Doug Dawson, President of CCG Consulting, joins the show to discuss what the FCC might focus on under a new presidential administration. He also explains how FCC policies are affecting broadband expansion in rural America.
Transcripts have been lightly edited for clarity and readability.
Stephen Smith: You know, the federal government has many layers, and we don’t always think about how various departments and agencies impact our lives. In today’s show, industry veteran Doug Dawson joins me to dissect the role of the FCC in determining the future of broadband in rural America. Doug is founder and owner of CCG Consulting that works with hundreds of telecommunications companies across the U.S. Listen in particular as Doug discusses what the FCC might focus on under a new presidential administration. And, quite interestingly, the corner that the FCC has painted itself into regarding broadband speed definitions. Here’s my conversation with Doug Dawson.
Stephen Smith: And thanks for tuning into another episode. I’m excited about our guest today, Mr. Doug Dawson with CCG Consulting. Doug, welcome to the show.
Doug Dawson: Oh, good to be here.
Stephen Smith: Now, before we get into our very interesting topic today, tell us a little bit about CCG Consulting and what all you guys do there.
Doug Dawson: Sure. I’m the president and founder. We’ve been around now about 25 years. We’re a full service consulting firm. We do, you name it: engineering, regulatory work, raising money, business plans, back office buildings. We do a little bit of everything. We’ve been home-based now for 20 years, and we moved our folks home out of offices. And so that’s the same core people working with me for over 20 years, so we are a very tightly knit company who really likes doing this stuff. We’ve had over a 1,000 clients since we started the business. We know a little bit about everything in the industry because we have so many interesting folks that we work with.
Stephen Smith: So this whole work-from-home thing with a distributed workforce and all that the pandemic has forced upon a lot of companies to adjust to, you were already there way ahead of the curve, huh?
Doug Dawson: Well, interestingly, this is back around 2000, we had a whole lot of folks in our offices, and we got better broadband at home in those days. We had a T1 where 10 people were trying to share an office, and at home we could all get one Mbps broadband from DSL, which was like, let’s all go home. So, you know, broadband was actually the thing that drove us out of the office, and that was 20 years ago.
Stephen Smith: What about that. You have folks based all over the country now, right?
Doug Dawson: Yes, sir, we do.
Stephen Smith: Well, certainly with that many clients across the country, a lot of people have worked with you and know you that way. But I dare say more people know you by reading your column, your blog, that goes out every day of the week called “Pots and Pans.” For those who are not — you know, that’s some old school language there. Tell us what those acronyms mean.
Doug Dawson: Yeah, that’s some very old school language. Pots is “plain old telephone service.” We started this business in 1997 when the FCC allowed people to get into telephone competition. So that’s sort of where we started. Obviously nowadays we do broadband, and telephone is a minor thing. But our background is working for telephone companies way back when, so yes, sir.
Stephen Smith: Well, that column, that article goes out across social media as well as through email. I bet you get a lot of feedback on that. Do you have any idea how many folks are seeing that now?
Doug Dawson: The most that have ever had read a column was 40 or 50,000 people. I think on most days, I’m reaching 2,000 to 3,000. So I got a lot of readers. Yes, sir.
Stephen Smith: Well, you touch on so many subjects. I mean, just in the last few weeks, I’ve read about 5G, microtrenching, and quantum encryption. I’m like, this guy knows something about everything. As someone who you know, I write the occasional blog post for our company as well, and I’ve always fascinated how you come up with something to write about every day of the week. It’s curious, how much time do you spend researching and writing these articles?
Doug Dawson: Actually, not a whole lot. When I first started this, my wife suggested that — I told her I was having trouble keeping up with the industry because this is hard. You know, there’s a million things to keep up with, right? She said, why don’t you write a blog? Because that’ll just make you go out and do the reading, right? And so I did. Oh, boy, in the old days when I first started this thing, man, it was hard. You know, but I read all the stuff like everyone else does. It comes across your desk. Nowadays, I write a blog in about 15 minutes. It used to be a torturous, long process. So I think it’s the old practice until you get perfect. You know, I can write quickly these days, but I did not start that way at all. But I’ve been doing this now since 2013 and, you know, you kind of get good at it after a while.
