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.
In Discussing ‘Broadband and the Biden Administration,’ Trump and Obama Transition Workers Praise Auctions
November 22, 2020 – In the event that the incoming administration of President-elect Joe Biden seeks substantial funding for broadband infrastructure, there is a strong likelihood that such monies would be channeled through a reverse-auction mechanism, said panelists at the Broadband Breakfast Live Online event on November 11.
See more from Broadband Breakfast Live Online, including “Broadband and the Biden Administration, Part II,” on December 2, 2020.
In a discussion with Broadband Breakfast Editor and Publisher Drew Clark, two broadband policy experts who served on the transition teams for Donald Trump and Barack Obama, respectively, championed the role of such a mechanism as efficient and fair.
Previous attempts to run funding through other selection processes provided funds only to the well connected, claimed to Mark Jamison, research and education director at the University of Florida, and who served on then President-elect Trump’s 2016 transition team.
Places with a Democratic governor or a congressman of either party that sat on a powerful committee were funded more often compared to other regions, Jamison said.
Whether or not funding mechanisms were in fact biased in that way, both Jamison and Technology Policy Institute President Scott Wallsten both praised the transparency and economic efficiency of the Federal Communications Commission’s reverse-auction funding mechanism.
Wallsten, an economist who was involved in the transition for then President-elect Obama, and who also served on the National Broadband Plan implemented in the first year of the Obama administration, criticized the Rural Utility Service and the old funding process of Universal Service Fund. Both said under these mechanism, a lot of money is spent without good information about how such funds are awarded or distributed.
Wallsten and Jamison agreed that more data would help make broadband funding more effective, they also said that the FCC was right to move forward with its Rural Digital Opportunity Fund auction on October 29 – part of the new auction-based approach to the Universal Service Fund – despite imperfect mapping.
In part, this was because any inadequacy of mapping data can be resolved in the challenge process, said Wallsten. Additionally, it is not clear that auctions like RDOF, or the Connect American Fund auction in 2018, would have yielded better results had the FCC waited to update their maps.
Jamison and Wallston also projected how the Biden administration might tackle net neutrality, Section 230 and antitrust regulation.
Jamison said that if the Biden administration reinstitutes net neutrality, it will quickly see that that won’t work very well.
Wallsten said that if it’s reinstituted the debate will be different than in the past. A large part of net neutrality is paid prioritization where third parties can pay ISP’s to put their content “at the front of the line.” He said that the pandemic has demonstrated why no paid prioritization may be a mistake, as many people need guarantees of stable connection for their schooling and telehealth applications.
Wallsten also noted that many made doom and gloom forecasts when the Trump administration FCC removed net neutrality protections in December 2017. None of those predictions came to pass, he said.
Both also agreed that the FCC should not be involved the regulation of Section 230 of the Communications Decency Act, which protects tech platforms from liability for user-generated comments.
They also were wary of changes to the consumer welfare standard governing antitrust because, said Jamison, “If you’re not regulating for consumers, who are we regulating for?”
See “Broadband Breakfast Live Online on Wednesday, November 11: Broadband and the Biden Administration,” Broadband Breakfast
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National Broadband Plan Has Held Up Well, With Notable Downsides, Say Authors
June 29, 2020 — The National Broadband Plan has been successful, despite notable downsides, said panelists in a Federal Communications Bar Association webinar on Friday.
The plan, first released ten years ago, aimed to increase competition, provide lower-cost service to more Americans and decrease regulatory barriers to broadband rollout.
“Ten years in this space in terms of technology is remarkable,” said Rebekah Goodheart of Jenner & Block. “At the time only 15 percent of people had access… of 25 megabits… The fact that this plan was able to stand up through time shows how visionary it really was.”
“All the stuff that we’re taking for granted now are things that came out of recommendations from the plan,” she added.
Participants noted that, despite broadband access deficiencies amid the coronavirus, “overall broadband adoption rates [are] going up reasonably well right now,” said John Horrigan, Senior Fellow at the Technology Policy Institute.
But there are still significant barriers to unfettered telework capabilities, he said.
“We’re also waking up to the fact that smartphones, as useful as they are, have significant limitations for completing homework,” he said.
Ruth Milkman of Quadra Partners agreed.
“There’s a lot of stuff you can’t do on a smartphone,” she said. “It’s hard to read papers… and there are data caps, and it can be quite expensive if you try to use it in the same way that you would use a fixed wireline network.”
Blair Levin, non-resident Fellow at the Metropolitan Policy Project of the Brookings Institution, said that sections of the National Broadband Plan held up remarkably well, even ten years later.
“In the healthcare section which says, ‘We really need to utilize telehealth because someday there’ll be a pandemic’… it does look very prophetic,” he said.
Despite the proactivity of the policy, Levin said, it has certain shortcomings that the FCC should address.
“We’ve become much more aware in this society of different ways in which our institutions do not include everyone and lead to inequalities,” he said. “I would argue that absolutely needs to be a new plan… now it’s more important than ever because we recognize the importance of closing that digital divide.”
Authors of the 2010 National Broadband Plan Say That a ‘Refresh’ Should Not Only Be Up to FCC
WASHINGTON, March 4, 2020 – Panelists at the INCOMPAS policy summit Tuesday looked back with fondness on the Federal Communication Commission’s National Broadband Plan that was released 10 years ago this month. They agreed that if the plan is refreshed, the FCC should not be the lone agency to lead in the changes.
The 10-year-old plan was designed to “ensure robust competition” and “maximize the benefits of broadband,” while fostering the spread of broadband across the country, said INCOMPAS General Counsel Angie Kronenberg.
New Street Research Policy Analyst Blair Levin, who led the plan’s development, called it a “three-act play.”
The first act was the hiring people. The second act was holding hearings and acquiring data. The third act was an extensive writing process, Levin said.
When asked how the United States is doing in regards to the plan, Levin said there have been great improvements and some complications.
Mattey Consulting Principal Carol Mattey who worked on the plan, said it was a “long and evolutionary process,” that often required “nitty gritty details” from complex concepts.
Technology Policy Institute Senior Fellow John Horrigan, who also worked on the plan, said that while the statistics do not show a large increase in Americans that have wireline broadband at home, smart phones and mobile devices have made a huge difference.
Even so, Horrigan admitted that for children who have to do homework at home, smart phones are not enough.
However, Horrigan said the way that policy makers understand and think about the digital divide has improved.
A decade ago, city mayors were not concerned about digital inclusion, and now that has changed, said Horrigan.
Levin disclosed his frustration with the “metrics” section of the plan. The availability of bandwidth should not hinder economic growth, said Levin. But, “fundamentally we’ve made progress,” Levin admitted.
“The regulatory process is too slow to catch up,” and legislators are hesitant to look so far in the future while also considering cost concerns, said Mattey.
Looking ahead to a possible refresh of the plan, Horrigan said the FCC should not be the sole organization reworking the document.
Levin agreed and added that broadband has changed over the past decade as well. He called broadband a “mixed bag.”
The whole federal government should be thinking about how to revive the plan and take into consideration cybersecurity and privacy, Levin advised.
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