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Boucher and Terry Declare USF Broken

WASHINGTON July 22, 2010- Representative Rick Boucher (D-VA) Chairmen of the Subcommittee on Communications, Technology, and the Internet, and Lee Terry (R-NE) introduced a new bill to update the Universal Service Fund. This update will include broadband as a mandatory serve, modify the contribution requirements and add new accountability measures.

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WASHINGTON July 22, 2010- Representatives Rick Boucher (D-VA) Chairmen of the Subcommittee on Communications, Technology, and the Internet, and Lee Terry (R-NE) introduced a new bill to update the Universal Service Fund. This update will include broadband as a mandatory serve, modify the contribution requirements and add new accountability measures.

“The Universal Service Fund is broken. Consumers currently pay more than thirteen percent of long distance revenues into the fund and have at times this year contributed over fifteen percent. Our legislation is a comprehensive and forward-looking measure, which will control the spiraling growth of the Universal Service Fund while ensuring that sufficient universal service support is available on a technology-neutral basis to the carriers which rely on it to provide service. The measure will expand who pays into the Fund, control the growth of the Fund and modernize the Fund by allowing its use for the deployment of high-speed broadband service,” said Boucher and Terry

The National Broadband Plan had recommended the inclusion of broadband within the fund but also wanted to change the entire structure to include wireless broadband.

The bill declares broadband to be a universal service and that the fund should support the build out of broadband lines. It also requires fund recipients to offer high speed broadband service within five years of the bills enactment. The definition of “high speed” is to be determined by the Federal Communications Commission. This requirement may be waived by the FCC if they determine that offering the service would be too expensive.

The FCC will also be instructed to develop a new cost model which will incorporate broadband.

In order to manage the rising costs of the High Cost Fund the bill will decrease the number of eligible carriers by “eliminating high-cost support to incumbent carriers in areas where at least 75 percent of households can receive voice and high-speed broadband service from a competitive provider that does not receive universal service support”

Contributions will now be required of “Any provider of a service that uses telephone numbers, IP addresses or their functional equivalents to provide or enable real time voice communications and in which the voice component is the primary function (e.g., VoIP providers); and any provider that offers a network connection to the public (e.g., DSL, cable modem, WiMax and broadband over powerline providers).”

One of the largest criticisms of the USF is that it lacks accountability. In order to resolve this the bill directs the FCC to setup a set of performance goals and measures for each of the USF programs. The FCC will then be required to produce an annual report to Congress on the status of each program.

The bill has received support from American Public Communications Council, Inc., AT&T, CenturyLink, Frontier Communications, the Independent Telephone and Telecommunications Alliance, the National Cable and Telecommunications Association, the National Telecommunications Cooperative Association, OPASTCO, Qwest, USTelecom, Verizon, Vonage and the Western Telecommunications Alliance.

The National Cable & Telecommunications Associations released a statement in which they say in part “The Universal Service Reform Act of 2010 represents a sound first step in modernizing the USF program to bring it into the competitive era and refocus the program on broadband adoption and deployment where support is needed. Building on a proposal that NCTA filed with the FCC last year, the bill would establish a permanent mechanism by which the Commission would reassess support levels in competitive areas and reduce or eliminate support where adequate competition exists. The bill also recognizes the importance of resolving the difficult, but very important, issues surrounding intercarrier compensation reform.”

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

Broadband's Impact

USC, CETF Collaborate on Research for Broadband Affordability

Advisory panel includes leaders in broadband and a chief economist at the FCC.

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Hernan Galperin of USC's Annenberg School

WASHINGTON, September 22, 2021 – Researchers from the University of Southern California’s Annenberg School and the California Emerging Technology Fund is partnering to recommend strategies for bringing affordable broadband to all Americans.

In a press release on Tuesday, the university’s school of communications and journalism and the CETF will be guided by an expert advisory panel, “whose members include highly respected leaders in government, academia, foundations and non-profit and consumer-focused organizations.”

Members of the advisory panel include a chief economist at the Federal Communications Commission, digital inclusion experts, broadband advisors to governors, professors and deans, and other public interest organizations.

“With the federal government and states committing billions to broadband in the near term, there is a unique window of opportunity to connect millions of low-income Americans to the infrastructure they need to thrive in the 21st century,” Hernan Galperin, a professor at the school, said in the release.

“However, we need to make sure public funds are used effectively, and that subsidies are distributed in an equitable and sustainable manner,” he added. “This research program will contribute to achieve these goals by providing evidence-based recommendations about the most cost-effective ways to make these historic investments in broadband work for all.”

The CETF and USC have collaborated before on surveys about broadband adoption. In a series of said surveys recently, the organizations found disparities along income levels, as lower-income families reported lower levels of technology adoption, despite improvement over the course of the pandemic.

The surveys also showed that access to connected devices was growing, but racial minorities are still disproportionately impacted by the digital divide.

The collaboration comes before the House is expected to vote on a massive infrastructure package that includes $65 billion for broadband. Observers and experts have noted the package’s vision for flexibility, but some are concerned about the details of how that money will be spent going forward.

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Broadband's Impact

Technology Policy Institute Introduces Data Index to Help Identify Connectivity-Deprived Areas

The Broadband Connectivity Index uses multiple datasets to try to get a better understanding of well- and under-connected areas in the U.S.