Stephen Smith: Well, you certainly piqued my interest with a recent article entitled “What Does an Administration Change Mean for the FCC?” And that’s really what caused me to reach out to you and say, “let’s get on and talk about this,” because certainly a very timely topic as we’re sitting here. We’re recording this right before Thanksgiving. So there is an assumed president elect, although not a concession yet, so there’s a little bit of uncertainty out there. But the general assumption is we’re moving toward a change in administration, and we don’t always think about how that ripples out and how that can impact something like rural broadband. So I thought we’d take this as maybe one of those prediction interviews. You know, we might come back in three or four years and see how spot on Doug was in some of these things. But before we dive into some of the points of your article about the FCC, set the stage, if you would for our listeners, for the role of the Federal Communications Commission. Help us better understand the impact that the FCC has on things like the availability and even the quality of broadband in rural America.
Doug Dawson: Sure. You know, the FCC is like any regulatory body. And of course, they exist in all sorts of industries, trucking. I mean, there’s probably, you know, 50 regulatory agencies in the U.S., mining, all sorts of stuff. A regulatory agency, by definition, has to balance the needs of the industry that they’re regulating and the general public. So there’s always the two sides to every [coin], and that’s why they’re created. Typically, a regulatory agency is created when an industry is sort of running over the general public. And so, you know, you go way back to Teddy Roosevelt and that’s when a whole lot of this stuff got started. You know, there was a lot of monopolies and it’s like, well, gee, we got to find a way to curb these monopolies, and you do that with regulation. So regulatory agencies have this very interesting balancing act where they have to try to do things that actually try to benefit their industry. They don’t want to cripple them. They want to do things in favor of the industry. But at the same time, they don’t want the industry to do things that harm the public. And so they’re always trying to find that middle ground. And the perfect FCC or the perfect regulatory agency of any kind looks at every issue, balances the two sides, and makes the best decision they can make.
Doug Dawson: And so the FCC got started to regulate telephone service because way back in 1932 when they got started, that’s what there was. And of course, at that time, the giant company was AT&T, the old Ma Bell. And so they were created to sort of regulate them. But even then, there were almost, I think way back in the 30s, there were maybe 1,500 or 2,000 other telephone companies as well. So they regulated them off. Of course, over the years, as technology changed, they simply picked up anything that was related to telecom. So, you know, they regulate cell phones and cable TV. Nowadays, they regulate satellite broadband. They regulate, supposedly regulate, broadband, which we’ll probably talk about here in a minute. If it comes along and it’s in that field of communications, what happens is any time there’s a controversy, like if somebody makes a lawsuit against a topic like one of the big carriers, the courts will send that topic to the FCC. They get half of their work handed to them by courts. The courts go, “we don’t decide this kind of stuff — that’s a regulatory issue.” And boom, off the pop it goes to the FCC. So they exist there for the whole broadband industry. Now we call it the broadband industry, not the telecom industry really anymore.
Doug Dawson: But that’s their role: to make up rules. They have the ability to make rules the companies have to follow. They have the ability to resolve disputes, and that’s disputes between the players in the industry, also disputes between the players in the industry and consumers. They will step in and go you’re over-billing these folks; you have to stop it. Or they’ll come into two carriers and resolve a dispute on how they’re doing something. So that’s their natural role, is to sort of be the policeman of the industry. But they are the policemen who also get the write the rules, which is interesting. Their one limitation on that is that their charter is established by Congress. And so Congress sort of tells them how far they can go. So the Telecom Act — there’s been two major telecom acts, one in 1932 and one in 1996. And in between Congress passes a law or two every year that has something to do with telecom. So all of those laws together are telling the FCC what they can and cannot do. But they get to interpret that, and they push those limits. What you find is some FCCs are more in favor of the big companies and other FCCs over the years have been more in favor of the public. So they take those laws given by Congress, and they interpret them under their own little filter of what they want the telecom world to look like. But the FCC is just like people who regulate drugs or trucking or any other industry — all of them do exactly the same sort of thing so.
