Funding: The Ever On-Going Race To Keep Telecommunication Technologies Upgrade And The Struggles That Minimal Goverment Funding Adds To ISP Companies

Rehash of Discussion

I could throw out a number of company names that just about anyone anywhere in the nation would recognize as a major telecommunications company; such as: AT&T, Verizon, Cox Communications, Frontier, CenturyLink, and so on. 

The major companies have made a name for themselves that lets the government know they mean some serious business, a name they aren’t going to risk tarnishing do to lack of follow through of their commitments, but even as such these widely know companies don’t monopolize the market on telecommunications. In Rural America you may have the option of one or two of those major companies but more than likely your option is that of a Mom and Pop company; a company that has yet to make a name for itself, and that the government makes jump through an extensive series of hoops before even being considered to receive funding. 

Regardless of the company; how major or minor of a company they are; and how many clients they have or what part of the nation they service when funds are allocated by the government from our tax dollars (albeit whether it is the yearly taxes we pay or the taxes on our phone bill) we want to know that the money we are paying is going for exactly what the government is claiming it is being used on. The only way our concerns can be laid to rest is by asking questions! Questions that we all should be asking, and questions that we should be relentless in receiving an answer for. 

In the previous blog I left off leaving you all with a few of those very questions. Questions that we, as consumers, need to be asking. Questions that center around how can the government ensure the following: 1.) that funds are being allocated accordingly, 2.) that  funds allocated will be used as per the guidelines, and 3.) that those being granted the allocated funds follow through with using the funds as stated and per the guidelines? 

Answering The Three Questions On Everyone’s Mind

Let’s address each of these questions individually. The first question that we are going to address is “How Can We Ensure That The Funds Are Allocated Accordingly?”  

In the previous articles we have discussed many programs that have been created throughout the decades for the sole purpose of allocating funds to the advancements of telecommunication capabilities. We have discussed everything from the Universal Service Fund to the Senate Commerce Committee; from the Willis Graham Act to the prohibition of allowing monopolies in the telecommunications industry; the Communications Act to the revisions; from the Omari Plan to the three stages of CAF; the Omnibus Appropriations to RAF…. And so on the list goes of the many different programs aimed specifically at addressing the funding of advancing telecommunication capabilities as the technology advances. 

Each of these programs have allocated millions (and even billions in some cases) of dollars to the advancements of telecommunication capabilities and yet a large portion of the country seems to be running on outdated technology while other portions seem to have bigger, better, faster stuff. It makes it appears as though there is a huge discrepancy in where the funds are being allocated. As you may remember in the throughout the previous articles there have been many factors that influenced the advancements throughout the history of telecommunications. Everything from AT&T trying to monopolize the industry to taxes being tacked onto the consumers bill for services, to too many different hands (departments needing funding) in the honey pot of funds. You should also recall though that as more departments dipped their hands into the honey pot that the programs started breaking down into smaller sections so that each department would have their own honey pot to dip into which allowed for better regulation of funds. 

Upon the breakdown of funds it then allowed for the major telecommunication companies to keep track of where funds for advancements were coming from; such as the taxes between metropolitan areas verses the taxes paid in from rural areas. While the distribution of these smaller programs benefited the allocation of funds to being solely for the advancements of telecommunication capabilities it also hindered the rural areas from being treated as fairly and justly as the metropolitan areas because they simply were not paying in as much as they are unable to do so for the simple lack of the number of customers. 

OARB: Funding For Rural America

However, that lack of return due to low customer numbers hasn’t diverted the governments interest in seeing to it that all Americans have access to the most current telecommunication technologies though. They are more determined than ever to see it through that Rural America receives access to the same capabilities as the Metropolitan areas. Hence the development of funding programs specifically for Rural America. Omnibus Appropriations (OARB) is one such program that has allocated $600 million dollars to Rural Broadband Pilot. OARB specifically states in their structure that they are for area’s where Federal Funding isn’t not available. 

One of the structures of such programs is that they actually send someone out to rural areas to measure the output speed of the internet rather than going based on what is advertised. For example, here at Electrum we have a serviceable area that covers California, and Arizona with advancements being made to include Nevada in the near future. As of current we can get a large portion of our serviceable area set up on anything from 1 Mbps to 115 Mbps. However, not all of our serviceable area has the technology available to support the faster speeds and so sadly, we have to inform our customers in such rural areas that the speed they are requesting is not available to them at this time. 

Rural areas are still operating on technologies that are considered ancient as the progression of advancements of technologies continues to speed up making old technologies obsolete. Many areas still operate on dial up, some have advanced as far as DSL, but there is still a ton of work yet to be done before rural areas will catch up to the fiber optic options that metropolitan areas already have. A huge portion of that work is getting the funding together and allocating it to where it will be put to the most use.

As you’ve probably already extrapolated thus far the line of ISP’s awaiting funding to upgrade the services they provide is long; and the process is slow because they want to ensure that the moneys they grant to various companies actually gets put to upgrading the technologies rather than the money being pocketed so they put the ISP companies through a rigorous application process and then continually follow up with them throughout the process of the upgrades being completed.

