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Congress, Industry Execs Agree on Broadband in Revamped Universal Service Fund

WASHINGTON, March 12, 2009 -The Obama administration’s priority in broadband deployment injected an undercurrent of excitement into a Thursday hearing of the House Energy and Commerce Subcommittee on Technology, Communications, Technology and the Internet.

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WASHINGTON, March 12, 2009 – The Obama administration’s priority in broadband deployment injected an undercurrent of excitement into a Thursday hearing of the House Energy and Commerce Subcommittee on Communications, Technology, the Internet.

While the hearing was scheduled to be focused on reforming the universal service fund high-cost program, both members and witness spent much of the hearing debating how best to use the fund to deploy broadband internet access to all Americans.

“Broadband has emerged as a critical part of our telecommunications infrastructure,” said Chairman Rick Boucher, D-Va. “New funding sources must be tapped” in order to bring access to unserved areas, he said.

“Broadband is to communications today what electricity and telephone service were 100 years ago,” Boucher said. And while he acknowledged the impact of $7.2 billion in stimulus funding for broadband was a subject for debate, Boucher reiterated his view that broadband is “clearly deserving…of universal service fund support.”

But Ranking Member Cliff Stearns, R-Fla., said the stimulus plans made expansion of the fund irrelevant. Instead of expanding the USF, Stearns suggested examining the successes and failures of the stimulus program while it is implemented.

Congress should focus efforts on reducing waste and fraud in current USF programs and adding a cap prevent more “uncontrolled growth” of the fund, Stearns said.

“Throwing money at this crumbling program makes no sense,” he said. Instead of more subsides, Stearns suggested using “market-based, technology-neutral systems” to encourage broadband deployment.

Industry leaders were in agreement on Boucher’s plan for expanding the USF to include broadband service. “The core principle of competitive telecommunications for every American remains an important and worthy goal,” said U.S. Cellular Chairman LeRoy Carlson. “[T]he proper role of [the USF] must be to ensure that [rural] areas have modern, high quality telecommunications infrastructure” that is both feature and price comparable with their urban and suburban counterparts, he said.”

Broadband and mobile wireless services are two ‘must-have’ functionalities consumers expect and demand for home and business, Carlson declared,” whether they live in urban or rural areas. “I believe a reformed program can effectively…address those problems, and if tailored correctly, can even be complimented by leveraging the [broadband stimulus funds],” he said.

“A central goal of this program must be to provide rural citizens with access to high quality mobile voice and broadband services, everywhere that people live, work and travel,” said Carlson.

Verizon executive vice president Tom Tauke told the subcommittee he believes that consumers, industry and policymakers agree that modern and affordable communications services are “a prerequisite for economic growth, and an essential platform to address major social challenges.”

But the high-cost fund “remains focused on yesteryear’s technology,” Tauke said. “Attempts to fit new technologies into a telecom framework.” This process has not allowed the fund to meet its “fundamental objective: providing universal service.”

Qwest Communications Executive Vice President Robert Davis agreed for the need to reform the fund to allow for new technologies. “The grants for broadband deployment that will be provided by the [stimulus program] are a start,” he said, “but no one believes that this money will result in ubiquitous deployment of [broadband] to currently underserved areas.” There remains a crucial role for universal service funding,” David declared.

Adopting broadband as part of universal service would also resolve questions on how to stop what some lawmakers described as “runaway” increases in USF fees. AT&T vice president Joel Lubin suggested that moving from charging consumers based on a portion of their bill to a per-number charge.

While Lubin acknowledged revenues paid into the fund from telephone network access charges might temporarily decrease under such a plan, he predicted that the drop would be inevitable as more Americans move to voice over internet protocol (VoIP) services.

The increasing number of phone numbers used by consumers in next-generation technologies such as mobile phones, VoIP lines, and multi-line business systems would more than make up for the temporary drop, Lubin said.

“Broadband is a disruptive technology that redefines the game,” Lubin said. “Local calling areas are now the whole world.” A broadband based USF program would eliminate access charges while providing “more capability, without the complexity of old narrowband pipes”

Free Press research director Derek Turner noted both “critics and defenders of the high-cost fund all agree that broadband is the essential communications infrastructure of the 21st Century.” When USF was created in 1996, “internet access was an application that used telephony as an infrastructure,” he said.

