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The Connect America Fund: Statements and Highlights from the FCC Commissioners



WASHINGTON, Friday  October 28, 2011.  The Federal Communication Commission unanimously voted to overhaul its outdated the Universal Service Fund and reform its intercarrier compensation fund at yesterday morning’s Open Commission Meeting.

The FCC predicts that an effort to expand high speed internet to rural America over the next six years, will increase economic growth by $50 billion.  The Commission introduced the Connect America Fund.  The CAF replaces the high-cost fund by shifting the focus of the fund to support broadband capable networks, setting performance goals and a capping the fund at $4.5 billion.

The goals stated in the FCC executive summary include:  (1) preserve and advance universal availability of voice service; (2) ensure universal availability of modern networks capable of providing voice and broadband service to homes, businesses, and community anchor institutions; (3) ensure universal availability of modern networks capable of providing advanced mobile voice and broadband service; (4) ensure that rates for broadband services and rates for voice services are reasonably comparable in all regions of the nation; and (5) minimize the universal service contribution burden on consumers and businesses.

Chairman Julius Genachowski remarked, “We are taking a system designed for the Alexander Graham Bell era of rotary telephones and modernizing it for the era of Steve Jobs and the Internet future he imagined.”

Below are a number of quotes from the Commissioners that best highlight the major accomplishments of the proposal.

The Chairman directed his initial comments to praising the accomplishments made in the creation of the Mobility Fund. “Today, we make mobility an independent universal service objective for the first time, providing dedicated support through the world’s first Mobility Fund. Over the next three years, we will provide almost $1 billion in funding per year for universal mobility.”

Genachowski also stressed his approval of the proposal’s consumer protection measures and competitive bidding provisions.

“By constraining the growth of existing programs, today’s reforms will also minimize the burden those programs place on all consumers, keeping hundreds of millions of dollars in consumers’ pockets over the next several years. Our overhaul of the intercarrier compensation system will gradually eliminate the billions of dollars in hidden subsidies currently paid by consumers across the country through their wireless and long distance phone bills. Our staff estimates that the consumer benefits of ICC reform will be more than $2 billion annually. Consumers will get more value for their money and less waste.”

“Also a first, today’s Order brings market-based competitive bidding into universal service support. In a series of ways, including auctions, we have structured distribution of public funds to ensure real efficiency and accountability in the Connect America Fund.”

As noted by many stakeholders throughout the day, the Commissions plan did not adopt wholesale the telecom industry’s America’s Broadband Connectivity Plan, better known as the ABC plan.  Genachowski addressed the various stakeholder proposals by saying, “We did not rubber stamp or adopt wholesale the proposals of any stakeholder or group of stakeholders. Instead, we made our decisions on what’s right for the American people and our economy based on facts and data gathered in one of the most extensive records in FCC history, including hearings and workshops across the country, and more than 2,700 substantive comments totaling tens of thousands of pages.”

Commissioner Copps focused his statements on the details of the Mobility Fund, the benefits the plan brings to Tribal communities, ICC reforms and the role of states.

With respect to the reverse auctions, Copps stated, “While we have considerable experience with spectrum auctions, this is in many ways a new species of auction and we will need to be very careful in how we approach and evaluate it. I hope… it will truly become an efficient way to expend our limited USF dollars to reach unserved areas.”  He added, “Let me also say how much I appreciate the item’s prohibition on nation-wide package bidding in the Mobility Fund. I believe this is an important safeguard against gamesmanship and even further consolidation in the industry.”

“I am also encouraged that we launch a Tribal Mobility Fund specifically to target support for mobile service in Tribal areas…Again, getting this right will take more money than is being proposed in today’s proceedings, but it also hinges on more than money alone. It hinges also on the Commission taking prompt action on other proceedings and spectrum issues pending before us.” Copps said noting the specific efforts to address the unserved tribal areas.

Copps was very clear in expressing why the ICC reform was beneficial for consumers.

“This item puts the brakes on the arbitrage and gamesmanship that have plagued ICC for years and that have diverted private capital away from real investment in real networks. By some estimates, access stimulation costs nearly half a billion dollars a year, and phantom traffic affects nearly one fifth of the traffic on carriers’ networks. Today, we say “no more.” We adopt rules to address these arbitrage schemes head on. And, very importantly, we chart a course toward a bill-and-keep methodology that will ultimately rid the system of these perverse incentives entirely.”

