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While Universal Service Reforms Show Promise, Politics Clouds Fund’s Future

in Broadband's Impact by

ASPEN, Colorado, August 19, 2015 – In spite of several positive efforts to reform the complex and dated rules that govern the Federal Communication Commission’s universal service fund, key decisions surrounding the $8 billion annual fund remain ineluctably political.

That was the message shared by panelists, including a commissioner at the FCC, speaking at a session on Tuesday at the Technology Policy Institute’s annual forum here.

For example, the panelists — which also include two economists, a cable industry lobbyist and the former director of the National Broadband Plan — applauded efforts to bring greater economic efficiency to telecom network construction through a system known as a “reverse auction.”

They also supported efforts to promote broadband adoption by providing income-based vouchers for the purpose of internet services.

But decisions about the allocation of funds within the USF — and the key question of how the fund is to be paid for — remain political hot potatoes.

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Moderator Scott Wallsten of the Technology Policy Institute, with panelists Mignon Clyburn, James Assey, Blair Levin, Gregory Rosston, and Bradley Wimmer.

“The electorate will decide the right size” of the USF, said Blair Levin, former director of the FCC broadband plan, referring to the 2016 presidential vote. Levin is currently executive director of Gig.U and a senior fellow at the Brookings Institution.

“Let’s put aside, for now, the question of the budget” and whether fees should be levied on internet connections to pay for the USF, said Levin. Putting that issue aside would allow the FCC to design the best policy, irrespective of how large the fund ultimately will be.

Over the past five years, each of the four main components of the universal service fund have undergone an overhaul. First was the “high-cost fund,” the largest component of the USF, which became the Connect America Fund and the Mobility Fund.

These changes include the implementation of a “reverse auction,” in which the FCC promises to support rural broadband providers based on the bidder who offers to provide broadband at the lowest cost.

The other three components of the USF are the eRate for schools and libraries — changed last year by FCC decisions in July and December – plus the health care and telemedicine fund, and the Lifeline program for low-income connectivity.

Much of Tuesday’s panel discussion, titled “”Universal Service: Towards Broadband, Efficiency and Equity,” revolved around the Lifeline program, which is currently being reviewed and potential modified by the agency.

Too frequently, commentators speak of “lifeline and universal service. Lifeline is universal service. It is one leg in a four-legged stool,” said Commissioner Mignon Clyburn, who is spearheading efforts to enhance the current Lifeline program.

Until the changes over the past five years, universal service monies could not be used directly on expenditures for broadband. That remains the case with Lifeline; although FCC Chairman Tom Wheeler has proposed changing that.

Two economists participating on the panel said that Lifeline has become an income-redistributing effort instead of a program ensuring greater access for low-income individuals.

“A lot of the money from the Lifeline program goes to households that would subscribe to telephone service even if there were no subsidy,” said Bradley Wimmer, an economics professor at the University of Nevada at Las Vegas.

Clyburn pushed back on that point.

Speaking about low-income individuals, she said that “people want to communicate, and they will make sacrifices to do so. Should they make the tradeoffs they are making to be able to communicate?”

Additionally, Clyburn said, 44 percent of those who are low-income end up having their smart phones disconnected because of economic hardships.

However, all of the panelists supported efforts to use vouchers to move the Lifeline program in a direction of allowing low-income consumers greater communications choices.

The four of USF programs are funded by a 17 percent fee on telephone communications, a number that is adjusted for cell phone users. Currently, broadband connections are not subject to the fee, but that might change.

When Congress put legislation in place to limit taxes and fees on internet connections in the 1990s, demand for such services were not “inelastic.” That economics term refers to goods, like automobile fuel, that consumers tend to purchase irrespective of how the price changes.

“Now, they are relatively inelastically demanded,” said Gregory Rosston, deputy director of the Stanford Institute for Economic Policy Research. That means that, over the past two decades, consumers have come to regard broadband as more of a necessity.

But James Assey, executive vice president of the National Cable and Telecommunications Association, countered: “At a time we want to promote broadband, why impose additional costs on broadband bills?”

Although most cable companies have not been eligible for universal service funds, Assey said that could change as FCC updates its traditional rules around the Connect America Fund and Lifeline.

Assay also said that cable companies have been among the most active in promoting connectivity through efforts like Comcast’s Internet Essentials. Initiatives designed to spur greater broadband adoption were required of Comcast, the largest cable provider, as part of conditions attached to approval of its merger with NBC Universal.

