The FCC proposed fines of $8.8 million against 22 applicants in the Rural Digital Opportunity Fund Phase I auction for apparently violating agency requirements by defaulting on their bids last year between May 3 and Dec. 16. Two applicants also failed to submit audited financial paperwork, resulting in additional fines. “The FCC provided clear guidance in its rules and notices on the monetary forfeitures associated with defaults in Auction 904,” the FCC said Monday: “The bid defaults prevented 2,994 census block groups in 31 states and an estimated 293,128 locations from receiving new investments in broadband infrastructure.” Leading the list, California Internet, a CLEC, faces a fine of more $3 million and Connect Everyone, a wholly owned subsidiary of Starry, a fine of more than $3.8 million. Some proposed fines were less than $10,000. “Not following the rules has consequences,” said Chairwoman Jessica Rosenworcel: “For those who failed to meet their obligations, today’s action shows the Commission takes seriously its commitment to hold applicants accountable and ensure the integrity of our universal service funding.”
AT&T continues to grow its subscriber base, adding a net 708,000 postpaid phone customers in Q3, the company reported Thursday. AT&T was the first of the big three wireless carriers to report. The company also said its 5G mid-band spectrum now covers 100 million POPs, with 130 million expected year-end. AT&T’s stock price rose 7.72% Thursday to close at $16.74, the company's best day on Wall Street in two years.
Hurricane Ian cellsite outages sharply declined over the weekend, the FCC reported Monday in disaster information reporting system data. The DIRS report said 3.8% of cellsites were out of service in affected Florida counties, down from 7.7% in Friday’s report (see 2209300053). Counties experiencing the highest outage rates were Hardee (20.5%), Charlotte (18.4%) and Lee (17.8%). Cable and wireline companies reported 474,706 subscribers without service. One TV, six FM and two AM stations were down. On Sunday, the FCC deactivated DIRS for Hurricane Ian in many South Carolina counties. The agency deactivated Hurricane Fiona DIRS reporting Friday.
California Assemblymember Jim Wood (D) wondered if environmental review hurdles to building the state’s middle-mile network might warrant legislative attention. At a California Middle-Mile Advisory Committee virtual meeting Friday, Wood said he doesn’t understand why placing conduit along a highway would require California Environmental Quality Act (CEQA) and other reviews. “Highway projects already are massively invasive on the environment and there have to have been cultural studies in these highway projects at some point in the past as well,” he said. “Why do we have to repeat things? How much more of an environmental impact could the trenching or the placement of conduit have than building the original highways?” A presentation by California Department of Transportation Division Chief-Design Janice Benton estimated 30 months for permitting, including a 17-month CEQA review. Wood worries about the state finishing projects before it must return federal funding, he said. “If there’s something we need to do more as a legislature to give you more tools to move this thing along, please tell us.” Assemblymember Sharon Quirk-Silva (D) agreed with the need for urgency. “The frustration … or fear is that we’re going to run out of time.” Earlier at the meeting, Quirk-Silva praised progress made and a California budget signed June 30 that included another $550 million for the middle-mile project over the next two fiscal years. It brings total funding to $3.8 billion, “which will be vital in helping the state address the cost increases for the project,” said Mark Monroe, California Technology Department Broadband Middle-Mile Initiative deputy director. The California Public Utilities Commission will start taking applications Aug. 1 for the state’s new $50 million local and tribal technical assistance fund, CPUC program manager Jonathan Lakritz told the committee. On July 1, the CPUC received 99 project applications seeking about $28.6 million total for broadband adoption and digital equity grants, plus 19 applications seeking about $1.4 million in grants for public housing and low-income community projects, he said.
Fewer Americans are moving, creating broadband woes for big cable, said three cable providers in their quarterly earnings reports. Charter Communications and Alitice cited fewer people moving as a big challenge for adding subscribers. Comcast also pointed last week to fewer people moving as an issue with its slowing broadband growth (see 2204280004).
