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Trump Administration Releases Details of $1.5 Trillion Infrastructure Plan Leveraging $200 Billion in Federal Funds

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WASHINGTON, February 11, 2018 – After a year of promises, President Donald Trump on Monday is expected to unveil his long-awaited proposal for revamping the nation’s infrastructure. The plan, which was previewed by a senior White House official over the weekend, is designed to stimulate investment with an injection of limited federal funds and streamlining the permitting process.

Infrastructure is obviously a critical component to the functioning of our economy,” the official said. He called the current system “fundamentally broken” because of years of underinvestment and a permitting process that can take up to a decade before construction on infrastructure projects can begin.

“[T]he President’s vision is to have a permanent fix for the problems that plague us in terms of underinvesting and the length of the permitting process, and not just kick the can down the road and pass things over for a couple of years, which has been the habit in infrastructure policy for the last couple of decades.”

Is Trump infrastructure plan coming back to the forefront?

During the 2016 election, Trump often spoke of the nation’s crumbling bridges and roads. He pledged to help rebuild as President by bringing the know-how and experience he’d gained from decades working as a real estate executive building hotels and apartment complexes in numerous countries.

Many hoped that this experience would lead Trump to make an infrastructure package his first priority.

But the White House only touched lightly upon the subject during Trump’s first year. Last June, in an attempt at imposing message discipline by the communications division of the White House, Trump’s nascent administration tried its hand at highlighting infrastructure issues – particularly the difficulties associated with the federal permitting process – during something called “infrastructure week.” It was one of several similarly-themed weeks.

That week included the signing of an executive order meant to streamline the federal permitting process. But the week soon became dominated by coverage of Capitol Hill testimony by former FBI Director James Comey and other news relating to Trump’s decision to fire Comey.

Previously leaked document shows Trump administration plans to spend $1.5 trillion on infrastructure

Leaked documents indicate plans to spend $1.5 trillion on infrastructure projects. But the administration’s second bite at the infrastructure apple might disappoint those seeking large federal projects.

Although $1.5 trillion infrastructure plan would certainly rival the Obama administration’s American Reinvestment and Recovery Act, estimated at the time as $787 billion of new spending. The amount was later revised to $831 billion between 2009 and 2019.

But the Trump proposal envisions no new federal projects, contains no overarching plan for repairing, rebuilding or new construction projects, and gives nearly no attention to 21st century digital infrastructure components like fiber or wireless broadband.

Instead, Trump’s proposal will spend just $200 billion in federal funds – to be found in cost savings from other programs – on loans and block grants for mostly rural infrastructure projects.

Details of Trump administration infrastructure investment plans

The $1.5 trillion number, the official said, comes not from any rigorous attempt at projections but represents how state and local governments will respond to the program.

While it was once projected at $1 trillion, it was bumped up to half a trillion “because we’ve actually received a… more enthusiastic response than we anticipated from state and local governments coming to us and saying, ‘we have this project, we have funding identified, but we’d love to participate in incentives to get that match to help finish up the project and build the whole thing.’”

The hope, the senior White House official said, is that the $1.5 trillion in infrastructure investment will be realized by spending the $200 billion and having it stimulate states, localities, and the private sector to spend that much on infrastructure investments in the form of repairs and improvements to existing infrastructure as well as new construction projects.

The plan reserves one-half of the $200 billion — which the official referred to as an “incentives package” – for use as matching funds to be distributed to state and local governments as a reward for infrastructure spending.

“If they’re creating new revenue streams and they want to build something, we will partner with them to help them to match and fulfill that one final gap in terms of financing infrastructure.”

The fund will finance rail, water and transportation projects

The plan directs another 10 percent of the $200 billion, or $20 billion, toward expand current loan and private activity bond programs to finance rail, water and other transportation projects.

Still another $20 billion will be directed toward “transformative projects,” which the official defined as projects “that can lift the American spirit, that are the next-century-type of infrastructure as opposed to just rebuilding what we have currently.”

“That ensures that we’re not focusing on just patching up the infrastructure that we have currently, but will we also have a vision toward the future,” the official said.

Another $10 billion won’t actually go toward infrastructure projects, but will be set aside for a “capital financing fund” to help with “governmental accounting rules,” the official said. “In essence, it’s a just more responsible way for us to actually fund the office-building infrastructure that the federal government is building currently.”

Second-largest segment of funds, or $50 billion, will go to rural infrastructure

But the official confirmed that the plan sets aside the second-largest portion of funds of the $200 billion in federal spending – $50 billion – for rural infrastructure projects.

