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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.



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 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

Broadband's Impact

FCC Pushes Congress on Spectrum Auction Authority, ACP Funding at Oversight Hearing

Commissioners from both parties emphasized the issues to the House Communications and Technology Subcommittee.



Screenshot of FCC Chairwoman Jessica Rosenworcel at the hearing Thursday.

WASHINGTON, November 30, 2023 – The Federal Communications Commission asked Congress to move on renewing the agency’s auction authority and funding the Affordable Connectivity Program at a House oversight hearing on Thursday.

“We badly need Congress to restore the agency’s spectrum auction authority,” said FCC Chairwoman Jessica Rosenworcel at the hearing. “I have a bunch of bands that are sitting in the closet at the FCC.”

Rosenworcel pointed to 550 megahertz in the 12.7-13.25 GHz band. The commission would “be able to proceed to auction on that relatively quickly” if given the go ahead, she said.

The commission’s authority to auction spectrum expired for the first time in March after Congress failed to extend it. Auction authority lets the commission auction off and issue licenses allowing the use of certain electromagnetic frequency bands for wireless communication.

Repeated pushes to restore the ability, first handed to the commission in 1996, have stalled in the face of gridlock on Capitol Hill.

Opening up spectrum is becoming more necessary as emerging technologies and expanding networks compete for finite airwaves. The Joe Biden administration unveiled a plan this month to begin two-year studies of almost 2,800 MHz of government spectrum for potential commercial use.

FCC Commissioner Brendan Carr said that’s not fast enough. “I would have had the spectrum plan actually free up more than zero megahertz of spectrum,” he said.

Rosenworcel said the FCC was in talks with the National Telecommunications and Information Administration, the agency that wrote up the plan, during the drafting process. When asked if the NTIA followed her recommendations, she said she would “like everyone to move faster and have a bigger pipeline in general.”

Commissioners expressed support for a House bill that would give the FCC temporary authority to issue the licenses it already auctioned off for 5G networks in the 2.5 GHz band. An identical bill passed the Senate in September.

T-Mobile took home more than 85 percent of the 8,000 total licenses in the band for $304 million, but the company and other winners cannot legally use their spectrum until the FCC issues the licenses.

Affordable Connectivity Program

Also at the top of commissioners’ minds was the Affordable Connectivity Program. Set up with $14 billion from the Infrastructure Act, the program provides a monthly internet subsidy for 22 million low-income households.

The program is expected to run out of money in April 2024.

“We have come so far, we can’t go back,” Rosenworcel said. “We need Congress to continue to fund this program. If it does not, in April of next year we’ll have to unplug households.”

The Biden administration asked Congress in October for $6 billion in the upcoming appropriations bill to keep the ACP afloat through December 2024. The government has been funded since September by stop-gap measures, with House Republicans ousting former Speaker Kevin McCarthy, R-CA, over his unwillingness to cut spending and making similar demands of his replacement. 

A coalition of 26 governors joined the chorus of calls to extend the program on November 16. Lawmakers, activists, and broadband companies have been sounding the alarm on the program’s expiration for months as the $42.5 billion Broadband Equity, Access and Deployment effort gets underway. Without the subsidy, experts have said, households could be unable to access the new infrastructure built by BEAD.

Representative Yvette Clarke, D-NY, said of the ACP shortfall that she is “looking forward to introducing legislation on that very subject before Congress concludes its work for the year.”

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FCC to Consider ‘Rapid Response Team’ for Pole Attachment Disputes at December Meeting

Proposed rules would also put more limits on when utilities can pass full replacement costs to telecom companies.



Photo of a utility pole by Scott Akerman.

WASHINGTON, November 28, 2023 – The Federal Communications Commission is considering setting up a “rapid response team” to resolve pole attachment disputes, according to a public draft of the proposed rules.

The Rapid Broadband Assessment Team, or RBAT, would be available to resolve disagreements that “impede or delay broadband deployment,” according to the proposed rules. The team would be responsible for quickly engaging both sides of a pole attachment dispute and working to find a solution, which can include staff-supervised mediation.

If the parties cannot come to an agreement, the RBAT can place their dispute on the commission’s “Accelerated Docket,” meaning the FCC would adjudicate the issue in under 60 days. Not all disputes are eligible for the Accelerated Docket, as the tight time constraint makes it difficult to resolve novel or complex cases.

The commission is also considering requiring utility companies to provide attachers with their most recent pole inspection information. That’s an effort to avoid disputes before they start, according to the proposed rules.

Expanding broadband networks often involves attaching equipment to poles owned by utility companies. The arrangement has led to ongoing disputes on replacement costs and other issues between telecommunications and utility companies.

The FCC has authority under the 1996 Communications Act to set the terms of those pole attachment deals and is looking to have a system in place for expediting disputes ahead of the Biden administration’s $42.5 billion broadband expansion effort. That authority only stretches to the 26 states that have not passed their own laws on pole attachments.

Pole replacement costs

On pole replacement costs, one of the more contentious pole attachment issues, the proposed rules place more limits on when a utility can force an attacher to pay in full for a replacement pole. The commission’s standing policy prevents pole owners from passing off replacement costs if the new pole is not “necessitated solely” by an attacher’s equipment.

Since the commission first sought comment on the issue in 2022, telecommunications companies have argued that utilities unfairly pass the entire cost of replacement on to them, even when poles are already unsafe and would need to be replaced regardless. Utilities say they would not normally replace the poles being used by telecom companies, either because they are structurally sound or to phase out old lines, and don’t benefit from the installation of newer poles.

The draft rules would expand the commission’s definition of a “red tagged” pole, the replacement of which cannot be allocated entirely to an attacher. Under current FCC rules, a red tagged pole is one that is out of compliance with safety regulations and has been placed on a utility’s replacement schedule.

The updated definition would do away with the compliance requirement, defining a red tagged pole as one flagged for replacement for any reason other than its inability to support extra telecom equipment.

The proposed rules also explicitly clarify some situations in which replacements are not “necessitated solely” by new telecom equipment, including when a pole fails engineering standards or is already on a replacement schedule.

In addition, the rules specify that when an already defective pole needs to be replaced with a larger pole to accommodate new equipment, the attacher would only be responsible for the extra cost of the larger pole, not the cost of an equivalent pole.

If the proposed rules are approved, the FCC would also look for comments on processing bulk pole attachment applications and on changing rules on when attachers can do their own work to prepare a pole for attachments.

The measures will be voted on at the commission’s December 13 meeting.

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FCC Aims to Combat Video Service ‘Junk’ Fees

FCC Chairwoman Jessica Rosenworcel proposes a new way to eliminate junk fees.



Photo of Jessica Rosenworcel courtesy the FCC

November 21, 2023 – The head of the Federal Communications Commission announced Tuesday a proposal to eliminate video service junk fees incurred by cable operators and direct broadcast satellite service providers.

The proposal by Chairwoman Jessica Rosenworcel would prohibit cable operators and DBS providers from charging subscribers early contract termination fees and require those providers to issue a prorated credit or rebate for remaining days in a monthly billing cycle after cancellation. 

It will be voted on at the commission’s open meeting next month. 

“Because these fees may have the effect of limiting consumer choice after a contract is enacted, it may negatively impact competition for services in the marketplace,” said a press release. 

“No one wants to pay junk fees for something they don’t want or can’t use.  When companies charge customers early termination fees, it limits their freedom to choose the service they want,” said Rosenworcel. 

In October, President Joe Biden addressed his administration’s effort to combat junk fees, part of a larger goal to provide consumers choice by way of cost reduction outlined in an executive order on which was signed into effect in July of 2021. 

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