By contrast, Turner said in today’s world, “telephony is one of the many applications that are supported by broadband infrastructure.” And while the FCC can take steps to modernize the USF regulatory structure, Turner emphasized that “meaningful and lasting reform” can come only from congressional action. “Achieving this goal…will require the complete upending of the status quo and direct confrontation of difficult and politically challenging choices,” he said.

When Boucher asked the panel if the law should explicitly allow USF to cover broadband, there was no disagreement that the 1996 Telecommunications Act should be changed to allow USF funding to explicitly cover broadband services.

But there was some disagreement over whether a “USF 2.0,” as one witness put it, should be limited to wireline services only. While Davis said a program should be “technology neutral” once speed and price targets had been determined, Carlson said that both were equally important – and that wireline and wireless could be subjected to different speed requirements.

And while Turner acknowledged wireless could have a role in reducing costs, he wasn’t convinced. “I’m not sure if checking Facebook while driving at 70 miles per hour is [needed in USF programs]. But Tauke pointed out that fixed and mobile wireless have different use cases and potentials. Rep. John Shadegg, R-Ariz., agreed, calling the two technologies “a different ballgame.”

The Federal Communications Commission is currently accepting comments on a proposal to expand the USF-funded Life Line and Link Up programs to include broadband services. In response to a question from Rep. G.K. Butterfield, D-N.C., Tauke said he didn’t support the proposal in its current form.

Tauke later said in an interview that Verizon believes it is important for all Americans to have access to broadband and that USF should be included, but he could not offer specific alternatives to the Life Line/Link Up proposal except to suggest the program be technology-neutral.

And while AT&T’s Lubin was wary of subsidizing access devices, he agreed that the choice of wired or wireline service, even under Life Line/Link Up, should be “in the mind of the consumer.”

The Life Line/Link Up proposal was endorsed by the National Association of Regulatory Utility Commissioners at its winter 2009 meeting last month.

Andrew Feinberg is the White House Correspondent and Managing Editor for Breakfast Media. He rejoined BroadbandBreakfast.com in late 2016 after working as a staff writer at The Hill and as a freelance writer. He worked at BroadbandBreakfast.com from its founding in 2008 to 2010, first as a Reporter and then as Deputy Editor. He also covered the White House for Russia's Sputnik News from the beginning of the Trump Administration until he was let go for refusing to use White House press briefings to promote conspiracy theories, and later documented the experience in a story which set off a chain of events leading to Sputnik being forced to register under the Foreign Agents Registration Act. Andrew's work has appeared in such publications as The Hill, Politico, Communications Daily, Washington Internet Daily, Washington Business Journal, The Sentinel Newspapers, FastCompany.TV, Mashable, and Silicon Angle.

Expert Opinion

Adrianne Furniss: Lifeline Needs A Lifeline

The FCC should hit the pause button on a current plan to zero out support for voice-only services.

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The author of this Expert Opinion is Adrianne Furniss, Executive Director of the Benton Institute for Broadband and Society

In less than three months, nearly 800,000 low-income people who receive telephone subsidies through the Universal Service Fund’s Lifeline program will be negatively impacted by changes scheduled to go into effect at the Federal Communications Commission on December 1. That is one of the most troubling — and pressing — conclusions of an independent evaluation of the FCC’s Lifeline program conducted by Grant Thornton. As the COVID-19 pandemic rages on, the FCC must act now to ensure people can retain essential communications services.

As of June 20, 2021, approximately 6.9 million subscribers were enrolled in the Lifeline program; most (approximately 94 percent) are enrolled in supported wireless plans. Voice service remains a desired service for both Lifeline subscribers and the general American consumer. Only 1 percent of surveyed American adults live in a home with neither fixed nor mobile voice service, and mobile-only voice subscribers comprise more than 60 percent of U.S. households.

In 2016, the FCC adopted a comprehensive reform and modernization of the Lifeline program. For the first time, the FCC included broadband as a supported service in the program. Lifeline program rules allowed support for stand-alone mobile (think cell phone) or fixed broadband Internet access service (think home broadband service delivered over a wire), as well as bundles including fixed or mobile voice and broadband. The 2016 decision also set in motion a plan to zero-out support for voice-only services.

