rural broadbandWireless internet service providers (WISPs) have never been coy regarding their opinion of the universal service fund (USF) and its impact on their business. Many WISPs feel the USF unfairly rewards incumbent providers with subsidies and undermines their ability to compete. The latest iteration of the USF is the Connect America Fund, which aims to shift the USF from funding voice centric networks to building and supporting broadband infrastructure.

The trade association representing WISPs, WISPA recently singled out CenturyLink, arguing the newest tier 1 telecom service provider should not be entitled to Connect America Funding for broadband build outs, at least in areas where their members already serve.

“The Wireless Internet Service Providers Association (WISPA) opposes an FCC waiver request filed by CenturyLink that, if approved, would entitle CenturyLink to federal subsidies from the Connect America Fund for broadband deployment in areas already served by Wireless Internet Service Providers (“WISPs”),” states WISPA in a press release outlining their opposition.

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The WISPA-CenturyLink dispute is illustrative of the many controversies regarding the new Connect America Fund. The issue is building momentum because select ‘price cap’ carriers need to decide in short order if they intend to tap $300 million in Phase I of the Connect America Fund program for broadband build outs. Frontier has already decided to move forward, and will receive $775 per line in support to bring broadband to 92,876 new households at a total cost of $71,979,104. A few WISP representatives have shared their less than enthusiastic view of the Frontier move  with us.

Other carriers who need to decide a CAF course of action include Alaska Communications Systems, AT&T, CenturyLink, Consolidated Communications, Fairpoint Communications, Hawaiian Telecom, Virgin Islands Telephone Co., Verizon and Windstream.

WISPA is particularly concerned about CenturyLink because according to WISPA, CenturyLink has requested a waiver for Phase I CAF funding, in order to receive funding to serve territories that are already served by existing WISPs. “They want to treat WISPs the same as satellite broadband when it comes to phase I of the CAF,” WISPA board member Matt Larsen told Telecompetitor today in a phone interview.

Should the price cap carriers choose not to accept phase I CAF funding, the next step is reverse auctions, where carriers bid to serve unserved territories, with the lowest bid winning the funding. For WISPs though, the reverse auction mechanism doesn’t hold much appeal either. Reverse auctions will only be open to qualified eligible telecommunications carriers (ETCs), which most, if not all WISPs are not.

“We don’t think direct government funding to carriers like CenturyLink is needed for broadband. If there is to be any government funding or involvement, we would prefer the government offer a voucher program direct to consumers and allow them to choose which broadband service provider they want,” said Larsen.

 

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39 thoughts on “WISPs Target CenturyLink over Connect America Fund

  1. $775 per customer, Now know how Centruy Link is paying for the free perks like laptops they are offering to switch to their service. Goverment should not be taxing my phone service to pay for stuff like this. USF is a fraud ridden program!

  2. Are you kidding? Some rural customers cost north of $2k, $3k or more to connect. You have to put the entire picture into perspective.

  3. Interesting how a WISP can deploy for half of that. As I've said many times in my "Tales from the Towers", this is simply government screwing up the free enterprise system by stealing money from legitimate businesses and giving it to companies that line the pockets of their government representatives. No different than the billions of dollars that Obama funneled into the pockets of his donors under the guise of advancing technology and then watching them go bust. Government should stay out of the free market because if these people were actually competent, they would be in the free market instead of working for the governmnet and trying to correct what we, the small businesses, are doing wrong. These poeple couldn't run a lemonade stand successfully.

  4. If you read the Century Link filing (http://apps.fcc.gov/ecfs/document/view?id=7021978621) it’s full of egregious misrepresentations of the WISP community. For example, they pick the slowest service some WISPs offer and generalize it as the maximum the industry offers. It seems they've never heard of service tiers.

    They also suggest that Century link be funded to overbuild WISPs if their coverage areas haven't been specifically validated by a state agency. Of course, there's been little or no state validation of any carriers' input to the National Broadband maps. Certainly, CenturyLinks coverage maps present a generous view of what their DSL technology can do.

    But we shouldn't be surprised. USF funds have a long history of abuse both here in the US and globally. (E.g. http://blogs.broughturner.com/2006/10/mobile_netw….

    1. Thanx for the link to CenturyLink's petition. Do you know if the FCC has requested comment and if so, what is the comment date?

  5. How did WISPA "single out" CenturyLink? This implies that other telecom carriers also asked for waivers to do this. CenturyLink singled themselves out by trying the change the rules so that they can get as much free money from the government as possible without actually adding service to truly unserved areas of the country.

