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Senate Commerce, Science & Transportation Committee Reviewed Universal Service Reform

WASHINGTON, June 25, 2010 – Universal Service reform is one of the key components of the National Broadband Plan and a principal which many in the telecommunications industry believe needs to happen before the current system collapses. On Thursday, the Senate Committee on Commerce, Science & Transportation held hearings to determine the state of the Universal Service Fund and to hear testimony to determine what should be done to reform it. While the hearing was titled “Universal Service: Transforming the High-Cost Fund for the Broadband Era” many of the Republican Senators spent a majority of their questions on reclassification not on universal service.

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WASHINGTON, June 25, 2010 –Universal Service reform is one of the key components of the National Broadband Plan and a principal which many in the telecommunications industry believe needs to happen before the current system collapses.

On Thursday, the Senate Committee on Commerce, Science & Transportation held hearings to determine the state of the Universal Service Fund and to hear testimony to determine what should be done to reform it. While the hearing was titled “Universal Service: Transforming the High-Cost Fund for the Broadband Era” many of the Republican Senators spent a majority of their questions on reclassification not on universal service.

The National Broadband Plan aims to reform the Universal Service Fund by deconstructing it into two separate funds. The first fund would be the Connect America Fund which would replace the High Cost Fund; it would provide access to rural areas where no business case exists for corporate investment.

Additionally in comparison to the current High Cost Fund the CAF would only fund a single entity per geographic area which would limit costs. The second fund would help support the expansion of mobile broadband via the expansion of 3G and then 4G; this fund is called the Mobility Fund.

USF reform is one of the few topics where the majority of the FCC agree on and want to action upon quickly. Many of the democrats on the Senate Committee also seemed in agreement that reform is necessary. Senator Byron Dorgan (D-ND) compared the expansion of broadband to electricity and the highway system, something which the government must support due to its high cost and ability to transform society.

Dorgan also stated that he felt that the 1996 Communications Act gave the FCC the authority to transform the USF from telephone support to broadband. Senator David Vitter (R-LA) agreed that USF need to provide rural America the same level of connectivity as the rest of the country but emphasized the need to do so with a limited amount of regulation.

Senator John Kerry was unable to attend the hearing but released the following statement “The program must evolve to reflect an evolving level of telecommunications services in the market.

And through reform, we must make sure the billions we spend to execute on that mission are spent effectively and efficiently and focused on increasing the number of Americans who receive and connect to our broadband network rather than on the size of the companies that receive the subsidy.”

The first witness panel consisted of Federal Communications Commissioners Michael Copps, Mingnon Clyburn and Meredith Atwell Baker.

Commissioner Copps lead off the witness testimony calling for large scale reform. He then gave a short history of how the nation even in its early colonial days provided for necessary infrastructure.  “So those generations built roads and bridges, turnpikes and canals, regional and then transcontinental railroads, an interstate highway system, nationwide electricity grids and nearly universal plain old telephone service.  They did this, more often than not, by working together—private enterprise in the lead, to be sure, but encouraged by visionary public policy.”

Copps then advocated the need for universal broadband access as not only a source of  economic empowerment but also as a social necessity. “America’s future town square will be paved with broadband bricks.  Sustaining small “d” democracy by effectively informing all of our citizens in the Digital Age goes to the core of what we are trying to achieve in the National Broadband Plan”

When asked if expansion should be left to the market; Copps reaffirmed his belief that the market cannot bring broadband to all of America and the government must help.

Commissioner Clyburn then reiterated the statements made by Copps for the need for government support. She then went onto underline the problems americans who don’t have access face. “Children cannot use high-speed Internet to complete their homework, enhance their educational opportunities through distance learning, or apply for college online.  Parents cannot apply for jobs that require online applications, and they cannot access many other services and critical information that is only available online.”

Commissioner Baker also agreed with her colleagues on the need for reform but warned that the USF does not have an unlimited source of funds. In fact due to the increasing number of consumers getting VOIP services they are not contributing to the USF.

She then went onto rearticulate her position that any action must be done with “a light-touch regulatory approach”.

When the commissioners were asked by Senator Dorgan if potential reclassification would hurt infrastructure investment Commissioners Copps and Clyburn felt it would not.

Clyburn stated that she had met with investors from UBS, Goldman Sachs and Meryl Lynch who said that it would provide them with increased security. Commissioner Baker however disagreed and claimed that investors told her that reclassification would bring about “too much regulation”.

The second witness panel consisted of industry professionals and was composed of Jeff Gardner, CEO Windstream Communications; Delbert Wilson General Manager, Hill Country Telephone Co-op; John Gockley VP Legal and Regulatory Affairs at US Cellular, Paul Waits President of Ritter Communications and Keyle McSlarrow CEO of the National Cable and Telecommunications Association.

Jeff Gardner CEO of Windstream a firm which provides service to a majority of rural America agreed that USF needs to focus on areas where no economic case exists for corporate investment. He also urged that USF reform include a simpler mechanism for obtaining support so that smaller firms are able to participate.