Copps then raised the issue that has been a major concern for many in the public interest community.

“My enthusiasm here is tempered by the fact that end-user charges (under the label of “Access Recovery Charges”) are allowed to increase, albeit incrementally, for residential consumers. My first preference was to prevent any increase. Alternatively, we could require individual carriers to demonstrate their need for additional revenues before imposing the ARC. Perhaps some of the largest and most profitable companies should not be able to charge the ARC.  However, the Commission does adopt some important measures to protect consumers even as it allows additional charges. In particular, consumers already paying local phone rates of $30 or more cannot be charged the ARC.  The use of this ceiling recognizes that some early adopter states have already tackled intrastate access rates, and their citizens may already be footing a reasonable part of the bill. In the end, I am grateful that, at the very least, additional charges to end-users are not as great as they might have been, are spread over a longer period of time, and should be offset (and hopefully more than matched) by savings and efficiencies realized because of the more rational programs we begin to put in place.”

The role of states in the proposed plan has been brought up many times in the months leading up to this proposal.  Copps was very clear about the role of states moving forward.

“Building critical infrastructure—and broadband is our most critical infrastructure challenge right now—has to be a partnership. The states are important and essential partners as we design and implement new USF and ICC programs.”  He continued, “More even than my personal preference, which is deeply-held, this is the mandate of the law. Section 254 of the Act is clear—the states have a critical role in the preservation and advancement of Universal Service. While I understand the need for predictability in an ICC regime, I am pleased that my colleagues have retained a key role for states, including arbitrating interconnection agreements; monitoring intrastate access tariffs during the transition to bill-and-keep; and helping to implement our Universal Service Fund as well as, in many cases, their own state universal service funds. State regulators are by definition closer to the needs of their consumers than federal regulators ever can be, and they retain their role as the likely first venue for consumer complaints.”

Copps ended his statements by noting that while the proposal deal with distribution of funds, reforming contribution to the fund will be another difficult task.

“I would have preferred to see such an item in front of us today. There is inherent inequity in a system that funds the deployment of broadband off of assessments on interstate telephony. Once we ensure that double, triple and quadruple play services that benefit from Universal Service bear their fair share; we will not be subject to the unnecessary financial constraints that our current approach imposes.  We also need spectrum management decisions that avoid putting still more spectrum in too few hands.”

Commissioner McDowell, not surprisingly, used the podium to address the importance of fiscal responsibility and how it was expressed in the proposal.  “In the spirit of being fiscally responsible, however, we are mandating that the high cost program of the Universal Service Fund live under a definitive budget for the first time in history.  Functionally, the budget serves as an annual cap through 2017.  Until then, the Fund may not rise higher than $4.5 billion per year, on average after true-ups, without Commission approval.”

Following the comments of Commissioner Copps McDowell also addressed the need for contribution reform,

“The contribution factor, a type of tax paid by consumers, has risen each year from approximately 5.5 percent in 1998 to an estimated 15.3 percent in the fourth quarter of this year.  This trend is unacceptable.  We must abate this automatic tax increase without further delay.  Accordingly, I strongly urge that we work together to complete a proceeding to reform the contribution methodology in the first half of the year.”

McDowell also applauded the proposal’s focus on competitive bidding including reverse auctions, the elimination of the inefficient identical support rule, the benefit consumers will receive from transparency by the phasing out of hidden subsidies, the waiver process for carriers experiencing hardship, and the proposed means testing in the Further Notice that will identify the qualified recipients in remote areas.

As a champion of consumers and a former state utilities commissioner, Commissioner Clyburn had a lot to say about ICC reform and the role of States in USF reform.

“I carefully considered how much those consumers are being asked to shoulder, when it comes to the costs of Intercarrier Compensation reform, as well as the impact on those consumers who already have service.”  She continued, “It also shouldn’t surprise anyone that it was similarly important to me, that we give service providers and their investors time to adjust to our proposed reforms, because from day one, I made a firm commitment to no flash cuts.  A reasonable transition period will help ensure that providers can navigate these reforms successfully.  But for those providers who require additional time to adjust, we have in place a waiver process that is firm, predictable, yet fair.   Another benefit of this waiver process is that it provides this Commission with a safety net—so that we can adjust support as needed, in order to avoid inadvertently harming the success we have already achieved through our legacy system.”

