Jonathan Chambers from Conexon works with rural electric cooperatives as they bring high-quality Internet access to rural America. When he spoke with Christopher for episode 229 of the Community Broadband Bits podcast last November, he had some choice words to say about how the FCC chose to continue to subsidize big telcos for little return.

They Propose "A Huge Mess"

In a recent post on the Conexon blog, Chambers analyzes “The New Trumpfone Program,” and reveals how proposed Connect America Fund (CAF) subsidies, when applied to real world data, creates outrageous financial waste. While providers can receive up to $17,500 per location in CAF funding, when applied to a per subscriber formula, the figure is $100,000:

There are no U.S. communities where satellite or fixed wireless provides broadband to 100% of the homes and small businesses. Not 80% either, which is the FCC assumption. Not 50% or 25% or 15% or 10% or even 5%. The FCC has data on this. Let’s say, for this arithmetic exercise, that a satellite or fixed wireless subscriber achieves a 15% market share of telephone and broadband service in a rural community.

A 15% market share while receiving $17,500 for every location in an area translates into over $100,000 per subscriber. Should there be insufficient competitive pressure in the auction, the $17,500 per location is a realistic outcome, as is the likelihood of $100,000 per subscriber by some technologies.

Reimburse Per Subscriber

Chambers offers a sensible solution to save CAF funds and direct public dollars in the right direction: reimburse providers for actual subscribers, rather than by location.

Jonathan Chambers from Conexon works with rural electric cooperatives as they bring high-quality Internet access to rural America. When he spoke with Christopher for episode 229 of the Community Broadband Bits podcast last November, he had some choice words to say about how the FCC chose to continue to subsidize big telcos for little return.

They Propose "A Huge Mess"

In a recent post on the Conexon blog, Chambers analyzes “The New Trumpfone Program,” and reveals how proposed Connect America Fund (CAF) subsidies, when applied to real world data, creates outrageous financial waste. While providers can receive up to $17,500 per location in CAF funding, when applied to a per subscriber formula, the figure is $100,000:

There are no U.S. communities where satellite or fixed wireless provides broadband to 100% of the homes and small businesses. Not 80% either, which is the FCC assumption. Not 50% or 25% or 15% or 10% or even 5%. The FCC has data on this. Let’s say, for this arithmetic exercise, that a satellite or fixed wireless subscriber achieves a 15% market share of telephone and broadband service in a rural community.

A 15% market share while receiving $17,500 for every location in an area translates into over $100,000 per subscriber. Should there be insufficient competitive pressure in the auction, the $17,500 per location is a realistic outcome, as is the likelihood of $100,000 per subscriber by some technologies.

Reimburse Per Subscriber

Chambers offers a sensible solution to save CAF funds and direct public dollars in the right direction: reimburse providers for actual subscribers, rather than by location.

In January, Governor Bill Haslam announced that he and Senator Mark Norris would introduce legislation to provide grant funding and tax credits to private companies in order to expand rural connectivity in Tennessee. In a recent Knoxville News Sentinel, Christopher took another look at more subsidies to large private providers and how that strategy has worked out so far.

We've reprinted the op-ed here:

Christopher Mitchell: State needs better broadband, not subsidies

If you were tasked with improving the internet access across Tennessee, a good first start would be to examine what is working and what’s not. But when the General Assembly debates broadband, it frequently focuses on what AT&T and Comcast want rather than what is working.

Broadband expansion has turned into a perennial fight between Tennessee’s municipal broadband networks and advocates of better connectivity on one side and AT&T and Comcast on the other. On one side is a taxpayer-subsidized model, while the other depends solely on the revenues of those who choose to subscribe. But which is which?

AT&T has received billions of taxpayer dollars to build its networks, whereas Chattanooga, Tullahoma and Morristown, for example, financed their fiber-optic networks by selling revenue bonds to private investors and repaying them with revenues from their services. The big telephone companies are massively subsidized, whereas municipal networks have generally not used taxpayer dollars.

It is true that after it began building, Chattanooga received a Department of Energy one-time stimulus grant for $111 million, but that was actually less than AT&T is getting from just one federal program in Tennessee alone – over $125 million from the Connect America Fund. And most of the money to Chattanooga went into devices for its smart grid that have since led to massive job gains.