Stephen Smith: Well, one of the issues that the FCC deals with — which has certainly impacted broadband in general, but particularly I think rural broadband — is the definition of broadband itself. Currently, the FCC definition of broadband is 25 Mbps down and 3 Mbps up. This definition is really important because often it guides grant and loan awards. So in your estimation, Doug, does that definition of broadband speeds disadvantage rural areas, particularly those that are seeing broadband come to their communities for the first time in the last few years?
Doug Dawson: That’s interesting because that’s actually one of their newer responsibilities. There was a law passed in Congress that said that the FCC had to report back the state of broadband every year to Congress. And so as they started to figure out over a couple of years after that law was passed about what it means to report on the state of broadband, they found that they had a hard time doing that unless they could define what broadband was. So the first couple of years, they didn’t have a speed definition. So they eventually came up with a speed definition that was 4 Mbps down on 1 Mbps up. In 2015, they came and revised that definition to 25 Mbps down and 3 Mbps up. By claiming that definition, what they said was, that’s what broadband is. Something that’s less than that is not broadband; it’s inferior service. Anything that’s at that speed or faster is broadband. Well, broadband has been growing so rapidly that, you know, the demand for speeds and the amount of broadband we use grows at the rate of 20-25% a year, and so we now quickly outstrip those definitions. From 2015 to now, actually that probably was not a bad definition in 2015. But now if you just take that definition and grow by 25% a year, the definition of broadband download should probably be 125 Mbps just because that’s where we’re at. And sure enough, if you look out and you look at the guys who measure it nationwide, that’s about where the average broadband speed is in the US. Because in the cities, the cable companies have increased their speeds, and that’s what they offer people for the most part is 100 Mbps or faster.
Doug Dawson: And so they sort of left the rural areas behind. It’s a very interesting dilemma because the FCC for the last three years has looked at and rejected increasing that definition. And that’s, I hate to say it, but it’s somewhat political. It’s not political as in parties. It’s political as into not making themselves look bad honestly. If they raised the speed of broadband — let’s just say they take it from 25 Mbps to 100 Mbps — all of a sudden, all the people who have speeds between 25 and 100 would be classified on that day as no longer having broadband. And so they don’t want to come to Congress and go, well, last year there were 14 million people without broadband. This year there’s 100 million people without broadband. So that’s really what stopped them from raising that limit. And when they first set it, I don’t think they foresaw that — broadband wasn’t growing so crazily, rapidly that they had that dilemma. Now you could examine it every year, literally. Every year it’s 20% faster than the year before. So they have an ongoing dilemma. No matter what they do and set that speed in two or three years after that, it’s going to be obsolete again. And so, you know, they’re going to have to find another way to do this because no FCC is going to have the courage to put out a true definition of broadband.
Doug Dawson: Interestingly, the answer is easy. If 80% of the people in the country live in cities which can get fast broadband, rural folks ought to have the same right. That ought to be what their goal is, right? And it’s not. You put your finger on the problem. The problem is they hand out grants to build the slower technologies. If they just didn’t do that — if grants weren’t tied to that definition — then we really wouldn’t have a big issue about this. I mean, we don’t really care what they tell Congress, right? We do care in that it helps to set policy, but Congress gets feedback from a lot of us telling them that broadband isn’t fast enough. So they know all about the dilemma in rural America. But unfortunately, the FCC turns around, even in this latest auction that’s in the process of closing, there are ISPs allowed even today to bid on federal money to help build broadband that only delivers 25 Mbps per second. And that’s somewhat crazy. I mean, that’s simply not fast enough for our households anymore. So that definition, unfortunately, if it wasn’t tied to grants, I don’t think we would care much at all.
Stephen Smith: So you’re seeing real life issues where a community, a rural area in particular, is disadvantaged in that inadequate broadband networks are being built just because they’re meeting a minimal standard.