    1. Your comment is so on target. I live in a small unserved area and feel like I am being held "hostage" by this company as they demand more money before serving us. We are far enough away from all other providers that they don't feel threatened by them and can safely "hold hostages." It is far past time for us to have service. Give the money to a wireless and let them bring us service.

  6. It is no surprise to me that large corporate interests are spinning the Universal Service Fund into their own little piggy bank for broadband (Connect America Fund). When you cannot compete with small business in rural America and you can manipulate Uncle Sam to subsidize your expensive network deployments I guess you line up for the slop like any other pig. I was sure this would happen 10 years ago. My only surprise is that they waited this long. The FCC needs to make these monies available as vouchers to individual US citizens if they do subsidies at all. Mr. Larsen has it right.

    This program is proof once again that the federal government should not be picking winners and losers in the business of broadband Internet. WISPs are building broadband at a fever pitch throughout rural America WITHOUT subsidies. Why not let them invest their time and money and stay out of their way?

  7. Interesting to me how all these wisp guys are so easily willing to trash decades worth of public policy on universal service. It is not a perfect system, but this is classic case of throw the baby out with the bathwater.

    1. Some areas will need subsidization to deliver 4 megabit speeds to everyone. Let's choose the most economical solution – whatever that may be – instead of whomever got money before.

  8. “These WISP guys” are not “willing to trash decades worth of public policy.” The CAF is a new program, and the FCC’s order establishing it was so poorly considered and written that dozens of parties — including many telephone companies! — filed petitions for reconsideration and/or are suing to have the order overturned. Nor are they “singling out” CenturyLink. CenturyLink is the only telephone company which has had the temerity to file a petition — filled with misinformation — asking the FCC to ignore the fact that broadband service exists in an area and pay it to provide expensive, redundant service.

    What is really going on here is simple. CenturyLink, which provides service that is both inferior to that provided by WISPs and more costly — is asking the FCC to subsidize it, using taxpayer dollars, to build out its own broadband to areas where WISPs already provide it. The WISPs got no government handout to build out to those areas; they did it on their own dime, leveraging superior and more cost-effective technology. In effect, CenturyLink is asking the FCC to subsidize it because its outmoded technology and bloated corporate structure can’t keep up with WISPs without government help!

    The fact that WISPs have built broadband out to these areas without government assistance is evidence that the CAF is not needed at all; Congress would do us all a service if it simply repealed the USF tax, which amounts to 15% of consumers’ telephone bills, and let innovative providers like WISPs continue to solve the problem of ubiquitous broadband access. But until and unless this happens, the last thing we should do is give taxpayer money to the phone companies to be less efficient and to build facilities that are redundant. The FCC should not only reject the petition, but if they give money to anyone, it should be to the WISPs. They’re the ones who would use it efficiently.

  9. The legacy U.S. telecom network has always been the envy of the globe. If that admiration is to continue in the Internet age, I'm sorry, it won't come from a patchwork of WISPs delivering "just enough" services. It will come from a universal fiber to the premise network, delivering a robust two-way IP stream. The government should be doing everything in its power to ensure this nation achieves it, and every citizen has access to it.

  10. Larry, who is going to pay for that? Our company is $16 Trillion in debt now. If users want to live in podunk U.S., then it's not the taxpayers job to spend $5M to bring fiber to their house. It's no different than the taxpayer picking up healthcare or daycare because you had a kid you couldn't afford. And to make it worse, a WISP will do it for far less than what CenturyLink will and will charge less to the client. When a big corporation is the only game in town, then the consumer pays. Just look at your cable or cell phone bill. That's what you get when government is involved.

    1. Rory, I remember hearing Blair Levin suggest that it would be cheaper to buy certain rural Americans houses in Bethesda MD than to build broadband to them. While perhaps factually correct, I think Blair's statement and yours show a lack of understanding what "podunk" areas mean for our country. I've seen numbers like 85% of the food we eat is produced in the US, much in "podunk". And the value of that Agriculture is around $300B annually. Then we can look at energy production- I have no solid numbers, but whether it's shale in North Dakota or coal in West Virginia- "podunk" helps meet our energy needs.

      Are there rich people that build places in rural America and choose to live there- absolutely. But I'd suggest many people "choose" to live there because it's how they earn their livelihood. Is it worth a few Billion a year to ensure that these folks have access to broadband and I have access to food at my grocery store? Absolutely.

      1. I am a WISP and my family farms. Broadband is needed, yes. Fiber Internet, no. I'm not adverse to fiber as all buildings on the farm have conduit to them and am in process of ordering the things to connect them via fiber. Many devices on the farm are Internet capable.

        They don't need fiber Internet.

