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Broadband's Impact

Expert Opinion: Business as Usual Despite Departure of Universal Service Administrative Company CEO

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Although it is the Federal Communications Commission (“FCC” or “Commission”) that is charged with implementing the ambitious universal service policy goals set forth in the Telecommunications Act of 1996 (the “Act”), the FCC designated the Universal Service Administrative Company (“USAC”), an independent, not-for-profit corporation, to administer the day-to-day operations of federal universal service. USAC bills and collects contributions to the federal universal service fund (“USF”) from telecommunications providers and disburses the funds to the four federal universal service programs: (1) High Cost; (2) Lifeline; (3) Rural Health Care; and (4) E-Rate. At the head of USAC is its Chief Executive Officer, who is responsible for the management of USAC’s daily operations.

What does this have to do with Scott Barash? As USAC’s first in-house counsel (a post he assumed in 1999) and Acting Chief Executive Officer (a post he assumed in 2006), Scott has been a constant USAC presence for over fourteen years in an otherwise tumultuous telecommunications world. He has had a ringside seat as telecommunications has progressed from primarily PSTN to include wireless, interconnected VoIP and broadband.

In his role as USAC’s first in-house counsel, Scott worked with USAC to develop federal universal service practices and procedures when the federal universal service fund was still in its infancy. As USAC’s Acting CEO, Scott managed USAC’s day-to-day operations, a task which required him to forge strong collaborative relationships with the FCC and USAC Board of Directors. As USAC’s figurehead, and perhaps most well-known employee, Scott was held accountable for USAC’s actions to Congress, the FCC, the USAC Board of Directors, industry participants and telecommunications consumers alike.

Given Scott’s long history with USAC and the importance of his role as Acting CEO, one would think that his recently announced departure would mean significant upheaval at USAC. That is not the case. There is no doubt that USAC faces tough challenges. Technology has rapidly outpaced the current telecommunications laws making it difficult for USAC to align the FCC’s policy goals and regulations with the practical reality of today’s telecommunications providers and the services they offer.

The FCC is grappling with reform in all of the federal universal service programs, as well as attempting comprehensive contribution reform. Lawmakers are also grappling with the task of universal service reform. President Obama has previously called for the overhaul of E-Rate, a task which the FCC initiated with its E-Rate modernization NPRM. In his 2014 State of the Union address, President Obama re-stated his commitment to bring high-speed broadband connectivity to 99% of America’s students with the support of the FCC and philanthropic relationships with companies like Apple, Microsoft, Sprint, and Verizon.

All of these potential changes come at a time when federal universal service has seen a shrinking contribution base and higher contribution factors (16.4% for the first quarter of 2014). With the move away from the Public Switched Telephone Network towards IP-based telecommunications, whether broadband Internet access, text-messaging and enterprise communications providers should be added to the list of federal USF contributors remains a contentious subject. While each of these is a matter of policy that must first be addressed by the FCC,9 each of them will have a significant administrative impact on USAC.

And yet, the old adage is true. The more things change, the more they stay the same. There is no doubt that the loss of Scott’s broad institutional knowledge and practical perspective regarding effective implementation of FCC policy goals will be a significant loss to USAC. However, perhaps the best testament to Scott’s leadership is that because of the strong administrative practices and procedures developed during his tenure, his departure will have little to no impact on the day-to-day administrative aspects of federal universal service.

At least in the short term (i.e., pending any significant Congressional or FCC universal service reform), the day-to-day obligations for federal USF contributors and beneficiaries will look the same after Scott’s departure as they did during his time as USAC’s Acting CEO. Nonetheless, given the rapidly evolving state of telecommunications and the calls for rapid, decisive federal universal service reform, it will only benefit USAC to have a strong, knowledgeable leader at the helm. The board would be wise to nominate, and the FCC to appoint, a new USAC CEO in an expeditious manner.

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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