Delbert Wilson who was representing the Western Telecommunications Alliance, Organization for the Promotion and Advancement of Small Telecommunications Companies and Organization for the Promotion and Advancement of Small Telecommunications Companies also believed that USF was crucial for the expansion for broadband to rural America but does not feel that rural America should have to make do with the slower speeds which the NBP proposes.

He felt that the plan “Discriminate[s] against rural consumers, by proposing to fund rural networks at speed standards that will render them obsolete almost as soon as they are built”.

John Gockley from US Cellular espoused the benefits of maintaining technological neutrality in the funding to allow for wireless to be on equal footing with wireline. Since wireless technologies are able to connect the most remote areas with the lowest cost they should be considered as an equal option.

Paul Waits from Ritter Communications urged the panel to proceed slowly and to take on responsible reform which can be sustained. Waits also stated that the base of contribution to the USF needs to be expanded. “The solution must include restoring the contribution base for the USF fee to effectively support the original intent of what constitutes universal service, must include all telecommunications service in its revenue base for collections, and be neutral to changes in technology.  The amount that individuals pay on their telephone bill to support universal service is simply too high and unsustainable.”

Commissioner Copps while not present during the testimony of Mr. Waits made a similar comment when asked about the long term sustainability of the USF. Copps said that broadband services may have to be taxed in the same way that telephone services are to provide proper funding.

Kyle McSlarrow from National Cable and Telecommunications Association provided the final statement in which he supported reform and agreed that technological neutrality ensured competition. He also wanted to ensure that waste is cut from the program.

Many of the Republican Senators felt that the FCC did not have the full authority to conduct an overhaul of USF and that the FCC should ask Congress for a new mandate.

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

FCC

Senate Committee OK’s Rosenworcel, Questions Sohn on Mapping, Net Neutrality, Broadband Standards

Gigi Sohn explained her positions on issues facing the FCC.

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Gigi Sohn at Senate Commerce, Science, and Transportation Committee meeting

WASHINGTON, December 1, 2021 – As the Senate Commerce, Science and Transportation Committee confirmed Jessica Rosenworcel as commissioner of the Federal Communications Commission, it also questioned Wednesday agency nominee Gigi Sohn on issues including net neutrality, broadband mapping, and speeds.

Rosenworcel is already chairwoman of the FCC by virtue of being named to the position by President Joe Biden. The president picks the chair of the agency from among the commissioners. However, Rosenworcel’s term as commissioner is to expire unless the Senate confirms her appointment to another term.

The committee on Wednesday also approved Alvaro Bedoya, a staunch privacy advocate, as commissioner of the Federal Trade Commission and had rounds at questioning Alan Davidson, who was nominated as head of the National Telecommunications and Information Administration, which will oversee $42.5 billion in broadband funds from the recently signed Infrastructure Investment and Jobs Act.

On mapping, Sohn called for a “crowdsourcing” effort amongst states to improve the quality of broadband mapping, as the agency has started to do. “A lot of states have maps already and they are quite accurate,” she said. Though she could not commit to a timeline, Sohn said that there could be no “good policy without good maps” and that if she were confirmed, she would dedicate herself to improve the FCC’s broadband maps.

Sohn also voiced her support for municipal broadband. “I have supported municipal broadband for a very long time,” she said, adding she supports open access models that allow service providers to share the same network. Sohn pointed to Utah as an example, where the model has been implemented successfully. She stated that the model has led to “enormous competition” for service providers.

When pressed as to whether the FCC should be able to preempt states and dictate how they implement their broadband policy, Sohn said she would like the FCC to have a better relationship with states. “If I am confirmed, one of the things I would ask the chairwoman [to use me as] a liaison to the states, because I’ve really formed very good relationships with them,” she said. “In the past, we have not [reached out] to the states and made them partners. We have been more adversarial.”

Net neutrality, broadband standards and Big Tech

Sohn also came out in support of net neutrality. “What I am concerned about now, with the repeal in 2017 of the net neutrality rules and the reclassification of broadband, is that we have no touch,” she said. “[Net neutrality] is really much broader than [preventing] blocking and throttling. It is about whether or not bandwidth – which we all agree is an essential service – should have government oversight, and right now, it does not.”

Legislators also questioned Sohn on her perspectives regarding broadband standards. Sen. Mike Lee, R-Utah, asked Sohn what standard – whether it was 100 Mbps download with 20 Mbps upload, or 100 Mbps symmetrical service – would bridge the digital divide. Sohn stated that it would take more than just the deployment of infrastructure to bridge the digital divide.

“I have urged that Congress adopt a permanent broadband subsidy like the Affordable Connectivity Program – which is more money but is not permanent,” Sohn said. “You still always have the adoption problem as well, where people do not have the digital literacy, sometimes not even [actual] literacy, to be able to use the internet.”

