If you’ve read my posts on the NTIA’s allocation of broadband funds, you’ll see I’m careful to say they are estimates. In particular, how the NTIA will allocate the 10% of the funding ($4.25 billion) set aside for high-cost locations has to be an estimate because the NTIA hasn’t shared guidance on how they plan to do that calculation. On a closer reading of the Infrastructure Investment and Jobs Act, I want to offer a possible — even likely — scenario where certain states get almost no funding in the high cost allocation because their Unserved locations are disperse and not concentrated. Iowa, Maine, New Hampshire, Ohio, South Dakota, North Dakota, Nebraska, and others — states with a high percentage of high-cost locations — may actually have a high-cost allocation of nearly $0.
The Notice of Funding Opportunity does allow for a single location to be considered an "Unserved Service Project", so maybe that is their way around the problem.
From page 17 in the NOFO: "(ee) Unserved Service Project—The term “Unserved Service Project” means a project in which not less than 80 percent of broadband-serviceable locations served by the project are unserved locations. An 'Unserved Service Project' may be as small as a single unserved broadband serviceable location."
The reason that last sentence is in the NOFO is because the NTIA knew there would be a lot of unserved locations that could not realistically be bundled in an area that contained 80% unserved locations. The same would certainly go for high-cost locations, and probably more so, since they are more likely to be scattered about, which is one of the reasons they are so expensive to build to and serve.
So, I would expect based on the language in the NOFO that high-cost locations that are off on their own would be treated like other unserved locations, where they can be defined as a single-location in an Unserved Service Project, and could also be deemed "high cost" based on the defined threshold in that state.
Thanks for the comment. Yeah, I'm not sure. It is my best guess that NTIA reads the statute more strictly and has some type of area definition that is going to knock out a lot of locations in certain states. I also believe there are downstream effects of the area definition such as match waivers and Enhanced ACP. But I'm not sure.
I certainly wouldn't be against it if there were a way for NTIA to give more of this allocation to high-cost states. Those states are much more expensive than the average, and I assume NTIA will do everything they can to help them. But it's a question of how strictly they feel they need to read the statute I guess.
Those locations seem like good candidates for LEO satellite service. I suspect that would be by far the most cost effective solution for many of the one-offs.
Looking at it from a different perspective, it seems that (I) - (III) -- and maybe (IV) carry more weight than how many unserved locations are isolated versus clustered in an unserved area. A typical case of an isolated unserved location might be a house set further back from the main road than the maximum drop length the service provider(s) will include in an installation without additional charge. The additional charge might not be huge, but the location would nonetheless be considered unserved, even though its neighbors -- located closer to the road -- would be served. Similarly, for fixed wireless, a location might be unserved because of Line-of-Sight issues that could be fixed by tree trimming or by raising the antenna.
I would not expect Iowa to have many extremely high-cost locations (although admittedly have not researched it well enough to say so conclusively). Utilities are mostly aerial and if below-ground construction is required, duct or cable can be plowed into the soft soil. Between topography and vegetation, line-of-sight for fixed wireless is rarely a problem. Construction can be done year-round.
You don't explain how you obtain the number of high-cost locations in each state. Texas, for example appears to be disproportionately high (considering its topography) while Vermont seems to be disproportionately low (for the same reasons). Cost modeling is treacherous, given the numerous factors and the fact that different providers will have very different costs.
My sense is that we won't have a reasonably accurate picture until the states have actual bids in hand -- presumably based on the bidders' preliminary designs, labor rates and materials prices.
The Notice of Funding Opportunity does allow for a single location to be considered an "Unserved Service Project", so maybe that is their way around the problem.
From page 17 in the NOFO: "(ee) Unserved Service Project—The term “Unserved Service Project” means a project in which not less than 80 percent of broadband-serviceable locations served by the project are unserved locations. An 'Unserved Service Project' may be as small as a single unserved broadband serviceable location."
The reason that last sentence is in the NOFO is because the NTIA knew there would be a lot of unserved locations that could not realistically be bundled in an area that contained 80% unserved locations. The same would certainly go for high-cost locations, and probably more so, since they are more likely to be scattered about, which is one of the reasons they are so expensive to build to and serve.
So, I would expect based on the language in the NOFO that high-cost locations that are off on their own would be treated like other unserved locations, where they can be defined as a single-location in an Unserved Service Project, and could also be deemed "high cost" based on the defined threshold in that state.
Hi Rick,
Thanks for the comment. Yeah, I'm not sure. It is my best guess that NTIA reads the statute more strictly and has some type of area definition that is going to knock out a lot of locations in certain states. I also believe there are downstream effects of the area definition such as match waivers and Enhanced ACP. But I'm not sure.
I certainly wouldn't be against it if there were a way for NTIA to give more of this allocation to high-cost states. Those states are much more expensive than the average, and I assume NTIA will do everything they can to help them. But it's a question of how strictly they feel they need to read the statute I guess.
We'll see in a couple weeks!
Those locations seem like good candidates for LEO satellite service. I suspect that would be by far the most cost effective solution for many of the one-offs.
Looking at it from a different perspective, it seems that (I) - (III) -- and maybe (IV) carry more weight than how many unserved locations are isolated versus clustered in an unserved area. A typical case of an isolated unserved location might be a house set further back from the main road than the maximum drop length the service provider(s) will include in an installation without additional charge. The additional charge might not be huge, but the location would nonetheless be considered unserved, even though its neighbors -- located closer to the road -- would be served. Similarly, for fixed wireless, a location might be unserved because of Line-of-Sight issues that could be fixed by tree trimming or by raising the antenna.
I would not expect Iowa to have many extremely high-cost locations (although admittedly have not researched it well enough to say so conclusively). Utilities are mostly aerial and if below-ground construction is required, duct or cable can be plowed into the soft soil. Between topography and vegetation, line-of-sight for fixed wireless is rarely a problem. Construction can be done year-round.
You don't explain how you obtain the number of high-cost locations in each state. Texas, for example appears to be disproportionately high (considering its topography) while Vermont seems to be disproportionately low (for the same reasons). Cost modeling is treacherous, given the numerous factors and the fact that different providers will have very different costs.
My sense is that we won't have a reasonably accurate picture until the states have actual bids in hand -- presumably based on the bidders' preliminary designs, labor rates and materials prices.