Levin said that the debate about the USF suffered from a “penny-wise, pound-foolish” mentality. “How much more efficient would government be if it knew that everyone was online?”

Being able to reconfigure government systems and make them almost-exclusively online could end up saving billions, if not tens of billions of dollars every year, he said.

 

36-Member Public Interest Group Coalition Responds to Sen. McCaskill’s Call to End Lifeline Program

in Broadband's Impact/Congress/Education/Senate by

WASHINGTON, July 2, 2013 – On Friday a coalition of 36 interest groups sent a letter to Sen. Claire McCaskill, D-Mo., urging her to reconsider her position calling for the eliminating the Lifeline program, one of a handful of programs that currently make up the Universal Service Fund.

On June 11, McCaskill had sent a letter to Federal Communications Commission Acting Chairwoman Mignon Clyburn advocating the defunding of the Lifeline program in order to fund President Barack Obama’s recently announced ConnectEd initiative, which aims to provide gigabit-level broadband connections to 99 percent of students within the next five years.

McCaskill’s letter provoked a response from the coalition, which includes organizations including the AARP, Consumers Union, and Public Knowledge. The coalition agreed that ConnectEd is an important program – but also emphasized the need for the Lifeline program.

The letter shared McCaskill’s concerns over possible waste and fraud within the program, but called for reform rather than abolition. The interest-group letter stated that both programs filled important needs.

“These two programs are complementary pathways to bringing connectivity to our country,” read the letter.

Lifeline Reform One More Step Toward Adoption

in FCC/Universal Service by

WASHINGTON, January 27, 2012 – A couple weeks ago, Federal Communications Commission Chairman Julius Genachowski announced the FCC’s Order to modernize the Universal Service Fund’s Lifeline Program. In a week where almost all of the media’s attention was focused on new technologies and innovative gadgets at the International Consumer Electronics Show, Genachowski reminded the public of the challenges facing basic broadband adoption — and the importance of the FCC universal service efforts over the past two years.

He noted the FCC’s recent accomplishments including overhauling the universal service fund and intercarrier compensation systems as well as setting up balanced rules to preserve internet freedom and openness. He praised the elimination of over 200 outdated rules and data collections, the general crackdown on fraud and abuse and the additional $67 million logged in enforcement penalties and settlements. Genachowski highlighted the FCC’s efforts to place many of the FCC’s programs under the microscope. The Chairman added, “a program can be efficient and fiscally responsible and still be ineffective. That’s why we’ve also asked if programs need to be modernized to meet today’s needs.”

In asking whether the programs are serving the right policy goals of today’s broadband world, the Commission has already reformed the Video Relay Service, the E-Rate program, the largest part of the USF and ICC systems. With the decision to reform the Universal Service Fund’s Lifeline Program, the Chairman praised the Commission’s efforts in following through with Congress’ directive, ensuring that “consumers in all regions, including low income consumers…should have access to telecommunications and information services.”

As valuable as the Lifeline program has been to low income families it has had its share of problems and additional costs on consumers nationwide. Carriers are providing lifeline services to individuals that already receive lifeline services from another carrier, and carriers have abused the program by receiving additional funds for signing up homes that do not qualify for program support. The proposed reforms will aim to standardize eligibility requirements and clarify rules to prevent duplicative support.

Genachowski announced three goals for a reformed program. Those include cost controls, a budget designed to address the issues consistent with programs purpose, and a shift to supporting high speed internet as a vital communications platform.

Initial phases of the Lifeline reform began last summer when the Commission adopted an order clarifying that an eligible consumer may only receive one lifeline supported service, creating procedures to detect and de-enroll subscribers with duplicate lifeline supported services. “As a result of these actions we’ve already identified more than 200,000, duplicative Lifeline subscriptions for elimination,” touted Genachowski.

The order establishes clear goals for the program as well as metrics to measure progress towards the goals.

GOALS

- Create a National Lifeline Accountability Database – to minimize contribution burden for consumers and businesses

- Create a budget – to eliminate unnecessary spending

- Create accountability measures – every carrier that receives over a specified annual amount of funds will be subject to independent audits every two years.

- Create national eligibility criteria to ensure that low income consumers meet federal standards in order to participate – the eligibility standard will take into account the unique circumstances of Tribal communities and allow states to add additional criteria.