“We owe a debt of gratitude to our State Members.  They have been a significant resource for this Commission in our reform process…We are requiring USF recipients to meet interim broadband build out milestones, to annually report on their build out and service requirements, and to file those reports jointly at the FCC and the state utility Commissions.  We also are implementing a cap on total per-line support, and other fiscally responsible measures, to eliminate waste and inefficiency in the system.”

Clyburn made a point of also focusing on IP interconnection issues,

“Not only did we hear from the states about how important it is to ensure that IP interconnection occurs, we also received significant comment from competitive voice providers that the lack of IP interconnection is impeding the development of IP networks, including VoIP services.  As such, the Order confirms that the duty to negotiate in good faith, does not depend upon the network technology underlying the interconnection, whether it is TDM, IP, or otherwise, and that we expect good faith negotiations to result in interconnection arrangements between IP networks for the purpose of exchanging voice traffic. “

“However, I think it is only appropriate that our actions today carefully preserve and recognize the reforms that some states already have undertaken.  Most importantly, we have provided for replacement funding as intrastate access rates decline as a result of our reform which relieves the financial burden that would have been on states in their own attempts at reform.  To that end, we also have carefully balanced ICC revenue replacement for providers, with the important goal of not burdening consumers with significant increases in their bills or overburdening the USF which is ultimately paid for by consumers.  As indicated by our staff’s analysis, we believe that the overall benefits that will flow to consumers as a result of this reform will far outweigh the minimal price increases they will experience on their phone bills due to ICC reform.”

“I also want to be quite clear that states will continue to have an important role with respect to the arbitration of interconnection agreements and in the operation of USF.  With respect to USF, states will continue to designate Eligible Telecommunications Carriers for USF purposes and will continue to protect consumers through their carrier of last resort regulations.  As technology evolves, so too must the role of the regulators.”

Clyburn ended her comments by stating how important the states were in cost saving because of their ability to help target the fund to areas that are most underserved.

“One constant that I have seen, however, is that consumers expect that their state regulators will serve and protect them.  Moreover, those of us at the FCC need the states’ expertise and knowledge on the ground, to properly execute and operate our new universal service funding mechanisms.  For instance, we need the state’s assistance in identifying those areas that currently are unserved by broadband.  We want to target our limited resources to those consumers who do not have any broadband provider offering them service.  Likewise, we will need the states’ help assessing that those providers who receive funding meet their public interest obligations to build and serve.”


As Deputy Editor, Chris Naoum is curating expert opinions, and writing and editing articles on Broadband Breakfast issue areas. Chris served as Policy Counsel for Future of Music Coalition, Legal Research Fellow for the Benton Foundation and law clerk for a media company, and previously worked as a legal clerk in the office of Federal Communications Commissioner Jonathan Adelstein. He received his B.A. from Emory University and his J.D. and M.A. in Television Radio and Film Policy from Syracuse University.


Digital Learning is Here to Stay, Necessitating Multi-Sector Collaboration: Connected America Conference

The pandemic heightened the urgency of closing the digital divide, but several barriers remain.



Photo of panelists at Connected America 2023

DALLAS, March 29, 2023 — As technology continues to play a growing role in education, successful efforts at closing the digital divide will require collaboration between schools, government agencies, community organizations and the private sector, according to industry experts at the Connected America conference on Tuesday.

Lack of digital access has short-term impacts on students’ grades and test scores, as well as compounding long-term effects on their ability to succeed in the workforce — and these impacts are particularly significant for students of color, explained Ji Soo Song, digital equity advisor for the U.S. Department of Education.

The pandemic left millions of students struggling to participate in remote classes, heightening the urgency of closing the digital divide.

“In Texas alone, it was 34 percent of students that did not have full internet access,” said Tonjia Grimble, founder and CEO of STEM It Up Sports. “That’s about 1.8 million students.”

Although schools have largely returned to in-person learning, the pandemic “opened a door that can’t be closed again” in terms of technology’s role in education, said Jennifer Berkner, education lead strategist at AT&T’s FirstNet.

This shift enables a new realm of learning opportunities, but it also presents challenges for both students and educators, panelists agreed.

“Affordability is still the main barrier to access,” said Francisco Gallegos, digital inclusion program manager for the Dallas Innovation Alliance.

For some schools, their actual physical infrastructure poses a problem. “You have schools that are built in concrete — you can’t get service through concrete,” Grimble said. “If their structure itself is not sound, then they’re not going to be able to get what you’re trying to get them… More of our states need to start thinking about improving that infrastructure.”

