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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.”

Rahul Gaitonde has been writing for BroadbandBreakfast.com since the fall of 2009, and in May of 2010 he became Deputy Editor. He was a fellow at George Mason University’s Long Term Governance Project, a researcher at the International Center for Applied Studies in Information Technology and worked at the National Telecommunications and Information Administration. He holds a Masters of Public Policy from George Mason University, where his research focused on the economic and social benefits of broadband expansion. He has written extensively about Universal Service Fund reform, the Broadband Technology Opportunities Program and the Broadband Data Improvement Act

Health

FCC Proposes Notification Rules for 988 Suicide Hotline Lifeline Outages

The proposal would ensure providers give ‘timely and actionable information’ on 988 outages.

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Photo via Health and Human Services

WASHINGTON, January 26, 2023 – The Federal Communications Commission unanimously adopted a proposal to require operators of the 988 mental health crisis line to report outages, which would “hasten service restoration and enable officials to inform the public of alternate ways to contact the 988 Lifeline.”

The proposal would ensure providers give “timely and actionable information” on 988 outages that last at least 30 minutes to the Health and Human Services’s Substance Abuse and Mental Health Service Administration, the Department of Veteran Affairs, the 988 Lifeline administrator, and the FCC.

The commission is also asking for comment on whether cable, satellite, wireless, wireline and interconnected voice-over-internet protocol providers should also be subject to reporting and notification obligations for 988 outages.

Other questions from the commission include costs and benefits of the proposal and timelines for compliance, it said.

The proposal would align with similar outage protocols that potentially affect 911, the commission said.

The notice comes after a nationwide outage last month affected the three-digit line for hours. The line received over two million calls, texts, and chat messages since it was instituted six months ago, the FCC said.

The new line was established as part of the National Suicide Hotline Designation Act, signed into law in 2020.

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Health

FCC Eliminates Use of Urban-Rural Database for Healthcare Telecom Subsidies

The commission said the database that determined healthcare subsidies had cost ‘anomalies.’

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WASHINGTON, January 26, 2023 – The Federal Communications Commission adopted a measure Thursday to eliminate the use of a database that determined the differences in telecommunications service rates in urban and rural areas that was used to provide funding to health care facilities for connectivity.

The idea behind the database, which was adopted by the commission in 2019, was to figure out the cost difference between similar broadband services in urban and rural areas in a given state so the commission’s Telecom Program can subsidize the difference to ensure connectivity in those areas, especially as the need for telehealth technology grows.

But the commission has had to temporarily provide waivers to the rules due to inconsistencies with how the database calculated cost differences. The database included rural tiers that the commission said were “too broad and did not accurately represent the cost of serving dissimilar communities.”

FCC Chairwoman Jessica Rosenworcel gave an example at Thursday’s open meeting of the database calculating certain rural services being cheaper than in urban areas, when the denser latter areas are generally less expensive.

As such, the commission Thursday decided to revert the methods used to determine Telecom Program support to before the 2019 database order until it can determine a more sustainable method. The database rescission also applies to urban cost determinations.

“Because the Rates Database was deficient in its ability to set adequate rates, we find that restoration of the previous rural rate determination rules, which health care providers have continued to use to determine rural rates in recent funding years under the applicable Rates Database waivers, is the best available option pending further examination in the Second Further Notice, to ensure that healthcare providers have adequate, predictable support,” the commission said in the decision.

Healthcare providers are now permitted to reuse one of three rural rates calculations before the 2019 order: averaging the rates that the carrier charges to other non-health care provider commercial customers for the same or similar services in rural areas; average rates of another service provider for similar services over the same distance in the health care provider’s area; or a cost-based rate approved by the commission.

These calculations are effective for the funding year 2024, the commission said. “Reinstating these rules promotes administrative efficiency and protects the Fund while we consider long-term solutions,” the commission said.

The new rules are in response to petitions from a number of organizations, including Alaska Communications; the North Carolina Telehealth Network Association and Southern Ohio Health Care Network; trade association USTelecom; and the Schools, Health and Libraries Broadband Coalition.

“The FCC listened to many of our suggestions, and we are especially pleased that the Commission extended the use of existing rates for an additional year to provide applicants more certainty,” John Windhausen Jr., executive director of the SHLB Coalition, said in a statement.

Comment on automating rate calculation

The commission is launching a comment period to develop an automated process to calculate those rural rates by having the website of the Universal Service Administrative Company – which manages programs of the FCC – “auto-generate the rural rate after the health care and/or service provider selects sites that are in the same rural area” as the health care provider.

The commission is asking questions including whether this new system would alleviate administrative burdens, whether there are disadvantages to automating the rate, and whether there should be a challenge process outside of the normal appeals process.

The Telecom Program is part of the FCC’s Rural Health Care program that is intended to reduce the cost of telehealth broadband and telecom services to eligible healthcare providers.

Support for satellite services

The commission is also proposing that a cap on Telecom Program funding for satellite services be reinstated. In the 2019 order, a spending cap on satellite services was lifted because the commission determined that costs for satellite services were decreasing as there were on-the-ground services to be determined by the database.

But the FCC said costs for satellite services to health care service providers has progressively increased from 2020 to last year.

“This steady growth in demand for satellite services appears to demonstrate the need to reinstitute the satellite funding cap,” the commission said. “Without the constraints on support for satellite services imposed by the Rates Database, it appears that commitments for satellite services could increase to an unsustainable level.”

Soon-to-be health care providers funding eligibility

The FCC also responded to a SHLB request that future health care provider be eligible for Rural Health Care subsidies even though they aren’t established yet.

The commission is asking for comment on a proposal to amend the RHC program to conditionally approve “entities that are not yet but will become eligible health care providers in the near future to begin receiving” such program funding “shortly after they become eligible.”

Comments on the proposals are due 30 days after it is put in the Federal Register.

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Digital Inclusion

Broadband Breakfast Interview With Michael Baker’s Teraira Snerling and Samantha Garfinkel

Digital Equity provisions are central to state broadband offices’ plans to implement the bipartisan infrastructure law.

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Digital Equity provisions are central to state broadband offices’ plans to implement the Broadband Equity, Access and Deployment grant program under the bipartisan infrastructure law.

In this interview with Broadband Breakfast Editor and Publisher Drew Clark, Michael Baker International Broadband Planning Consultants Teraira Snerling and Samantha Garfinkel go into detail about the role of Digital Equity Act plans in state broadband programs.

Michael Baker International, a leading provider of engineering and consulting services, including geospatial, design, planning, architectural, environmental, construction and program management, has been solving the world’s most complex challenges for over 80 years.

Its legacy of expertise, experience, innovation and integrity is proving essential in helping numerous federal, state and local navigate their broadband programs with the goal of solving the Digital Divide.

The broadband team at Michael Baker is filling a need that has existed since the internet became publicly available. Essentially, Internet Service Providers have historically made expansions to new areas based on profitability, not actual need. And pricing has been determined by market competition without real concern for those who cannot afford service.

In the video interview, Snerling and Garfinkel discuss how, with Michael Baker’s help, the federal government is encourage more equitable internet expansion through specific programs under the Infrastructure Investment and Jobs Act.

The company guides clients to incorporate all considerations, not just profitability, into the project: Compliance with new policies, societal impact metrics and sustainability plans are baked into the Michael Baker consultant solution so that, over time, these projects will have a tremendous positive impact.

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