- Transparency – the order would make Lifeline reimbursements more transparent and streamlined so carriers receive funds for subscribers actually served

- Protect and empower consumers – the order would provide more information to consumers about program requirements

- Order will modernize Lifeline from telephone to broadband

- Broadband Adoption Pilot Program – transitioning the program to support broadband would require a program that would test and determine how Lifeline can best be used to increase broadband adoption among Lifeline eligible consumers.

According to Genachowski, the program would solicit applications from providers and select a number of projects to fund. Applicants will be expected to use the Lifeline support to reduce the monthly cost of broadband and also address the cost of purchasing broadband devices and lack of digital literacy.

The data derived from the Broadband Adoption Pilot Program as well as all of the other adoption programs across the country will be used to understand how to best transition Lifeline support to broadband

Next Tuesday January 31st, the Commission takes up the Order in a full Commission meeting.

FCC Aims to Increase Awareness of Lifeline, Link Up Programs

in Broadband's Impact/FCC/Tribal Broadband/Universal Service by

WASHINGTON, September 14, 2010 – This week is the second annual “National Lifeline and Link Up Telephone Discount Awareness Week” brought to you by the Federal Communications Commission, National Association of Regulatory Commissioners and the National Association of State Utility Consumer Advocates.

The week kicked off with a congressional briefing, where members of the telecom community outlined for lawmakers efforts being made to promote awareness of the two telephone assistance programs.

Various state and local agencies throughout the country are participating in the awareness week with outreach activities and events.  The Lifeline and Link Up programs are designed to help ensure that all Americans can get basic telephone service by providing discounts to consumers who might not otherwise be able to afford service.  Statistics show that of the 25.7 million eligible, 8.2 million households participate, or roughly a 32 percent national participation rate for 2009, according to the FCC.

Lifeline involves discounts on monthly charges for a primary residential telephone line, which might be wireless service.  Link Up involves a discount on the cost of initiating the primary telephone service for a residence, including the activation of a wireless phone that serves as the primary residential telephone. The discounts are available throughout the country, including an enhanced discount on tribal lands.  In general, consumers at or below 135 percent of the federal poverty guidelines, or who participate in one or more of a number of other assistance programs, are eligible for Lifeline and Link Up.

More information about the programs and how to apply is available at www.lifeline.gov or http://www.usac.org/li/low-income/apply-for-support.aspx.

Human and Civil Rights Group Pushes FCC to Move Forward on Broadband Plan Proposals

in Broadband Updates/Broadband's Impact/Education/FCC/Minority by

WASHINGTON, September 2, 2010 – The Leadership Conference on Human and Civil Rights has offered its suggestions to the government on how to improve the access of low-income, minority and other underserved communities to important communications services like broadband.

The leadership conference is recommending that the Federal Communications Commission and the Federal-State Joint Board on Universal Service:

  • Move quickly to expand the Lifeline and Linkup programs to support broadband services that can support voice and other applications as was recommended in the National Broadband Plan;
  • Maximize the impact of the program by expanding eligibility and improving participation rates by enhancing outreach and administration by doing things such as mandating automatic enrollment programs so individuals who apply for benefits for one agency can automatically be enrolled for benefits through Lifeline and Linkup. It also suggests that group homes such as domestic violence and homeless shelters be allowed to use the Lifeline and Linkup programs;
  • Allow low-income consumers flexibility to meet their needs while ensuring companies don’t receive compensation for poor services. For example, the government could look at ways that universal service funds might help support digital literacy. Additionally, it should review concerns that some states require individuals to apply for unemployment benefits online but those consumers might not have access to the internet to do so; and
  • Develop electronic management tools to reach low-income populations online.

Genachowski Calls for Removal of Barriers to Minority Business Owners

in Broadband's Impact/Minority/National Broadband Plan/Spectrum by

WASHINGTON, July 21, 2010- Market barriers to minority and small business owners must be removed so that they can compete in the global marketplace says Federal Communications Commission Chairman Julius Genachowski.

Speaking at the Minority Media & Telecom Council’s Access to Capital and Telecommunications Conference, Genachowski assured his audience that the FCC is focused on equal employment opportunity and private sector investment, which fosters a good environment for emerging businesses.

He said that since broadband is undoubtedly the main infrastructure of the 21st century; every entrepreneur should have access to and be comfortable with the technology.

The cost of digital exclusion affects minorities in a world where classifieds are moving online and job applications must be completed and submitted through the internet, to the point where “if you don’t have broadband, you can’t get a job,” said Genachowski. He cited low penetration rates among African-Americans, Latinos, and Native Americans, and said the digital divide seriously troubles him.

