big telco might say "no" in some >states, I dont want USF? Sure, they'll turn it down to emphasize wireless instead. More profitable right now. VZ has been unloading rural territory and ATT might start to do so. Frontier, Windstream, CLQ and the other rural chains are buyers. >It has happened in the past, to some extent. I can give the example of >Verizon pulling out of a low profit analog market, and letting a smaller LEC >take over such as either Century tel or Frontier (forget which LEC, and >which Eastern state).. Back then it made sense with Verizon focusing on FIOS >preferring to bypass regulation, that FIOS allowed them. >But would that same justification still be there, when USF subsidees are >there to compensate? VZ has pulled out of a *lot* of states, including all of ME, NH, VT, WV, OR, WA, HI, AL, MO, KY, AZ, NM, ID, IL, IN, OH, WI, MI, AK and I forget if they had any others. They've kept only three ex-GTE states (and not all of Texas). CAF is capped. Phase 1 is $775/line. Phase 2 has dollar caps to be divided among recipients. Phase 3 will be bid, so even if they take Phase 2, there's no guarantee of future funding in Phase 3. That's a risk. The FCC assumption is that up-front subsidies will leave it profitable in the long term. > > If the location is "served" on the National > > Broadband Map, or if the ILEC *knows* it's served by an unsubsidized > > competitor, it's off limits >...... > > Again, only unserved areas will get > > support, though an ILEC can use support to build common plant in an > > area that is more than 50% unserved. > >Also, regarding those to comments in your original Email... I think the risk >here is the same that it was with ARRA. >Whats the definition of "unserved", and but more importantly what is the >definition of "area", and what is the protest proof process, and is WISP's >coverage large enough to qualify an area as served? And will gerrymandering >allow a recipient to get around it? Obviously, the National MAP, that >documents all reported coverage from all carriers will help quite a bit. But >I'm still concerned that many WISP's coverage will be to small of a take >rate or area, to be proportional enough to mark an area as "served". I can >tell you that in my rural markets, it would be near impossible to get over >50% coverage, even if I served everyhome that I had coverage to. >Lets use a hypothetical example of the average member WISP having 1000 subs. >There are not many areas that have less than 2000 potential subs. I can >tell you from community connect grant research, looking at census data, it >was tough finding areas that gained maximum points of under 500 households. The Phase 1 and 2 subsidies will be based on Census Blocks. That's the smallest geographic area that the federal government knows about or has maps of. So if you can cover all of a block, you put it on the map, and subscribers there cannot be counted towards CAF subsidies. Now when auction time comes, AFAIK the size of each area to be auctioned has yet to be determined.. And for Rate of Return carriers, the rules will differ, and don't seem firm yet, so census blocks might not be the protected level. You might need a much bigger footprint. >Did it say anything in the rules, to define what an eligible size "area" is? >Both for identifying served and unserved, not just USF qualification? > >Wondering if NTIA/USDA is going to help identify preferred qualifying area >on the broadband map? I dont think it will be as simple as looking for >blank spots. >IS there currently a map of ILEC coverage area of Voice, that can be >overlaid to the broadband map? A few states do have it, but in general, ILEC coverage maps are not publicly available in GIS format. They are however always included in baseline tariffs. To be sure, the tariff maps you can find are usually n-th generation photocopies of hand-tool-drawn maps from the 1940s or so, and illegible, but they're official. And there are (expensive) commercial GIS layers showing each ILEC wire center's coverage boundary. But this also ties in to Carrier of Last Resort obligations. ILECs have state COLR obligations in most states, which is covered by their open-ended (monopoly/USF) finance model. An open question now is what happens to COLR if they lose their USF. Does CAF come with COLR? >A question likely to develop for WISPs is.... What are the safest places to >invest in expanding coverage, meaning less likely to get overbuilt with >subsidized competition? >The very Suburban/Urban and very Rural are becomming most likely for >subsidee and harsh competition. Some where in the middle, such as barely >rural, may be safer? > I'm not done with the rules yet, but offhand my guess is the safest place is one served by a Price Cap Carrier (not a small rural telco) that is far from their major focus (cities). But then the question is not really relevant for a lot of WISPs and local ISPs and CLECs. We serve the areas we serve because that's our business. It's finance capital that looks for cream areas to skim. Locals need to be able to operate anywhere. And that's a problem with some of the FCC rules, which assume that the operator is really mobile finance capital that will operate where it's most profitable, and to hell with potential customers in harder-to-serve areas. These new rules are less evil in that regard than some others from the past decade, though -- they at least made some effort to balance it a little. >----- Original Message ----- >From: "Fred Goldstein" <fgoldst...