Welcome back to the Solution Series brought to you by DoubleRadius. In the WISP world today we are constantly talking about the BDC, FCC Form 477, and the changes to the NTIA BEAD program. So, we actually sat down to interview and talk to a trusted source in the industry. We wanted to share this information with you and hope it is valuable. Please welcome Steve Curan.
“This presentation is not intended to create an attorney client relationship, the information contained in this presentation is general and is not offered as legal advice. You are strongly encouraged attorney if you have specific questions, and any reliance on the information in this presentation is taken at your own risk.”
Katie: Welcome Steve glad you’re able to join us today for the first Solution Series not product or ties to any hardware. Can you just do a quick little introduction?
Steve: Sure, my name is Steve Coran. I’m an attorney at Lerman Center in Washington DC for the last 15+ years. I’ve been representing WISPA, the trade association for wireless ISPs in addition to servicing clients who our broadband providers for all technologies. Everything from funding programs such CAF (Connect America Fund), DAF (Donor-Advised Fund), and BEAD (Broadband Equity, Access, and Development), as well as MNA work, transactional work, licensing enforcement .. your name it. I’m very fortunate to have a lot of talent of people around me who I can’t make me look good, but can’t make me look better. That’s a little bit about who I am.
Katie: We are glad to have you. Maybe we can just jump right into it. As you have mentioned there has been a lot of discussion, especially in the WISPA community, about the BEAD funding and all the new requirements that are coming about WISPs in particular that we mostly DoubleRadius deal with. Or those having to figure out seemingly maybe a little bit on their own, but reaching out to you, or reaching out to distributors like us, or even on the radio manufacturing side. Can you do a brief introduction of BEAD, and now the new form 477 and those requirements, and the broadband data collection? Also, how do all those three things intertwine?
Steve: Let me start with kind of a high-level on the BEAD program that NTIA is putting together is $42.45 billion that will be made available through a federal program but distributed by each of the states that have decided to participate, and all of them have. All the states and the territories have indicated they want access to this federal funding to promote broadband service. The program will be implemented between now and then, there’s a lot of hoops that states and others need to go through and we’ll talk about some of those, but the money won’t start flowing until probably late 2023 or early 2024, that’s my best guesstimate now. That’s because the FCC and NTIA (National Telecommunications and Information Administration). The FCC is creating the broadband map that NTIA will rely on when they identify, and the states identify, what areas will be treated as unserved in what areas will be treated as underserved and therefore be available for for this funding. So, the process that folks are really focused on right now is the broadband data collection (BDC) that the FCC is implementing alongside, for at least the cycle Form 477. Between now and September 1 all broadband providers will be filing Form 477 and also the new BDC submission that goes through the FCC’s portal and is filed electronically. That is to design the areas where broadband providers self-report where are they offer broadband service, whether it’s fiber or fixed wireless or some other technology. Very important for folks to participate because if you do want to participate in the BEAD program timely submission of Form 477, and timely submission of BDC information is a prerequisite even applying for that funding. If you don’t do that you’re not gonna be eligible for the funding. We can talk about whether funding is a good thing or a bad thing and how do you play defense/offense/special teams, but let me stop there and take your follow up question.
Benton: A lot of the confusion seems to be on some of the key dates. I know you mentioned September 1, what are the next couple key days that they are customers or buyers need to know about or need to be aware of?
Steve: The the form 477 and the BDC deadlines are the same as they’ve always been for form 477, the September 1 deadline is to report information as of the end of June. At the end of December is another kind of reporting period ending, those reports will be due before March 1. Once again it’ll be BDC and Form 477 on March 1 for information as of December 31, and then so on and so forth every six months to be reporting that information. I do think there will be some changes as we go forward here on the way the FCC collects information. They’re also putting out FAQs from time to time so if folks do have questions on certain BDC submission information, as well as Form 477 information, you can ask the FCC through a drop-down menu on the webpage and they will answer your question, get back to you, or post an answer on FAQ for all to see.
Gerry: If they have an intent to complete, should they fill out their Form 477 by what they actually have rolled out as of June, or what they are going to roll out between now and the end of the year?