These problems were the main drivers in creating the National Broadband Plan to ensure that no Americans were left behind in the digital age. Plans for infrastructure deployment will drive private investment in broadband. It also calls for government resources and the removal of market barriers to make these private investments viable and successful.

Another barrier to entrepreneurs is the availability of spectrum, especially for mobile applications. Genachowski said “Without more spectrum, the first choice of internet access for millions of minority Americans will deliver second-rate service.” This is a particular problem for minorities, many of whom access the internet primarily through mobile devices.

In addition to driving broadband deployment, he said the National Broadband Plan calls for increases in broadband adoption as well. The main barriers to adoption are cost and digital literacy. He said in addition to the Lifeline, Linkup, and Digital Literacy Corps programs, he also wants to help small businesses improve their digital skills.

The FCC is currently working with the Small Business Administration to create public/private partnerships that will provide broadband education for small and diverse businesses.

The FCC is revitalizing its Office of Communications Business Opportunities by bringing in a new office head and focusing on making the best capitalization strategies available online for emerging businesses. They are also working on networking systems that could connect small businesses with larger companies in the communications field.

Genachowski said keeping an open internet is essential, and “entrepreneurs shouldn’t have to ask permission to innovate online.” The ability to “connect, create, and communicate” online should be available to everyone, he said.

National Broadband Plan: A Look at Chapters 1 & 2

in Broadband's Impact/National Broadband Plan/Smart Grid/Universal Service/Wireless by

Editor’s Note: This is the first in a series of articles written by BroadbandBreakfast.com staff summarizing each chapter of the FCC’s National Broadband Plan.

WASHINGTON, March 26, 2010 – The national broadband plan aims to present not just a roadmap of broadband expansion, but also to provide a long-term vision of innovation. While the first chapter of the plan explains its overarching goals and congressional mandate, the plan is really outlined in the second chapter. The plan has six goals that the Federal Communications Commission plans to achieve through four general recommendations.

Looking at the recommendations, they’re not distinct policy actions to be taken but a series of overall actions to be taken to create a more inviting environment for future innovation.

Looking at the other major broadband plans published by South Korea, Japan, Sweden and Germany, the FCC clearly recognized the need for increased competition in order to maximize consumer welfare.

The second general recommendation deals with the physical expansion of the network by working with localities to make it easier to obtain permits for the installation of poles, cables and other network equipment. In addition to the physical network, the FCC feels that the available spectrum needs to be inventoried and cataloged in order for more efficient use; this may include the redistribution of government-owned spectrum.

The Universal Service System needs direct reform; specifically the high-cost system that currently subsidizes telephone service needs to be redirected for the use of broadband funds. This transformation needs to occur for low-income Americans and others.

The final recommendation is the most vague. It simply states that laws and policies and standards need to be reformed in order to allow the government to influence public education health care and other government operations to be better used over the Internet.

Looking over the six goals, some of them have direct implications while others are simply overall statements designed to allow for the improvement of broadband availability.

The plan’s first goal is the most lofty and the most concrete: “at least 100,000,000 U.S. homes should have affordable access to an actual download speeds of at least 100 megabits per second and a dual upload speeds of at least 15 megabits per second.”

The FCC plans to achieve this goal by ensuring that every American has accurate actual performance data. It recently released its own speed-test service using data provided by M lab and others to allow consumers to determine their actual speeds. This will allow the FCC to determine what the differential is between what consumers actually get and what ISPs claim they are delivering.

In later sections of the plan, the FCC goes into more detail about actual vs. advertised. The specific goal is that by 2015, 100 million Americans should have affordable access with actual download speeds of 50 megabits per second and actual upload speeds of 20 mbps. This benchmark will allow the agency to determine in five years the actions of helping to achieve the ultimate goal or whether new policies should be enacted.

With the rise of smartphones and netbooks, the mobile connectivity of Americans has been steadily increasing. Numerous studies have concluded that many minorities and low-income households use the mobile Internet to connect. In order to expand the mobile network, the FCC plans to work with locality staff to allow for easier pole placement but also to expand spectrum. Specifically, the agency plans to lift the 500 MHz band and make it available by 2020 with making 300 MHz available by 2015.

