Thursday, October 27, 2016

Hello Wireless Loops. Goodbye Fiber? (Part 1)

Wireless Loops As Copper Substitute
There have been reports that California's largest local exchange carrier and Connect America Fund Phase II recipient, AT&T California (maps of California's CAF II areas), plans to use wireless loops to deliver broadband to high cost-eligible households -- in other words, use mobile (i.e. "wireless loops") as a substitute for copper telephone lines to offer speeds of 10 megabits per second down and 1 megabit per second up or faster (10/1). How the FCC measures AT&T's progress in deploying wireless 10/1 could greatly influence the level of investment AT&T needs to make. This post analyzes several scenarios where AT&T uses mobile LTE spectrum to deliver wireless loops. Read Part 2 for corrections and comments to this analysis.
(photo credit: Owen Rochte)

Last year, AT&T, Verizon, Frontier, and Consolidated agreed to receive from the FCC, collectively, $105 million annually for five years to upgrade California homes so they can get at least a 10/1 connection to the internet. The federal program that pays for this is called Connect America Fund Phase II (CAF II), and it is funded by surcharges on our telephone bills.

Fiber Optic Reality Check
As we enter the last quarter of 2016, it's time for a reality check. For those of you living in CAF II high cost areas (primarily rural California) who've been holding out hope for fiber optic broadband access to your home, you may be waiting in vain. That's because CAF II doesn't pay enough for fiber to the home, and carriers are not obligated to build fiber to the home. Furthermore, once the CPUC's California Advanced Services Fund runs out of money, there's arguably no funding mechanism, either federal or state, to bring fiber to rural California homes. 

Can Mobile Deliver?
If engineered as a wireline substitute, mobile can deliver 10 megabits per second downstream and 1 megabit per second upstream (10/1) to the home. The question is what will be used as proof that AT&T's 141,000 CAF II-eligible homes have been upgraded to receive that level of service? We know from mobile field tests that mobile speeds are highly variable from one moment to the next, so in order to deliver a reliable 10/1 service, AT&T may need to augment their network to deliver considerably faster speeds on average. Refer to the CPUC's comments to the FCC on GN Docket No. 15-191 regarding the highly variable nature of mobile broadband and the importance of accounting for reliability when measuring broadband speeds.

The "LTE" Indicator On Your Phone Doesn't Mean Fast Speeds
The FCC has made available to the public some of AT&T's mobile broadband deployment data. Unfortunately, speed data are missing. What remains is a file showing areas with access to LTE (4G "Long Term Evolution") service, as well as other, lower levels of service. We know from experience that mobile coverage shrinks as speeds increase, so it's impossible to tell how large a 10/1 service area extends across California.

Three CAF II Wireless Loop Scenarios 
If AT&T is going to use LTE wireless loops (i.e. home broadband access over the mobile network), here are three initial takes on how many CAF II-eligible households are theoretically covered today using various data sets. Based on these scenarios, AT&T has to make either very little investment to offer 10/1 service to their CAF II high cost households, or they have to make a significant investment. The answer hinges on what validation method the FCC uses to ensure AT&T has met its CAF II obligations to offer 10/1 or faster.
  • Scenario 1: FCC 477 Deployment Data - Using the December 2015 deployment data AT&T filed with the FCC, 85% of AT&T's CAF II high cost households have LTE coverage. Note that "LTE" is not the same as 10/1 or faster. However, if the FCC were to use 477 data as proof of meeting CAF II obligations, AT&T could conceivably claim subsidies for most of the 141,000 high cost households without doing any network upgrades.
  • Scenario 2: Interpolated Average Speed Data - Based on interpolated average speeds from Spring 2016 mobile field testing, over half of AT&T's CAF II high cost households appear to have access to speeds of 10/1 or faster.
  • Scenario 3: Interpolated Mean Minus 2 Standard Deviations - Using this stricter standard, where we reduce the average speed at each of the 1,990 field test locations by two standard deviations and create an interpolated surface using those adjusted speeds, nearly all of the 141,000 households appear to remain CAF II eligible. This suggests that AT&T would need to make a significant investment in their mobile network to deliver a reliable 10/1 or faster service to their high cost households.
Of these three scenarios, the answer to how much additional coverage is necessary is likely to be somewhere between scenarios 2 and 3, because scenario 1 is does not rely on a speed threshold, but rather simply the presence of LTE service. "LTE" offers a wide range of speeds, including zero kilobits per second. For the sake of reliability, the FCC should implement a robust mobile measurement program, such as CalSPEED, to verify AT&T has met its CAF II obligations using wireless loops.

Scenario 1: FCC 477 Deployment Data: 85% LTE Coverage

Scenario 2: Interpolated Average Speed Data: 57% High Cost Households with 10/1 or Greater

Scenario 3: Interpolated Mean Minus 2 Standard Deviations: No Households with 10/1

Here is what AT&T's LTE coverage looks like based on Scenario 1 (no speeds indicated):

Here is what AT&T's LTE coverage looks like based on Scenario 3 (speeds indicated in legend):

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