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Broadband's Impact

FCC Issues Notice of Inquiry Regarding Broadband Regulation and Industry Offers a Mixed Response

WASHINGTON, June 18, 2010 –Yesterday the Federal Communications Commission met to consider putting out a Notice of Inquiry on how they should regulate broadband. After the recent Comcast decision the FCC’s ability to regulate broadband was put into question. After looking at the various issues FCC’s counsel came to the conclusion that there were 2 possible methods of regulating either as an information service under Title I or as a Telecommunications service under Title II. The chairmen however did not feel that Title I gave the commission enough authority; while Title II put too much regulation on ISPs; to solve this he created his Third Way proposal.

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WASHINGTON, June 18, 2010  – Yesterday the Federal Communications Commission met to consider putting out a Notice of Inquiry on how they should regulate broadband. After the recent Comcast decision the FCC’s ability to regulate broadband was put into question. After looking at the various issues FCC’s counsel came to the conclusion that there were 2 possible methods of regulating either as an information service under Title I or as a Telecommunications service under Title II. The chairmen however did not feel that Title I gave the commission enough authority; while Title II put too much regulation on ISPs; to solve this he created his Third Way proposal.

Under the Third Way ISPs would only be subject to a limited number Title II provisions. The NOI explains the Third Way as “ (i) reaffirm that Internet information services should remain generally unregulated; (ii) identify the Internet connectivity service that is offered as part of wired broadband Internet service (and only this connectivity service) as a telecommunications service; and (iii) forbear under section 10 of the Communications Act from applying all provisions of Title II other than the small number that are needed to implement the fundamental universal service, competition and small business opportunity, and consumer protection policies that have received broad support. “

The NOI seeks comment on how the FCC should proceed, whether they should stick to Title I, reclassify as Title II or proceed with the Third Way proposal. Additionally they seek comment to determine how they should proceed with Universal Service under Title I regulation “Can the Commission reform its universal service program to support broadband Internet service by asserting direct authority under section 254, combined with ancillary authority under Title I?”

They also would like comments on how they can provide support for disabled individuals, privacy issues, public safety and how they can address any future harms caused by ISPs.

The NOI was passed with a vote of 3-2; with Commissioners Baker and McDowell dissenting.

Commissioner Copps voiced the strongest support for the reclassification. He felt that using Title I regulation would be too light and the commission would spend years in court trying to support its position. “Down this path would be years and years of dead-end delays, years without the most elemental public interest safeguards for broadband, and years of agency paralysis.  It would be death by a thousand cuts.” He then went on to describe how back in 2002 he dissented to the change in reclassification of cable modems to Title I.

In response to those who claim that broadband services should not be regulated, Copps stated:  “I, for one, am worried about relying only on the good will of a few powerful companies to achieve this country’s broadband hopes and dreams.  We see what price can be paid when critical industries operate with unfettered control and without reasonable and meaningful oversight.  Look no further than the banking industry’s role in precipitating the recent financial meltdown or turn on your TV and watch what is taking place right now in the Gulf of Mexico.”

Copps then went on to describe how the rest of the world is lapping the US in broadband speed and availability while the US is stuck arguing these basic issues.

Copps also warned the commission about the PR campaign being waged about the issue, “So beware of all the slick PR you hear, and remember that much of it is coming from lavishly-funded corporate interests whose latest idea of a “triple play” is this: (1) slash the FCC’s broadband authority; (2) gut the National Broadband Plan; and (3) kill the open Internet.”

Commissioner McDowell opposed the NOI claiming that by merely issuing the notice the investment community would stop providing capitol to ISPS due to the high level of uncertainty. He then went on to claim that Title II regulation is unnecessary; and that the Comcast decision does not create any new paradigm. “The Comcast decision certainly does not affect our ability to reallocate spectrum, one of the central pillars of the Plan.  Nor does the decision undermine our authority to reform our Universal Service program, the other major component of the Plan.  In the unlikely event that a court decided against granting us Chevron deference in the pursuit of directly supporting broadband with Universal Service distributions, the FCC could tie future subsidies to broadband deployment.”

McDowell then went on to state that the FCC does not have the authority to reclassify and that only Congress can reclassify. He then pointed out that “a large bipartisan majority of Congress – consisting of at least 291 Members – has weighed in asking the Commission to discard this idea or at least to wait for Congress to act.  In other words, a commanding majority of the directly elected representatives of the American people do not want the FCC to try to regulate broadband Internet access as a monopoly phone service.”