Steve: The information needs to be current as of that June 30 date and reflect where are you offer service, or where you can offer service, within 10 days without an extraordinary expenditure of expenses. That’s the standard that is used for Form 477, and what they are using for the BDC. Your submissions, as well as the broadband fabric that is being created separately to identify serviceable locations, will be subject to a challenge process. It’s important to file as accurately, and of course timely, with the understanding that the information you submit to the FCC, as well as the broadband map, will be subject to challenge from community officials, potential customers that have been denied service, etc. You’re gonna have a chance to challenge the fabric because it may not include all the areas that you can cover from that. It will all get kind of sort it out and will have a “final map”. Now, obviously there’s no such thing as a final map because it’s evolving all the time; you’re building out service, houses are being torn down, new ones are going up, etc., so it becomes a very sort of dynamic process as we go forward.
What we don’t know is which map the states will be using (they are supposed to go through a challenge process too) when it sets the locations and then decides how much money they are going to be able to deploy and what their process is going to be. There’s a multi step process. We don’t know the exact timelines for any of this but I’ve heard that October we may be ready to go through the first challenge process. What I hope is that we don’t have, what I refer to as a map gap, which is where your information goes in on September 1 of 2022 and someone in 2024 decides that we’re going to use that map to make our funding decision because it won’t be current, it won’t be accurate, and it will be granular. Getting the final map as close to the funding decisions is real important. One thing that they constrained that is the NTIA needs to know how much money to give each state, and that’s gonna be based on what their locations are. Hopefully with everything moving in parallel we won’t have a large map gap.
Katie: What about one of the requirements on the Form 477 that seems like a lot of WISPs are very confused about is having a PE sign-off or PE certification sign-off on the data.
Steve: Right. That is not for Form 477, that is only for the Broadband data collection. For Form 477 you do need a corporate officer to sign. For the BDC program you need not just a corporate officer but either a certified professional engineer license by the state, or a corporate engineering officer employed by the provider who has direct knowledge of a responsibility for generating the BDC filing. A bunch of associations, CCA (Competitive Carriers Association) being in the lead, filed with the FCC and said there are not very many certified professional engineers out there and why do you need a certified license professional engineer to sign off on a map? They are not building towers or putting pipes in the ground or building sewage systems, they’re really just looking at the map in which case why do you need a professional engineer? Which is primarily for safety, to sign off on these. So the FCC made some decisions in a waiver order that came out a couple of weeks ago to say here’s the clarification on the rule, you need to be either a professional engineer or you need to be a corporate engineering officer. If you can’t meet any of those requirements then we’re going to grant a limited waiver and this will apply to the first three BDC filing cycles, so the data as of June 30, 2022 (that’s the one that has to be uploaded by September 1) and then the next two cycles ending December 31, 2022 and June 30, 2023. The waivers to provide sufficient time for providers to become accustomed to filing the data in the BDC system and obtain necessary engineering support.
What does the waiver allow you to do? Based on what’s going on is you have two different ways that you can qualify for the engineering waiver. One is the engineer must possess a bachelors or post graduate degree in electrical engineering, electronic technology, or another similar technical discipline, AND at least seven years of relevant experience in broadband and network design and/or performance. That’s the first waver. The second one is probably the one that most wireless ISPs will want to take advantage of. That’s where the engineer has to possess specialized training, in other words not a college degree, relevant to broadband network engineering and design deployment and performance, and at least 10 years (instead of seven) of relevant experience in broadband network engineering design and/or performance. The FCC was convinced that these were ways that most filers for these first recycles would be able to qualify for the waiver. If you do want to take advantage of the waiver you can go into the BDC portal, there should be a drop-down that says “explanations and comments” and then you include the following language; “the engineer certifying our submission meets the minimum qualifications outlined in the declaratory ruling and limited waiver adopted on July 8, 2022 in WC docket number 19–195”. So, if you’re a WISPA member we did a webinar on this a few weeks ago when you can go and look at this in more detail. That webinar was done on July 13th, just five days after the order came out. There is more detail there, or contact me off-line if you have questions about about the waiver or about the certification process.
Katie: Do you think that this is a service distributers could offer if they have someone on staff that has their 10+ years experience going out on site doing installs?