U.S. consumers spent $1.7 trillion online during two years of the COVID-19 pandemic (March 2020-February 2022), $609 billion more than in the two preceding years combined, reported Adobe Tuesday. Demand remained strong in 2021 with $885 billion in online spend, up 8.9% year over year, it said: “As the digital economy shifts to more personalized customer experiences, Adobe expects the annual online spend in the U.S. to surpass $1 trillion for the first time in 2022.” Of the $1.7 trillion spent by consumers, $32 billion was due to higher prices, said Adobe. Online inflation, first observed in June 2020, has persisted for 21 consecutive months, it said. “The impact was most notable in 2021, where $22 billion of e-commerce growth was driven by higher prices compared to just $4.7 billion in 2020.” In the first two months of 2022, $3.8 billion in e-commerce growth was driven by higher prices, said Adobe. But inflation didn't deter demand, it said. Online spending in January and February topped $138 billion, up 13.8% from the first two months of 2021, it said: “Adobe expects consumers could pay as much as $27 billion more online for the same amount of goods due to inflation.”
Pay-TV providers controlling 93% of the market lost about 4.7 million net video subscribers last year vs. a pro forma net loss of about 4.9 million in 2020, reported Leichtman Research Group Tuesday. The loss of 2.7 million cable video subscribers in 2021 compared with an exodus of 1.9 million in the prior year, it said. Comcast shed 1.7 million subscribers to end 2021 with 18.2 million; Charter dropped 367,000 to end at 15.8 million, it said. Other traditional pay-TV services lost 2.9 million subs vs. a loss of 3.8 million in 2020. DirecTV lost 1.9 million to end with 14.6 million customers; Dish TV lost 595,000 to 8.2 million, and 282,000 left Verizon Fios, bringing its subscriber count to 3.6 million. Top vMVPDs added 895,000 subs last year vs. a gain of 915,000 in 2020, led by fuboTV, which added 581,000 subscribers to end the year with 1.1 million. Hulu+ Live TV remains the leading vMVPD, adding 300,000 subs for a total 4.3 million; Sling TV added 12,000 accounts for a total 2.5 million. The top seven cable companies have 41.3 million video subscribers; other traditional pay-TV services have 26.8 million and the top publicly reported vMVPD services have 7.9 million, it said.
WideOpenWest will spend $40 million over the next two to three years on extending its fiber network to parts of Orange County, Florida, CEO Teresa Elder said during a call Thursday announcing its latest quarterly results, in addition to $60 million it will spend over the next two to three years on fiber expansion to greenfield areas of Seminole County, Florida, announced earlier this month. Elder said the Orange County focus will be on the northern suburbs rather than the Orlando metro area. Chief Financial Officer John Rego said construction should start in the second half of this year, with the first Greenfield customers expected to come in early 2023. He said the two projects combined will take its network past 100,000 new homes. WOW said it ended 2021 with revenue from continuing operations of $725.7 million, down $45 million. It said it finished the year with 511,700 high-speed data subscribers, up 12,900 year over year. It said broadband generated $399.1 million for the year, up $40.1 million from 2020. Rego said that partially offset year-over-year declines in video and telephony revenue of 13% and 12.1%, respectively. WOW stock closed at $16.96, down 3.8%.
The FCC committed an additional nearly $603 million in Emergency Connectivity Fund support, bringing the total to more than $3.8 billion so far, said a news release Monday. The new funding will support 1,651 schools, 85 libraries and 14 consortiums. “Today’s announcement will help an additional million children get the internet access and technology needed for success in today’s virtual and hybrid classrooms,” said Chairwoman Jessica Rosenworcel.
Four companies will pay $6.3 million in penalties for 911 outages last year, the FCC announced Friday. Some said they had made procedural changes to avoid a repeat. Lumen will pay $3.8 million, Intrado $1.75 million, AT&T $460,000 and Verizon $274,000. Both Lumen and AT&T said their blackouts involved work by vendor Intrado. See our news bulletin here.