The FCC Disqualified a Bunch of Rural Communities from Receiving Internet Funding After Big Telecom Said They Already Have Internet

The Federal Communications Commission is about to hold an auction used to dole out grants to companies to build internet in rural America. But now, a bunch of items are off the block: Companies and co-ops, big or small, will no longer be able to apply for money to build internet infrastructure in many of these regions, because Big Telecom says there’s already internet there.

At the end of last year, the FCC released the final list of areas in the country that are eligible for grant money under the Connect America Fund—a grant program that provides subsidies to businesses willing to build internet infrastructure in some of the country’s hardest-to-serve areas. This was an update to the preliminary list released in 2016, but with several regions no longer eligible for funding.

The data the agency used to make this decision was based on 477 forms—semi-annual filings that telecom companies have to submit, indicating their service coverage areas—which eliminated wide swaths of rural communities across the country. The end result is that some rural areas of the country will be ineligible for the grants even though they might need them.

“The new data suggests that 30 percent of the most-remote and hardest to serve parts of the country now have new internet service,” said Jonathan Chambers, a former FCC executive who now works at Conexon, a private consulting firm that works with rural electric co-ops seeking to expand into broadband delivery. “The FCC did release data 16 months prior that showed every census block eligible for funding, which is what I am comparing it to. What was really striking to me was the number of newly-served areas with broadband.”

Here’s how it works: telecom companies are required to file 477 forms every six months. On these forms, the companies indicate any census block where at least one home could theoretically be served with 10 mbps internet within “a reasonable amount of time”. If so, that region is considered “served,” and is no longer eligible for funding under the Connect America Fund.

The problem is that none of those residents may currently actually have internet, and even if a few did, it doesn’t mean everyone in the census block would have access, leaving many rural communities without any options for getting connected.

“You might have a census block outside of a city that comes close to the city, so a few people can get DSL there, and then the entire block is considered to have access when in fact it does not,” said Christopher Mitchell, director of community broadband networks for the Institute for Local Self-Reliance, a nonprofit that advocates for local solutions for sustainable development. “That’s important here because the FCC is removing a lot of census blocks from potential subsidies on the assumption that everyone in that block has service.”

As just one example, Chambers pulled the data for Dunklin County, Missouri (Conexon represents co-ops in this region, which will now be unable to apply for the CAF money). In the preliminary data, that area had dozens of unserved census blocks eligible for funding. By the time the final data was released, only three small blocks were still considered unserved. It’s difficult to verify how much of the area is actually able to get online. One local wireless ISP, Hillbilly Wireless, only serves a portion of the region, for example:

Mark Wigfield, an FCC spokesman, told me while the data isn’t perfect, the FCC believes it’s the best possible option for figuring out where this money would do the most good.

“While there are limits to any dataset, the FCC has worked continuously to improve the accuracy and timeliness of the data it uses to allocate Connect America Fund support,” Wigfield wrote. “Chairman Pai’s top priority is closing the digital divide, and he will continue to work tirelessly to reach that goal through the upcoming auction and the auctions that will follow it.”

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