Steve: One of the thing that’s pretty clear is, for purposes of the waiver, the engineer does not need to be an employee. If there is somebody who meets those qualifications of specialized training and 10+ years of experience and they’ve looked at the information than the provider could go ahead and make that certification in the waiver request. I do think that there are companies that hopefully will offer professional engineering services because then you don’t need the waiver you just have the PE sign off on it. I don’t know what they charge, but I know there are some companies out there offering that. There may be vendors or other consultants that are program to work with providers to offer either the PE certification or one of the waiver certifications, probably not a corporate engineering officer since they’re not an officer of the company.
Benton: If we could take a little bit of a step back; what led to the to the BBC? How did we get to where we are today? The customer may say “we have been doing the same thing for 15-20 years, why now?”
Steve: Because broadband maps suck. That would be the first thing and everybody realized that, including Congress. This is a congressional action, not the FCC as a way to promote raider accuracy and granularity in reporting of where broadband is available and where it isn’t. That’s for purpose of determining where funding should be provided. Congress appropriated a lot of money for this to put the map in place and is providing technical support, and therefore it’s important. It is required by Congress and the FCC has implemented the program in order to make sure the money goes the right place. It’s really important for providers to comply, because if they don’t they are either subject to sanctions, forfeitures, fines, things like that. It doesn’t help advocacy when you go to the FCC to ask for something, but more importantly you’re more likely to get overbuilt by federal funding if your coverage area is not accurate.
Gerry: Do you think the challenge process is going to be fair to smaller service providers and not just get overwhelmed by the larger ones?
Steve: It’ll be fair so long as the information that goes in as accurate and as long as people are diligent and participate. So, sure. As long as larger companies have more resources, but you know smaller companies will probably will have less to look at. The FCC will be providing some form of technical assistance, not quite sure what that looks like, but there’s lots of information on the offices website videos, tutorials, walk-throughs of what the specifications on how to fill it out. There’s a lot of data there and I’m sure there will be some people that decide that they don’t want to do this, and they do so at their own peril.
Gerry: To plug you a little bit, it’s also a service you can provide to them as well, right?
Steve: Certainly we can help them answer questions when it comes to filling out the form and dealing with the challenge process absolutely we can help them with that. I think it’ll be designed to be online, not filing written filings but I think there are certain things that we could work with folks, and come up with good answers to the questions when they’re challenged. If there are no good answers we can help them deal with that. It’s all gonna be very fact-based and the FCC will look at what they get in. So, if they get good data that’ll be great, if they get bad data and bad answers then we have to deal with that as well.
Benton: Outside of the of being overbuilt, which obviously is a huge determining factor, what are the other consequences could an operator possibly run into? Do they have fines, or what else besides being overbuild you would they run into?
Steve: Yeah, you’re gonna face FCC enforcement action if (A) you don’t file (B) there are material errors in what you submit so something in purple crayon is probably not gonna go over very well, and then there’s an obligation to update your data. If you don’t update your data you could be subject to fines for that as well. There is a carrot and a stick here. The carrot is you can avoid a lot of things and you can protect yourself if you submit the data accurately and in the way the FCC wants you to and as completely and thoroughly as you can. The stick is if you don’t not only are you hurting yourself, but you are going to be subject to FCC enforcement.
Katie: Can we talk through the change the FCC has made with now allowing considering CBRS as license to be able to get the funding but a lot of ISPs for the majority of their networks are unlicensed, how should operators go about that? Should they just throw up some CBRS so they are able to be considered for the funding, what would be the best approach for a lot of these operators who are mostly deploying 5GHz right now?
Steve: There are two technology codes that would apply to fix wireless; one is code 70 which is unlicensed service at a location and the other is licensed, that is code 71. Code 71 now includes CBRSGAA for if you were serving a location with CBRSGAA, or any other license service like 2.5, mm wave, or something like that. Or in combination with unlicensed is kind of a hybrid, so if you have a 5GHz and you also have GAA at the same tower and the location you can get both. Or if you are a fiber provider and you have fiber and fix wireless at the same location then you report all of that. As you kind-of alluded to Katie, the FCC changed CBRSGAA from unlicensed and put it on code 70 and is now including that in code 71 as something called License by Rule, because it is a license service. If you were providing GA service as of June 30, 2022 then you should go ahead and report that you were able to provide service as of that date using CPRS and and use code 71. If you put up something now it won’t help you with respect to the filing, it’s due on September 1 because that had a June 30 snapshot date. But if you still have that in place as of December 30 this year then go ahead and report it on the next BDC filing on March 1st.