Song pointed to a September 2022 report, stemming from the Department of Education’s Digital Equity Education Roundtables initiative, that detailed existing barriers and potential solutions for increasing digital access. Among other recommendations, the report advised that community leaders should develop public trust by partnering with a broad range of local entities, including educational institutions, internet service providers, nonprofit organizations and more.

“The education sector needs to be in collaboration with the broadband sector as the digital equity plans are developed, because we can’t have siloed solutions,” Song said. Many states have already announced opportunities for community members to contribute to the digital equity planning process, he added.

In addition to the digital equity funding established by the Infrastructure Investment and Jobs Act, Song highlighted a variety of other government funding programs that can be layered to support digital learning. A “Dear Colleague” letter issued by the Office of Educational Technology in January provided guidance for maximizing this range of federal funding.

Private companies can also play a role in narrowing the digital divide, said Garner Duncan, vice president of sales for Ezee Fiber. Noting the longevity of fiber, Duncan advocated for service providers to focus on a longer-term return on investment in order to better support digital education infrastructure.

“We have returns that we have to make, but we need to be less rigid,” he said.

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Lindsay Mark Lewis: As Inflation Spiked, Broadband is ‘The Dog That Didn’t Bark’

Why have internet prices remained constant while demand surges? It all boils down to investment.



The author of this Expert Opinion is Lindsay Mark Lewis, executive director of the Progressive Policy Institute.

There are many lessons to be learned from last year’s midterms, but Democrats should not take the results as some broad endorsement of the economic status quo. Midterm voters identified inflation as the most important issue driving their votes. And while the latest Labor Department data shows the producer price index decreasing by 0.1% in February, prices remain 4.6% higher than a year ago, which means lawmakers still have work to do to bring inflation under control.

And as they search for ideas, they may want to examine the dog that didn’t bark – in particular, the one sector of the economy that has been an interesting counternarrative to the otherwise troubling inflation story.

Home internet service is one of the few major living costs that isn’t skyrocketing. In fact, the most popular broadband speed tier one year ago actually costs 15% less today, on average.

This success story – and the bipartisan policies behind it – offers important lessons.

Remarkably, broadband prices are declining even as demand surges. The pandemic made home internet service more essential than ever for education, job opportunities and health care – all driving internet traffic 25% to 50% above pre-pandemic levels.

So why have internet prices remained constant – even declined by some measures – while demand surges? In short, it all boils down to investment.

When the pandemic cratered economic activity in the spring of 2020, executives in many industries – from lumber to oil refineries to computer chips – made the snap decision to pull back on long-term investments in new factories and manufacturing capacity. When the economy roared back, those industries couldn’t meet demand, sending prices soaring.

In the broadband industry, conversely, providers responded by investing $86 billion into their network infrastructure in 2021 – the biggest one-year total in nearly 20 years. These investments are fueling faster speeds – fixed broadband speeds are up 35% nationwide in the past 12 months – while making sure networks have the capacity to handle growing traffic needs.

This teaches us three things.

First, we should observe a Hippocratic oath and “do no harm.” America’s broadband system has thrived under a decades long bipartisan consensus for light-touch, pro-investment policies. Nearly $2 trillion in private capital built the networks that now deliver American consumers higher speeds at lower per-megabit prices than consumers enjoy in Europe, despite having to cover greater distances and more difficult terrain.

This further tells us that it’s precisely the wrong time to abandon this successful model in favor of price controls and utility-style regulation, as some House and Senate progressives have proposed. Even Democratic policy experts acknowledge that approach would be toxic for private investment.

Second, policymakers need to recognize that broadband isn’t immune from the supply chain crunches plaguing so many other sectors of the economy. Broadband buildouts are already getting delayed by shortages in fiber cable, network hardware and skilled labor. And that’s before $42 billion in federal infrastructure funding goes out the door starting next year, which will only intensify demand for these scarce supplies.

That means rural buildout projects funded by federal dollars are likely to see inflationary pressures – and take longer to complete – than Congress expected when it passed the infrastructure bill in 2021. That will put pressure on state broadband offices to be even more diligent about waste, and to emphasize reliable supply chains with experienced network builders. Bidders will also need the flexibility to buy fiber from wherever they can manage to source it, even if that means relaxing the program’s strict “Buy American” rules. This requires a regulator ability to do smart tweaking of rules to expedite buildouts cost-effectively.