Doug Dawson: Yeah, well, there was a grant process last year called The Reverse Auction for CAF II, where the FCC gave money to Viacom, the satellite company, to serve some of those areas. Well, that stuff was already available to everyone who lived in those areas, but they gave them federal funding to do we don’t know what, since they could already sell there. The bad news is the FCC then goes that area is now served, and they checked it off of the list of places that needed help. Those folks didn’t get anything new, and they didn’t get anything that was fast. And there’s such an amount of delay called latency and these satellites are 20,000 miles over the Earth that nobody likes it. So, yes, so that definition translated into a very bad policy it turns out. If they would have just not allowed satellite companies to get that money, that would not have happened, but they did.
Stephen Smith: Well, this FCC tends to be technology agnostic when it comes to delivering grants and loans. Do you think that’s a good policy, or should we be looking at particular types of delivery systems?
Doug Dawson: Well, here’s the problem you get into. When they give these grants being given out right now, the companies have six years to build it. So you’re really saying, here’s what I’m going to fund you to build six years from now or five years from now. So you should be building for a technology that’s going to fit what households need then. If you pick something that was good 10 years ago, and you’re going to let it be six years ago, that’s a 16 year gap. It’s like, no that’s not cutting it. It’s just not fast enough. You know, we don’t have enough federal money to solve the whole broadband problem, so we just shouldn’t give it out to technologies that don’t solve the issue. Areas would be better served to get no funding than to get funding for a bad technology. So the answer is yes. You know, there are technologies that should not be funded. There’s not a lot of them, but there are some. We still shouldn’t be funding high satellites. We certainly should not be funding DSL. I mean, these are obsolete technologies. There are still grants going out for fixed wireless. If they’re built correctly, they can do 100 Mbps per second, and I don’t have a problem with funding those technologies. So we should stop funding stuff that can’t satisfy today’s broadband demand.
Stephen Smith: So do you think an FCC under the Biden administration will take another look at that definition? You think we’ll see a change there?
Doug Dawson: I think that a new FCC will certainly be under pressure to relook at the definition, but they’re going to have the same old dilemma of, do they have the courage to reclassify millions of homes as not having broadband anymore? A change in administration may not mean a braver FCC. We’re going to have to find out. They are still regulators. I mean, the FCC is like most regulatory agencies, and they don’t directly report to the administration. They are independent agencies. They feel a lot of pressure from the administrations. They tend to have the people picked who run it. You know, the new FCC chairman would be picked by the new administration, but that’s only one person voting out of five. That doesn’t necessarily mean that person gets their way. I mean, they tend to. FCCs tend to trend towards that administration, but they don’t always do everything they want. In fact, sometimes they don’t do a lot of what they want. They do feel a sense of independence.
Doug Dawson: But what we know is that there’s something that I call the regulatory pendulum. It’s been around forever. It’s not just telecom. It’s all these agencies. Over time, agencies will drift either towards the public or towards the big companies that they regulate. And when that happens, when they get too far in either direction, there’s push-back. There’s push-back by the public or push-back by Congress, and they tend to then swing back the other direction. This particular FCC we are just in right now has been the most prone, large company FCC we’ve ever had. And so another administration is going to push them back the other direction. That’s kind of — we sort of ignored privacy issues and net neutrality and things that regulate what the public want in favor of what the big companies want. This is not the first FCC that’s been pro big business, but it really went very far in one direction. That always means push-back and that always means it’s going to swing in the other direction. What we don’t know is how much in the other direction. It could still be very much a pro big business one and just start paying more attention to the public. Again, the perfect FCC is right in the middle. They’re not pro either one of them. You know, that would be a big change just to get back to that. So, we’ll have to wait and see how far back they swing, but there’s no doubt that there will be a new chairman who will be less pro big business.
Stephen Smith: So the current chairman, Pai, he was appointed to the FCC by a Democrat president, and he was named chairman by a Republican president.