Benton: Does having a license link, 60 GHz or 11 GHz, from point A to point B considered reliable, or does it have to be extended beyond that?
Steve: What you’re referring to is something that’s in the NTIA BEAD program and the BEAD program says that if you are providing reliable broadband service at a particular location, then that location is treated as served and will not be available for BEAD program funding. However, what NTIA said was that service provided entirely over unlicensed spectrum is not reliable broadband service. So, what NTIA really said is that reliable broadband service must be a fixed broadband service that is available with a high degree of certainty both at the present and the foreseeable future. They’ve included fiber optic technology, cable modem/hybrid fiber coax tech, DSL, or terrestrial fix wireless technology utilizing entirely licensed spectrum or a hybrid of licensed an unlicensed spectrum. That generally will direct you back to the two FCC technology codes that I talked about.
If you are providing service at a location with unlicensed fixed wireless spectrum then that is eligible to be unserved or underserved for purposes of big program funding. Obviously not an outcome that favors a lot of WISPs that are only using fix wireless at the location. What we’ve been able to determine from the FCC, which is not 1000% clear, what is meant by entirely. Does entirely mean only? Which means it’s a last mile interpretation. What does the customer receive at that location? If they’re only getting it off of 5 GHz link, a PTMP 5 GHz tower and that’s the only way that they are getting their broadband service through the last mile, does that mean that it’s an unlicensed and not reliable broadband service? The answer that we’ve been able to get from the FCC is yes. Regardless of whether you have a Fiber backhaul or PTP 11 GHz or 18 GHz or 6 GHz link. The opposite would be true if you have an unlicensed PTP link going to a tower but then you have, for instance, 2.5 license service going to the customers location. Because the FCC seems to be looking at this from what is available at the location and only the last mile service, anything further up the chain does not factor in. Another long winded way of saying this is that when you see the word entirely we think the FCC is interpreting this to mean only. If the only way the customer gets your service is through an unlicensed connection to whatever happens to be upstream then you would be code 70, you would be unlicensed broadband service, and you would be subject to overbuilding under the BEAD program because they would not treat that as reliable broadband service.
You may have seen what WISPA put out that has had some engagement with him NTIA and WISPA’s new president and CEO posted a LinkedIn discussion of what WISPA’s position is on this. If you go to David Zumwalt or WISPA, I’m not sure where it was posted on LinkedIn, you can see a long discussion about WISPS’s position as to why 9 million customers with low turn who are receiving broadband service (many of those over non-licensed connection) do not believe it is unreliable. There’s a lot of other technical arguments that we can add to that with respect to the way that unlicensed is architected and configured in a network. In some cases may be better than license service because you have more spectrum to be frequency agile over. Beam-forming technology, and a lot of different things that are being used now strongly suggest that unlicensed spectrum will be around for a while. In fact, there’s 850 MHz of pretty clean 6 GHz spectrum in rural areas that hasn’t even been deployed yet, or isn’t it even commercially available yet! That’s something that I think NTIA needs to hear about. We’re hopeful, if not optimistic, that NTIA may change its mind and reconsider, will see where that goes.
Benton: As we stand today, the new spectrum in the 6 GHz would still be considered unlicensed, correct?
Steve: Yeah, it is an unlicensed service. It’s part 15, it may use an AFC, but the AFC (Automated Frequency Control) is not there to provide interference protection it’s there to ensure that incumbents don’t get interference. The incumbents being PTP links that are used by public safety, CII (critical information), as well as a lot of WISPs for their backhaul.
Katie: Has there been any feedback on a time frame for the FCC to finally roll out the AFC for 6GHz?
Steve: I know they are still working on that in the multi stakeholder group, I don’t have too much visibility into what they’re doing but I understand that they’re moving forward so hopefully it won’t be too much longer. I know that’s not a very good estimate, but that’s as good as I can do. I’m not sort of in the weeds on that and there’s lotta stakeholders and it is a big process so that’s where we are.
GERRY: Thinking of the NTIA is it a fight to help them understand the technology, is it from the unlicensed side, or are they pretty open for the technical conversations?
