Broadband's Impact
Free State Foundation Panel Calls for USF, Intercarrier Compensation Reform
WASHINGTON, July 14, 2011 – The Free State Foundation, a free-market think thank, assembled key industry experts Wednesday and pressed for the immediate need for reforms to the Universal Service Fund and Intercarrier Compensation systems.
For the past year, the Federal Communications Commission has worked on updating the Universal Service Fund to handle the demands of broadband expansion rather than voice service.
WASHINGTON, July 14, 2011 – The Free State Foundation, a free-market think thank, assembled key industry experts Wednesday and pressed for the immediate need for reforms to the Universal Service Fund and Intercarrier Compensation systems.
For the past year, the Federal Communications Commission has worked on updating the Universal Service Fund to handle the demands of broadband expansion rather than voice service.
“While the USF was updated in 1996 to deal with modern communications the inclusion of broadband was never envisioned,” said James Assey, Executive Vice President, National Cable & Telecommunications Association (NCTA). “The National Broadband Plan clearly shows that the FCC is trying to figure how to properly update the USF to deal with broadband.”
Assey suggested that the FCC refocus the USF from supporting voice service to supporting broadband.
“Holding down the price of voice service is no longer a national priority, if consumers are given access to broadband they can get cheap or free voice service using Magic Jack or Skype,” said Tom Tauke, Executive Vice President, Verizon.
According to Tauke now is the perfect time to deal with the issue since the major telecommunications providers have already transitioned their businesses away from relying on voice service to data and television services. Tauke went onto say that unfortunately the firms that rely most heavily on voice service for revenue are also located in the most rural areas where telecommunications costs are high.
Mike Romano, Senior Vice President at the National Telecommunications Cooperative Association advised the group that any transition away from supporting telephone to broadband services should be done in a slow and methodical manner.
“We don’t want to leave consumers in a position where they face a dramatically high bill,” Romano said.
While all of the panelists agreed that the USF needs to transition to broadband they differed what the role of the USF should be in supporting broadband.
Assey said that funding should be limited to deployment in both unserved areas and places where there is only a single broadband provider; Tauke also supported the idea of using USF funds for deployment. Romano however recommended that funding should be split between deployment and sustainable adoption programs.
Deborah Taylor Tate, former FCC Commissioner suggested that in addition to funding existing programs for sustainable adoption, the Commission should be funding pilot programs to reach the final one percent without access.
“We need to learn what the most efficient method is to reach these people and that requires experimentation,” Tate said.
Broadband's Impact
Missouri’s BEAD Initial Proposal, Volume Two
The state is unsure if any of its $1.7 billion allocation will be left over after funding new infrastructure.

Missouri released a draft volume two of its Broadband Equity, Access and Deployment initial proposal on November 15.
It was part of a wave of states and territories that began seeking public comment on their drafts in recent weeks. All 56 have now done so.
After a 30-day comment period, states and territories are required to submit their proposals to the National Telecommunications and Information Administration by December 27. The proposals come in two volumes: volume one details how states will ground-truth broadband coverage data, and volume two outlines states’ plans for administering grant programs with their BEAD funds.
The Missouri Broadband Office is “not yet able to determine” whether it will have any of its $1.7 billion in BEAD money left over after funding infrastructure projects.
The state is planning to administer two rounds of funding, something the state’s broadband director BJ Tanksley has flagged as being potentially difficult given BEAD’s one year timeframe for grant awards. The MBO said in the proposal a “sub-round” might be necessary if some undeserved and underserved areas receive no applications, and the state might seek an extension from the NTIA.
Missouri is looking to release multiple “advisory figures” for its high-cost threshold, the price at which fiber becomes expensive enough for the state to consider other technologies not favored by BEAD. Cost modeling data will be used for an initial figure before the first round of grant applications, and the number will be updated based on the applications the state receives in each round.
The state will also be using the NTIA’s updated financing guidance, which gives states more options to ensure the financial viability of a project. The new guidance makes room for performance bonds and reimbursement milestones, which tie up less money than the 25 percent letter of credit required by initial BEAD rules.
The agency made the change on November 1 after months of pushback from advocates and lawmakers, who warned small providers could be edged out by the letter of credit.
The public comment period for Missouri’s volume two is open until December 15.
Broadband Updates
Alabama’s BEAD Initial Proposal, Volumes One and Two
The state is asking for a waiver to open up RDOF areas to BEAD applications.

