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Microsoft Aims to Eliminate Unserved Areas Within Five Years

Randy Sukow Jul 11, 2017

Microsoft came out in a big way today with a plan to use fixed wireless technology to close all the gaps in broadband connectivity by July 4, 2022. Brad Smith, Microsoft president and chief legal officer, gave a one-hour presentation this afternoon at the Willard Hotel in Washington, DC, surrounded by high-level politicians and media figures. The “Rural Airband Initiative,” he said, will lead to a world where the broadband coverage map is one solid color thanks to a combination of fiber technology and wireless technology, especial TV white spaces technology.

NRTC agrees with Smith that connectivity in rural America depends on multiple technologies. We have begun forming partnerships with companies to support fixed wireless broadband services using a variety of bands, including the white spaces, which are unused broadcast television channels in the 600 MHz and 700 MHz bands. In addition, NRTC members will continue to offer Exede broadband satellite service and design fiber optic networks to support both utility and residential functions.

NRTC’s goal is to meet the many diverse broadband needs of its members. NRTC subsidiary Pulse Broadband has expanded the range of its broadband feasibility study to include analysis of potential combinations of fiber networks with fixed wireless facilities.

Smith referred to FCC estimates that about 23 million Americans currently do not have access to broadband. Microsoft’s plan is to enter into partnerships with service providers – 12 projects in 12 states within the next 12 months – to directly serve 2 million within the next two years. The hope is that the projects will help create the right market conditions for others to follow suit and close the remaining gaps on the map.

“It is not our goal to make a profit from these projects. In fact, it is our goal to not make a profit,” Smith said. “We’re going to seek a revenue share [with project partners] to recoup our capital costs and for the next five years, we’re going to take the money we get back through that revenue share and use it to expand coverage and work with more partners.”

Microsoft is looking for rural telcos to enter partnerships. “Rural communities in this country are still in many instances served by very small telephone companies. They might be companies that have been owned by a family for multiple generations, and they’re not able to put to work large amounts of capital and they certainly can’t take big risks,” he said. He said that combination of Microsoft partnerships, other companies entering similar partnerships and government assistance could start a chain reaction.

“We hope that the administration will consider making 21st Century infrastructure, like broadband, part of an infrastructure bill this fall,” Smith said.  President Trump did indicate recently that broadband will be part of his proposal.

During a question and answer period, some in the audience questioned the emphasis on TV white spaces for the initiative. Smith said the laws of physics were at the root of the decision. Lower-band signals simply carry farther and penetrate walls better than other bands.

“In recent months, we have worked with the Boston Consulting Group, and what BCG concluded in its analysis is that TV white spaces is the most cost-effective solution for about 80 percent of rural America, specifically people that live in areas that have a population density between two and 200 people. That’s the right solution for them,” he said. “But for people who live in an area where the population density is less, it shouldn’t be TV white spaces. It should be satellite. And for people who live in an area where the population density is more than 200 persons per square mile, we should look for 4G technologies and even some limited fiber to the home.”

The Microsoft initiative is not without controversy. The company currently is asking the FCC to make three TV channels available in every TV market for white-spaces broadband operation. TV broadcasters have long opposed broadband in the white spaces due to potential interference with their stations. The National Association of Broadcasters this morning pointed out that white spaces advocates over several years have failed to establish a viable service.

“It's the height of arrogance for Microsoft -- a $540 billion company -- to demand free, unlicensed spectrum after refusing to bid on broadcast TV airwaves in the recent FCC incentive auction,” said Dennis Wharton, NAB executive VP, Communications in a statement this morning. “Microsoft's white space device development has been a well-documented, unmitigated failure. Policymakers should not be misled by slick Microsoft promises that threaten millions of viewers with loss of lifeline broadcast TV programming.”

Microsoft is offering a replay of Smith’s presentation on its web site. It also has published a white paper describing the plan in greater detail.

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