Last week Governor DeWine's office announced the winners of Round 2 of the state's Ohio Rural Broadband Expansion Grant (ORBEG) competition. $94.5 million of the state's Federal Coronavirus Capital Projects allocation will go to just two broadband providers to subsidize new fiber infrastructure to reach about 35,000 unserved or underserved homes in 22 counties.
88% of that funding, targeted to 86% of those subsidized home connections, is going to Charter Spectrum. (The rest will go to Brightspeed, the private-equity-owned ISP that acquired what used to be CenturyLink in 2022.)
ORBEG Round 1, announced back in March 2022, awarded $233 million of the state's own money to subsidize connections for 44,000 homes. Of the ten broadband providers that "won" Round 1, Spectrum was selected for just 24% of the dollars but 45% of the homes.
Adding the first two rounds of ORBEG awards so far, we get this:
Even before its big ORBEG haul, Spectrum was working its way through more than 110,000 new-connection sites in Ohio for which it was awarded $160 million in 2020 by the FCC's
Rural Digital Opportunity Fund (RDOF). Originally 59% of the RDOF's Ohio funded sites, Spectrum's share rose to 67% after two other major awardees dropped out.
This isn't the end of ORBEG subsidies. On the contrary: We'll see ORBEG Round 3 in 2025 and Round 4 in 2027, which will divvy up nearly $800 million in Federal infrastructure funding that Ohio expects to receive through the
Broadband, Equity and Deployment (BEAD) Program.
There's no certainty that Spectrum will continue to dominate this process. Maybe there will be fewer eligible homes that can be reached relatively cheaply at the edges of Spectrum's existing service areas. Maybe the large telco providers already serving rural Ohio with DSL -- Windstream? Frontier? TSC? -- will start bidding more aggressively to preserve their turfs.
But if Spectrum continues to compete seriously for ORBEG/BEAD dollars, I'd guess the company has a very good chance of continuing to clean up.
Monopoly money
Back in 2022, I did a painstaking analysis for Connect Your Community of the FCC's June 2021 Broadband Map data for Ohio. This was the FCC's old Form 477 mapping system, based on Census blocks rather than individual broadband serviceable locations.
As this CYC blog post reported at the time, my analysis revealed that:
Cable, DSL or fiber Internet service at a speed of 100/10 Mbps or more was available to at least one residence in 280,591 Ohio Census blocks.
For residents of 164,649 of those Census blocks, or 59% of the total, that service was available only from Charter Spectrum.
Repeat: Three-fifths of Ohio Census blocks with any high-speed home wireline broadband access in 2021 had only Spectrum cable. That's pretty much the definition of a monopolized market.
By awarding 50,000 of the first 79,000 ORBEG-assisted homes to Spectrum, BroadbandOhio is helping Charter Spectrum to expand and entrench that monopoly. It's probably an unintended consequence. But it's a real consequence, nonetheless.
Why does it matter? Well, to start with, Spectrum is expensive. The post-promotional cost of their cheapest Internet-only plan -- 300 Mbps down, 10 Mbps up -- is now $95 a month ($87.99 plus $7 to turn on the router's WiFi.) AT&T's comparable fiber offering is just $65 a month for 300/300 Mbps, with no extra "WiFi charge". Same for Windstream/Kinetic fiber. Frontier offers 200/200 Mbps for $39.99.
No doubt most of us would rather have high-speed Internet available from only one expensive provider than from zero providers. Anyway, that's the assumption baked into RDOF, ORBEG and BEAD, whose sole purpose is to find homes where the number of high-speed broadband providers is zero, and spend what it takes to change that number to one.
As long as those are the rules, expensive single-source broadband will continue to be a fact of life for millions of Ohioans, including those who finally get access to broadband via public subsidies.
RDOF-subsidized Spectrum fiber installation in rural Ashtabula County (February 2024)
