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Broadband's Impact

While Universal Service Reforms Show Promise, Politics Clouds Fund’s Future

ASPEN, Colorado, August 19, 2015 – In spite of several positive efforts to reform the complex and dated rules that govern the Federal Communication Commission’s universal service fund, key decisions surrounding the $8 billion annual fund remain ineluctably political.

That was the message shared by panelists, including a commissioner at the FCC, speaking at a session on Tuesday at the Technology Policy Institute’s annual forum here.

For example, the panelists — which also include two economists, a cable industry lobbyist and the former director of the National Broadband Plan — applauded efforts to bring greater economic efficiency to telecom network construction through a system known as a “reverse auction.”

They also supported efforts to promote broadband adoption by providing income-based vouchers for the purpose of internet services.

But decisions about the allocation of funds within the USF — and the key question of how the fund is to be paid for — remain political hot potatoes.

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Moderator Scott Wallsten of the Technology Policy Institute, with panelists Mignon Clyburn, James Assey, Blair Levin, Gregory Rosston, and Bradley Wimmer.

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ASPEN, Colorado, August 19, 2015 – In spite of several positive efforts to reform the complex and dated rules that govern the Federal Communication Commission’s universal service fund, key decisions surrounding the $8 billion annual fund remain ineluctably political.

That was the message shared by panelists, including a commissioner at the FCC, speaking at a session on Tuesday at the Technology Policy Institute’s annual forum here.

For example, the panelists — which also include two economists, a cable industry lobbyist and the former director of the National Broadband Plan — applauded efforts to bring greater economic efficiency to telecom network construction through a system known as a “reverse auction.”

They also supported efforts to promote broadband adoption by providing income-based vouchers for the purpose of internet services.

But decisions about the allocation of funds within the USF — and the key question of how the fund is to be paid for — remain political hot potatoes.

Embedded image permalink

Moderator Scott Wallsten of the Technology Policy Institute, with panelists Mignon Clyburn, James Assey, Blair Levin, Gregory Rosston, and Bradley Wimmer.

“The electorate will decide the right size” of the USF, said Blair Levin, former director of the FCC broadband plan, referring to the 2016 presidential vote. Levin is currently executive director of Gig.U and a senior fellow at the Brookings Institution.

“Let’s put aside, for now, the question of the budget” and whether fees should be levied on internet connections to pay for the USF, said Levin. Putting that issue aside would allow the FCC to design the best policy, irrespective of how large the fund ultimately will be.

Over the past five years, each of the four main components of the universal service fund have undergone an overhaul. First was the “high-cost fund,” the largest component of the USF, which became the Connect America Fund and the Mobility Fund.

These changes include the implementation of a “reverse auction,” in which the FCC promises to support rural broadband providers based on the bidder who offers to provide broadband at the lowest cost.

The other three components of the USF are the eRate for schools and libraries — changed last year by FCC decisions in July and December – plus the health care and telemedicine fund, and the Lifeline program for low-income connectivity.

Much of Tuesday’s panel discussion, titled “”Universal Service: Towards Broadband, Efficiency and Equity,” revolved around the Lifeline program, which is currently being reviewed and potential modified by the agency.

Too frequently, commentators speak of “lifeline and universal service. Lifeline is universal service. It is one leg in a four-legged stool,” said Commissioner Mignon Clyburn, who is spearheading efforts to enhance the current Lifeline program.

Until the changes over the past five years, universal service monies could not be used directly on expenditures for broadband. That remains the case with Lifeline; although FCC Chairman Tom Wheeler has proposed changing that.

Two economists participating on the panel said that Lifeline has become an income-redistributing effort instead of a program ensuring greater access for low-income individuals.

“A lot of the money from the Lifeline program goes to households that would subscribe to telephone service even if there were no subsidy,” said Bradley Wimmer, an economics professor at the University of Nevada at Las Vegas.

Clyburn pushed back on that point.

Speaking about low-income individuals, she said that “people want to communicate, and they will make sacrifices to do so. Should they make the tradeoffs they are making to be able to communicate?”

Additionally, Clyburn said, 44 percent of those who are low-income end up having their smart phones disconnected because of economic hardships.

However, all of the panelists supported efforts to use vouchers to move the Lifeline program in a direction of allowing low-income consumers greater communications choices.

The four of USF programs are funded by a 17 percent fee on telephone communications, a number that is adjusted for cell phone users. Currently, broadband connections are not subject to the fee, but that might change.

When Congress put legislation in place to limit taxes and fees on internet connections in the 1990s, demand for such services were not “inelastic.” That economics term refers to goods, like automobile fuel, that consumers tend to purchase irrespective of how the price changes.

“Now, they are relatively inelastically demanded,” said Gregory Rosston, deputy director of the Stanford Institute for Economic Policy Research. That means that, over the past two decades, consumers have come to regard broadband as more of a necessity.