When looking at why Americans don’t have access, the most obvious reason is a lack of physical connectivity. However, with the over-expanding network, the lack of use it is becoming more attributable to a lack of digital literacy or basic affordability. With regards to digital literacy, the commission proposes the creation of the digital literacy corps. This new program is expanded upon later in the plan.

In order to tackle the issue of affordability, the Universal Service Fund and intercarrier compensation will be reevaluated. The goal is that over the next 10 years both programs will be modified to allow for a shift from telephone service to broadband service. Unfortunately with limited funding, telephone service will no longer become a focus. In addition to the universal service program, the Life Link and Link Up services that are used to bring telephone service to low-income communities, will be expanded to include broadband.

In order to achieve true ubiquity, institutions such as schools, hospitals, government buildings and libraries also need a high-speed connectivity. Here the FCC is pushing for a one gigabit per second connection for these anchor institutions. The FCC also plans to reevaluate the rural healthcare support programs. Additionally, it would like nonprofit and public institutions to work together to obtain better connectivity.

The fifth goal is one of the concrete goals which the FCC has proposed after the 911 Commission released a report addressing emergency responder systems. The 911 group found that emergency personnel were unable to communicate with each other across various systems since many of them are not interoperable. The FCC is proposing a new nationwide wireless interoperable public safety network to be completed no later than 2020. This would allow first responders, hospital personnel, fire and police officers to communicate using one unifying network.

The final goal addresses a tangential benefit of a high-speed network – access to energy information. A smart grid would allow all Americans to access direct energy information on pricing and consumption ball and allow for the easier transmission of energy across the United States. This could enable better load management and price control. According to the plan, studies demonstrate that when people get feedback on their electricity usage, they make simple behavioral changes that save energy.

FCC Readies Plan to Bring Affordable Broadband to 100 Million Homes, Dubs Plan ‘Connecting America’

in Broadband Stimulus/FCC/National Broadband Plan/Universal Service/Wireless by

WASHINGTON, March 15, 2010 – The Federal Communications Commission will present its congressionally mandated plan to bring high-speed internet access throughout the United States to lawmakers tomorrow, outlining six long-term goals and detailing its views on better ways to encourage broadband competition, free up available spectrum and modernize health care, among other things.

The agency hopes that its 360-page document will help bring affordable broadband to at least 100 million U.S. homes, which would enjoy download speeds of at least 100 megabits per second and uploads speeds of at least 50 mbps.

It also strives to make the United States a leader in mobile innovation “with the fastest and most extensive wireless networks of any nation,” according to the “Connecting America: The National Broadband Plan” document.

Under the plan, every American community would have access to at least 1 gigabit per second broadband service at institutions like schools and hospitals. Additionally, first responders would be able to access a national, wireless public safety network if the plan’s recommendations were implemented.

It also pushes for each American to be able to use broadband to track and manage their energy consumption.

FCC officials reiterated in a Monday press briefing for reporters that the plan’s goals are a directional compass that will constantly be evaluated.

The officials said they expect that within the next few years most people will access broadband services via mobile devices, and their plan reflects that.

The plan calls for making 500 megahertz of spectrum newly available for broadband within 10 years, of which 300 megahertz should be made available for mobile use within five years. In some cases spectrum could be reallocated or the FCC could change technical rules that would free it up, FCC officials said Monday.

The vast majority of the plan does not require government funding, but its ideas “seek to drive improvements in government efficiency, streamline processes and encourage private activity to promote consumer welfare and national priorities,” the plan reads.

The funds that are requested relate to public safety, deployment to unserved areas and broadband adoption efforts.

The plan argues that if the spectrum auction recommendations are implemented, the plan is likely to offset the potential costs.

The plan also calls for shifting up to $15.5 billion over the next decade from the existing Universal Service Fund to support broadband, and says that if Congress wants to accelerate broadband deployment to unserved areas, “it could make available public funds of a few billion dollars per year over two to three years.”

Officials declined to put a price tag on how much an implemented plan might cost.

The agency also seeks to expand the Lifeline and Link-up programs for bringing telephone service to low-income Americans to include broadband, and to launch a Digital Literacy Corps to organize and train youth and adults to teach digital literacy skills.

Officials also said the don’t see the plan as a major call for reform of telecommunications law, but lawmakers could consider a privacy act to encourage consumers that their privacy when using broadband would be protected.

The plan also reaches out to many other agencies and departments. For example, it recommends that Congress and the secretary of Health and Human Services consider developing a strategy that documents the proven value of electronic care, or e-care, technologies.