While the $100 billion “incentives package” will be spent as matching funds, the $50 billion directed specifically for rural states, which overwhelmingly supported Trump over Democrat Hillary Clinton in the 2016 election. This $50 billion will be distributed directly to rural governors in the form of block grants, “to allow governors to select what the priorities of infrastructure are in their respective states.”

While telecommunications projects of a “transformative nature” would theoretically be eligible to receive federal funding, the rural program is the only part of the plan for which broadband is specifically envisioned as a use case, the senior White House official said.

Previously announced rural broadband initiatives

Monday’s plan will not, however, be the Trump administration’s first foray into the world of rural broadband, as President Trump has previously acknowledged the need for expanded broadband access in rural America.

In January 2018, Trump addressed the American Farm Bureau convention in Nashville, Tennessee, and signed two executive actions meant to facilitate rural broadband deployment: An executive order for “Streamlining and Expediting Requests to Locate Broadband Facilities in Rural America” and a presidential memorandum for “Supporting Broadband Tower Facilities in Rural America and Federal Properties Managed by the Department of the Interior.”

The two actions would “provide broader and faster, and better internet coverage,” Trump said at the time.

Another previously-announced rural broadband initiative announced by the Trump administration intended to explore the use of federally-owned “dark fiber” – fiber that has been laid but is not currently in use – in order “to interconnect and provide service to communities that have not had access to broadband before,” National Economic Council Special Assistant for Technology, Telecommunications, and Cybersecurity Grace Koh said in January.

Compared to Obama, Trump administration shows lack of attention to telecommunications infrastructure

The lack of attention to broadband and other telecommunications infrastructure from Trump or his advisors compared to that given to brick-and-mortar projects may not be surprising when considering the president’s background as a builder.

Still, it remains noteworthy when contrasted with the Obama administration’s attention to broadband deployment and efforts to improve access and close the digital divide, which were the focus of several programs funded under the 2009 American Reinvestment and Recovery Act.

Under the Recovery Act, in which Congress pumped federal money into an economy still suffering from the effects of the 2008 financial crisis, the Obama administration distributed a combined $7.2 billion in loans and grants through the National Telecommunications and Information Administration’s Broadband Technology Opportunity Program and the U.S. Department of Agriculture Rural Utilities Service’s Broadband Incentives Program.

While the Trump infrastructure plan in theory makes a combined $60 billion available which could be used for broadband projects, none of the funds are set aside for such projects.

Potential state laws barring municipal broadband networks

In addition, jurisdictions in many of the same states that will be eligible to receive block grants under the rural infrastructure program would be prohibited from spending those funds on broadband projects, as they have laws in the books banning public funds from being spent to build or operate municipal broadband networks.

State legislatures enacted many of those laws at the behest of cable and internet providers, which often lobby for municipal broadband bans out of fears that such networks would cut into their customer base.

As to why the Trump administration’s plan lacked any specific focus on broadband networks or whether it would copy the ARRA’s inclusion of a “dig once” requirement to mandate that federally-funded projects include features to facilitate broadband deployment – including conduits in road projects – neither the White House nor the National Economic Council responded to queries on the subject by our deadline.

(Photo of Donald Trump in October 2016 by Gage Skidmore used with permission.)

 

 

 

 

Andrew Feinberg was the White House Correspondent and Managing Editor for Breakfast Media. He rejoined BroadbandBreakfast.com in late 2016 after working as a staff writer at The Hill and as a freelance writer. He worked at BroadbandBreakfast.com from its founding in 2008 to 2010, first as a Reporter and then as Deputy Editor. He also covered the White House for Russia's Sputnik News from the beginning of the Trump Administration until he was let go for refusing to use White House press briefings to promote conspiracy theories, and later documented the experience in a story which set off a chain of events leading to Sputnik being forced to register under the Foreign Agents Registration Act. Andrew's work has appeared in such publications as The Hill, Politico, Communications Daily, Washington Internet Daily, Washington Business Journal, The Sentinel Newspapers, FastCompany.TV, Mashable, and Silicon Angle.

Universal Service

Appeals Court Denies Petition Challenging FCC Administration of Universal Service Fund

The matter is also in front of the 6th and 11th Circuit courts.

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Photo from Etsy

WASHINGTON, March 27, 2023 – An appeals court ruled Friday that Congress provided sufficient guidance and limits on the Federal Communications Commission in its administration of the Universal Service Fund, turning away a petition that argued the agency was unjustly collecting arbitrary amounts from telecommunications service providers and was unduly delegating that collection to a private entity.

Early last year, non-profit research house Consumers’ Research and communications service provider Cause Based Commerce asked the U.S. Court of Appeals for the Fifth Circuit to find that Congress under Section 254 of the Telecommunications Act of 1996 gave the FCC unfettered delegatory authority to raise revenues akin to taxation for the fund that provides basic telecommunications services and that the commission has illegally delegated that authority to a private entity known as the Universal Service Administration Company.