But James Assey, executive vice president of the National Cable and Telecommunications Association, countered: “At a time we want to promote broadband, why impose additional costs on broadband bills?”

Although most cable companies have not been eligible for universal service funds, Assey said that could change as FCC updates its traditional rules around the Connect America Fund and Lifeline.

Assay also said that cable companies have been among the most active in promoting connectivity through efforts like Comcast’s Internet Essentials. Initiatives designed to spur greater broadband adoption were required of Comcast, the largest cable provider, as part of conditions attached to approval of its merger with NBC Universal.

Levin said that the debate about the USF suffered from a “penny-wise, pound-foolish” mentality. “How much more efficient would government be if it knew that everyone was online?”

Being able to reconfigure government systems and make them almost-exclusively online could end up saving billions, if not tens of billions of dollars every year, he said.

 

Drew Clark is the Editor and Publisher of BroadbandBreakfast.com and a nationally-respected telecommunications attorney at The CommLaw Group. He has closely tracked the trends in and mechanics of digital infrastructure for 20 years, and has helped fiber-based and fixed wireless providers navigate coverage, identify markets, broker infrastructure, and operate in the public right of way. The articles and posts on Broadband Breakfast and affiliated social media, including the BroadbandCensus Twitter feed, are not legal advice or legal services, do not constitute the creation of an attorney-client privilege, and represent the views of their respective authors.

Health

Ask Me Anything! Friday with Craig Settles, Community Telehealth Pioneer at 2:30 p.m. ET

Visit Broadband.Money to register for the Ask Me Anything! event on Friday, December 3, 2021, at 2:30 p.m. ET.

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Visit Broadband.Money to register for the Ask Me Anything! event on Friday, December 3, 2021, at 2:30 p.m. ET.

Craig’s tireless work has helped transform the last mile of broadband in the U.S., through his influence among national, state, and corporate decision makers, and his on-the-ground work building community broadband coalitions. Broadband Breakfast Editor and Publisher Drew Clark will interview Craig Settles in this Broadband.Money Ask Me Anything!

Read the Broadband.Money profile of Craig Settles

About Our Distinguished Guest

Saved from a stroke by telehealth, Craig Settles pays it forward by uniting community broadband teams and healthcare stakeholders through telehealth projects that transform healthcare delivery.

Mr. Settles conducts needs analyses with community stakeholders who want broadband networks and/or telehealth to improve economic development, healthcare, education and local government. Mr. Settles’ needs analyses opens up additional opportunities to raise money for networks, as well as increase the financial sustainability of your network. He’s been doing this work since 2006.

A community telehealth champion

Mr. Settles views telehealth as the “Killer App” that can close the digital divide because everyone experiences illness or cares for someone who is ill. Every home that telehealth touches must have good broadband. Telehealth technology and broadband in the home provide avenues for other home-based technology services that can improve quality of life, such as companion distance-learning apps, a home business app, and home entertainment apps.

He authored Fighting the Good Fight for Municipal Wireless in 2005, and since then, Mr. Settles has provided community broadband consulting services. His public-sector client list includes Ottumwa, IA, Riverside, Benicia and Glendale, CA and the State of California. Calix, Ciena and Juniper Networks are among those on his private sector client list. In addition, he has testified for the FCC and on Capital Hill.

Craig around the web

Mr. Settles hosts the radio talk show Gigabit Nation, His in-depth analysis reports are valuable resources for community broadband project teams and stakeholders. Building the Gigabit City, Mr. Settles’ blog, further showcases his expertise in this area.

Follow Mr. Settles on Twitter and LinkedIn.

Mr. Settles is frequently called upon as a municipal broadband expert for journalists at CNN, the Wall Street Journal, New York Times, Time Magazine and a host of business, technology and local media outlets. He has spoken at various conferences in the U.S, Europe, South America, Australia and Asia.


About Ask Me Anything! (AMA)

AMA invites broadband industry leaders from all corners to share their knowledge and perspectives with our community.

The format is simple:

  1. A one hour live webinar with our distinguished guest
  2. Interactive questions from attendees in the comments below this post
    • See a question you also wonder about? “Like” it to upvote it
    • Have more questions? Add them as comments to this post.
  3. Our guest will answer as many questions as time permits, in order of upvotes
    • A community moderator will paraphrase our guest’s answers and post as reply
    • Want to weigh in with your perspective? You’re welcome to share your replies!

Please be respectful of our distinguished guest. It’s okay to disagree, but thank you for being kind. Trolls will be banned.

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Broadband's Impact

Julio Fuentes: Access Delayed Was Access Denied to the Poorest Americans

Big Telecom companies caused months and months of delays in the rollout of the Emergency Broadband Benefit.

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The author of this Expert Opinion is Julio Fuentes, president and CEO of the Florida State Hispanic Chamber of Commerce

Remember when millions of students in dense urban areas and less-populated rural areas weren’t dependent on home broadband access so they could attend school?