Ensuring That The Funds Allocated Will Be Used As Per The Guidelines

The SLIGP (State and Local Implementation Grant Program) is a formula-based grant, which when you consider all the factors that all the programs take in it could be said that they are all formula-based yet SLIGP is one of the few that can actually chalkboard their formula for it to be understood. Which brings us to the second question that we are going to address is “How Can We Ensure That The Funds Allocated Will Be Used As Per The Guidelines?” 

The guidelines that dictate if an area is considered rural is if 90% of the households do not have access to 10/1 Mbps. That does not mean that 90% of household opting not to have internet in their home, but rather access should they choose to have internet. It also does not mean the speed of which ISP companies advertise, but that actual throughput. That measure is tested as frequently as annually. 

Now then comes the big kicker…. Say you’re an ISP Company in a rural area and are applying for funding, not only do you have to jump through many hoops in the application process but you also have to prove the demand for such services. Not a problem for metropolitan areas, but in rural areas and some guidelines state you have to show that at least thirty percent of households want your services specifically. Not just internet service in general, but internet service from your company. If you have competition in other companies being in the area you have got your work cut out for you in showing that it is your services that the community wants. 

Other Problems ISP Company Owners Face

The other problem that ISP Companies have to contend with is that while many of the programs have several of the same criteria as each other, they also individually have criteria specific to them for the ISP Companies to meet and so in preparing for one grant you may have some of the necessary paperwork to apply for the next grant coming open but there will still be many hoops to jump through for each one individually. These application processes keep ISP Company owners jumping at the same time they are trying to run their business. 

It is those very hoops that they have to jump through that ensure that money is allocated to companies that are determined to keep moving forward and advancing their businesses which in turn benefits the communities in which they serve to a greater extent than just improved internet technologies and speed. The more business that a company has the more job positions open to fulfill the demand. It becomes a cycle of supply and demand as more jobs open up words gets out and more people start moving to the rural areas, the rural areas then get built up and more jobs are being created. So the application processes have to ensure that they are picking companies that are going to spring their communities forward instead of companies that are going to be reliant upon them for funding year after year. 

Dispersement of Funds & The Completion of Projects

And lastly, but not least is the addressing “How The Government Plans On Ensuring That The Funds Dispersed Through Grants and Other Such Options In Which Funding Is Provided To ISP’s Is Used For The Improvements To Telecommunication Capabilities As Per The Guideline Of Being Granted Such Funding?”  

First, as mentioned previously there are different protocols and application processes to ensure that the government branch handling the disbursement of allocating funds from various programs ensures that the most proactive ISP companies receive the monies. According to the NTIA they want companies that are going to “lay the groundwork for sustainable economic growth, improved education, public safety, healthcare, and the advancement of other national priorities.” Secondly, there are certain structures of advancements that ISP companies have to agree to if they are chosen. Third, their progress is monitored and if they fall behind there are repercussions for not keeping their commitments. 

One such example is a program that required as part of the application process that they have to show that there is a bigger need in their area than other areas. By meeting that application process a program that was going to distribute $1.48 billion nationally to 103 providers in 45 states ended up distributing funds to 90 of 114 counties in Missouri because of their extreme need. Missouri singlehandedly secured more funds from that program than any other state. 

Example of Various Application Processes, Decision Protocols, & Follow Up of Project Advancements

The Columbia Missourian went on to further explain that one of the ISP providers was that won $176 million from one of the CAF Auctions will receive the money over a ten year span. This is to ensure that the monies are being used appropriately. As they meet their commitments they are given more of their awarded money as long as their commitments are met within the specified timeframes. The company that won the $176 million CAF funds has three years to must complete 40% in the first three years, and continue progress by 20% each year following until the project is complete with a deadline at the end of the sixth year.   

Diligent Research Is The Only Way To Counteract The Negative Impact Of The Rumors Today From Learning Experiences Of The Past

Although the answers to all these questions have been answered it doesn’t calm peoples fears and concerns that their tax dollars used for funding such advancements are not actually being used when you have people like r/explainlikeimfive posting questions geared at discrediting the governments protocols, application process, and accountability by questions like: “how were ISP’s able to receive so much money with zero accountability? Did the government really set up a handshake agreement over $200 billion?” Granted, this individual, clearly by his handle, didn’t mean to inflict any of that doubt. He simply wants, like the rest of us, to understand. Can’t blame him for that. 

What does harm our understanding is when you have people, actively trying to discredit the advancements that the government is trying to make. We all understand that the government is far from being infallible but in some areas they do strive to improve by learning from their mistakes. Have funds been allocated to companies that probably shouldn’t have been? Most definitely. Is it a common practice though? Absolutely not. Its no different than any of us giving our children money for something without completing their chores…..its a learning experience. 

If you really want to have a clear understanding the best source is conducting your own research. I will include some additional links below the cover the history of fiber optics, but I highly recommend jumping down that rabbit hole of research and delving deeper where your research takes you. However, please don’t forget to subscribe or bookmark us so you can always return for the next article. 

Part 3 of 10 in the series: The Funding Of Advancements Made To The Telecommunication Capabilities. 

Written By: Crystal Lori-Ann Winkelman (July 2019) 

References and further reading material……

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About the Author: Crystal Lori-Ann Winkelman

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