@ionary.com> >To: "WISPA General List" <wireless@wispa.org> >Sent: Monday, November 21, 2011 9:08 PM >Subject: Re: [WISPA] FCC releases USF/ICC Order, rules on subsidizing ILECs > > > > At 11/21/2011 08:04 PM, you wrote: > >>Yes agreed, its not nearly as bad as it could have been. But I still say > >>ARRGGG! > >> > >> > Price Cap Carriers will be offered $775 per > >> > line to add 4/1 broadband serivce to "unserved" areas > >> > >>Thats much better for WISPs than if they agreed to pay our competitors > >>greater than $10,000 per sub for FIOS like Fiber. > >>WISPs atleast have a chance to compete against 4/1 services, and ILEC > >>reimbursement now inline with what it would cost a WISP to deploy, and not > >>to much more.. > > > > Note that this is "incremental" $775, a subsidy to add to their > > capital budget, not the total investment. Of course big ILECs tend > > to be wasteful spenders. > > > >> > So this might be a good time to make sure the mappers > >> > are aware of your service areas, or to think about short-term service > >> > expansion. > >> > >>yeah, you gotta love help that says.... "WISPs Go hurry up and build a > >>network at your cost quickly, we wont pay you, but if you dont build > >>quick, > >>we'll pay your competitor instead." > >>(Sarcasm) > >> > >> > The date by which you must be on the map isn't set yet, > >> > but it's presumably in 1H2012. > >> > >>Well, that is good, that they are looking at mapping for disqualification. > >>Also good that not all WISPs reported their coverage in the past. > >>The rules are good incentive for rural WISPs to report now. Those rules > >>may > >>not have ever made it into the FCC rules, without the insight that it > >>would > >>be incentive to get reamining WISPs to report. If WISPs had already > >>reported, why would the FCC have needed to include consideration and > >>incentive in the new rules? > > > > The FCC just had to have a date, and was nice enough to not close it > > too early. This also gives WISPs time to do some more construction > > and have it included. > > > >> > Phase II starts in 2013. For this, Price Cap Carriers will be > >> > offered support based on a cost model that the FCC will create in > >> > 2012. Once the model is complete, the ILEC will decide if it wants > >> > to take that support for its territory on a state-by-state (all of a > >> > state or nothing) basis. > >> > >>Thats the bad part.... Only a select few monopoly like companies can > >>afford > >>to do complete State wide deployment, even when subsidized. > >>So basically, the FCC is saying.... Time to force the Monopolies to serve > >>ALL Americans, and leave no unserved areas left for the competitive > >>property. > > > > The whole-state rule applies to the big ILECs. If they say no, the > > rules for the auction aren't written yet, and may work on a smaller > > basis. I think that's one of the things to discuss in the FNPRM > > Comments, which are due 24 January. > > > >>... > >> > A separate Extremely High Cost fund will allocate up to $100M/year > >> > for locations too costly (by the model) to serve via the standard > >> > subsidy. This will be separately bid, and it's assumed that fixed > >> > wireless and satellite will be the mostly likely technologies. So > >> > this could allow some subsidies to rustic-but-Bell-area WISPs. > >> > >>Yes, that may be good for WISPs. > >>Or, better positioned ILECs to become WISPs. > > > > Good question. But due to caps on USF, ILECs might not want to play > > in that space. Also, the Big Dog Theory might come into play -- big > > dogs want big bones. A rural ILEC might play though, or a small CMRS. > > > >> > So on balance, the FCC has done a lot less harm to the rural WISP > >> > community than it could have, while still encouraging ILECs to deploy > >> > more broadband via subsidies. > >> > >>I fully agree with your conclusion. > >>Realistically, that could be considered a victory, for Rural WISPs. > >> > >>With that said, I would have preferred the FCC to have the balls to name > >>the > >>new program what it really was... > >>They could have called it the "CAIF" - Connect America to ILECs fund. or > >>"KCC-CAF" - Kill Competiton and Choice, but Connect America Fund.". > >> > >>The interesting part will be to see how many RURAL ILECs will choose to > >>accept $768 per sub, to build out to all remaining Americans in their > >>state. > >>What else will be interesting will be to see if, the RBOC fund recipients > >>really do what they are obligated to do afterwords. > > > > That number doesn't necessarily apply to Phase II -- if the bids are > > on a more granular area basis, they could go considerably > > higher. And they'll be for five years of funding, though frankly I'd > > prefer just CapEx, since WISPs need capital and big ILECs just need > > to pay off their investors. > > > >>I think it is an ambitious plan to try to get the remaining American's > >>some > >>form of broadband, which outcome would likely be good, I just cant say I > >>agree with the method. > > > > I'm with you there. It's far from ideal, but it could have been worse. > > > >>Tom DeReggi > >>RapidDSL & Wireless, Inc > >>IntAirNet- Fixed Wireless Broadband > >> > >> > >>----- Original Message ----- > >>From: "Fred R. Goldstein" <fgoldst...