An executive summary of the plan is available on the FCC’s web site, http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-296858A1.pdf

FCC Releases First Draft of National Broadband Plan After Weighing Record

in National Broadband Plan/Premium Content/Universal Service/Wireless by

WASHINGTON, December 17, 2009 – The Federal Communications Commission on Wednesday laid out a rough draft of its national broadband plan after weighing through 66,000 pages of written comments, 27 public notices, 100 items posted on its “blogband” web site, and 700 blog comment posted to the record.

But the agency says it is still difficult to answer key questions that must be addressed within two months time, or by February 17, 2010.

In November, the Commission identified gaps in broadband infrastructure deployment and adoption, and identified shortfalls in adoption and spectrum. This month the FCC laid out the policy framework to help us address the key broadband gaps.

Omnibus Broadband Initiative Executive Director Blair Levin kicked off the meeting by acknowledging the objectives of (1) understanding the principles on how to develop policy and (2) reviewing the policy framework by going through the principles that the policies should be based on.

Levin followed up by stating that the national purposes of the plan will be laid out in the January meeting.

Levin said he wanted to focus on the plan and the situation in America. Other countries have created their own plans but their infrastructures and needs differ in many ways.

He outlined what he called “Principles for Policy Choices”:

  • Private sector investment
  • Competition drives innovation and better choices for consumers
  • Better utilization of existing assets is required (Universal Service Fund, Spectrum, Rights of Way)
  • Policy changes must consider unintended consequences
  • New laws necessary in certain cases, but should be limited

Erik Garr, general manager of broadband initiative, told the audience that there will be no recommendations made, and that the meeting will simply be a discussion on the merits to determine if the ideas are good or not.

Garr introduced the broadband ecosystem as a function of networks , devices, application and content as well as adoption and utility. He then let his fellow bureau chiefs and panelists explain the guideline principle details and frameworks surrounding all of the issues.

In the following sections included as Premium Content, BroadbandBreakfast.com details the Universal Service Fund framework, infrastructure issues, spectrum policy, broadband adoption and utilization, and public safety issues for consideration in the national broadband plan. Premium Content below = 1,386 words.

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Universal Service Fund Framework

Short and medium term action to improve the performance of the current system include cutting inefficient spending in the high cost fund, removing barriers to E-Rate funded connections in schools and libraries, enabling school and libraries with dial-up to migrate towards broadband, and extending the deadline for the Rural Health Care Pilot Program and providing more administrative support to help the participants through the process. Long term transformations focused on shifting the support for broadband services; transforming the High Cost Fund to support specific broadband goals; integrating lifeline with other programs to promote adoption and digital literacy; permitting low income households to use Lifeline support for broadband; and design a new health program to expand affordable broadband connectivity

Infrastructure Principles and Framework

In order to promote additional infrastructure development the plan must include, required partnerships between state federal and local entities to create uniform rental rates for pole attachments and easier access to poles ducts, conduits and rights of way. Additionally, they must include timely and predictable dispute resolution strategies, creative opportunities to coordinate with other agencies and “dig once” for installing infrastructure.

Spectrum Policy Principles and Long Term Planning

To address the spectrum gap, there are three potential paths, said agency officials: find more productive uses of existing bands; make more bandwidth available for broadband services; and develop and deploy technologies to support such uses.

The FCC believes they should pursue all three simultaneously. In order to create more productive uses of existing bands the Commission can provide better transparency and incentives to encourage incumbents to use existing allocations more effectively by:

  • using assessment tools to document and expose current license usage information;
  • performing a periodic spectrum review based on a list of factors created by the FCC and the Commerce Department’s National Telecommunications and Information Administration with respect to specific bands;
  • utilizing spectrum fees and band clearing auctions to drive more effective market allocation; and
  • creating incentives for more efficient use of government owned spectrum.

In making more bandwidth available, the agency would like to consider: identifying new spectrum for licensed and unlicensed use including white spaces, resolve pending spectrum allocation use issues and exploring various proposals that have been submitted, including access to broadcast spectrum while maintaining over-the-air television, access to federal spectrum in conjunction with the NTIA and use of terrestrial operations in mobile satellite spectrum.