Alabama released a draft of its Broadband Equity, Access and Deployment initial proposal on November 14.
It was part of a wave of states and territories that began seeking public comment on their drafts in recent weeks. All 56 have now done so.
After a 30-day comment period, states and territories are required to submit their proposals to the National Telecommunications and Information Administration by December 27. The proposals come in two volumes: volume one details how states will ground-truth broadband coverage data, and volume two outlines states’ plans for administering grant programs with their BEAD funds.
Volume one
The state is planning to adopt the NTIA’s model challenge process to accept and adjudicate claims of incorrect broadband data. The Federal Communications Commission’s largely provider-reported coverage map was used to allocate BEAD money, but is not considered accurate enough to determine which specific locations lack broadband.
Local governments, nonprofits, and broadband providers are able to submit those challenges on behalf of consumers under the model process.
Alabama is also electing to use one of the NTIA’s optional modifications to the model process. The state’s broadband office will designate all homes and businesses receiving broadband from copper telephone lines as “underserved” – and thus eligible for BEAD-funded infrastructure. The move is an effort to replace older technology with the higher speed fiber-optic cable favored by the program.
The state will administer two optional challenge types the NTIA laid out: area and MDU challenges. States are not required to use these, but most are planning to do so.
An area challenge is initiated if six or more locations in a census block group challenge the same technology from the same provider with sufficient evidence. The provider is then required to show evidence they provide the reported service to every location in the census block group, or the entire area will be opened up to BEAD funds.
An MDU, or multiple dwelling unit, challenge is triggered when three units or 10 percent of the total units in an apartment building challenge a provider’s service. It again flips the burden of proof, requiring providers to prove they give the reported service for the entire building, not just units that submit challenges.
Alabama’s broadband office is requesting a waiver from the NTIA’s rule around enforceable commitments from other funding programs. The state wants areas set to get broadband from the FCC’s Rural Digital Opportunity Fund to be considered unserved for the purposes of BEAD.
That fund, the state argues, has a deployment deadline too far in the future – six to eight years to BEAD’s four years – and is too prone to defaults to be a reliable alternative to BEAD.
Volume two
Alabama does not expect to have any of its $1.4 billion BEAD allocation left over after funding broadband infrastructure.
The state is planning to award that money in a single round of grant applications, but may administer a second, according to its proposal.
Like most states, Alabama won’t be setting a high-cost threshold before looking over all BEAD grant applications. That’s the price point at which the state will look to non-fiber technologies to serve the most expensive, hardest to reach areas.
Alabama’s broadband office is seeking comment on using the NTIA’s updated financing guidance, but plans on implementing it.
That updated guidance allows options which tie up less capital, like performance bonds. BEAD rules initially required a 25 percent letter of credit, which advocates and lawmakers warned could prevent small providers from participating in the program.
The public comment period for Alabama’s initial proposal is open until December 14.
Broadband Mapping & Data
Connect20 Summit: Data-Driven Approach Needed for Digital Navigation
The NTIA’s Internet Use Survey doesn’t delve deeply enough into why people choose not to adopt broadband.

WASHINGTON, November 20, 2023 – Better data about broadband adoption is necessary to closing the digital divide in the U.S., a broadband expert said during a panel at the Connect20 Summit here.
Speaking on a panel about “The Power of Navigation Services,” the expert, Jessica Dine of the Information Technology and Innovation Foundation, said states lack comprehensive data on why some residents remain offline. This information is essential for digital navigator programs to succeed, she said.
She highlighted the need for standardized national metrics on digital literacy and inclusion, and said that federal surveys – including the Census Bureau’s American Community Survey – provide insights on barriers to technology adoption. But more granular data is required.
She also said that the National Telecommunications and Information Administration’s Internet Use Survey doesn’t delve deeply enough into why people choose not to adopt the internet. For instance, understanding the nuances behind the ‘not interested’ response category could unveil targeted intervention strategies.
In particular, Dine praised Louisiana and Delaware for surveying communities on their connectivity needs, including overlaying socio-economic indicators with broadband deployment data. But she said more work is required to quantify the precise challenges different populations face.
Other panelists at the session, including Michelle Thornton of the State University of New York at Oswego, emphasized the importance of tracking on-the-ground efforts by navigators themselves.
Bringing in her experience from the field of healthcare navigation, Thornton underscored the value of tracking navigator activities and outcomes. She suggested a collaborative model where state-level data collection is supplemented by detailed, community-level insights from digital navigators.
The panel was part of the Connect20 Summit held in Washington and organized by Network On, the National Digital Inclusion Alliance, and Broadband Breakfast.
The session was moderated by Comcast’s Kate Allison, executive director of research and digital equity at Comcast.
To stay involved with the Digital Navigator movement, sign up at the Connect20 Summit.
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