Third, we need to help more financially struggling households get connected. Thanks to President Joe Biden’s Affordable Connectivity Program – and an agreement with 20 broadband companies – 48 million households can now get home internet service for free.

But more than a year later, just over a third of eligible households have signed up. Investing in enrollment campaigns and digital literacy training programs is the fastest way we can crank up the dial on enrollment. Relatively small investments here could pay huge dividends in bringing millions more Americans into the digital economy.

Even with these remaining challenges, the overall contours of American broadband policy – encouraging investment, competition and affordability – are working well. And as the saying goes: “If it ain’t broke, don’t fix it.” In an inflation-roiled economy that defies easy answers, we should learn from – not mess with – this all-too-rare success story.

Lindsay Mark Lewis is executive director of the Progressive Policy Institute. Contact him at This piece was originally published in the Richmond Times on March 24, 2023, and is reprinted with permission.

Broadband Breakfast accepts commentary from informed observers of the broadband scene. Please send pieces to The views reflected in Expert Opinion pieces do not necessarily reflect the views of Broadband Breakfast and Breakfast Media LLC.

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Josephine Bernson: The Customer Experience is About More Than Fiber

‘Listen to the customer’ is a fundamental pillar in gaining a satisfied customer.



The author of this Expert Opinion is Josephine Bernson, Chief Revenue Officer at Great Plains Communications.

Customer experience and the digital customer experience are what makes businesses today stand apart from competitors. In our connected world, it means delivering products and services via high-speed internet, provided by a network that’s reliable and scalable according to rising bandwidth demand.

Yet, we must keep in mind the other component of a first-rate customer experience: customer service excellence.

Customer service excellence, from the beginning

How does a fiber provider successfully work with the customers and the community from the very beginning? And, continue to provide exceptional customer service each day thereafter?

It begins with listening.Listen to the customer” is a fundamental pillar in gaining a satisfied customer, whether it’s meeting with business executives, community leaders or residents. What are they hoping to achieve with their network, short-term and long-term? Any concerns that should be addressed?

Respond with solutions that meet their needs.  Personalization is better than a one-size-fits-all approach. Each customer has different needs and unique bandwidth specifications that should be taken into consideration. For example, the ability to adjust availability to accommodate peak work hours for a financial institution or local government complex or the flexibility needed for a local business that serves an online global market.

Get to know your customers. Focus on getting to know your customers through participating in local events and spending time in the community. Teams that live and work in same community they serve care about providing their neighbors with high-quality products and superior service. Valuable feedback comes from customers who directly interact with local employees immersed in the community.

Timely and convenient customer service options. If there’s a problem, how can customers contact you for a resolution? Does the customer service center or 24/7 operations center always have agents available? Are there easily accessible online resources equipped to handle common questions? Automation is a big trend in CX. While we enjoy our personal relationships with our customers, we also leverage technology for self-service tools. It’s important to enable customers to do business in whichever manner works best for them.

Happy employees for a happy customer experience

Happy employees have long been credited with increased productivity and better service for customers. Great Plains Communications’ culture has always been to attract, train and retain workers from the areas it serves.

Customer service representative Marisa Benham has been with Great Plains Communications for 15 years. “I’ve always been a people person so I really love talking to people! I love helping them figure out what services they want and helping them if they have an issue with their account.”

As for the GPC team itself, she says, “The biggest thing I love about our team is that even though we’re a large company, I feel like we are still trying to get that small company family feel.  I really love that about Great Plains as well.”

For any business to survive for a long period it must continually evolve. Great Plains Communications is a 113-year-old company serving nearly 200 Midwestern communities.  As a leading digital telecommunications leader, our core focus remains the same: customer service excellence. We believe in our high-performing network and high-performing people.

Customer loyalty depends on the customer experience, but it must be earned. It’s more than state-of-the-art technologies. It’s the people behind the innovation. It’s the teams that deliver and support the technology that make all the difference.

Josephine Bernson is the chief revenue officer at Great Plains Communications. This piece is exclusive to BroadbandBreakfast.

Broadband Breakfast accepts commentary from informed observers of the broadband scene. Please send pieces to The views reflected in Expert Opinion pieces do not necessarily reflect the views of Broadband Breakfast and Breakfast Media LLC.

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