Commissioner Clyburn supported the NOI with a brief statement which defended the authority of the FCC.  She then refuted the claims made by Commissioner McDowell by saying: notable telecommunications analysts at firms such as Bank of America Merrill Lynch, UBS, and Goldman Sachs have each asserted that the public reaction by industry to the Chairman’s proposal is overblown.  In fact, they believe the current landscape presents a tremendous buying opportunity.  As one well-regarded analyst stated: [T]he FCC’s “Third Way” reclassification largely keeps the status quo intact, with key points being: 1) no rate regulation, 2) no unbundling, to require Cable to share its networks, 3) the forbearance is difficult to overturn, 4) no inconsistent state regulation, [(5)] provides no competitive advantage to DBS or Telco vs. Cable and [(6)] Wireless has a similar “Third Way” reclassification, which has not negatively impacted the business model.”

Clyburn then echoed Copps statement regarding the PR campaign being waged, stating that investors are more fearful of the PR than the actions taken by the FCC.

Commissioner Baker’s statement of dissent reiterated the points she made last week while addressing the Broadband Policy Summit. She felt that the Comcast decision did change the way the FCC could regulate broadband and reiterated the comments made by McDowell that the NOI will create too much uncertainty which will decrease overall investment.

Baker then went on to oppose the Third way by saying “I reject the effort to re-brand a Title II classification with forbearance as a middle ground, it is not.  There will be time to address all of the legal and factual infirmities of a Title II approach for broadband, and its adverse impact on capital markets, consumer welfare, and international regulatory norms.”

The chairmen made the final statement of support for the NOI reiterating many of the points he has made before and brought up the fact that the chairs of the Senate and House committees which oversee telecommunications, Senators Rockefeller, Kerry, and Representative Waxman, and Boucher have all publically supported the actions being taken by the FCC.

He then went on to say that he supported the possible updating of the communications act, “I fully support this Congressional effort.   A limited update of the Communications Act could lock in an effective broadband framework to promote investment and innovation, foster competition, and empower consumers.  I commit all available FCC resources to assisting Congress in its consideration of how to improve and clarify our communications laws.”

The response to this NOI is mixed, the National Cable & Telecommunications Association, which represents the cable industry, opposed the regulation by saying “As we revisit this question with the start of today’s inquiry, we see little benefit to changing course and great danger in attempting to shoehorn modern broadband services into a Depression-era regulatory regime without serious collateral effects to investment, employment, and innovation.”

The Small Business & Entrepreneurship Council criticized the proposal by stating “”Today’s vote opens the door to a future where government dictates the price and operational models on broadband providers.  Such regulation will severely limit small business choices, raise prices, deter broadband deployment and hurt our innovative capacity.”

The commission did receive support from the Center for Democracy and Technology, “It is also crucial for the FCC to recognize limits to its authority,” said CDT Senior Policy Counsel David Sohn.  “The agency needs to expressly refute and disprove the common rhetorical claim that its efforts here amount to an attempt to ‘regulate the Internet,'” Sohn said.  “The ‘Third Way’ option outlined today can offer a sound path forward from both a policy and a legal perspective.”

Public Knowledge also supported the actions, with Gigi Sohn saying ““The Commission’s simple, uncomplicated action today of makes certain that the expert agency in telecommunications has the authority to carry out its mission.  The Commission has been attacked unmercifully by multi-billion dollar companies using threats, intimidation and fabrications, among other distasteful tactics.  They have used captive or unwitting legislators, in the face if common sense, to further their corporate goals at the expense of millions of Americans.”

The President of the CTIA Wireless Association released the following statement “We are disappointed that the Commission continues to consider the application of monopoly-era rules for the U.S. mobile broadband ecosystem.  Despite the fact the FCC has heard from more than half of the elected officials in Congress that this approach is wrong, the Commission has chosen to ignore this diverse and bi-partisan group of Senators and Representatives from around the country.  Instead, the Commission’s action is a dangerous solution in search of a non-existent problem.”

Dish Network offered a statement of support “DISH Network applauds the Commission’s decision to release a Notice of Inquiry on the ‘Third Way’ legal approach. We strongly support Chairman Genachowski’s leadership in moving this critical process forward,” said Charlie Ergen, Chairman, President and CEO of DISH Network. “A sound legal framework is absolutely necessary to preserve a free and open Internet and encourage innovation and investment.”