But the appeals court denied the petitioners’ points in a decision Friday, ruling that Congress provided sufficient guidance to the agency when administering the $9 billion fund, put in place guardrails to guide that administration, and that the FCC has sufficient oversight of USAC to allow for the subordination. In other words, the FCC is not deviating far from the guidance and the limits imposed on it by the legislative house, according to the court.

On the first point, the three-panel court ruled that – contrary to the petitioners’ claim – Section 254 offers specific guidance, such as offering affordable telecommunications services of decent quality, making it equitably available in rural and urban areas, and funded in an equitable and nondiscriminatory manner.

“Rather than leave the FCC with ‘no guidance whatsoever,’ Congress provided ample direction for the FCC in S 254,” the decision read, adding Congress chose to “confer substantial discretion” over the USF’s administration to the FCC.

On the FCC’s revenue-raising ability, the court also ruled that Section 254 provides adequate limits on that ability. Section 254 “certainly, did not leave the matter to the FCC ‘without standard or rule, to be dealt with as [it] pleased,’” the decision read. “Instead, § 254 requires that the FCC only raise enough revenue to satisfy its primary function.”

Those limits under the provisions of Section 254 include specific guardrails for the expenditure of those funds on telecommunications services that are essential, deployed in public networks by telecoms, and consistent with the public interest.

“Taken together, these provisions demonstrate that the FCC is not in the dark as to the amount of funding it should seek each quarter,” the decision said, referencing how much USAC needs to collect from the largely voice service providers to sustain the fund. “Instead, § 254 sets out the FCC’s obligations with respect to administration of the USF and the FCC, in turn, calculates what funds are necessary to satisfy its obligations.”

Finally, the petitioners argue that the FCC has violated the private nondelegation doctrine by giving authority of the USF over to USAC with no oversight, in part because the FCC only has 14 days to approve the amounts to be collected for the fund and thus rarely exercises its power to change the contribution amount. The petitioners’ argue that the combination of those factors make it so that USAC, not the FCC, administers the fund.

But the court disagreed on that point as well. First the court established that federal statutory law expressly subordinates USAC to the FCC, with the private entity not being able make policy or interpret provisions or the intent of Congress. Second, it said the FCC dictates how USAC calculates the contribution amount and reviews the calculation after the private entity makes a proposal. Third, it noted that those proposals made by the USAC must be approved by the FCC before they are required of the communications companies. Finally, the agency allows for challenges to USAC proposals and “often” grants those challenges, the court ruled.

Still more appeals to go

The court, however, ruled against an FCC argument that the petition is “time barred” because it was not brought when Section 254 was enacted by Congress. The court noted that constitutional challenges are allowed when the approval of contribution amounts by the FCC are applied to companies.

That said, the petitioners also filed appeals in the 6th and 11th Circuit courts on the matter.

“While we are disappointed that the three judge panel ruled against us, we are encouraged that they saw through the FCC’s absurd preliminary arguments, including that our case was not timely,” William Hild, executive director of petitioner Consumers’ Research, told Broadband Breakfast in a statement. “With the acknowledgement that our case is ripe and that we have standing, we will look forward to continuing the legal fight to defend consumers from the unconstitutional USF tax on their phone bills set by unelected bureaucrats.”

The Schools, Health and Libraries Broadband Coalition, whose institutions are recipients of the fund’s money, also filed a brief in the case and said in a statement on Friday it was pleased with the decision.

“SHLB is extremely pleased that the court recognized the importance of the universal service program for the thousands of schools, libraries and health care providers that receive Universal Service Fund (USF) support,” said its executive director John Windhausen. “In the 1996 Telecom Act, Congress provided the FCC with both specific guidance and flexibility to adjust the USF program over time to embrace changes in the marketplace.

“With two more decisions to go, support for thousands of anchor institutions nationwide is still in jeopardy,” Windhausen added. “If the USF is ruled unconstitutional, it would put at risk the funding for four key programs: the Connect America Fund, Lifeline, Schools and Libraries (E-Rate), and Rural Health Care.”

Greg Guice, director of government affairs at advocacy group Public Knowledge, which filed a brief in the case, added “the Fifth Circuit has once again affirmed the importance of our nation’s universal service mission and the FCC’s obligation to ensure it is achieved by placing the program on a sound financial footing,” adding the organization hopes the other courts “take notice of this opinion and rule consistently.”