Steve: I don’t want to get into too much on the inside of baseball but I would say that they seem (on the outside) disinclined to change anything for this program, doesn’t mean we shouldn’t try. They were required to coordinate with the FCC on the definition of reliable broadband service. From what we understand there were discussions, there were also discussions with folks at OMB, and the White House. And this comes back way up top as to why BEAD is different than CAF and DAF. One of the primary reasons is the department of commerce in NTIA is an executive agency, which means that the White House can have influence. FCC is an independent agency and there’s not supposed to be that level of influence from cabinet level or the White House on those sorts of things. This is a a political shift from the way that we’ve done reverse auctions in CAF and DAF from the way that states will likely be allocating BEAD funds. Although I have heard that Nebraska has adopted a reverse auction at least for their current and ongoing program. That’s kind of the answer here. I think there were some things that they knew and when we presented them a lot of technical information there were some things that they didn’t know. I think their concern was well there’s no guarantees that the spectrum is going to be available in 5 years or 10 years. We’re like we’ve got a lot of 50 MHz just sitting there that isn’t even available yet, but we know it will be. When was the last time the FCC took away unlicensed spectrum? Quite the contrary, they are continuing to put more and more out there to support Wi-Fi 6, Wi-Fi 7, IOT, world broadband, all host of things. My personal opinion is this was a political decision made by folks in the White House and they charter their own path. Very different from the FCC which had no problem excepting unlicensed spectrum for purposes of CAF and DAF, even 6 GHz for the DAF program.
Gerry: Does it make it any risk being a political driven process and there is a change in the White House does it impact the viability of this program?
Steve: It could force some changes, we’ll see where we are in 2024. I mean if the money is already going out the door 2024 it’s gonna be hard to reverse that. Hard to say If the midterms what would change much, there are folks in Congress that are very interested in the overbuilding issue. They tend to be Republicans because the Democrats really don’t wanna undermine the White House and undermine the Democratic administration that’s a place in NTIA. That’s just sort of a political fact that probably doesn’t need to be stated, but that’s where we are. If the House flips and the Senate flips will the influence change? Probably so. Will result in changes in legislation that will override a presidential veto? I don’t know the answer to that. We like to say that consequences, and they do. I would also add for the BEAD program Covid has consequences. I doubt very much that there be $42.45 billion available for broadband if we didn’t have Covid in the last couple years. I don’t know what the number would’ve been, maybe zero, but somewhere between zero and $42 billion. Real taxpayer money. But, that’s the other thing that unique about this. It is being funded under through appropriations, not through contributions into the Universal Service Fund. A lot of differences between the way things were done before. I like to say, with BEAD, there is the good, the bad, and the uncertain. One of the uncertain we talked about before was the map gap, another one is how are the states going to distribute the money. About half of them have broadband programs in place already, and some of those do a good job and some in my personal opinion not so much. But the other ones have not even stirred up a program yet. We don’t know what that’s gonna look like, hopefully they will get good advice from consultants and people like us.
This is where we talk about special teams, that is where you get in to meet the folks making those decisions; the governors office, the broadband office, the State Department of Commerce, whomever is responsible for doling out the money. Get them to know you if you’re an ISP and you’re interested in this. We talked about playing defense in making sure that the map accurately projects what you have, and then there is playing offense, “What if I want to go after the money?”. In that respect I would just say make sure you read through the BEAD rules very very carefully because, another thing I like to say is “BEAD is not a broadband program, it’s a Roosevelt era Public Works program.”. It involves things like prevailing wages, like having sustainable low income programs. Not for the life of the program, but for the life of that of the network assets. It could be as long as 20 years. You have to have that program in place, it’s a 25% letter of credit where you have to post 25% of the value of what you’re getting. Which means you have to put up cash collateral equal to the amount. That’s money that you have to have to just sit in the bank to make bank happy. You won’t even be able to borrow from that, its a contingent liability, and then there’s going to be ongoing fees with that. You also have to have a cyber security plan, and a supply chain plan. For any program above $5 million you have to meet Davis-Bacon wage requirements. There is a whole bunch of ornaments that are put on the street and, for some, they will look at this and say my Christmas Tree is going to fall over and set my house on fire because the cost of this program is so excessive. All the more reason to focus on defense now, think about what you want to do for offenses, and play that the special teams game by talking to the state folks.
Gerry: Great advice. This has really been helpful, it gives us a good understanding of where we are in the industry.
Katie: Thank you Steve. We appreciate all your insight and educating us and our customers too.
Steve: Happy to Help.