@ionary.com> > >>To: "WISPA General List" <wireless@wispa.org> > >>Sent: Monday, November 21, 2011 6:02 PM > >>Subject: [WISPA] FCC releases USF/ICC Order, rules on subsidizing ILECs > >> > >> > >> > On Friday, the FCC finally released the Order in their Intercarrier > >> > Compensation and Universal Service Fund docket. The executive > >> > summary had come out with the Adoption at last month's FCC Public > >> > Meeting, but the 759-page (!) Order took a while to finish. > >> > > >> > The results, from a WISP perspective, are not nearly as bad as could > >> > have been. The FCC has taken safeguards to make it easier for an > >> > unsubsidized WISP to prevent subsidized competition from an incumbent > >> > LEC. > >> > > >> > The high-cost portions of the Universal Service Fund are being > >> > restructured into the Connect America Fund. This will come into > >> > being in three phases, each with different rules for Price Cap > >> > Carriers and Rate of Return Carriers. About 95% of phone lines are > >> > in the former category; the latter are basically small rural carriers > >> > who depend upon USF. > >> > > >> > Phase I is just 2012. Price Cap Carriers will be offered $775 per > >> > line to add 4/1 broadband serivce to "unserved" areas that they > >> > weren't otherwise going to serve. They can choose how many lines > >> > this applies to. If the location is "served" on the National > >> > Broadband Map, or if the ILEC *knows* it's served by an unsubsidized > >> > competitor, it's off limits. I think this must be at least 768k > >> > fixed service. So this might be a good time to make sure the mappers > >> > are aware of your service areas, or to think about short-term service > >> > expansion. The date by which you must be on the map isn't set yet, > >> > but it's presumably in 1H2012. > >> > > >> > Phase II starts in 2013. For this, Price Cap Carriers will be > >> > offered support based on a cost model that the FCC will create in > >> > 2012. Once the model is complete, the ILEC will decide if it wants > >> > to take that support for its territory on a state-by-state (all of a > >> > state or nothing) basis. Again, only unserved areas will get > >> > support, though an ILEC can use support to build common plant in an > >> > area that is more than 50% unserved. So a new DSLAM that covers 40% > >> > unserved would not be covered, but ont that covers 60% unserved would > >> > be. So again it's important for WISPs to make their presence > >> > known. If the ILEC turns down the state, USF support goes to the low > >> > bidder. > >> > > >> > Phase III starts in 2018, and will be entirely bid-based, but the > >> > details will be worked out in the future. > >> > > >> > A separate Extremely High Cost fund will allocate up to $100M/year > >> > for locations too costly (by the model) to serve via the standard > >> > subsidy. This will be separately bid, and it's assumed that fixed > >> > wireless and satellite will be the mostly likely technologies. So > >> > this could allow some subsidies to rustic-but-Bell-area WISPs. > >> > > >> > The FCC notes that while this gives ILECs first dibs on funding, it > >> > also takes away Price Cap Carrier USF from areas served by > >> > unsubsidized competitors, so WISPs could theoretically come out > >> > better under the new rules. > >> > > >> > Now here's a catch: "Unsubsidized competitor" is defined as a > >> > provider of both voice and broadband service. It's not entirely > >> > obvious (you try parsing 759 pages of FCC-speak this quickly... ;-) ) > >> > if that applies to the Price Cap Carrier model, or just the rural > >> > Rate of Return case, since the PCCs already offer unsubsidized voice > >> > across most of their territories, and the map isn't about voice. In > >> > the rural Rate of Return Carrier case, voice will be more > >> > important. This does not mean that the WISP must be a CLEC per se; > >> > it might be high-quality (QoS) VoIP offered in conjunction with a > >> > CLEC who has local numbers, for instance. But for some ISPs, this > >> > might be a good time to start thinking about adding voice > >> > service. (My talk at FISPA last month was about the case for whether > >> > an ISP should start up a CLEC.) > >> > > >> > In areas served by rate-of-return carriers, the new rules phase out > >> > (over 3 years) all USF support to an ILEC that is 100% overlapped > >> > (voice and broadband) by an unsubsidized carrier, typically > >> > cable. If there is less than 100% overlap, then support will be > >> > reduced, but the actual methodology is left to be determined via the > >> > Further NPRM. > >> > > >> > So on balance, the FCC has done a lot less harm to the rural WISP > >> > community than it could have, while still encouraging ILECs to deploy > >> > more broadband via subsidies. > >> > > >> > > > > > -- > > Fred Goldstein k1io fgoldstein "at" ionary.com > > ionary Consulting http://www.ionary.com/ > > +1 617 795 2701 > > > > > > > > > -------------------------------------------------------------------------------- > > WISPA Wants You! Join today! > > http://signup.wispa.org/ > > > -------------------------------------------------------------------------------- > > > > WISPA Wireless List: wireless@wispa.org > > > > Subscribe/Unsubscribe: > > http://lists.wispa.org/mailman/listinfo/wireless > > > > Archives: http://lists.wispa.org/pipermail/wireless/ > > > >-------------------------------------------------------------------------------- >WISPA Wants You! Join today! >http://signup.wispa.org/ >-------------------------------------------------------------------------------- > >WISPA Wireless List: wireless@wispa.org > >Subscribe/Unsubscribe: >http://lists.wispa.org/mailman/listinfo/wireless > >Archives: http://lists.wispa.org/pipermail/wireless/ -- Fred Goldstein k1io fgoldstein "at" ionary.com ionary Consulting http://www.ionary.com/ +1 617 795 2701 -------------------------------------------------------------------------------- WISPA Wants You! 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