In its February 2021 report, Thornton found that the phase-down and ultimate phase-out of voice services by December 1, 2021 may negatively impact 797,454 Lifeline consumers (that’s over 10 percent of all Lifeline enrollees) who use voice-only services for fundamental needs. So that’s nearly 800,000 households that could face being disconnected from phone service this winter.

The FCC needs to change course and help more Americans keep connected to communications services that are essential to navigate the ongoing public health and economic crisis.

And it needs to act before December 1.

Most importantly, the FCC should act swiftly and hit the pause button on the 2016 plan to zero-out support for voice-only services. During the pandemic, the stakes are just too high for anyone to be disconnected from essential communications networks.

Then the FCC should launch a new effort to reform and further modernize the Lifeline program, informed by what we’ve witnessed during COVID, and the findings in Thornton’s and the FCC’s own recent review of the Lifeline program.

First, Lifeline needs to have foundational governance documents—such as strategic plans, performance objectives, and an integrated communications plan—to assist in the longitudinal success and guidance of the program.

Second, the FCC has to consider raising Lifeline’s monthly subsidy, $9.25, so it can make more meaningful services affordable for low-income families. Home-broadband prices (both for fixed and wireless service) remain disproportionately high when compared to the Lifeline program subsidy. The FCC should evaluate minimum service standards in relation to the average cost of wireless, wireline, and broadband data plans and determine if the subsidy will cover all, or even the majority of costs to provide Lifeline services.

Third, the FCC must adopt changes in the program so it better benefits the people it was created to connect.

  • The FCC should seek to understand the composition of Lifeline households and what services various members need (i.e., school-aged children, telecommuters, etc.). The minimum services supported by Lifeline should address the needs of the entire household.
  • Just 25 percent of the people eligible to participate in the Lifeline program actually enroll. The FCC must understand why and should consider ways to improve awareness of the Lifeline program. One idea is to partner with other federal benefit programs, and the state agencies that administer those programs, to not only increase outreach about Lifeline, but ideally to integrate Lifeline’s application processes into those program applications.
  • The FCC should adopt program rules that incorporate Lifeline consumer feedback to ensure the program works for the most vulnerable people in society.

Fourth, changes in the Lifeline program should encourage all telecommunications and broadband service providers to compete to serve low-income households in their service areas.

Finally, the FCC should also consider revising its measure of affordability of broadband for low-income consumers. Currently, the FCC considers “affordable service” as 2 percent of disposable income of those below 135 percent of the federal poverty level. Instead, the FCC should consider affordability in the context of a subscriber’s purchasing power in a geographic location and balanced with availability of services and choice of providers. The FCC should evaluate the pricing packages of voice and broadband services offered by Lifeline carriers and provide assurance that packages offered are in the reasonable standard of affordability for low-income consumers. And the FCC should institute a structured process to regularly review the Lifeline program’s pricing packages and incorporate measures of both the subsidy rate and service standards for similar programs (like the Emergency Broadband Benefit), income statistics of current consumers, and the percentage of Lifeline subscribers who pay out of pocket for services.

The commitment to connecting people with low incomes to essential communications services is not new. But the past 18 months have offered stark reminders of the importance of universal service. We need the FCC to act now to keep everyone connected. And we need the FCC to update the Lifeline program so everyone can rely on a basic level of connectivity no matter how much income they have.

Adrianne Furniss is the Executive Director of the Benton Institute for Broadband and Society. She manages the institute’s staff and relationships with Benton experts, partners, and supporters in service to Benton’s mission and in consultation with Benton’s Trustees and Board of Directors. Previously, she held management positions at both non-profit and for-profit content creation companies, focused on program development, marketing, and distribution. This piece was originally published in the Benton Institute’s Digital Beat, and is reprinted with permission. © Benton Institute for Broadband & Society 2021. Redistribution of this publication – both internally and externally – is encouraged if it includes this copyright statement.

Broadband Breakfast accepts commentary from informed observers of the broadband scene. Please send pieces to commentary@breakfast.media. The views expressed in Expert Opinion pieces do not necessarily reflect the views of Broadband Breakfast and Breakfast Media LLC.