Insofar that capacity and internet speeds are concerned, Sohn emphasized that the Infrastructure Investment Jobs Act “does prefer scalable networks to meet the needs of tomorrow.”

“What we do not want, I would think – or I would not want – is to come back in five or ten years and say, ‘Oh, my goodness! We spent all this money, and we still have slow networks, and we still have areas that are not served,” she said. “The ability to have technologies that can grow over time.” Sohn stopped short of explicitly listing specific scalable technologies.

On Big Tech, Sen. Ted Cruz, R-Texas, described “a confluence of liberals advocating for censoring anyone with whom they disagree,” and a situation where “big tech [is] eagerly taking up the mantle to censor those with whom they disagree.” Cruz asked Sohn how she could guarantee she would not “use the power of government to silence.”

Sohn said that she would “make that commitment” to not act in such a way and added that she would “take any allegations of bias extremely seriously.” She said that she will continue to work with the Office of Government Ethics to dissuade any concerns people may have about her biases.

A date for a vote on Sohn and Davidson’s nominations has not yet been scheduled.

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FCC

FCC Eliminates Emergency Broadband Benefit Enrollment Freeze

The commission says an enrollment freeze is no longer necessary as the Infrastructure Act’s Affordable Connectivity Program takes effect.

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FCC Chairwoman Jessica Rosenworcel

WASHINGTON, November 29, 2021 – The Federal Communications Commission said Friday it is axing rules requiring a freeze on enrollment at the initial end of the Emergency Broadband Benefit program.

That’s because the Infrastructure Investment and Jobs Act, signed into law two weeks ago, extends the program indefinitely and rebrands it to the Affordable Connectivity Program. The FCC is currently gathering comments on how it should manage the transition to the new program.

The freeze was initially planned to avoid claims volatility and to allow for more certain financial projections in the EBB’s final months when funds were running low. Based on current budget projections, there is no longer concern that the EBB will run out of funding before the Affordable Connectivity Program takes effect, the FCC said.

In its announcement on Friday, the FCC also waived requirements for customer notice on the end of the EBB, which mandated 15- and 30-day consumer notices.

These mandates were eliminated to prevent any alarm or confusion over the EBB Program ending, as consumers will continue to receive service for 60 days following the program’s end due to provisions of the IIJA.

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FCC

FCC Watchdog Finds Evidence of Fraud in Emergency Broadband Benefit

Inspector General report finds “dozens” of cases of EBB abuse across the country.

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FCC Chairwoman Jessica Rosenworcel

WASHINGTON, November 24, 2021 – The watchdog that monitors fraud and abuse of Federal Communications Commission programs said it has found evidence that service providers are enrolling into the Emergency Broadband Benefit program more students than exist at some schools.

The Office of Inspector General said in a Monday report that service providers, who are reimbursed from the program for offering subsidized broadband services to schools, and their sales agents have been abusing the program by enrolling more “households that claimed they have a dependent child” than students “who are actually enrolled in those schools.”

The report found “dozens” of eligible schools across the country are overenrolled six months into the program. That includes schools in Alaska, Arizona, California, Colorado, New York and Florida.

The most “egregious examples” of such abuse, the OIG said, came out of Florida, with one example of a school that had enrolled 1884 households in the EBB program, when OIG research showed that “no more than 200 students attend” the school. Another school with 152 students had 1048 households enrolled in the program. The OIG said it will not disclose which schools to preserve its on-going investigation.

The report notes that additional households were blocked from enrolling in the program “by other program safeguards.”

Majority of abuse done by “handful” of providers

“Evidence shows this is not consumer-driven fraud – enrollment data directly links certain providers and their sales agents to these enrollments,” the report said, adding the same sales agents who overenrolled students in the aforementioned schools also did the same in other state schools.

“Sales agents who work for just a handful of EBB providers are responsible for the majority of this fraudulent enrollment activity,” it added.

Other examples of abuse, the report said, includes failure to identify the dependent child, the repeated use of the provider retail address as the address of homes served, and more than 2000 EBB households were noted as being more than 50 miles from their schools.

“As EBB providers incentivize sales agents to maximize enrollments by providing commission-based compensation, many of the abuses that once plagued the FCC’s Lifeline program have reappeared in the EBB program,” the report concluded, adding these providers will be liable for violations.

“If providers discover enrollment problems, OIG reminds them of their obligation to take appropriate remedial measures,” the report added. “Providers who defraud FCC programs by violating program enrollment rules and claim support for those households will be held accountable and may be subject to civil or criminal sanctions.”

The $3.2-billion EBB program, which launched in May, provides a subsidy of $50 per month to eligible low-income households and $75 per month for those living on native tribal lands, as well as a one-time reimbursement on a device. The program has enrolled over five million households so far.

The FCC is currently asking the public for comment on how it should handle the program’s expansion into a permanent fixture as a result of the Infrastructure Investment and Jobs Act signed by President Joe Biden last week.

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