The National Lifeline Association, which advocates for the continuity of the USF program Lifeline, and industry association INCOMPAS also praised the decision. The latter added “we believe reforms to the USF are necessary to ensure this critical service can continue to exist.”

Those reform calls stem from concern that the fund is unsustainable because it is largely supported by voice service providers who have seen dwindling revenues as more Americans use other forms of communication.

The FCC has left it to Congress to provide it the authority to make changes to the fund for its long-term support, including possibly expanding the base to include broadband service providers and Big Tech.

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Funding

Treasury Department and Local Officials Tout American Rescue Plan Funds

Federal funding program prepares communities for economic turmoil.

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Photo of Jacob Leibenluft of the U.S. Department of the Treasury

WASHINGTON, March 23, 2023 – American Rescue Plan Act funds sets the United States ahead in economic resiliency, said experts at a Brookings Institution event Thursday. 

When ARPA was passed in March of 2021, the United States Department of the Treasury was tasked with ensuring that funds would be used to build sustainable programs past the 2026 expenditure deadline as well as programs that would build capacity for future government programs, said Jacob Leibenluft of the Treasury.  

At the onset of the COVID-19 pandemic, states did not have the systems in place to reach people in need of help, said Leibenluft. ARPA funds help communities invest in a strong system to provide support to community members, which sets the United States ahead of where it would have been otherwise, he said, claiming that the funds will help the country weather upcoming economic turmoil. 

To take advantage of this opportunity, Leibenluft suggested that localities develop and share best practices. The most effective way to use ARPA funds is to develop the “plumbing” that connects citizens to government programs which localities can then maintain on their own budgets, he said. 

“There are certain things that are just not sustainable in the absence of ARPA funds,” he continued, “what we have built is really a demonstration of programs that can be sustained through a combination of local, state and federal funds.” 

Local governments need to view ARPA as one-time spending, added Tishara Jones, mayor of Saint Louis, Missouri. Saint Louis did not develop any ARPA-reliant programs that would extend beyond the 2026 expenditure deadline. Instead, the city is finding revenue in its existing budget for supporting new programs on its own. 

Even so, state officials suggest that the Treasury’s 2026 expenditure deadline is too soon, claiming that not all funds necessary for broadband infrastructure upgrades will be received by that time.  

The American Rescue Plan gave $1.9 trillion for direct financial assistance, education support, health programs, transportation, and state and local fiscal recovery. An estimated 10% of funds are being used to build infrastructure, including broadband deployment, according to Brookings. The program’s allocation phase is set to be complete by the end of 2024.  

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Broadband Mapping & Data

FCC Added Just Over 1 Million Net New Locations in Broadband Map Fabric Slated For Spring Release: Chairwoman

Chairwoman Jessica Rosenworcel said the second version of map fabric ‘largely completed.’

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WASHINGTON, March 23, 2023 – The head of the Federal Communications Commission said Thursday that the commission added just over one million net new broadband serviceable locations after processing challenges and improving data models in its second round of data collection that ended March 1.

In a mapping update blog post, chairwoman Jessica Rosenworcel noted that the net additions to the map – where fixed broadband could be installed – came after it added 2.96 million new locations and removed 1.92 million locations from the first version of the fabric released in November.

The chairwoman also said the second version of the fabric, which underpins the broadband map, is “largely completed” and is slated for a release later this spring. The map will be used by the National Telecommunications and Information Administration to spread among the states by June 30 the $42.5 billion from its Broadband Equity, Access and Deployment program.

“In the past four months, our mapping team has processed challenges to availability data for over 4 million locations,” Rosenworcel said in the post. “In other words, on average, we are addressing availability challenges to tens of thousands of locations every single day. Every two weeks, our public map is updated to reflect all availability challenges that have been resolved. In other words, the system is working.”

The chairwoman noted that the one-million-location difference suggests that the net adjustment from the last version of less than one percent in the number of serviceable locations “says that, on balance, the November pre-production draft of the National Broadband Map painted a helpful picture of where high-speed Internet service could be available.”

Previously, the chairwoman said challenges that sought corrections to the data corresponded to less than one percent of the total number of locations identified.

Rosenworcel also noted Thursday that important corrections and additions to the data were made, including “data refreshes to more sophisticated tools” that helped remove structures like garages and sheds. The most significant additions were in Alaska, U.S. territories and tribal lands, she said.

The challenge process led to nearly 122,000 new location additions, she noted, but also added that the majority of location adds were due to the updates and dataset model refinements by the agency’s contractor CostQuest.

“While over time we expect future versions of the Fabric to require fewer refinements,” Rosenworcel added, “these ongoing efforts to improve the Fabric outside of the challenge process will continue and will remain an important tool for the improvement of the National Broadband Map.”

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