Every year I write a blog talking about the trends that I think we’re likely to see in the coming year. But 2021 was such an unusual year for all of us that I thought it would also be useful to talk about what we accomplished in the industry over the last year while fending off a pandemic. All in all, it was quite a year.
Broadband Funding. This was the year when the federal government finally reacted to the poor broadband in many parts of the country and pulled the trigger on huge broadband grants. Before the year started, we saw funding through the CAREs funds in 2020. We saw money going to every community that can be used for broadband in the American Rescue Plan Act. This legislation also funded grant programs at the RUS and the NTIA. The big grant announcement was the $42.5 in broadband infrastructure funding from the Infrastructure Investment and Jobs Act. States across the country have chipped in with state broadband grants funded by legislatures. 2021 was the year when the funding spigots were opened wide.
Technology Getting Faster. 2021 was the year when XGS-PON became price competitive with GPON, and we’re starting to routinely talk about new FTTP networks as 10-gigabit capable. Fixed wireless technology has been improving, but the jury is still out on claims made in 2021 for being able to deliver rural gigabit wireless. Several cable companies did field trials of early DOCSIS 4.0 technology last year—the technology that will bring gigabit upload speeds to coaxial networks. Starlink showed us last year that satellite broadband doesn’t have to suck.
Supply Chain Becomes an Issue. I don’t recall ever hearing the term supply chain in the broadband industry before 2021—and now it’s on everybody’s lips. Supply chain issues became real in 2021. ISPS ran into sudden long waits for basic electronics like switches and servers. During the year, the delivery times for fiber grew longer. And like always happens in times of shortages, by the end of the year, it became obvious that the biggest ISPs are still getting what they need while new ISPs at the bottom of the supply chain are told to wait a year to buy fiber.
BIG ISPs Interested in Rural America. I find it dismaying and somewhat ironic to see the big telcos and even a few of the big cable companies taking a sudden serious interest in serving rural America. The telcos started to ignore rural copper networks as far back as the 1980s, and their collective neglect led directly to the current dreadful state of rural broadband that we are now attempting to fix. The new interest in rural America is clearly due to the gigantic grant programs. Since the big grants are going to be funded through states, I guess we’ll find out if anybody wants to trust these companies yet another time.
Expansion of WiFi. When we look back twenty years from now, the expansion of WiFi spectrum might have been the most important development in 2021. The FCC originally voted to add 6 GHz spectrum to WiFi in April 2020, but the order was appealed by cellular carriers that wanted the spectrum for 5G. At the very end of 2021, the courts sided with the FCC and are allowing the use of 6 GHz WiFi to finally move ahead. WiFi is the wireless solution the world needs. You buy a box and can transmit wireless broadband around the home or office—the alternative is to buy subscriptions from cellular carriers. WiFi 6 and 6 GHz spectrum is going to take the technology to a new level.
Private Equity Finds Broadband. 2021 saw private equity money pouring into the broadband market. The big flashy announcement was when Apollo Global Management bought the copper assets of CenturyLink in twenty states. But more quietly, there is private equity money being used to buy smaller ISPs and to launch new fiber networks. It’s an interesting phenomenon when you consider that none of the fundamental aspects of the market has changed. Broadband networks are never likely to earn more than infrastructure returns, and the sudden interest in investing in low, slow return businesses is baffling.
Regulation Went Nowhere. There was big anticipation at the end of 2020 that a change of administration meant a new regulatory direction for the broadband industry. But inexplicably, almost all of 2021 went by without the White House naming a fifth FCC Commissioner or a new head of NTIA. 2021 was a year of regulatory status quo where the FCC concentrated on issues that have bipartisan support like awarding new spectrum and trying to fix robocalling.