These community networks offer modern connectivity. Chattanooga offers 10,000 Mbps to anyone in its territory. AT&T is getting enormous checks from Uncle Sam to deliver 10 Mbps. Comcast will soon offer 1,000 Mbps, but only for downloads. If you are a small business trying to upload lots of data, Comcast won’t get you there.

In January, Governor Bill Haslam announced that he and Senator Mark Norris would introduce legislation to provide grant funding and tax credits to private companies in order to expand rural connectivity in Tennessee. In a recent Knoxville News Sentinel, Christopher took another look at more subsidies to large private providers and how that strategy has worked out so far.

We've reprinted the op-ed here:

Christopher Mitchell: State needs better broadband, not subsidies

If you were tasked with improving the internet access across Tennessee, a good first start would be to examine what is working and what’s not. But when the General Assembly debates broadband, it frequently focuses on what AT&T and Comcast want rather than what is working.

Broadband expansion has turned into a perennial fight between Tennessee’s municipal broadband networks and advocates of better connectivity on one side and AT&T and Comcast on the other. On one side is a taxpayer-subsidized model, while the other depends solely on the revenues of those who choose to subscribe. But which is which?

AT&T has received billions of taxpayer dollars to build its networks, whereas Chattanooga, Tullahoma and Morristown, for example, financed their fiber-optic networks by selling revenue bonds to private investors and repaying them with revenues from their services. The big telephone companies are massively subsidized, whereas municipal networks have generally not used taxpayer dollars.

It is true that after it began building, Chattanooga received a Department of Energy one-time stimulus grant for $111 million, but that was actually less than AT&T is getting from just one federal program in Tennessee alone – over $125 million from the Connect America Fund. And most of the money to Chattanooga went into devices for its smart grid that have since led to massive job gains.

These community networks offer modern connectivity. Chattanooga offers 10,000 Mbps to anyone in its territory. AT&T is getting enormous checks from Uncle Sam to deliver 10 Mbps. Comcast will soon offer 1,000 Mbps, but only for downloads. If you are a small business trying to upload lots of data, Comcast won’t get you there.

In January, Governor Bill Haslam announced that he and Senator Mark Norris would introduce legislation to provide grant funding and tax credits to private companies in order to expand rural connectivity in Tennessee. In a recent Knoxville News Sentinel, Christopher took another look at more subsidies to large private providers and how that strategy has worked out so far.

We've reprinted the op-ed here:

Christopher Mitchell: State needs better broadband, not subsidies

If you were tasked with improving the internet access across Tennessee, a good first start would be to examine what is working and what’s not. But when the General Assembly debates broadband, it frequently focuses on what AT&T and Comcast want rather than what is working.

Broadband expansion has turned into a perennial fight between Tennessee’s municipal broadband networks and advocates of better connectivity on one side and AT&T and Comcast on the other. On one side is a taxpayer-subsidized model, while the other depends solely on the revenues of those who choose to subscribe. But which is which?

AT&T has received billions of taxpayer dollars to build its networks, whereas Chattanooga, Tullahoma and Morristown, for example, financed their fiber-optic networks by selling revenue bonds to private investors and repaying them with revenues from their services. The big telephone companies are massively subsidized, whereas municipal networks have generally not used taxpayer dollars.

It is true that after it began building, Chattanooga received a Department of Energy one-time stimulus grant for $111 million, but that was actually less than AT&T is getting from just one federal program in Tennessee alone – over $125 million from the Connect America Fund. And most of the money to Chattanooga went into devices for its smart grid that have since led to massive job gains.

These community networks offer modern connectivity. Chattanooga offers 10,000 Mbps to anyone in its territory. AT&T is getting enormous checks from Uncle Sam to deliver 10 Mbps. Comcast will soon offer 1,000 Mbps, but only for downloads. If you are a small business trying to upload lots of data, Comcast won’t get you there.

In January, Governor Bill Haslam announced that he and Senator Mark Norris would introduce legislation to provide grant funding and tax credits to private companies in order to expand rural connectivity in Tennessee. In a recent Knoxville News Sentinel, Christopher took another look at more subsidies to large private providers and how that strategy has worked out so far.