Historically, unlicensed spectrum has been home for many innovators. The agency listed a number of ways to require space and development of unlicensed spectrum to promote new devices and applications

The FCC’s Bill Lake introduced the section on TV settop boxes. He began by stating that the “TV is growing up and becoming an internet access device, as well as a place to watch broadcasters and content delivered by other video providers. If we can encourage that trend, the TV which is found in 99 percent of those homes can help to pull broadband into more homes as more applications evolve that take advantage of the converged capabilities.”

This process however would move faster if there was a competitive market for set-top boxes. CableCards have not been working, and cannot produce devices that can be ported if a consumer switches to another video provider. An alternative solution would be to mandate a home gateway device that will be required for all video programmers.

The FCC’s Brian David, addressed the issue of transparency through the consumer information gap and the need to encourage consumer choice. There is a 50 percent gap between advertised and actual speed. Service providers only attribute to part this problem while other issues develop in other parts of the network. In order to provide consumers with better information about actual performance of different services to incent competition and improved performance.

The commission should consider: measurement systems which allow consumers to see differences between average and advertised speeds, ratings systems so consumers or property owners can see relative performance of broadband in their facility, and a clearinghouse of broadband data that is searchable and open to direct consumer feedback.

Commissioner Michael Copps particularly applauded the work that the FCC has done in working with tribal lands. Deployment and adoption lags the U.S. average. First options to consider is how to improve data collection for the tribes, second, whether the plan can cost effectively solve more than one problem by finding ways to deploy fiber to anchor institutions in tribal lands, and finally the plan should consider creation of tribal federal broadband working group to address the tribal specific issues.

Adoption and Utilization

David continued by stating that policies should further local existing efforts for adoption and utilization but bring federal support efforts to the table. He also noted that the private sector also has a stake in increasing adoption. On a similar note accessibility is also a major issue.

There are over 54 million disabled Americans have some accessibility issue. Of these, 42 percent of them have adopted broadband but those with disabilities have unique barriers in terms of cost an usability. Brian continued that the plan should therefore: focus on built in accessibility and interoperability in devices, promote accessible web content and captioning, and promote best practices in training and customer support for dealing with consumers with disabilities.

Public Safety National Purpose

The one national purpose that the Commission addressed in more detail was Public Safety. The FCC’s Jennifer Manner stated that, in developing the plan surrounding public safety, the agency has been driven by three main goals.

First, it wants to improve first responder access to broadband communications; second, it wants to leverage broadband communications to improve pub safety communications; and third, it wants to ensure broadband networks are sound and secure. These goals will be used to create interoperable broadband public safety networks, next generation emergency 911 dialing, next generation alerting, protecting critical infrastructure and address other emergency preparedness issues.

Questions From the Commissioners

Once the broadband team finished their presentation most of the Commissioners withheld their questions. But not Commissioner Copps. He started off by asking the panel to elaborate on the mechanisms for monitoring the plan and implementing the plan.

Levin answered that other countries that have implements broadband plans have developed an ongoing process and there should be institutional policies in place to follow up and analyze the development of the plan. The process should not end when present the plan is presented.

Copps followed up with a question about an independent foundation to focus on adoption. Brian David noted that the idea behind such a foundation would be to create a non-profit foundation tasked with focusing on a minimum of broadband adoption. Whichever way it is created, its mandate would support local efforts with best practice toolkits, intelligence gathering and being a conduit for resources through public private partnership to be most effectively managed.

Chairman Julius Genachowski warned the attendees that while at some point the process feels like Blair Levin might be channeling Bill Murry in “Groundhog Day”: there is a point where all the information comes together and the team can then process all of the information they have been hearing over and over again and place it to good use.

Genachowski followed with Erik Garr’s comment that in crafting a plan we must be aspirational and practical in how we achieve them – aspirational because opportunities for the country could be immense, and practical because there are a number of hard truths that come with implementing such a plan.

Genachowski ended his remarks by focusing on the need to redirect USF to bring broadband services to all; and that to fully achieve a transformation of the USF, the agency must tackle contribution to the fund in a smart way.

Second, he commended the planning team on their work in the mobile broadband area and reminded the audience about the powerful evidence that the demand for mobile broadband spectrum will overcome supply if we do not come up with “more bandwidth for broadband.”