Doug Dawson: That always happens. By definition there has to be three of one party and two of the other. So whatever administration is in gets to make sure that their party has three, but there’s always two people of the other party as well. And as people leave the FCC, then they fill in those holes, whether that’s Democrat or Republican. So probably half the people who have ever been on the FCC have been appointed by the other party. That’s pretty normal. And then, you know, the new administration could pick one of the two Democrats that are in there for the chair, or they could bring in an outsider as the chair, and that’s the choice of the administration.
Stephen Smith: So you don’t see much of a chance of Pai staying on the commission under a Biden administration?
Doug Dawson: The chairmans have the option to drop back to be one of the two lower people. They don’t do that. That’s not good for their career. He wouldn’t have to leave because there is a Republican FCC person who is leaving, and so he could take his slot probably if he wanted to. But having been the head of the FCC is good for your career. So he will probably move on to make more money. But he could stay; no one has ever done that.
Stephen Smith: Yeah. So you have any thoughts, any predictions for us on who might assume that chairmanship?
Doug Dawson: Oh, the rumors are running around the industry. It’ll probably be somebody who’s been aligned with the FCC before, but you never know. The last head of the FCC came out of left field, and no one expected him at all. So it’s hard to say. There’s lots of names being floated around, but they’re being floated around by industry people like me. We don’t know who the new president might want to put in there.
Stephen Smith: Who’s on the short list? Do you have any names you can share with us?
Doug Dawson: One of the names I heard was a Gigi Sohn. The other would be to promote one of the two existing Democrats. You know, there’s a really high chance that it’s someone completely that we haven’t even thought of before. Who knows?
Stephen Smith: So far the names that we’re hearing from the Biden administration on cabinet level positions are not household names.
Doug Dawson: They are not. They are absolutely not. In fact, I think to go look every one up them up. So that very well may happen with the FCC. And in fact, that would not be unusual for that to be fresh blood. It very well could happen.
Stephen Smith: You mentioned net neutrality earlier. Now, FCC Chairman Pai took a very different approach to net neutrality than his predecessor. Help our listeners understand what that is, what the current FCC has done regarding net neutrality, what their stance is, what direction the new [FCC] might go and what challenges they might see.
Doug Dawson: Well, net neutrality in general is the concept that ISP companies — Comcast, AT&T and all the folks that provide broadband — won’t discriminate among bids. They will treat all parts of the Internet the same so that everything will flow to people. If I want to use something, I shouldn’t have a harder time getting connected to service A versus service B. That’s a pretty simple concept. In fact, even the big carriers didn’t have a real problem with it. The president of Charter and AT&T said, we can live with it. They didn’t really hate it. And what the current FCC did was they sort of used the net neutrality issue to do something much larger in that they have completely written the FCC out of regulating broadband. And so there’s something called Title II, which is what authorizes the FCC to regulate something. They made a classification that the broadband is not a Title II service. And so what this FCC did was they completely handed off the regulation of broadband to the Federal Trade Commission, which doesn’t really regulate. They are actually not a regulator. They are more like a court. They only punish really bad behavior, but they don’t write rules. The FCC framed that as a net neutrality battle, but it was really a battle to get rid of regulation. So this FCC currently, and I told you earlier, that the FCC, for instance, gets in between disputes between consumers and carriers. They don’t do that anymore. They abolished their dispute regulation. The people used to be able to go, “Comcast did blah, blah, blah to me.” And the FCC would write a letter to Comcast on your behalf, and go, “you really shouldn’t do that. Could you talk to this guy and straighten it out?” And sometimes they did, and sometimes they didn’t. But normally, carriers listen to the FCC. They didn’t want to get embarrassed. Corporations are huge and employees do things in corporations that maybe the corporation doesn’t necessarily agree with. And so, that was a way to sort of get little problems fixed. But sometimes they were big problems. There was the big problem where Verizon had cut off all the phones of firefighters during one of the big forest fires, so sometimes those are not small issues. But the FCC went so far to get rid of broadband that they got rid of that regulatory role. They do not regulate broadband as a product line anymore. What they are left with are the little bits and pieces of like picking the speeds of broadband because that was set by a different law. But the actual broadband issues, they no longer regulate disputes between AT&T and some underlying carrier. They don’t regulate disputes between people and Comcast. They don’t set broadband rules. So they use the net neutrality issue to get rid of it.