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Universal Service

Experts Concerned About Connectivity After Emergency Broadband Benefit Fund Runs Dry

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Screenshot taken from CCA event

April 1, 2021 – Experts are concerns about the long-term implications of the $3.2-billion Emergency Broadband Benefit program (EBB) running out of money without a plan for what happens after.

The fund, created by Congress in December, provides up to $50 in a monthly internet discount for families and $75 for tribal lands to access broadband internet. The fund will cease when all the money is used up or within six months, whichever happens sooner.

Clare Liedquist Andonov, principal at Herman and Whiteaker, LLC, said Wednesday during the CCA mobile carriers show that if all people on Lifeline — an older FCC program that provides monthly discounts for eligible low-income subscribers for internet and telephone services – subscribe to the fund, the money will “be exhausted within about four months.”

John Nakahata, partner at Harris, Wiltshire and Grannis LLP, said both the EBB and Emergency Connectivity programs are simply short-term stimulus plans that are not designed to last long.

Andonov said she is concerned about what happens after such funding ceases to exist. “What happens after four months?” she asked. “Do you disconnect those people?” She said the infrastructure built to connect people online in the first place would go to waste if the EBB program ceased operations in a matter of months, alongside the administrative costs to run the program.

To combat the expenditure of EBB funding in the mere four months projected by Andonov, Senator Amy Klobuchar, D-MN), co-chair of the Senate Broadband Caucus, and House Majority Whip James Clyburn, D-SC, introduced comprehensive bicameral broadband infrastructure legislation on March 12 to expand access to affordable high-speed internet for all Americans.

“In 2021, we should be able to bring high-speed internet to every family in America — regardless of their zip code,” said a press release from Klobuchar’s office. “This legislation will help bridge the digital divide once and for all.” If passed, Cole said it would allow the EBB program to last for an entire year; but even then, one year is not enough, they say, as broadband should be accessible for people indefinitely.

To address this challenge, there is some $100 billion set for recently-introduced broadband infrastructure bills being considered in Congress. That money is spread between three bills that would change the nation’s definition of served and unserved people with broadband by dramatically upping the threshold for broadband speeds.

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Education

Sen. Ed Markey Celebrates Telecom Act as Telecom Lawyers Tell Congress to Be Specific

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Photo of Sen. Ed Markey by NASA

February 2, 2021 – Democratic Sen. Ed Markey’s communications policy focus this Congress will be on net neutrality, children and climate change, the long-serving Massachusetts lawmaker said at a Federal Communications Bar Association event Tuesday to celebrate the 25th anniversary of the Telecommunications Act.

Reminiscing on the 1996 landmark legislation during his keynote, Markey focused on broadband accessibility and affordability, especially for children. He praised the Federal Communications Commission’s E-rate program, which subsidizes broadband access for schools and libraries.

But Markey also linked broadband to concern about climate change, highlighting the concern about how miles of broadband cable conceivably could be under the sea due to receding coastlines.

Most of all, he pushed on net neutrality. He said it was a major issue, and much-needed to prevent big companies from stifling smaller competition or consumers’ access to the internet.

Senator Markey’s remarks led into a panel discussion about the impact of the Telecommunications Act since it became law.

During that discussion, former FCC Commissioner Michael O’Rielly said that Congress needed to be more specific about what it does or doesn’t want the FCC to do. Too little specificity can lead the FCC to write bad rules that Congress doesn’t like.

John Nakahata, who worked for FCC Chairman Reed Hundt at time of the Telecom Act’s passage, agreed. Too much ambiguity by legislators has caused huge headaches for the FCC. For example, the very issue of net neutrality exists because of uncertainty about whether broadband should be classified as a Title II telecommunication service: It wasn’t, and then it was under former president Barack Obama, and then it wasn’t again.

O’Rielly said that more leeway was granted to the FCC in the past because Congress had faith in their ability to enact legislation. But legislators’ trust in the FCC has eroded.

Randolph May, president of the Free State Foundation, said that FCC regulation should look like antitrust law. He said it should be through incentives that competition is promoted, rather than through Title II regulation.

Former FCC chief of staff Ruth Milkman expressed desire to see funding for FCC programs, such as the E-rate program, used to maximum benefit where they are needed most.

The panelists agreed that legislation needs to address where technology is headed, rather than looking backward to solve past problems.

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