We've reprinted the op-ed here:

Christopher Mitchell: State needs better broadband, not subsidies

If you were tasked with improving the internet access across Tennessee, a good first start would be to examine what is working and what’s not. But when the General Assembly debates broadband, it frequently focuses on what AT&T and Comcast want rather than what is working.

Broadband expansion has turned into a perennial fight between Tennessee’s municipal broadband networks and advocates of better connectivity on one side and AT&T and Comcast on the other. On one side is a taxpayer-subsidized model, while the other depends solely on the revenues of those who choose to subscribe. But which is which?

AT&T has received billions of taxpayer dollars to build its networks, whereas Chattanooga, Tullahoma and Morristown, for example, financed their fiber-optic networks by selling revenue bonds to private investors and repaying them with revenues from their services. The big telephone companies are massively subsidized, whereas municipal networks have generally not used taxpayer dollars.

It is true that after it began building, Chattanooga received a Department of Energy one-time stimulus grant for $111 million, but that was actually less than AT&T is getting from just one federal program in Tennessee alone – over $125 million from the Connect America Fund. And most of the money to Chattanooga went into devices for its smart grid that have since led to massive job gains.

These community networks offer modern connectivity. Chattanooga offers 10,000 Mbps to anyone in its territory. AT&T is getting enormous checks from Uncle Sam to deliver 10 Mbps. Comcast will soon offer 1,000 Mbps, but only for downloads. If you are a small business trying to upload lots of data, Comcast won’t get you there.

In January, Governor Bill Haslam announced that he and Senator Mark Norris would introduce legislation to provide grant funding and tax credits to private companies in order to expand rural connectivity in Tennessee. In a recent Knoxville News Sentinel, Christopher took another look at more subsidies to large private providers and how that strategy has worked out so far.

We've reprinted the op-ed here:

Christopher Mitchell: State needs better broadband, not subsidies

If you were tasked with improving the internet access across Tennessee, a good first start would be to examine what is working and what’s not. But when the General Assembly debates broadband, it frequently focuses on what AT&T and Comcast want rather than what is working.

Broadband expansion has turned into a perennial fight between Tennessee’s municipal broadband networks and advocates of better connectivity on one side and AT&T and Comcast on the other. On one side is a taxpayer-subsidized model, while the other depends solely on the revenues of those who choose to subscribe. But which is which?

AT&T has received billions of taxpayer dollars to build its networks, whereas Chattanooga, Tullahoma and Morristown, for example, financed their fiber-optic networks by selling revenue bonds to private investors and repaying them with revenues from their services. The big telephone companies are massively subsidized, whereas municipal networks have generally not used taxpayer dollars.

It is true that after it began building, Chattanooga received a Department of Energy one-time stimulus grant for $111 million, but that was actually less than AT&T is getting from just one federal program in Tennessee alone – over $125 million from the Connect America Fund. And most of the money to Chattanooga went into devices for its smart grid that have since led to massive job gains.

These community networks offer modern connectivity. Chattanooga offers 10,000 Mbps to anyone in its territory. AT&T is getting enormous checks from Uncle Sam to deliver 10 Mbps. Comcast will soon offer 1,000 Mbps, but only for downloads. If you are a small business trying to upload lots of data, Comcast won’t get you there.

In January, Governor Bill Haslam announced that he and Senator Mark Norris would introduce legislation to provide grant funding and tax credits to private companies in order to expand rural connectivity in Tennessee. In a recent Knoxville News Sentinel, Christopher took another look at more subsidies to large private providers and how that strategy has worked out so far.

We've reprinted the op-ed here:

Christopher Mitchell: State needs better broadband, not subsidies

If you were tasked with improving the internet access across Tennessee, a good first start would be to examine what is working and what’s not. But when the General Assembly debates broadband, it frequently focuses on what AT&T and Comcast want rather than what is working.

Broadband expansion has turned into a perennial fight between Tennessee’s municipal broadband networks and advocates of better connectivity on one side and AT&T and Comcast on the other. On one side is a taxpayer-subsidized model, while the other depends solely on the revenues of those who choose to subscribe. But which is which?

AT&T has received billions of taxpayer dollars to build its networks, whereas Chattanooga, Tullahoma and Morristown, for example, financed their fiber-optic networks by selling revenue bonds to private investors and repaying them with revenues from their services. The big telephone companies are massively subsidized, whereas municipal networks have generally not used taxpayer dollars.