Finally, he lauded the cable industry for their introduction of their adoption plus program that would provide digital literacy discounted services and devices for children without access. Genachowski then also mentioned the bill, by Sen. Jay Rockefeller, D-W.V., to extend broadband on a pilot basis. He asked that all broadband providers take the initiative to “design affordable new offerings for low income households.”[/Private_Free Trial][/Private_Premium Content]

Universal Service Fund Needs Overhaul, and Most Want Broadband Included

in National Broadband Plan/Universal Service by

WASHINGTON, November 18, 2009 – The Universal Service Fund is in need of an overhaul to equalize costs among stakeholders and modernize programs to include broadband services, a group of industry representatives and regulators told the House Energy and Commerce subcommittee on Communications, Technology and the Internet during a Tuesday hearing.

The hearing examined a discussion draft of the Universal Service Reform Act of 2009, authored by subcommittee Chairman Rick Boucher, D-Va., and Rep. Lee Terry, R-Neb.

The Universal Service program, which existed for decades before being codified in the 1996 Telecommunications Act, is under “tremendous pressure” and requires a comprehensive effort to reform its operations, Boucher said during opening remarks.

Reform is needed because new technologies for long distance voice communications have reduced the available revenue that can be tapped to fund current programs, leading to soaring costs for consumers – a projected 14 percent of revenues in January of 2010, he said.

Such an increase and a maintenance of the status quo is simply “not sustainable,” Boucher said. The Boucher-Terry bill would cap the high cost portion of the fund while requiring wireless carriers who participate to do so through a competitive bidding process. Such legislative changes would include reporting requirements and auditing processes that critics of the fund say are long overdue.

Intrastate communications providers would also pay into the reformed fund under the Boucher-Terry bill, relieving pressure on long-distance carriers, and making the fund “sustainable,” Boucher said.

These changes would “bridge the divide” on USF issues between large carriers, which contribute more than they receive, and smaller carriers that receive more than they contribute under the current regime, he added.

And broadband services would finally be included in the list of services eligible for universal service subsidies. This move was applauded by Rep. Henry Waxman, D-Calif.

Waxman, who chairs the full committee, said USF reform must focus on how subsidies can contribute to broadband adoption. While 90 percent of households have access to broadband, Waxman lamented that adoption rates that have not kept pace with availability and have lagged beyond the national average among low-income households.

But ranking member Joe Barton, R-Texas, expressed skepticism that broadband should be considered a “civil right.” He said any addition of broadband into USF should be delayed until questions over definitions raised by the American Reinvestment and Recovery Act broadband grant programs have been settled.

State regulators strongly support the inclusion of broadband in any USF legislative effort, said Oregon Public Utility Commissioner Roy Baum. Baum, who chairs the telecommunications committee of the National Association of Regulatory Utility Commissioners, and who serves on the Federal Communication Commission’s Joint Board on Universal service, welcomed the Boucher-Terry bill.

“No one seriously disputes that reform of the existing mechanisms is long overdue,” Baum said.

Baum stressed the importance of incorporating broadband into USF. “Broadband deployment is of utmost importance to the economic productivity and quality of life of the entire country,” he said. Baum warned members that communities that lack broadband now will soon be as disadvantaged as those who lacked electricity in the first half of the 20th century. Inclusion of broadband in the discussion draft is a “major step forward,” Baum said.

Technological changes now warrant an overhaul of USF to focus around broadband where it once sought to deploy voice services, said National Cable and Telecommunications Association CEO Kyle McSlarrow. While McSlarrow acknowledged such a transition would entail “significant changes,” he recommended sweeping reforms to recognize the new reality, such as reducing the high cost program in areas where it is no longer required while ramping up programs to support broadband adoption in areas that lack access to such services.

Specially, McSlarrow reiterated NCTA’s support for including broadband in existing USF programs such as Lifeline and Link Up. “Expanding these programs to include access to broadband could help bring the benefits of broadband to low-income consumers,” he said.

Catherine Moyer, vice-chair of the Organization for Promotion of Small Telecommunications Companies, said OPASTCO “applauds” the inclusion of broadband in USF reform proposals, calling the draft a “forward looking move.” Such services are “rapidly becoming the mode of delivery for practically everything consumers may need or want regarding communications,” she said, including voice, data, education, health care and entertainment.

Support for broadband’s inclusion in USF reform was echoed by Joel Lubin, AT&T vice president for public policy services.

But Lubin cautioned against acting too quickly in light of the FCC’s forthcoming national broadband plan, due in just over three months. “Because the goals of the national broadband plan must include the availability of broadband services to every American within the near future, fundamental universal service reform is integrally related to the success of that plan,” he said. Legislative efforts must be “carefully calibrated” not to impede the FCC’s progress, he said.

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