BEAD Seen Driving Big Private Network Investments

One BEAD danger is that labeling underserved areas as unserved dilutes the spending’s effect, said Duke University economics professor Michelle Connolly. She said NTIA's not being technologically neutral as to unserved and underserved could result in some underserved areas being declared unserved just because they lack fiber.

BEAD has "some questionable policy prescriptions," such as labor requirements and price restrictions, said University of North Texas economics professor Janice Hauge. States will feel pressured to follow through even if they disagree with the policy choices, she said. Hauge said the federal government fell down on providing guidance and resources to states so they can all put together well-designed programs that invite competitive bidding.

Chaplin said the next decade could have as much as $100 billion in infrastructure spending to reach unserved areas, with BEAD being $42 billion of that. Access needs to be the top priority for states' use of BEAD funding, with other priorities like digital literacy or adoption -- while important -- needing to come second, he said. He said the vast majority of unserved locations should be able to get fiber via available BEAD funding, with satellite broadband making sense as a means for covering the remaining 2% of the underserved. Panelists and forum-goers discussed for several minutes the likelihood of project cost overruns and broadband bidders coming back for additional funding, and how to forestall that.

Citing T-Mobile's and Verizon's sizable fixed wireless subscriber growth over the past couple of years, Adams said NTIA's fiber focus for BEAD is somewhat contrary to consumers' preferences. Adams said particularly sophisticated states are thinking about an iterative BEAD process where, if an unserved area doesn't attract any bidders, the state gets more permissive about use of alternatives to fiber.

Broadband Competition

The competitiveness of the fixed broadband marketplace in Canada "is complicated," said Ian Scott, Canadian Radio-television and Telecommunications Commission former chairman. He called "disappointing" the increased broadband costs in the past couple of years. While "thorny," wholesale arrangements need to be revisited, he said. He said the nation's decision to review its wireless framework is in response to Rogers buying Shaw, which reduced competition in Canada, and was a way to forestall further deals at least in the short term.

Prices in Mexico for fixed network access have been declining notably, and there's significant competition from cable providers, said Ramiro Camacho Castillo, commissioner in Mexico's Federal Institute of Telecommunications. He said a competitive challenge is the high cost of spectrum, which is sometimes close to twice the cost in other countries.

Alongside robocalls -- which Jones called "the scourge of our world" -- she said consumer issue priorities for the agency include privacy and distribution of ACP funds. Scott said wireless rates remain significantly higher than in the U.S. and need addressing.

Canada focused on access issues when closing its digital divide, but a big challenge is that it hasn't looked yet at affordability, Scott said. Ensuring competition alone isn't sufficient and the government will likely have to commit money to affordability, he said. There's no universal service fund in Mexico, with public subsidies focusing on wireless access coverage, which was considered a low-cost way to bring service, especially for remote communities, Castillo said. Asked about Chinese-made telecom network infrastructure, Castillo said Mexico has no restrictions on it.

Canada's Nunavut territory is entirely dependent on satellite for broadband, though an undersea cable might also bring service there, Scott said. He said 92% of the population has access now and the nation’s digital divide efforts should bring that to 98%, with satellite likely needed to reach that other 2%. Castillo said Mexico is moving toward clearing part of the C band, used by satellite, for terrestrial 5G. He said commercial satellite broadband is starting to have a presence in the market. Jones satellite's role in broadband “is evolving,” with the agency still looking for evolution in the areas of latency and price. The FCC was criticized in the past for being slow on satellite issues, with the hope being the creation of the Space Bureau and increased staffing “will supercharge” its work, she said.

Aspen Forum Notebook

Big questions involve whether the semiconductor chip supply globally, the manufacture of which is getting sizable government subsidies, will line up with market demand, said Xiaomeng Lu, Eurasia Group geo-technology practice director. The semiconductor market traditionally goes through up and down cycles of demand, and the COVID-19 pandemic's impact on supply chains overlapped with a spike, she said. The industry is now in a downturn, she said. The Chips and Science Act (HR-4346), signed into law last year (see 2208090062), was in response to that supply chain stress and to China's "Made in China 2025" state-led industrial policy, speakers said. In response to the Chips Act, others -- including China and the European Union -- announced their own subsidies of domestic semiconductor capacity, said TPI President Scott Wallsten. Critical of the Chips Act, Stanford University economics emeritus professor Roger Noll called it protectionism cloaked as national security industrial policy. Theresa Fallon, Centre for Russia Europe Asia Studies director, said semiconductors are causing trans-Atlantic tensions. She said there are worries about oversupply of chips in Europe, but governments don't care because they want guaranteed access.

The Aspen Forum was interrupted for several minutes by a rain and hail downpour during a panel being held outside.