Doug Dawson: The new FCC is almost likely to try to bring that back, but they have their work cut out for them because there’s a very defined process to do anything at the FCC, like all regulatory agencies. And so they have to go through hearings, write projected rules and then hear from everybody. And so there’s a two or three step major process to go through to try to put broadband back to be regulated and try to bring that net neutrality back. And then after that’s done, invariably there will be lawsuits, and so there’s another year or two added to the process because AT&T or somebody is not going to like what the FCC decides. And so the courts will eventually decide if the FCC had the authority or not. And so that means it’s going to probably take three years, probably minimum, for the FCC to just get back to where the old FCC was. So for them to put those rules back in place, they probably won’t be able to go faster than three years just because of the processes. And there’s the only way to shorten that would be for Congress to pass a new telecom act, which is just not likely. Even if we had a Congress with both parties in the same House, they still don’t do telecom acts. There could have been a telecom back in this current administration. They had both the House and the Senate for the first years. They could never get agreement on telecom issues. Telecom issues are not really bipartisan. They always have a hard time, even with one party being in charge, to get an agreement on how to change anything. It’s probably going to be up to the FCC to put it back slowly because the chances of getting a telecom act are really tiny.
Stephen Smith: Well, another issue that the FCC deals with that is also impacting rural broadband consumers is the issue of mapping. Tell our listeners a bit about how mapping has been addressed in the past. Some things that the FCC has done to tweak some of that, really what shape we’re in right now and how that’s impacting the delivery of rural broadband.
Doug Dawson: Sure, mapping also came in, back earlier I said, they had to decide what to tell Congress. When they decided what to tell Congress, they said, well, we have to go out and find out what carriers are doing before we can tell Congress about it. So they put in this data gathering process, which we’re now calling mapping, but it’s really not. It’s a database. And what they do is twice a year carriers have to tell them where they cover geographically, and they do that by census blocks today. So are you in this [census block]? There’s a whole lot of census blocks; they cover anywhere from 50 to 150 homes. Little tiny parts of the country. And a carrier will come in and go, “yes, I serve in that area.” Then they have to tell them the technology they use, and the speeds that they offer. That’s completely self reported by the carriers. And what a lot of them do is they put in their marketing speeds. You know, DSL providers for years have said we sell speeds up to 25 megabits. In rural areas, they may only deliver two megabits, but they still report 25 in there because there’s no rule against them doing that. So we have this database that’s used to measure what’s actually been done in the world. It’s full of a lot of exaggerations from the carriers. Sometimes they’re just out and out lies. I mean, there’s carriers in there who say they offer gigabit who don’t even offer 10 megabits. I mean, you’re allowed to go in that database and put in there whenever you want. There’s some really ugly examples of that. There’s a company in New York who basically declared that the whole state of New York had gigabit broadband a couple of years ago. And the FCC put it in their annual report, and then got embarrassed when someone pointed it out to them that that wasn’t true. So that database is highly flawed. Carriers are claiming coverage in areas they don’t actually serve, but more importantly, they’re claiming speeds that they don’t actually have. And so the reports made to Congress, there’s been estimates that they’re off by as much as 100%, where if the FCC says there’s 12 million people without any broadband, it could be twice that high because of the flaws in that data gathering process. The new FCC is going to fix it. The current one started the fix it; they’ve pushed it off fixing it time after time, but it looks like it’s finally getting moving.
Doug Dawson: So they’re going to get rid of a coverage area issue by making you draw what they’re calling polygons and actually draw lines around your customers. Forget that the census box, because the current census box says if one customer in there has it, then they just assume everybody has it. Well, that’s usually not the case. That one customer may be a business, and no one else has good broadband. So they’re going to get rid of that, and they’re supposed to draw lines around customers. But currently with the new plans, they’re still not making them be honest with the speeds. So it may not be any better. Again, if that was only being used to report to Congress, that would be fine. They’re actually using that to decide who gets grants and who doesn’t get grants. So there’s entire counties that are on those databases that show having really good broadband, who have absolutely terrible broadband. They are not being considered for federal grants. That has to get fixed. It’s such a bad problem that there’s another big grant program to increase rural coverage for wireless. And that’s been put on hold now for two years because the data is so bad. I mean, who knows when they’re finally going to release it because they don’t want to get the money out in the areas that don’t need it.