It is true that after it began building, Chattanooga received a Department of Energy one-time stimulus grant for $111 million, but that was actually less than AT&T is getting from just one federal program in Tennessee alone – over $125 million from the Connect America Fund. And most of the money to Chattanooga went into devices for its smart grid that have since led to massive job gains.

These community networks offer modern connectivity. Chattanooga offers 10,000 Mbps to anyone in its territory. AT&T is getting enormous checks from Uncle Sam to deliver 10 Mbps. Comcast will soon offer 1,000 Mbps, but only for downloads. If you are a small business trying to upload lots of data, Comcast won’t get you there.

In January, Governor Bill Haslam announced that he and Senator Mark Norris would introduce legislation to provide grant funding and tax credits to private companies in order to expand rural connectivity in Tennessee. In a recent Knoxville News Sentinel, Christopher took another look at more subsidies to large private providers and how that strategy has worked out so far.

We've reprinted the op-ed here:

Christopher Mitchell: State needs better broadband, not subsidies

If you were tasked with improving the internet access across Tennessee, a good first start would be to examine what is working and what’s not. But when the General Assembly debates broadband, it frequently focuses on what AT&T and Comcast want rather than what is working.

Broadband expansion has turned into a perennial fight between Tennessee’s municipal broadband networks and advocates of better connectivity on one side and AT&T and Comcast on the other. On one side is a taxpayer-subsidized model, while the other depends solely on the revenues of those who choose to subscribe. But which is which?

AT&T has received billions of taxpayer dollars to build its networks, whereas Chattanooga, Tullahoma and Morristown, for example, financed their fiber-optic networks by selling revenue bonds to private investors and repaying them with revenues from their services. The big telephone companies are massively subsidized, whereas municipal networks have generally not used taxpayer dollars.

It is true that after it began building, Chattanooga received a Department of Energy one-time stimulus grant for $111 million, but that was actually less than AT&T is getting from just one federal program in Tennessee alone – over $125 million from the Connect America Fund. And most of the money to Chattanooga went into devices for its smart grid that have since led to massive job gains.

These community networks offer modern connectivity. Chattanooga offers 10,000 Mbps to anyone in its territory. AT&T is getting enormous checks from Uncle Sam to deliver 10 Mbps. Comcast will soon offer 1,000 Mbps, but only for downloads. If you are a small business trying to upload lots of data, Comcast won’t get you there.

In January, Governor Bill Haslam announced that he and Senator Mark Norris would introduce legislation to provide grant funding and tax credits to private companies in order to expand rural connectivity in Tennessee. In a recent Knoxville News Sentinel, Christopher took another look at more subsidies to large private providers and how that strategy has worked out so far.

We've reprinted the op-ed here:

Christopher Mitchell: State needs better broadband, not subsidies

If you were tasked with improving the internet access across Tennessee, a good first start would be to examine what is working and what’s not. But when the General Assembly debates broadband, it frequently focuses on what AT&T and Comcast want rather than what is working.

Broadband expansion has turned into a perennial fight between Tennessee’s municipal broadband networks and advocates of better connectivity on one side and AT&T and Comcast on the other. On one side is a taxpayer-subsidized model, while the other depends solely on the revenues of those who choose to subscribe. But which is which?

AT&T has received billions of taxpayer dollars to build its networks, whereas Chattanooga, Tullahoma and Morristown, for example, financed their fiber-optic networks by selling revenue bonds to private investors and repaying them with revenues from their services. The big telephone companies are massively subsidized, whereas municipal networks have generally not used taxpayer dollars.

It is true that after it began building, Chattanooga received a Department of Energy one-time stimulus grant for $111 million, but that was actually less than AT&T is getting from just one federal program in Tennessee alone – over $125 million from the Connect America Fund. And most of the money to Chattanooga went into devices for its smart grid that have since led to massive job gains.

These community networks offer modern connectivity. Chattanooga offers 10,000 Mbps to anyone in its territory. AT&T is getting enormous checks from Uncle Sam to deliver 10 Mbps. Comcast will soon offer 1,000 Mbps, but only for downloads. If you are a small business trying to upload lots of data, Comcast won’t get you there.