May 2018 Vol 73 No. 5

Washington Watch

Big New Dollars for Rural Broadband Companies

Broadband infrastructure was one of the big winners in the fiscal 2018 appropriations bill President Trump signed in late March. That bill included $600 million for rural broadband deployment through a new pilot program to be administered by the U.S. Department of Agriculture’s Rural Utilities Service (RUS).

That new program sits very well with NTCA–The Rural Broadband Association. “We are excited by the promise of the resources provided within the omnibus and the prospect of continuing our members’ work with RUS,” said Shirley Bloomfield, CEO of the association. “We also look forward to further conversations with Congress, the agencies and other policymakers about additional steps and resources needed to deliver on this vision.”

The NTCA has been up on Capitol Hill, along with CTIA – the Wireless Association, which represents the big broadband companies – arguing for inclusion of provisions for their industry in any large infrastructure bill Congress might pass. Their wish lists are different, however.

The big wireless carriers want regulatory easements so as to clear the path for 5G deployment in America, giving the U.S. a leg up, technologically, on China, which is seen as the major competitor in the 5G race. The rural broadband industry, however, is much less fixated on 5G, which Michael Romano, senior vice president of NTCA industry affairs & business development, says won’t solve the problem in unserved, rural areas.

In the areas served by NTCA members, 13 percent of consumers still cannot get 10 Mbps broadband, while 33 percent are unable to obtain 25 Mbps broadband, which is considered a threshold level today.

“And the story appears worse in areas that are not fortunate enough to be served by cooperatives and other small hometown-based telecom companies, like those in NTCA’s membership. In these other rural communities, we know that many more consumers, businesses, schools and medical facilities lack access to even basic levels of broadband,” Romano told the Senate Commerce Committee in March. The rural carriers want additional funding through the Federal Communications Commission’s Universal Service Fund (USF).

Both the big and rural carriers agree on one thing: federal environmental laws impede the permitting of broadband facilities. The chief barriers to construction are the National Historic Preservation Act (NHPA) and the National Environmental Policy Act (NEPA).

“NHPA mandates alone recently cost a carrier more than $170,000 to install just 23 small cells in a parking lot,” said Brad Gillen, executive vice president, CTIA, at the Senate hearings. “Another provider estimates that reviews under NHPA and NEPA comprised, on average, 26 percent of its total small cell deployment costs last year. These reviews can take months, which add delays and uncertainty to projects, keeping customers from enjoying the benefits of better service.”

The CTIA is pushing a bill called the SPEED Act (S.1988), which would modernize the NEPA and NHPA review process for wireless facilities. It allows antennas in public rights-of-way and where new facilities simply replace existing ones, or do not significantly expand existing ones. It also recognizes that a small cell should not face the same requirements as a 250-foot tower.

But additional funding is the top priority for the rural carriers, and no new programs are needed, according to Romano. “Standing up new programs from scratch is not easy, and if a new broadband infrastructure initiative conflicts with existing efforts, this would undermine, rather than further, our nation’s broadband deployment goals,” he told the Senate committee.

Major Power System Broker Pushes for New Gas Tariffs

At least one major, regional electric grid operator in the U.S. is pressing the Federal Energy Regulatory Commission (FERC) to revise the tariffs interstate pipelines can charge electric utilities. Also, they seek to institute mandatory information-sharing requirements instead of the voluntary provisions in Order 787, adopted in 2013 as a means of allowing pipelines to share sensitive information that could impact availability of gas. FERC has asked for ideas from the regional transmission operators (RTOs) and independent system operators (ISOs) on how the agency can improve the flow of gas to electric utilities in cold weather. That is increasingly important as utilities retire coal- and nuclear-fired generators.

Interstate pipelines, natural gas suppliers and alternative energy producers will have a chance to answer some of the RTO/ISO demands and claims, but have until May 15 to do so. FERC’s request for ideas on how to further the resilience of the bulk power system follows its decision not to move forward with Energy Secretary Rick Perry’s call for a rulemaking centered on ways to jigger rates so as to delay the retirement of coal and nuclear generation.
PJM Interconnection, the largest RTO in the U.S. serving a major swath of the Midwest, east to New Jersey, has suggested development of a gas-generation tariff would tailor specific rates and services to the generation fleet directly connected to the interstate pipelines. PJM’s general complaint is that the pipeline industry has developed its rate bases with major customers in mind being local gas utilities and industrial plants. Electric generators have been an afterthought, but are now clamoring for gas.

PJM admits that some pipelines are offering more flexible services, “But … appear to have been confined to the secondary market in which available gas from LDCs or industrial customers is made available, for a price, on the non-transparent bilateral secondary market,” said PJM in comments to FERC. “Although this is an effective, short-term strategy to ‘move around’ available capacity and take advantage of diversity in demand, it cannot, in the long run, serve as the sole means to meet the ever-growing demand for gas transportation by the generation sector.”
Pipelines are not likely to endorse the PJM tariff suggestion, once formal comments are filed. “INGAA is surprised that PJM is requesting that FERC compel each interstate pipeline to develop a gas generation-specific tariff because pipelines always have been willing to develop services and rates tailored to the needs of gas-fired generators,” said Cathy Landry, INGAA spokeswoman, previewing her group’s formal comments. “The problem has been that generators have not signed up for such service offerings.”

“INGAA also disagrees with PJM’s assertion that FERC Order 787 must be revised,” she continued. “Interstate pipelines already have increased the sharing of confidential information pursuant to the flexible framework established by Order 787. Pipelines question why PJM is pressing FERC to require more information from pipelines, when the desired information concerning generators’ contracting and operational practices can be provided most directly to PJM by the generators themselves.”

PJM argues that implementation of Order No. 787 has varied markedly among the pipelines, although great progress has been made. One reason for the lack of more progress is that some pipelines still contend that information specific to individual customers cannot be shared with system operators on a confidential basis, even for reliability reasons, without requiring a circuitous process of obtaining end-use customer consent.

PJM appears to be the only RTO pushing FERC to force interstate pipelines to provide mandatory information. The California ISO (CAISO) and New York ISO, for example, make only passing reference to gas pipelines in their comments on the reliability of the electric grid.

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