Doug Dawson: So, yeah, it’s a huge problem. That one is hurting people, absolutely hurting people. I mean, I’ve worked in a dozen counties in the last year who [according] to the FCC maps, they have good broadband coverage. In one of the counties, we couldn’t find anyone who even had 10 megabit broadband. In the whole county, the FCC database showed they had 100 megabit broadband. I mean, the problems are so exaggeratedly terrible that…and that county did not get any money out of this recent round of federal funding. And so, they’re simply being blackballed because of the bad reporting by the ISPs. And that’s not necessarily even the big company ISPs. The big companies exaggerate. The DSL guys exaggerate. But some of the worst reporting comes from little ISPs simply for whatever reasons that we can’t figure out because they put in really high speed in the database. So it’s a huge problem. You know, the state of Georgia did their own map, and they essentially found twice as many people without broadband as the FCC map.
Stephen Smith: Wow. Well wrapping up, the FCC, as you said earlier, the auction for the RDOF, Rural Digital Opportunity Fund, have we heard any news this week about how the auction is going?
Doug Dawson: No, it’s going to be over this week for sure. They said they actually want to wrap it up by Thanksgiving, but I think it will. We probably won’t find out the winners for a couple of weeks. They don’t announce that immediately, but we’ll find out who they are. Even then it’s not always obvious who they are because sometimes folks file in these auctions under a partnership name, and it may turn out a year later, we find out that’s AT&T or something. So, you know, sometimes it takes a while to figure out who the real winner is. But most of them are directly under carrier names. There’s a whole lot of speculation about how much the big cable — we think maybe Charter bid for a bunch. We’ll find out. Right now, that’s just speculation. You know, there’s all sorts of players in there that we’re going to have to wait and see what they did.
Stephen Smith: When talking about delivering broadband to rural America, there are some people who say, well, we need to forget this real expensive fiber to the home concept. These are high quality networks, of course, but, you know, 5G is going to be everywhere soon, and we’ll just connect everyone wirelessly. What is the right answer to that question?
Doug Dawson: Well, 5G is an interesting technology, but it’s always going to be an urban technology. All the great bells and whistles that come from 5G come from using multiple frequencies and having cell sites that are close to each other. And so in urban neighborhoods — I live in a town, Asheville, North Carolina, 90,000 people, no doubt, that we’ll eventually get all this stuff. And so there will be cell sites every three, four or six blocks. When I pick up my phone to do something, I’m going to probably see three, four, five or more. Today, I see one. All of a sudden all sorts of benefits come out of that strong of the wireless network. Well, nobody’s ever going to build that in rural America, just like they don’t want to build fiber. It takes fiber to support those multiple cell sites, and no one’s going to come — you’re not going to end up with a cell site per farm. And so 5G is never coming to those kind of places. It will never happen. We may put in 5G software into the rural cell sites that exist today, but that doesn’t make them 5G because none of the things that are cool about 5G will work when it’s just one south side in a county. That’s not going to help anybody. It’s exactly the same coverage they have today.
Doug Dawson: They will put in all the really cool frequencies because most of these frequencies go very short distances. There’s no reason to put in a frequency that goes a quarter of a mile if you’re in a rural cell site. Nobody lives within a quarter of a mile of it usually. It’s usually up on a hill. So rural areas are not getting 5G ever, probably. That’s just not going to happen. And there’s no reason it should happen. There’s no reason cellular companies would ever try to do that out there. I mean, it’s not a good investment for them, and it’s not a sensible investment for the rural areas. If they had enough money to build the 5G network, they might as well just finish it and put the fiber drops in. You know, a lot of rural areas do have fiber today. That’s the ultimate network that we know is good for the next 100 years, but it’s a lot of money to build them. You know, it’s a real dilemma of power, and we’re going to get there.