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Scott Wallsten is president and senior fellow at the Technology Policy Institute

WASHINGTON, September 16, 2021 – The Technology Policy Institute introduced Thursday a broadband data index that it said could help policymakers study areas across the country with inadequate connectivity.

The TPI said the Broadband Connectivity Index uses multiple broadband datasets to compare overall connectivity “objectively and consistently across any geographic areas.” It said it will be adding it soon into its TPI Broadband Map.

The BCI uses a “machine learning principal components analysis” to take into account the share of households that can access fixed speeds the federal standard of 25 Megabits per second download and 3 Mbps upload and 100/25 – which is calculated based on the Federal Communications Commission’s Form 477 data with the American Community Survey – while also using download speed data from Ookla, Microsoft data for share of households with 25/3, and the share of households with a broadband subscription, which comes from the American Community Survey.

The BCI has a range of zero to 10, where zero is the worst connected and 10 is the best. It found that Falls Church, Virginia was the county with the highest score with the following characteristic: 99 percent of households have access to at least 100/25, 100 percent of households connect to Microsoft services at 25/3, the average fixed download speed is 243 Mbps in Ookla in the second quarter of this year, and 94 percent of households have a fixed internet connection.

Meanwhile, the worst-connected county is Echols County in Georgia. None of the population has access to a fixed connection of 25/3, which doesn’t include satellite connectivity, three percent connect to Microsoft’s servers at 25/3, the average download speed is 7 Mbps, and only 47 percent of households have an internet connection. It notes that service providers won $3.6 million out of the $9.2-billion Rural Digital Opportunity Fund to provide service in this county.

“Policymakers could use this index to identify areas that require a closer look. Perhaps any county below, say, the fifth percentile, for example, would be places to spend effort trying to understand,” the TPI said.

“We don’t claim that this index is the perfect indicator of connectivity, or even the best one we can create,” TPI added. “In some cases, it might magnify errors, particularly if multiple datasets include errors in the same area.

“We’re still fine-tuning it to reduce error to the extent possible and ensure the index truly captures useful information. Still, this preliminary exercise shows that it is possible to obtain new information on connectivity with existing datasets rather than relying only on future, extremely expensive data.”

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Broadband's Impact

New Report Recommends Broadening Universal Service Fund to Include Broadband Revenues

A Mattey Consulting report finds broadband revenues can help sustain the fund used to connect rural and low-income Americans.

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Carol Mattey of Mattey Consulting LLC

WASHINGTON, September 14, 2021— Former deputy chief of the Federal Communications Commission Carol Mattey released a study on Tuesday recommending the agency reform the Universal Service Fund to incorporate a broad range of revenue sources, including from broadband.

According to the report by Mattey’s consulting firm Mattey Consulting LLC, revenues from “broadband internet access services that are increasingly used by Americans today should contribute to the USF programs that support the expansion of such services to all,” it said. “This will better reflect the value of broadband internet access service in today’s marketplace for both consumers and businesses.”

Mattey notes that sources of funding for the USF, which are primarily from voice revenues and supports expanding broadband to low-income Americans and remote regions, has been shrinking, thus putting the fund in jeopardy. The contribution percent reached a historic high at 33.4 percent in the second quarter this year, and decreased slightly after that, though Mattey suggested it could soar as high as 40 percent in the coming years.

“This situation is unsustainable and jeopardizes the universal broadband connectivity mission for our nation without immediate FCC reform,” Mattey states in her report, “To ensure the enduring value of the USF program and America’s connectivity goals, we must have a smart and substantive conversation about the program’s future.”

According to Mattey’s data, the assessed sources (primarily voice) of income will only continue to shrink over the coming years, while unassessed sources will continue to grow. Mattey’s report was conducted in conjunction with INCOMPAS, NTCA: The Rural Broadband Association, and the Schools, Health and Libraries Broadband Coalition.

“It is time for the FCC to take action, and to move away from the worst option of all – the status quo – that is jeopardizing the USF which is critical to connecting our nation,” the report said.

John Windhausen, executive director of SHLB, echoed the sentiments expressed by Mattey in her report, “We simply must put the USF funding mechanism on a more stable and sustainable path,” he said, “[in order to] strengthen our national commitment to broadband equity for all.”

Mattey report uniform with current recommendations

Mattey’s research is generally in line with proponents of change to the USF. Some have recommended that the fund draw from general broadband revenues, while others have said general taxation would provide a longer lasting solution. Even FCC Commissioner Brendan Carr suggested that Big Tech be forced to contribute to the system it benefits from, which the acting chairwoman Jessica Rosenworcel said is an “intriguing” idea.

The FCC instituted the USF in 1997 as a part of the Telecommunications Act of 1996. The fund was designed to encourage the development of telecom infrastructure across the U.S.—dispensing billions of dollars every year to advance the goal of universal connectivity. It does so through four programs: the Connect America Fund, Lifeline, the rural health care program, and E-Rate.

These constituent programs address specific areas related for broadband. For example, the E-Rate program is primarily concerned with ensuring that schools and libraries are sufficiently equipped with internet and technology assistance to serve their students and communities. All of these programs derive their funding from the USF.

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