Core Principles for Investment in Hawai‘i Broadband

• Broad recognition of the critical requirement for every citizen to have access to robust, reliable, and reasonably priced broadband service
• Lack of strategic investment in Hawai‘i’s middle mile infrastructure and monopoly-based practice of restricted investment has resulted in thin and aging assets which statewide broadband networks must depend on to deliver service to consumers (“middle mile infrastructure” refers to the parts of the telecommunications carrier and enterprise networks that are the foundation upon which services are delivered to consumers and end-users, and that are the high-capacity and high-cost connections to the global internet)
• Hawai‘i must take control of its future and pay attention to its own middle mile, in concert with the range of commercial infrastructure owners, to ensure that future broadband services are built and delivered on robust, resilient, and reliable middle mile assets.
• Thoughtful investment by the public sector will directly lower barriers to entry for potential trans-Pacific systems to land and help incentivize systems currently planning to bypass Hawai‘i to consider investment in interconnection in Hawai‘i.

Investment Pillars of the Strategic Framework

Access, Equity, and Literacy (AEL)

Key to ubiquitous adoption by all citizens and a long-standing focus of Federal universal service type supports and subsidies. Significant amounts of Federal pandemic relief have created an enormous bubble of one-time investment in the provision of consumer devices and access devices, in addition to multi-billion-dollar subsidies for economically challenged consumers. The majority of the funding support has flowed through state, county, and education programs, together with subsidies via the FCC and USAC (e.g., EBB/ACP, ECF, eRate). While equity and literacy elements have been slow to scale, we have growing community-based efforts to increase outreach with a combination of institutional and grass-roots community programs. The Strategic Framework shall continue to directly fund and encourage the integration of long-standing community programs to increase the breadth and depth of services and support to raise all boats in this critical pillar.

Supported efforts shall focus on public and community assets that can sustain support past the initial funding tranches, including leveraging long-term financial support from public and philanthropic sources. Ideal candidates for these centers of community support include public libraries, community centers, public housing authority facilities, and community focused outreach institutions. Use of one-time funds should include facility upgrades that can be sustained by the public and community assets and capital investments to leverage available funds to materially reduce long-term operating costs or subscription costs of broadband services and related ancillary services. Also crucial to these broad outreach efforts is the need to effectively identify the community’s unmet needs, including an understanding of possible future unrealized (and unmet) needs arising from ubiquitous access to robust broadband services.

Last Mile (LM)

Another pillar with long-standing Federal support mechanisms focused on rural, high-cost, and unserved communities. With roots in the legacy telephony network and original universal service concepts, these supports focus on building the edge, last mile connections into sparsely populated locations and generally deliver insufficient return on investment for carriers (with shareholders). Associated lifeline supports provided financial assistance to economically disadvantaged consumers to shore up the consumer revenue element of the equation.

The current-day equivalent of universal service, i.e., hefty broadband service, has been at the roots of the ongoing discussion on the modernization of universal service supports. Until recently, the challenge of justifying the additional investment and ongoing price supports has been a high hurdle – including as discussed in the 2007 Hawai‘i Broadband Task Force (as context for its 2008 report). Clearly, those hurdles have been shattered by the pandemic by exposing the (now) critical need to make robust broadband service available to all. Significant funds are already available to help close the gap for most of Hawai‘i’s unserved communities – our challenge is to include investment in the underserved areas, primarily located in well-connected geographic areas but suffering from lack of investment due to “poor” revenue upside potential (i.e., profit potential) mainly attributed to clusters of economically disadvantaged residents and business operations. These underserved communities predominantly suffer from aged last mile infrastructure and a lack of investment interest from carriers (with shareholders). Granted, aggressive state and federal regulatory influence might have altered the outcomes; unfortunately, neither a politically nor a socially supportable approach.

Supported efforts shall focus on strategic investment opportunities that can leverage available funds and the set of existing Federal/FCC/USAC supports, e.g., Connect America and Rural Digital Opportunity Funds, to extend Last Mile infrastructure to the maximum degree possible. DHHL also has significant resources available under the Tribal Broadband Connectivity grants; efforts should be coordinated to maximize benefits to both DHHL beneficiaries as well as the broader community (that also benefits DHHL beneficiaries that live throughout the state). Opportunities for investment include applying non-traditional wired and wireless solutions that appropriately integrate with carrier-operated telecommunications networks and strategic partnerships that focus on underserved communities in public housing and other congregate living community settings. As with Access, Equity, and Literacy efforts, Last Mile efforts must also identify viable community partnerships to help ensure long-term sustainable operations.

Middle Mile (MM)

This pillar requires a paradigm-changing public investment, partnering with the private sector to make a long-term impact in the economics of broadband to ensure that Hawai‘i has robust, reliable, and reasonably priced broadband to secure its future. A handful of key assets in Hawai‘i’s Middle Mile infrastructure suffer from under-investment and have constrained our collective ability to leverage the power of global broadband access fully; historically, that constraint has been limited supply and high cost; looking to the future, the constraint will be exacerbated by fragile infrastructure. Together, these aging assets create a thin and highly vulnerable keystone to Hawai‘i’s successful future. These assets include,

• Interisland submarine fiber optic cables – aged, aging, and brittle
• Lack of readily accessible carrier-neutral submarine cable landing station(s)
• Limited, high-cost terrestrial fiber networks interconnecting key Middle Mile assets

Supported efforts shall focus on developing high-value, shared, carrier-neutral infrastructure to address the limitations of private investors constrained by required return on investment principles. Opportunities for investment begin with strategically placed carrier-neutral cable landing stations timed with readily deployable inter-island cable infrastructure as the initial occupant. The physical requirements will range from a beach manhole with suitable backhaul to interconnect with terrestrial fiber infrastructure to a more robust “full-service” cable landing station with submarine power feed equipment (PFE), including the HVAC and redundant power sources required to support long-haul submarine cable operations. As trans-Pacific decisions unfold, the existence of a sufficiently provisioned carrier-neutral CLS will significantly reduce the cost and time hurdles of landing in Hawai‘i.

High-count terrestrial fiber bundles connecting strategic locations, including existing CLSs and large data center and colocation facilities, will complete the targeted public investment in Hawai‘i’s Middle Mile. Non-traditional Middle Mile connections for consideration include any significant enterprise and non-carrier locations (e.g., DoD, other Federal assets, State/City, University/DOE facilities). Design of the Middle Mile assets may also consider employing swaps of existing or purpose-built infrastructure by carrier and non-carrier entities to improve geographic path and ownership diversity further to improve the resilience of critical Middle Mile infrastructure.

Governance and Sustainability (GS)

Any investments in Hawai‘i’s broadband infrastructure and services should be crafted to maximize long-term, strategic public benefits and shall be governed with sustainability as a core design principle. Regardless of the source of funds, the design of governance efforts associated with broadband infrastructure investments should include representation from relevant stakeholders and tasked to ensure that Hawai‘i continuously benefits from these strategic investments. Especially where substantial public resources are utilized, governance bodies should include participants representing executive sponsors from public broadband infrastructure, carriers, DoD and other Federal operators, healthcare and finance sectors, and public policy interests. A vital function of the governance bodies is the convening and managing of interests by the infrastructure consumers, including coordinating the assessment of suitable fees to support required operations and maintenance (O&M), administrative overhead, and future asset refresh cycles.

_{Last updated: June 20, 2022}