Unsurprisingly Tom Tauke, Verizon executive vice president for public affairs, policy and communications opposed the NOI and released the following statement. “Reclassifying high-speed broadband Internet service as a telecom service is a terrible idea. The negative consequences for online users and the Internet ecosystem would be severe and have ramifications for decades. It is difficult to understand why the FCC continues to consider this option.”

Digital Inclusion

Doug Lodder: How to Prevent the Economic Climate from Worsening the Digital Divide

There are government programs created to shrink the digital divide, but not many Americans know what’s out there.

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The author of this Expert Opinion is Doug Lodder, president of TruConnect

From gas to groceries to rent, prices are rocketing faster than they have in decades. This leaves many American families without the means to pay for essentials, including cellphone and internet services. In fact, the Center on Poverty and Social Policy reports that poverty rates have been steadily climbing since March. We’re talking about millions of people at risk of being left behind in the gulf between those who have access to connectivity and those who don’t.

We must not allow this digital divide to grow in the wake of the current economic climate. There is so much more at stake here than simply access to the internet or owning a smartphone.

What’s at stake if the digital divide worsens

Our reliance on connectivity has been growing steadily for years, and the pandemic only accelerated our dependence. Having a cell phone or internet access are no longer luxuries, they are vital necessities.

When a low-income American doesn’t have access to connectivity, they are put at an even greater disadvantage. They are limited in their ability to seek and apply for a job, they don’t have the option of convenient and cost-effective telehealth, opportunities for education shrink, and accessing social programs becomes more difficult. I haven’t even mentioned the social benefits that connectivity gives us humans—it’s natural to want to call our friends and families, and for many, necessary to share news or updates. The loss or absence of connectivity can easily create a snowball effect, compounding challenges for low-income Americans.

The stakes are certainly high. Thankfully, there are government programs created to shrink the digital divide. The challenge is that not many Americans know what’s out there.

What can be done to improve it

In the 1980s, the Reagan administration created the federal Lifeline program to subsidize phones and bring them into every household. The program has since evolved to include mobile and broadband services.

More than 34 million low-income Americans are eligible for subsidized cell phones and internet access through the Lifeline program. Unfortunately, only 1 in 5 eligible people are taking advantage of the program because most qualified Americans don’t even know the program exists.

The situation is similar with the FCC’s Affordable Connectivity Program, another federal government program aimed at bringing connectivity to low-income Americans. Through ACP, qualifying households can get connected by answering a few simple questions and submitting eligibility documents.

Experts estimate that 48 million households—or nearly 40% of households in the country—qualify for the ACP. But, just like Lifeline, too few Americans are taking advantage of the program.

So, what can be done to increase the use of these programs and close the digital divide?

Our vision of true digital equity is where every American is connected through a diverse network of solutions. This means we can’t rely solely on fixed terrestrial. According to research from Pew, 27% of people earning less than $30,000 a year did not have home broadband and relied on smartphones for connectivity. Another benefit of mobile connectivity—more Americans have access to it. FCC data shows that 99.9% of Americans live in an LTE coverage area, whereas only 94% of the country has access to fixed terrestrial broadband where they live.

Additionally, we need more local communities to get behind these programs and proactively market them. We should see ads plastered across billboards and buses in the most impacted areas. Companies like ours, which provide services subsidized through Lifeline and ACP, market and promote the programs, but we’re limited in our reach. It’s imperative that local communities and their governments invest more resources to promote Lifeline, ACP and other connectivity programs.

While there’s no panacea for the problem at hand, it is imperative that we all do our part, especially as the economic climate threatens to grow the digital divide. The fate of millions of Americans is at stake.

Doug Lodder in President of TruConnect, a mobile provider that offers eligible consumers unlimited talk, text, and data, a free Android smartphone, free shipping, and access to over 10 million Wi-Fi hotspots; free international calling to Mexico, Canada, South Korea, China and Vietnam; plus an option to purchase tablets at $10.01. This piece is exclusive to Broadband Breakfast.

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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Broadband's Impact

Senate Bill Subsidizing U.S. Semiconductor Production Clears House, Going to White House

Bill aims to strengthen American self-reliance in semiconductor chip production and international competition.

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Photo of Sen. John Hickenlooper, D-Colorado, during Tuesday's press conference

WASHINGTON, July 29, 2022 – A $54 billion bill to subsidize U.S-made semiconductor chips passed the House Thursday on a 243-187, and moves to President Biden for his expected signature.

Dubbed the CHIPS Act for Creating Helpful Incentives to Produce Semiconductors Act for America Fund, the measure is expected to incentivize domestic semiconductor manufacturing and also provide grants for the design and deploying of wireless 5G networks. It also includes a $24 billion fund to create a 25 percent tax credit for new semiconductor manufacturing facilities.