Remember when we didn’t need telehealth appointments, and broadband access in urban and outlying areas was an issue that could be dealt with another day?

Remember when the capability to work remotely in underserved communities wasn’t the difference between keeping a job and losing it?

Not anymore.

Education. Health care. Employment. The COVID-19 pandemic affected them all, and taking care of a family in every respect required broadband access and technology to get through large stretches of the pandemic.

You’d think the Federal Communications Commission and its then-acting chairwoman would have pulled out all the stops to make sure that this type of service was available to as many people as possible, as soon as possible — especially when there’s a targeted federally funded program for that important purpose.

Alas, by all appearances, some Big Telecom companies threw their weight around and caused months and months of delays, denying this life-changing access to the people who needed it most — at the time they needed it most.

The program in question is the federally funded Emergency Broadband Benefit program. The EBB offered eligible households — often the poorest Americans — a discount of up to $50 per month toward broadband service, and those households can also receive a one-time discount of up to $100 to purchase a laptop or other computer if they contribute just $10 to the purchase. Huge value and benefits for technology that should no longer be the privilege of only those with resources.

Seems fairly straightforward, right?

It should have been. But FCC Chairwoman Jessica Rosenworcel slammed on the brakes. Why? It turns out that Big Telecom giants wanted more time to get ready to grab a piece of the action — a lot more time. While the program was ready to go in February, it didn’t actually launch until several months later.

That’s months of unnecessary delay.

But it wasn’t providers who were waiting. It was Americans in underserved and rural areas, desperate for a connection to the world.

Here are some numbers for Rosenworcel to consider:

  • As recently as March, 58% of white elementary students were enrolled for full-time in-person instruction, while only 36% of Black students, 35% of Latino students, and 18% of Asian peers were able to attend school in person.
  • Greater portions of families of color and low-income families reportedly fell out of contact with their children’s schools during the pandemic. In one national survey in spring 2020, nearly 30% of principals from schools serving “large populations of students of color and students from lower-income households” said they had difficulty reaching some of their students and/or families — in contrast to the 14% of principals who said the same in wealthier, predominantly white schools.
  • In fall 2020, only 61% of households with income under $25,000 reported that the internet was “always available” for their children to use for educational purposes; this share was 86% among households with incomes above $75,000.

And all of these numbers cut across other key issues such as health care and maintaining employment.

Access delayed was access denied to the poorest, most isolated Americans during the worst pandemic in generations.

Allowing Big Telecom companies to get their ducks in a row (and soak up as many federal dollars as possible) left poor and rural Americans with no options, for months. Who knows how many children went without school instruction? Or how many illnesses went undiagnosed? Or how many jobs were terminated?

This delay was appalling, and Chairwoman Rosenworcel should have to answer for her actions to the Senate Commerce Committee as it considers her nomination for another term as commissioner. Rather than expedite important help to people who needed it most, she led the agency’s delay — for the benefit of giant providers, not the public.

Hopefully, the committee moves with more dispatch than she did in considering her actual fitness to be FCC chairwoman for another term.

Julio Fuentes is president and CEO of the Florida State Hispanic Chamber of Commerce. This piece is exclusive to Broadband Breakfast.

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

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Education

Texas High School Students Enter the Fight for Better Connectivity

Students in a Houston-area school district hosted a panel on connecting schools and libraries as part of a national event on bridging the digital divide.

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John Windhausen Jr., founder and executive director of the Schools, Health & Libraries Broadband Coalition

WASHINGTON, December 1, 2021 – Generation Z students are making their mark at a Houston-area school district by adding broadband access to the list of issues they are actively working on.

The high school students in the Fort Bend Independent School District organized a panel conversation on internet access in education as part of Connected Nation’s national event titled “20 Years of Connecting the Nation,” and were able to host some high-profile guests in the world of telecommunications.

The November 17 panel included John Windhausen Jr., founder and executive director of the Schools, Health & Libraries Broadband Coalition, Chris Martinez, division director of information technology for the Harris County Public Library, Heather Gate, vice president of digital inclusion for Connected Nation, and Meredith Watassek, director of career and technical education for Fort Bend ISD.

Nine percent of residents in Harris County, where Houston is located, reports that they do not have a connected device at home and 18 percent say they do not have access to an internet connection. These gaps in access are the focus of the panelists’ digital equity efforts.

With Windhausen and Martinez present on the panel, a key point of discussion was the importance of helping libraries to act as anchor institutions – institutions which help enable universal broadband access.

Watassek pointed out that she has been helping oversee distance learning in Fort Bend ISD for six years, starting such a program to enable teachers to teach students in several of the district’s buildings without having to drive to each one, and has seen that with time and learned experience it is possible to work through distance learning logistical issues that school districts around the nation are currently facing.

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