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Broadband's Impact

Universal Service Reform Gets Bipartisan and Industry Support

WASHINGTON, September 16, 2010 – The Universal Service Fund is clearly in need of reform but rather than fully overhaul the program, Reps. Rick Boucher, D-Va., and Lee Terry, R-Neb., have introduced a bill targeting the high cost fund, the method of fund collection and the inclusion of funds for the support of broadband.

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WASHINGTON, September 16, 2010 – The Universal Service Fund is in need of reform but rather than fully overhaul the program, Reps. Rick Boucher, D-Va., and Lee Terry, R-Neb., have introduced a bill targeting the high cost fund, the method of fund collection and the inclusion of funds for the support of broadband.

H.R. 5828, the Universal Service Reform Act, has received support from a broad range of stakeholders including Verizon, the National Cable and Telecommunications Association and the National Telecommunications Cooperative Association.

“The bill modernizes a program that ensures the availability of communications connections to millions of Americans, benefiting not just the rural residents who live in high-cost areas, but benefiting the entire nation. We are a stronger nation when we are all connected through telecommunications,” said Boucher, who represents a rural district, at a Thursday Hill hearing discussing the fund.

The committee recognizes that while the inclusion of broadband in the fund is important, the rising cost to consumers is also a problem. To solve this issue, the bill mandates that USF taxes be applied to broadband providers in addition to telephone providers. In addition, rather than assess a tax based on revenue, the bill requires a flat amount based upon the total phone numbers issued.

This new inclusion of a tax based upon phone numbers does pose challenges. Rep Mike Doyle, D-Pa., raised the question of how devices which provide access to the internet such as the Amazon Kindle, will be taxed. The Kindle uses a whisper net provided by Sprint to connect to the internet. In counterpoint, the Sony eBook reader requires users to connect via a Wi-Fi network and would not be taxed.

The bill does however allow for exclusions or discounts for entities which use bulk numbers such as universities or large corporations.

The inclusion of broadband received broad support from the committee members along with the Federal Communications Commission. In a statement, Carol Mattey, deputy chief of the Wireline Competition Bureau, said: “The current system, which wasn’t designed to explicitly support broadband, is not working for everyone. While consumers in some places in rural America have access to some of the best broadband networks in the country, others don’t have access to broadband at all, even though they are served by providers eligible for universal service support. While many speak of an urban/rural divide for broadband service, the more troubling trend is a rural/rural divide that reflects the antiquated structure and incentives of our current high cost program.”

“Universal service support is now the only remaining potential source of funding for broadband deployment to unserved and underserved areas,” said Qwest Senior Vice President Robert Davis. “Qwest thus supports the bill’s explicit authorization of universal service support for the provision, maintenance and upgrading of high-speed broadband service.”

A major criticism of the high cost fund is that often times in areas of support there are double the number of providers than in competitive areas. This occurs since all the providers in a high cost area are given some level of support. The bill would limit the number of support recipients to two per region. Additionally, these providers would also be required to provide broadband along with telephone service.

The bill also tackles the issue of intercarrier compensation by forcing all carriers to identify all traffic which originates on their networks and determine where it terminates.

Verizon’s Kathleen Grillo said: “It is not possible to maintain the current intercarrier compensation system in today’s communications market. The current system is based on the idea that there are meaningful distinctions between interstate and intrastate services and between telecommunications and information services. The result of these distinctions is the current patchwork of vastly different charges and rates for communications traffic depending on what the traffic is, where it came from, and where it is going. In a market where most consumers now purchase a bundle of any-distance services (such as phone, TV, and Internet access), these distinctions are meaningless. And even in situations where it is still possible to measure traffic in these ways, continuing to do that just for intercarrier compensation purposes does not make sense. All of these complications and uncertainty reduce investment in broadband.”

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

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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Digital Inclusion

Outreach ‘Most Valuable Thing’ for Emergency Broadband Benefit Program: Rosenworcel

FCC Acting Chairwoman Rosenworcel said EBB will benefit tremendously from local outreach efforts.

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Internet Innovation Alliance Co-Chair Kim Keenan

WASHINGTON, September 13, 2021 – The head of the Federal Communications Commission said Monday that a drawback of the legislation that ushered in the $3.2-billion Emergency Broadband Benefit program is that it did not include specific funding for outreach.

“There was no funding to help a lot of these non-profit and local organizations around the country get the word out [about the program],” Jessica Rosenworcel said during an event hosted by the Internet Innovation Alliance about the broadband affordability divide. “And I know that it would get the word out faster if we had that opportunity.”

The program, which launched in May and provides broadband subsidies of $50 and $75 to qualifying low-income households, has so-far seen an uptake of roughly 5.5 million households. The program was a product of the Consolidated Appropriations Act of 2021.

“We gotta get those trusted local actors speaking about it because me preaching has its limitations and reaching out to people who are trusted in their communities to get the word out – that is the single most valuable thing we can do,” Rosenworcel said.

She said the FCC has 32,000 partners and has held more than 300 events with members of Congress, tribal leaders, national and local organizations, and educational institutions to that end.

“Anyone who’s interested, we’ll work with you,” she said.

EBB successes found in its mobile friendliness, language inclusion

Rosenworcel also preached the benefits of a mobile application-first approach with the program’s application that is making it accessible to large swaths of the population. “I think, frankly, every application for every program with the government should be mobile-first because we have populations, like the LatinX population, that over index on smartphone use for internet access.

“We gotta make is as easy as possible for people to do this,” she said.

She also noted that the program is has been translated into 13 languages, furthering its accessibility.

“We have work to do,” Rosenworcel added. “We’re not at 100 percent for anyone, and I don’t think we can stop until we get there.”

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