Advocates of the measure say that it will also improve U.S. supply chain, grow U.S. domestic workforce, and enable the U.S. to compete internationally to combat national security emergencies.

The measure passed the Senate Wednesday on a 64-33 vote.

Congressional supporters tout benefits

House Energy and Commerce Committee Chairman Frank Pallone, D-N.J., voiced his support on the House floor, calling it “a win for our global competitiveness.”

The CHIPS Act of 2022 provides a five-year investment in public research and development, and establishes new technology hubs across the country.

Of the funds, $14 billion goes to upgrade national labs, and $9 billion goes to the National Institute of Standards and Technology research, of which $2 billion goes to support manufacturing partnerships, and with $200 million going to train the domestic workforce.

In a virtual press conference on Tuesday, Colorado Democratic Sen. Michael Bennett said that America’s semiconductor industry has lost ground to foreign competitors. “Today, only 12% of chips are manufactured in the United States, down from 37% in the 1990s.”

He said relying on cheaper products produced in China and overseas for so long, it has caught up with the United States.

Bennet suggested to move manufacturing labs to Colorado, where it can support it due to the plenty of jobs in aerospace and facility and infrastructure space.

“We don’t want the Chinese setting the standard for telecommunications. America needs to lead that. This bill puts us in the position to be a world leader,” said Bennet. “We are at a huge national security disadvantage if we don’t do this.”

Sen. John Hickenlooper, D-Colorado, joined his Rocky Mountain state colleague in support: “There is a real sense of urgency here to compete not only to re-establish the U.S. to make their own chips, but to compete internationally.”

He said that semiconductor chips are vital to almost every business and product, including phones, watches, refrigerators, cars, and laptops. “I’m not sure if I can think of a business that isn’t dependent on chips at this point.”\

“This is a space race,” he said. “We cannot afford to fall behind.”

Industry supporters say measure is necessary

The U.S. has lost ground to foreign competitors in scientific R&D and in supply chain industry during a recent semiconductor crisis, said France Córdova, president of the Science Philanthropy Alliance, at a U.S. Chamber of Commerce Foundation event on July 19. The U.S. only ranks sixth best among other prominent countries in the world for research and development, she said.

“The CHIPS Act of 2022 and FABS Act are critical investments to even the global playing field for U.S. companies, and strategically important for our economic and national national security,” said Ganesh Moorthy, president and CEO of Microchip Technology Inc.

Bide expected to sign measure

With the Biden’s Administration’s focus to tackle the semiconductor shortage and supply chain crisis through the Executive Order made in February, the Biden administration has been bullish on the passage of the CHIPS Act, in a Wednesday statement:

“It will accelerate the manufacturing of semiconductors in America, lowering prices on everything from cars to dishwashers.  It also will create jobs – good-paying jobs right here in the United States.  It will mean more resilient American supply chains, so we are never so reliant on foreign countries for the critical technologies that we need for American consumers and national security,” said Biden.

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Health

Providers Call for More FCC Telehealth Funding as Demand Grows

‘I think obtaining funding from the Universal Service Fund would go a long way.’

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Photo of FCC Chairwoman Jessica Rosenworcel

WASHINGTON, July 26, 2022 – Health care providers in parts of America say they are struggling to deliver telehealth due to a lack of broadband connectivity in underserved communities, and recommended there be more funding from the Federal Communications Commission.

While the FCC has a $200-million COVID-19 Telehealth program, which emerged from the Coronavirus Aid, Relief and Economic Security (CARES) Act, some providers say more money is needed as demand for telehealth services increases.

“The need for broadband connectivity in underserved communities exceeds current availability,” said Jennifer Stoll from the Oregon Community Health Information Network.

The OCHIN was one of the largest recipients of the FCC’s Rural Health Care Pilot program in 2009. Stoll advocated for the need for more funding with the non-profit SHLB Coalition during the event last week. Panelists didn’t specify how much more funding is needed.

Stoll noted that moving forward, states need sustainable funding in this sector. “I am hoping Congress will be mindful of telehealth,” said Stoll.

“The need for telehealth and other virtual modalities will continue to grow in rural and underserved communities,” she added.

Brian Scarpelli, senior global policy counsel at ACT, the App Association, echoed the call for FCC funding from the Universal Service Fund, which subsidizes basic telecommunications services to rural areas and low-income Americans. “I think obtaining funding from the Universal Service Fund would go a long way.”

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