  11. Larry, WISPs deliver much better than “just enough” service. It’s CenturyLink’s DSL service that’s “just enough” — or, in rural areas where it is limited to 1.5 Mbps and sometimes 512 Kbps, not even enough at all.

    WISPs can offer links providing a gigabit per second or more (not that a rural residence is likely to need that much). What’s more, wireless outperforms fiber; the speed of light in fiber is one fifth (that’s right, a fifth) of the speed of radio waves in air.

    Government should get out of the way and let WISPs — which are genuine small businesses that create American jobs rather than exporting them to India and the Phillipines — deliver.

  12. Oops, meant to say our country is $16T in debt. Brett is right though, I'm delivering 10-15Mbps in a place where CenturyLink is delivering 3Mbps at best and 640Kbps at worst. They are lying and spinning facts to their benefit with the assumption that the government is too stupid to figure it out. Wait… my bad. They might get away with it.

  13. Larry: Do you have ANY idea the kinds of areas we are talking about? Telcos don't want to build out to towns of 500 people. WISPs get excited when they can hit 5 houses from a tower in certain areas…a handful of houses/square mile. Fiber is a great solution in more urban areas, but in most rural areas it's just a pipe dream. If you bother to look at the National Broadband Map (which is a work in progress…but it's a good start), you'll find that in states like IL, TX, MI, and IN most of the non-urban areas are covered by WISPs…not the telcos. That is today. WISPs are growing like crazy, adding coverage wherever possible. Some are adding fiber to their mix where it makes sense.

  14. You guys didn't read my post too closely. I'm not advocating for CL or CL DSL. I am advocating for fiber. Anyone with any sense would agree, that the best broadband approach is FTTP. This nonsense about wireless being better or faster is just that – nonsense.

    We used to be a country of bold ideas and action. I wasn't around, but I bet there were similar arguments being made when someone had the audacity to suggest we should bring electricity to every home/business in America. Well broadband is the electricity of our day and there are plenty of examples of rural LECs (not CL) successfully bringing fiber to rural America. Why can't we emulate that success across the country. Why not? Because we focus on what we can't do, rather than rolling up our sleeves and solving big problems.

    Is there a role for WISPs — sure. It's a great interim step, but it shouldn't be the final one.

    1. I don't think fiber should be the final solution (bad word choice?) for everyone, but eventually I suspect most will have it over the next 20 years. There's no reason why the rural towns can't have it, but it just isn't feasible for people living outside of town in rural areas to get that kind of service.

      At this time there is no reason for a residential user to have more than 10 or 15 megabits – and that speed is chosen to allow for multiple Netflix HD streams. A WISP could easily deliver that kind of service – especially to a rural population.

  15. Everyone is advocating for fiber with absolutely no justification or financing for it. Nobody can tell me why yet. Either the cost is too high and nobody can afford it or the groups that advocate for it then come out with contests for the "application" that will justify the tax money they just wasted. Our government has "NO MONEY" and is just priinting it willy-nilly. The only money they have they take. It's not fair to keep taking money from one group to waste on another group with absolutely no justifiable reason.

    What happens after the fiber gets installed and the governmnet paid for it. If it's run by the government to be wholeseled to private industry, they inevitably charge more than private industry for access. That doesn't help the small business. If the ystem goes down, the small WISP who is using them gets blamed for as long as it's down as they have to wait for governmnet, not know for it's speedy response time, to fix it. Again, that makes it useless to private industry.

    1. I do support the exploration of applications to properly utilize large pipes. That benefits everyone.

      I do support a limited (a fraction of the current program) equal access middle mile CAFUSF program, but would rather have none than one that does last-mile.

  16. If CAF or USF funds are used, the incumbent then uses that money to wipe out it's competition by giving away free laptops such as CenturyLink or providing bandwdith they couldn't possibly hope to reach with their own money. Once their competitors are gone, they raise prices and screw the consumer as in the case of cell companies. Commcast is also testing UBB to make ever more profit. The consumer ends up getting screwed in the end. All you poeple advocating fiber everywhere with government subsidies either don't have a clue about the free market or just like paying outrageious amounts because the government screwed up the balance of competition. If the consumer needs fiber and can pay for it, some company will figure our how to do it. CAF and the USF funds should be shut down immediately at this point.

  17. @Rory: The websites will speed up over time. I can remember when a couple of ISDN lines paired together was all the bandwidth you could want. Today, you'd be crawling at 128kbs/second. Faster speeds are great. We should be pushing the technology as far and as fast as it can go.