Stephen Smith: Well, that brings me back to something you said earlier in a subject I’d like for us to close out on. Thinking about the recipe that America needs to follow to ensure that everyone has access to a quality connection. A network that is reliable and is robust and can support us in really where we are going. We think that the trends that we have been seeing the last few years were solid and predictable and the pandemic just accelerated a lot of those: work from home and steady increases, as you pointed out earlier, in broadband usage. And certainly we were talking about speeds earlier, and we’re seeing that asynchronous approach to a much faster download speed than upload is really shifting. That we’re needing more upload speed as we’re working from home more and those sorts of things. And you mentioned earlier that you thought that really the federal government doesn’t have enough money to solve this issue. Looking forward, what is that recipe to get us to the place where we can say as a nation we’ve solved the rural broadband challenge?
Doug Dawson: Well, first off, that’s the longest question I’ve ever been asked. But it was a great question. It has to be the combination of federal and state governments. You know, unfortunately, in rural America, these networks don’t make sense for a commercial provider to just go to the bank, borrow the money, and do it. There’s just not enough revenue to pay for the technology to do that. So it’s going to have to be the federal government. And what I think has happened is, especially with the pandemic, there’s no politician in America who has not heard about the problems that we’re having because of not being able to work and do school from home. And so the issue has now bubbled up to the top of all the politicians list. And if that stays up high enough, they will find the money. The estimates have been that it’s maybe $100 billion to do this right everywhere, which is a giant number. But compared to the cost and the dollars of the day, that’s way less expensive than when we put electricity into rural areas. So we’ve done this once before. And if you take those dollars and put inflation on them, it cost a lot more than $100 billion, and yet we did it because broadband is basic infrastructure. And so if the federal government accepts that they need to help, then they can. But it has to be done right. You know, there are grants that work and grants that don’t work. And we have to stop putting money into grants that waste money and grants that don’t put in good enough infrastructure. But if we do it right, we you know, we can do it.
Doug Dawson: You know, the states have a big role in that, too. And probably about 30 of the states now have state broadband grant programs. So they have to help too. Not every state needs it. You know, there’s not a giant Rhode Island rural broadband grant because they don’t have a lot of rural areas. They have some, but not enough to have that need. But the states that really need it have to kick in, too, but it’s going to take government help to make it work. And there’s no other way around it. You know, if a place needs 50% financial help to get over that hump to build it, then that’s going to have to happen. We’ll just have to see if the next administration steps up. This may not even be an administration issue. Congress is…the last couple of rounds of funding came from Congress. Congress very well may step up regardless of who the president is. This is now an important enough issue that if we have an infrastructure program of any sort, if we built dams and roads, then broadband is going to be in there as well. So, you know, it may just be that politicians are recognizing that they better step up because they’re kind of getting tired of going to the gas station, and that’s the first thing everyone talks to them about.
Stephen Smith: Very good point.
Doug Dawson: I mean, because it’s that hot of a topic now. You know, I work in county levels, and counties around the country will tell you that this is the number one topic. This is the number one problem most counties see, and that’s pretty amazing considering that they have other big problems like opioid use and all sorts of other things. But most of them will tell you that lack of broadband is their number one issue.
Stephen Smith: Well, we’ve covered a lot of ground, Doug. I look forward to coming back and revisiting some of these topics with you down the road and and sort of seeing where things have developed. This podcast will sort of be a — we’re dropping a pen here, and then we’ll take a look later on and see how a lot of these things develop. I hope you can come back and join us. But thanks so much for being on the show today.
Doug Dawson: Glad to do it. And thank you for chatting with me today also.
Stephen Smith: Thank you for listening to Rural Broadband Today, where we take a look at the people and the issues shaping the rural broadband story across America. I’m your host, Stephen Smith, and this program is produced by WordSouth — A Content Marketing Company. Please share this episode with your network and help us tell the rural broadband story. Thanks for listening.