  18. Cadillacs! Hummers! We all need big, expensive, gas-guzzling, money-sucking vehicles, even if there’s only one person traveling in them. No other solution will do.

    Just like we all need fiber to the premises.

  19. @Jeff, I agree and believe it or not, I'm all for fiber everywhere if it's the most cost effective method and meets the needs of today, not tomorrow. We can't afford tomorrow until we get our budgets in line. If we paid $100 for fiber today, it would cost 2-3 times that by the time we needed it. If we wait until then, it might be cheaper or their might be another opportunity.

  20. Nice to see a spirited debate on this important issue! In my view, there has to be a broad and inclusive approach to this issue, involving many players including incumbent carriers, competitive carriers, and policy makers/regulators. There's no 'silver bullet' answer, and a variety of technologies will be a part of the final equation, including wireless, FTTH, DSL, satellite, and cable modem.

    It's great to see so much passion on this topic. Thanks for reading and adding your input.

  21. I don't think that a lot of people would disagree that fiber is the ultimate connectivity goal. However, there are many ways to get to that goal.

    The USF program has been a fiscal disaster, inflating customer line costs by nearly 20% and failing to evolve quickly enough to accommodate the rapid changes in telecom. Throwing more money at the companies that have failed to deliver broadband is not going to give us better results. I recognize that there may be some rural carriers that have been able to build out fiber to their customers and those customers would be without service if there was no subsidy. Those customers and carriers should consider themselves to be fortunate that someone else paid to build out their network – they have a great head start and should be able to do well going forward without subsidies.

    What is completely lost in this debate is that the fixed wireless model can deliver adequate speeds now and is so much more economical than fiber in non-urban areas that regular customer revenue will pay for a staged fiber deployment over a period of years. If the CLECs and RLECs can't compete with that, then they deserve to fail.

    CAF is intended to get more broadband out to people who can't get it, not to support untenable business models. Take the subsidies away, let the broken companies fail and the more efficient competitiors will pick up the pieces.

  22. The FCC has reasonably questioned the relative scalability, and therefore the long-term cost effectiveness, of wireless. "Given the high fixed costs of constructing broadband networks, once built, they are not likely to be replaced, especially in rural areas that are unserved today… [W]e believe that networks deployed in rural areas should not merely be adequate for current bandwidth demands. Instead, they also should be readily upgradeable to meet bandwidth demands of the future." (FCC Report on Rural Broadband Strategy, para. 82, rel. May 22, 2009). Back in 2008, a wireless industry report looking at emerging 4G offerings (Rysavy Research and 3G Americas, "Edge, HSPA and LTE – Broadband Innovation") predicted that, while faster speeds are possible in theory, given real-world limits involving spectrum, backhaul, hardware, and network topology, wireless broadband will top out at about 42 Mbps (page 57). Good speed today doesn't equate good long-term investment, comparatively.

  23. And the FCC would be wrong and/or crooked. They don't seem to have a problem let Verizon or AT&T dominate the spectrum squeeze WISPs out of the market. As for the 42Mbps limitation, they are wrong on so many levels. Wireless bandwidth is going crazy. You can now push 1.4GBps per square mile for less than what it costs for a single residential fiber deployment. My S.P.I.R.I.T. design is already at that level with 100Mbps or more planned for next year. Open up another 100MHz of bandwidth without the stupid 6MHz limitation and see what WISPs do then. Or take the 30dBm limitation off UNI-I. Get the ridiculous limitations off Ultra-Wide band and we no longer have any reason not to make everything wireless. The FCC articifically keeps the WISP industry and wireless technology down to pad the pockets of big political donors like Verizon, CenturyLink, and AT&T happy. So if you believe the lies they spew out, then yes, you deserve to pay $60 per month for 10GB monthly limit.

    Between the FCC and CAF, I don't know which is worse

  24. A significant problem with the FCC, Congress and the rest of our policy apparatus is that it's run by lawyers with virtually no independent input from physicists, engineers or scientists of any stripe. The political bodies get "expert" input that's sponsored by vested interests. Thus, as Cory puts it, the FCC is just plain wrong.

    4G was optimized for mobility. If you're trying to provide service to fixed locations, orders of magnitude increases in capacity are possible, with today's technology.

    If you look at the physics of electromagnetic radiation, these are many orders of magnitude improvements yet to come and these are being developed at Moore's law type rates. So what applies to fixed wireless today will be obsolete two years from now.

    Finally, if you do think about the physics of what's going on, you'd see the compelling advantage of fiber is over distances. Thus in low density areas, economics suggests you focus on fiber for backhaul and wireless for access.

    Too bad science and engineering is irrelevant in the corridors of power.

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